Planning to Retire Abroad - First Steps

Updated on December 25, 2017
Marisa Wright profile image

Kate Swanson is a Scottish-born Australian who has traveled to and lived in many countries across the globe.

Is your retirement dream dancing the tango in Argentina?
Is your retirement dream dancing the tango in Argentina?

The idea of retiring abroad is a dream to many for various reasons.

We all have such a great time on vacation - and retirement is going to be one long vacation, so some people think, "why not spend it in my favourite vacation spot?"

Alternatively, you may be worried about how your money will last in retirement and be tempted by tales of cheaper living costs in other countries, so you can live more comfortably in your old age.

Sanity Check

Many people think of "planning the move" as booking flights and packing up - but before you do any of that, it's vital to do a “sanity check”. That means checking your motivation is valid, and working out the practical implications of your move.

Tempted to skip this exercise? Don't!

If you're resisting the idea of analysing your plans, then it's even more essential to do the exercise. Resistance means that deep down, you know there are snags, and you'd rather not think about them for fear of ruining your dream.

Ignoring them will not make them go away – in fact, it makes them even more likely to sabotage you! The only way to overcome obstacles is to face them – that way, there's a much better chance you'll find a way around them.

Every year, many thousands of Brits move to Europe - it's easier for them, because Europe is so close and it's easier for them to get residency. It may surprise you to learn that of those thousands, two-thirds come home within three years. Likewise, thousands of English people move to Australia - and half of them return.

All those thousands of people are like you – looking forward to a new life in another country, full of hope and enthusiasm. So why do so many of them return home, disillusioned?

Because they don't analyse their motives and work out the practical aspects of their move, that's why. They set off to live a dream, and the reality didn't live up to that dream. Reality rarely does! Don't let that happen to you.

It's very, very unlikely that your retirement location will be perfect - nothing in life ever is. But it can still be the best choice you ever made, IF you choose carefully and relocate with your eyes wide open!

Is your retirement dream lazy days on the beach?
Is your retirement dream lazy days on the beach?

What is "The Dream"?

These questions are designed to make you think. Take three blank pages, write one of the questions at the top of each one, and try to fill the page with as long a reply as you can manage! Write down whatever occurs to you, even if it's not entirely relevant. Take your time.

Why do you want to move overseas?

  1. Describe a typical day in your new life at your new location.
  2. Do you imagine making new friends? If so, how? How social do you expect to be? What kind of activities will you do with friends?
  3. How will you keep in touch with family and friends in your home country? How often do you expect to visit them/have them visit you?

There are no right or wrong answers to these questions, they are unique to you. These questions are simply designed to make sure you know what your expectations are. And if you're a couple, it gives you a chance to check that you both agree!

For instance, many a retirement dream has foundered because one partner expects to fly home to see the family once a month, whereas the other partner knows they can't afford a visit more than twice a year.

Have You Done Your Research?

  1. How many times have you visited your destination city/village/rural area?
  2. Have you visited in the off-season/worst time of year?
  3. What's the longest stretch of time you've spent in that location on a single visit?
  4. What kind of accommodation did you stay in?
  5. How long have you stayed in your destination country in total?
  6. Do you have existing friends or family in your destination country?
  7. Do you speak the language?

The answers to these questions give you some insight into how prepared you are for the move.

First, Walk the Talk

If you've spent less than two months in your destination country in total, and if you've always stayed in hotels - face it, you have absolutely no idea what it's like to live there. You need a trial run!

Book a self-catering apartment or house for at least two weeks, preferably more. It must be in the area where you're planning to live - if you can afford to buy in a luxury beach resort, fine, but if your budget means you'll have to live further inland, or you hanker after a secluded mountaintop villa, then find a place there. If it's not a tourist destination, try AirBnB or contact local estate agents, who may have contacts who can help you.

It's also a good idea to book your trial run at the time of year when the weather is at its worst...

On your trial stay, live like a local. On vacation, it's tempting to eat out every night and spend your days sightseeing - but once you're living there, you can't go and see the same sights again and again, and you probably can't afford restaurant meals every day. Buy your groceries at the local store, cook your own meals and think about how you'll live day to day. You may be surprised how different it feels from what you imagined.

If you don't speak the language or have local friends, a try-out is even more vital - you need to find out if you can manage shopping, travelling on public transport etc. Have you considered how you'll cope with getting electricity and phone connected, getting medical care, opening a bank account etc?

Can You Afford It?

The big question for many people is "Can I afford it?" But don't base your decision on what you spend on vacation!

You also have to consider costs you don't see while on a short stay - buying a car, running a car, groceries, medical care, insurances, tax, etc etc. It will take some time to research all those costs, but it is an essential exercise.

Next you'll need to compare those figures with what your lifestyle costs now. Remember that your lifestyle will change when you move and you may be able to live more cheaply in retirement - for instance if you're giving up work, you'll save money on work clothes (and maybe expensive hairdressers?) and commuting expenses.

Finally, don't forget to work out your income! If you're entitled to a pension, will you still get it if you leave the country? Some countries will cut back or stop your pension if you move overseas, or tax it more harshly.

Some retirees plan to continue earning after they move, and that needs careful consideration, too.

Starting a Business Overseas

It’s part of the baby boomer dream: making a seachange and downshifting from a stressful job to your own little business. The reality can be very different!

Ask anyone (of any age) who has started a new business, and they’ll tell you they had to work much longer hours than they ever expected. And yes, that applies even if you're thinking of buying that little vineyard in Tuscany. If you were hoping to throttle back in retirement (either for health reasons or just because you’ve earned it), you may be in for a nasty surprise.

That’s why, for every baby boomer who successfully moves from corporate executive to vineyard owner (or whatever), there are several others who try the idea and give up – sometimes having lost a fair chunk of their retirement nest-egg in the process.

Let’s face it, anyone who is over 50 is all too aware that health can become an issue as we get older. In fact, those beginning-to-creak bones may be the very reason we’re thinking of a sea change! So it’s important to remember that businesses don’t become successful overnight. In fact, a typical small business makes very little, if any, genuine profit in the first year or even two.

Of course you can bypass that setup period by buying an established enterprise - but that will consume several thousand dollars of your nest egg, so the result is the same.

Another aspect of entrepreneurship which is often overlooked, especially by baby boomers, is the fact that independence means working alone – and alone can equal lonely. It’s well known that many retirees find it hard to adjust to spending most of their time alone or with their partner, instead of spending their days in a busy office full of people. We often underestimate the important role business colleagues and acquaintances play in keeping us in touch with the world, even though they are not close friends. Of course we all yearn for our own space, but are you going to be happy when you’re in it 100% of the time? If your business involves a lot of interaction with people this may not be a problem, but remember there is a difference between interacting with customers – a constantly changing population – and a regular group of co-workers.

Remember, you will be in a new country where you don't know anyone, and being tied up with your business may mean you don't have the time to make new friends.

Finally, make sure you research the bureaucracy in your proposed new country. Registration and taxation rules vary widely across the globe and as a business owner, you won't be able to avoid them.

Questions & Answers

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      • Glenis Rix profile image

        GlenR 20 months ago from UK

        Yes, England has certainly changed in the past thirty years! Perhaps not quite the 'green and pleasant land' that they left. (I'm allowed to say that because I'm English).

      • Marisa Wright profile image
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        Kate Swanson 20 months ago from Sydney

        Glenis, your friend is not alone! I'm a member of a forum for British people in Australia and I've discovered it's very common for people who have spent twenty or thirty years in Australia to suddenly feel homesick for "the old country" as they approach retirement.

        Of course, often the country they yearn for is the England of thirty years ago and when they return, they're disappointed. But others return and are delighted to have done so.

      • Glenis Rix profile image

        GlenR 20 months ago from UK

        Very interesting - I recently had a visit from an old friend who emigrated to Australia many years ago. Now about to retire, he seems to be feeling nostalgia for the Old Country. Said he would come back to the UK were it not for our cold climate and his great views over the Ocean. Interestingly, he said that people in Europe tend not to understand how remote Australia feels from home.

      • Sparrowlet profile image

        Katharine L Sparrow 2 years ago from Massachusetts, USA

        Good hub! Medical concerns would be a question for me too. Not just the language barriers, but the quality of medical care available - when you're aging and declining, you want the best medical treatment you can get! One option is to purchase a condo or cottage in another country for visits when you are able. Then leave it to your kids in your will as a vacation home!

      • Marisa Wright profile image
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        Kate Swanson 2 years ago from Sydney

        I feel the same about my time living in Africa (not in retirement, but with my husband who was on a British government aid mission). If I'd known how hard it was going to be, I wouldn't have done it - but having done it, I'm a different and better person I think.

      • Blond Logic profile image

        Mary Wickison 2 years ago from Brazil

        We moved to Brazil (rural Brazil) in 2009 and are ready to return to Europe.

        I think it is always a case of 'the grass is always green', but of course it isn't. I do think people that aren't happy in their home country won't be happy anywhere.

        I also don't think people who are moving to a less developed country understand the cultural differences. For example many people here can't read or write and many have no desire to learn.

        Littering here is second nature to them. So many just don't see anything wrong with it.

        But for all the little differences, I have never met people who are kinder in so many small ways. From people bringing me plants and home made cassava flour to a complete stranger giving me a hug and wishing me "feliz Natal" (happy Christmas).

        If I had to do it all again, I wouldn't but ...I would have missed out on a life changing time of my life.

      • Marisa Wright profile image
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        Kate Swanson 2 years ago from Sydney

        That's an excellent point, Sheila. My husband would love to retire to somewhere on the Mediterranean but that's exactly his concern.

      • SheilaMilne profile image

        SheilaMilne 2 years ago from Kent, UK

        One thing I think many people don't take into consideration when moving to a country with a different language, is what they will do if they need to rely heavily on medical services. That is not a time when you want to depend on getting the general gist of a conversation.

        Added to that, when you become very elderly and frail, your language skills diminish and you tend to revert to your mother tongue. I have a Dutch doctor friend who attends a retirement home and he sees it over and over again. He and his wife decided not to retire to France for this very reason.

      • Marisa Wright profile image
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        Kate Swanson 2 years ago from Sydney

        Sallybea, it's very easy to turn a perfectly ordinary country into "a dream" and wilfully ignore all the realities of a move! It's really important to sit down and ask yourself what you really KNOW about a place and what's just your daydream. As I've recently been reminded myself, going on holiday somewhere and actually living there are two very different propositions. And people do often underestimate the impact of leaving behind established friends and support networks.

      • sallybea profile image

        Sally Gulbrandsen 2 years ago from Norfolk

        You must have been reading my mind. My other half has would love to retire in Europe but think I will have to be taken kicking and screaming.

        Think I should let him read this:)

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