Save Money by Retiring Abroad: How to Retire Overseas for Less
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- By Jenny Kerr
- December 20, 2011
Have you ever thought about where you want to spend your retirement days? A recent article MSN–Retire Overseas on $1,200 a Month–got me thinking about it.
The thought of retiring abroad on a specific dollar amount really interested me for two reasons: I really have never thought about what my monthly retirement budget would be and I had certainly never thought about moving out of the country to retire! The article listed five places you can move to retire overseas on $1,200 a month. It included places like Ecuador, Thailand and Malaysia.
Reasons to Retire Overseas
Why would a retiree or retired couples want to move overseas? There are varying reasons to retire overseas according to Kathleen Peddicord, author of How To Retire Overseas–Everything You Need To Know To Live Well Abroad For Less. Some reasons include living in a location with a permanent summer, reduced expenses, less crime and a slower pace of life.
Myscha Theriault and her husband are in the process moving overseas since retiring and chronicle their story on the website Trekhound.com. When asked what made them decide to move overseas after retirement, Myscha told me, “We’ve lived overseas before and enjoy the expat lifestyle. Also, it’s a great way to leverage the retirement income dollar against a lower cost of living available in a number of countries.”
Theriault also suggested that if you are interested in exploring a second career during retirement, there are countries that offer tax free salaries to international hires. Some will even provided furnished housing! This can be an excellent deal and a great enticement to get retirees to move overseas.
For example, a country offering financial benefits to expats is Portugal. Portugal is the closest nation in Europe to the U.S., easy to get to and offers some of the best values in Europe today for the American traveler.
According to Jayme Henriques Simões, who is a Public Relations Partner to the Portuguese National Tourist Office, “There is a 10-year income tax exemption window for foreign residents relocating to Portugal. This tax break dates to 2009, and applies to new residents with foreign-sourced income from any nation with a double taxation agreement in place, as is the case of the United States.”
Additional benefits of retiring abroad in Portugal include lower property taxes, public transportation and lower health care costs. Locally products goods are affordable and property prices have dropped compared to other areas in Southern Europe.
Choosing the Best Places to Retire Overseas
With so many locations to choose from, how can you determine where the best places to retire overseas are and which one is right for you? A lot of it will depend on your preferences and what you are looking for, but not all retirees decide to live in one place.
When I asked Myschia Theriault how she and her husband determined where they were going to live during retirement, it wasn’t just in one location. “We’re going hopping to a few different places, and if the mood strikes us, we’ll settle down abroad. But picking one permanent location isn’t something we necessarily feel the pressure to do.”
The thought that a retiree would not have or want to settle down during retirement hadn’t even crossed my mind!
When you are not tied down to a job or a mortgage, you are not required to live in one location. Having the freedom to travel as you would like and see different things can provide a lot of joy for many retirees.
You Don’t Have to Retire Abroad to Live the “Retirement Lifestyle” Overseas
Believe it or not, there are people who decide that they are not ready to retire but want to move overseas to travel the world while still working when they can.
Nora Dunn is one of those people. Five years ago, Nora decided not to wait for retirement before she started to travel. While she does not consider herself “retired” in the traditional sense, she is living a lifestyle similar to a retiree.
When asked about her decision to sell her belongings and travel the world, Nora said “I’ve had a lifelong dream of traveling the world in a way that vacations never seemed to satisfy. I wanted to actually LIVE around the world, spending months (if not years) in a destination, and gaining an understanding of what the rhythm of life is like in other places.”
Nora had originally reserved her traveling as a retirement dream, but realized she might not be able to retire overseas if she waited for the traditional retirement age of 60 or 65.
“I couldn’t stand the idea of maintaining the status quo and ‘keeping up with the Joneses’ for another 30 years before realizing my retirement dream. Life is too short!” Nora decided to “retire” from the traditional way of doing things and has been traveling the world full time ever since.
In order to earn income and keep up with travel expenses, Nora specializes in house-sitting and volunteering, during which she trades for her accommodations. By doing so, Nora eliminates big expenses while enjoying a culturally rewarding experience.
She is in no hurry when she travels, staying at each location from 2-18 months at a time. This helps eliminate the high cost of transportation from her budget.
Nora also has a “location independent” income as a writer. She can earn income from anywhere in the world as long as she has her laptop and an internet connection. This income helps to take care of the rest of her expenses.
Nora refers to herself as “The Professional Hobo” and determines where she wants to live based on the opportunity. She may travel to a destination for house-sitting opportunity or another sponsored event. “There are so many places in the world I’d love to see and experience, so I just let serendipity and opportunity dictate where I go next!”
Is Retiring Abroad for You?
While retiring abroad is not for everyone, it can provide a rewarding experience for those who are up to the challenge. If you are curious about living a lifestyle like Nora or Myscha, here are some suggestions:
According to Nora, “If you want to do the same thing, it’s a matter of covering your bases (e.g., putting your financial house in order), and taking the plunge. Don’t worry too much about the specifics of how you’ll make it happen; my own travels have evolved many times over since I started, as will yours. Just make the decision to do it and avoid getting caught up in trying to plan out every detail.”
“The expat lifestyle is enriching, and a great way to make friends and contacts you’ll have for the rest of your life. It’s also refreshing to be able to check out of the day to day hustle and bustle so common in the typical North American lifestyle,” said Myscha.
If you are considering this type of lifestyle, do your research and seek out others who have done the same thing to gain from their advice and experience. You may be amazed at where you end up!