Retiring overseas is increasingly appealing, but it also raises many concerns. Administrative issues such as receiving a pension, health insurance, or a residence permit can make retirement abroad seem daunting. Is it a lifelong commitment?
Reasons to retire abroad
The reasons are as varied as the individuals and their personal contexts. One of the most common reasons is the desire to maintain or improve one's quality of life. Anticipating a lower income, most retirees seek to keep a certain level of comfort and, therefore, turn to countries where the cost of living is lower than in their home country.
The search for a pleasant climate and a favorable environment is another common aspiration. Few retirees settle in Nordic countries, preferring Mediterranean countries, Southeast Asia, or islands like Mauritius. Retirees often favor warm climates coupled with a healthy and exotic natural environment.
The desire for cultural discovery also plays a role in choosing to retire abroad. New customs and languages, different architectural and culinary experiences, all contribute to keeping the senses alert and continuing to learn with more time on hand.
Securing financial resources during retirement abroad
The more you understand the procedures and processes, the more confidently you can choose retirement abroad, in one or several countries. What should you consider before deciding to move overseas for retirement?
Will your pension allow you to live comfortably? What will the exact amount be? This question is complex if you've frequently changed employment types (employee, self-employed), jobs, or taken sabbaticals during your career. The linear path of a career and retirement isn't always clear. Reviewing your situation with your pension organization several years before your planned retirement date is recommended. You may need to provide numerous documents, so it's best to anticipate this process.
Receiving a pension abroad is possible with a declaration to your pension fund. You'll need to provide proof of your new residence and probably an annual certificate of life verified by the consulate in your new country of residence.
Pension organizations can generally transfer your pension to a foreign bank account if there are no transfer fees. Otherwise, you'll need to maintain an account in your home country and handle the transfers and transactions yourself. Consider this practical aspect to anticipate any potential fees.
Retirees rarely move to countries with a high cost of living unless they have a particularly lucrative pension. Choosing a destination with a reasonable cost of living will likely be one of your first criteria. Make sure your choice is based on accurate evaluations and data.
There are many online rankings of the best retirement destinations, but they don't always rely on precise data. To evaluate the cost of living concretely, refer to reputable sites like the Organisation for Economic Co-operation and Development (OECD), which provides data on inflation, housing costs, and price levels by country. You can also find reliable information about your host country on your home country's official consular website.
Obtaining the proper residence permit for retiring abroad
If you are a European Union (EU) citizen retiring in another EU country, you won't need a residence permit. Outside of this scenario or specific bilateral agreements, a residence permit is usually required for retiring abroad.
Around 20 countries officially offer a retirement visa, including Thailand, the Philippines, Spain, Portugal, Mexico, and Ecuador, among others. If the country you are interested in doesn't specifically offer a "retirement visa," it doesn't mean you can't move there. Check the official immigration website of your target country for the different visa types and their possible extensions for long-term stays. If this seems too complicated, there are many online visa agencies that can handle these tasks for you.
Obtaining a retirement visa comes with several conditions. Some countries require a specific age range, a minimum pension amount, or a bank deposit. Health insurance is usually mandatory in most countries. Retirement visas often include restrictions on engaging in local employment.
For example, a Thai retirement visa requires applicants to be at least 50 years old, have health insurance, a long-term housing lease, and proof of financial means. This can be a deposit of 800,000 THB (about $21,712), a monthly income of 65,000 THB (about $1,764), or a combination of both.
The retirement visa in Mauritius requires applicants to be at least 50 years old and provide proof of income, either by transferring a minimum of $18,000 to a local bank or demonstrating a minimum monthly income of $1,500. While you cannot work on this visa, investment opportunities are available.
Some retirement visas can lead to permanent residence after several years, as seen in countries like Ireland, Indonesia, and Thailand. Make sure to check this out if you are considering a long-term retirement overseas.
Health insurance tailored to your needs abroad
Health insurance is mandatory, but how do you choose one that suits your retirement needs? You may not be familiar with the healthcare system in your new country.
The easiest solution is to choose international health insurance. This type of private insurance covers you in many countries and usually offers at least English-language services, which can be reassuring. The benefits and reimbursements depend on the plan you choose. You can find health insurance comparison tools on the Internet. It's recommended that you run three to five simulations to get a broad view and make an informed choice.
Note that health insurance premiums generally increase with age. Depending on your medical history and anticipated care, not all insurers will accept your application.
Another option is to join the local health insurance system if it's of good quality, which will likely be cheaper than international private insurance. To determine if you can join the local system, see if there's a social security agreement between your home country and your host country. Visit your social security's "going abroad" section for different scenarios (going abroad for studies, work, or retirement). If an agreement exists, you will continue paying contributions to your home system while receiving care through the local health system. Without an agreement, you can usually directly join the local system, unless specific conditions apply.
Rely on precise data to evaluate the local healthcare system's quality. The best approach is to visit the local health insurance website for descriptions of covered care and reimbursements. This can be more complex in countries without a unified national health system, where different approved health insurance funds offer varying benefits. Compare at least three of these and investigate supplementary insurance based on your specific health needs.
Addressing these three crucial questions will help you make a well-informed and confident decision about retiring abroad, whether for a few years or a long-term adventure.
