Perhaps, if you are worried that you will outlive your cash. The price of living in numerous foreign nations is a lot reduce than that within the U.S. That indicates your retirement kitty can final longer. But there are lots of elements to think about. Some consist of:
Taxes. Numerous nations have tax treaties using the U.S. that assist to decrease the probabilities you will be taxed twice. (Google expat websites to get a offered nation and you will discover the information you'll need.) But even when you are living abroad complete time, you will nonetheless need to file a U.S. tax return.
In the event you function in retirement whilst you are living overseas, you are able to claim the Foreign Earned Earnings Tax Credit. In 2010, this enables you to exclude the very first $91,400 you earn within the foreign nation from U.S. taxes. Earn greater than that quantity and Uncle Sam is going to take his reduce of one's earnings. Pension earnings from U.S. sources can also be going to become taxed, regardless of exactly where within the globe you occur to become living.
Well being care. It is a large problem – and potentially a large issue. Regardless of all of the drawbacks using the health-care method within the U.S., the high quality of care there's amongst the highest within the globe, whilst some other nations are beneath par. Sadly, it is these nations using the lowest price of living that often possess the worst healthcare care.
An additional massive problem for expat retirees is the fact that Medicare coverage doesn't extend beyond U.S. borders. You will either need to return towards the U.S. for any care or spending budget to spend for care or insurance coverage inside your new house away from house. Either way, it could be much more costly than you bargained for.
Exchange prices. You will be topic to currency danger. In case your retirement earnings is in U.S. dollars, you can endure when the nation you reside in sees its currency's worth rise against the dollar.
Bill paying. Based around the nation, you might discover it almost not possible to open a nearby bank account – and as soon as you do, it might not be setup to deal with deposits (like Social Safety checks) in U.S. dollars. Numerous expats cope with this issue by sustaining a U.S. bank account and after that paying to get a wire transfer (and transfer to nearby currency) a couple of occasions a year.
And in the event you strategy to just depend on your U.S. bank, you will ring up some sizable ATM charges anytime you would like to obtain nearby currency by tapping your U.S. account. It could frequently price you greater than $5 per transaction, and numerous nations limit the quantity foreigners can withdraw every day. Consequently, you will be stuck paying the nuisance charge on smaller sized withdrawals.
Most retirees who reside overseas maintain their credit cards primarily based within the U.S. and make on-line bill payments. That is usually a great method to maintain expenses down.