The decision to retire abroad is increasingly popular among Americans, driven by factors such as lower housing costs and affordable healthcare options, as revealed by the annual Global Retirement Index from International Living. However, embracing expatriate life requires thorough planning and research.
Verify Residency Laws
Immigration and residency laws differ worldwide, but most destinations necessitate a Residency Visa with common prerequisites:
1. Proof of a valid passport and healthcare insurance.
2. Demonstration of income meeting the country’s specified minimum.
3. Confirmation of a residence upon relocation.
Consult the Department of State’s country information for precise visa details and requirements.
“Expatriates often encounter eligibility criteria, even in countries with national healthcare systems.”
Explore Healthcare Alternatives
Understanding your health insurance plan under the Federal Employees Health Benefits (FEHB) is crucial. Refer to Section 7 of your plan’s brochure to ascertain coverage abroad. Notably, FEHB’s HMO plans do not extend coverage to foreign residents, while traditional Medicare excludes overseas healthcare expenses. Some Medicare Advantage plans may cater to expatriates.
Expatriates are typically subject to eligibility requirements in countries with national healthcare systems. Private healthcare coverage, often more economical than U.S. counterparts, is widely available.
Social Security & FERS Pension
Over half a million individuals residing outside the U.S. receive Social Security benefits, according to the Social Security Administration. 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
Regardless of your location, the U.S. taxes your income, and retiring abroad may entail dual income taxation. Familiarize yourself with the IRS’s guidelines for residents and U.S. citizens living abroad.
Retirement accounts like the Thrift Savings Plan (TSP) and 401(k)s can typically be managed globally, but withdrawal regulations vary by country. Additionally, confirm the legal enforceability 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 assisting expatriates retiring overseas. Planning ahead ensures a smooth transition into an enriching retirement abroad.
