We’ve all heard and imagined the fantasies of living at least part of our retirement years overseas. You probably read articles and mail promotions describing overseas “retirement edens” and describing how you can live like a king on a couple thousand dollars a month. And of course, there are those fabulous tax breaks. It all can sound very attractive.
There are some good deals for Americans living overseas, and it is a good choice for some people. But before jumping into an overseas retirement location or spending a lot of money searching for one, consider these factors.
You also must examine the “low taxes” in foreign countries. Some tax free countries impose a number of other costs, especially on U.S. citizens who want to reside there. In many cases, you’ll find the low income and sales taxes are made up in other ways, such as import duties, sales taxes, and heavy taxes on utilities, among others.
In many places you’ll find real estate and labor are quite cheap. But you might very well spend more for things you take for granted in the U.S., such as utilities, home furnishings, and many types of food. Many things you are used to might be available only by importing them from the U.S. Telephone service and the mail might be very unreliable and more expensive.
My advice is the same as when looking for a retirement location in the U.S. Don’t get carried away by low cost real estate or a brief stay in an area. Check out all the costs of living in an area, and the availability of many goods and services you are used to.
How often do you want to keep in touch with those you left in the U.S.? Consider that, then look at the cost and practicality of keeping in touch, either in person or electronically.
Good deals on property are available in Mexico and Canada. Real estate professionals in both countries report an increase in U.S. residents buying property. Many are buying for investment or for vacation properties. If you want to retire there, you’ll be close to the U.S. for return trips. You’ll benefit from the strong dollar and from weak currencies in those countries. But don’t be swayed by the low cost of real estate.
Check out all the factors I’ve mentioned and decide if that area really is the place for you to live.