A Guide to Retiring Abroad
The trend of Americans opting to retire abroad is gaining momentum, driven by factors such as lower housing expenses and accessible healthcare options, as highlighted by the yearly Global Retirement Index from International Living. Nonetheless, embracing expatriate life necessitates comprehensive preparation and investigation.
Verify Residency Regulations
Residency and immigration laws vary across the globe, but most destinations require a Residency Visa, typically with common prerequisites:
- Proof of a valid passport and health insurance.
- Demonstration of income meeting the country’s specified minimum.
- Confirmation of a residence upon relocation.
Refer to the Department of State’s country information for accurate visa specifics and criteria.
“Expats often face eligibility standards, even in countries with national healthcare systems.”
Explore Healthcare Options
Understanding the coverage of your health insurance plan under the Federal Employees Health Benefits (FEHB) is essential. Consult Section 7 of your plan’s brochure to determine coverage overseas. Notably, FEHB’s HMO plans don’t cover foreign residents, and traditional Medicare doesn’t include overseas medical expenses. Some Medicare Advantage plans may cater to expats.
Expats typically need to meet eligibility criteria in countries with national healthcare systems. Private healthcare coverage, often more cost-effective than U.S. options, is widely accessible.
Social Security & FERS Pension
According to the Social Security Administration, over half a million individuals residing outside the U.S. receive Social Security benefits. Both Social Security and Federal Employees Retirement System (FERS) pensions can be conveniently deposited into overseas bank accounts, though additional fees may apply depending on the account type.
Financial Considerations
Irrespective of your location, the U.S. taxes your income, and retiring abroad may involve dual income taxation. Familiarize yourself with the IRS’s guidelines for residents and U.S. citizens living abroad.
Retirement accounts such as the Thrift Savings Plan (TSP) and 401(k)s are typically manageable globally, but withdrawal regulations vary by country. Additionally, ensure the legal validity of your trust, will, and powers of attorney in your chosen country.
Connect with FRC® trained advisors to access a network of tax and legal professionals experienced in aiding expatriates retiring overseas. Advanced planning ensures a seamless transition into a fulfilling retirement abroad.
