Boomers and Travel Pros Reveal 5 Money Lessons From Traveling Abroad That Can Help You Retire Overseas Now
Written by
Jacob Wade
Edited by
Chris Cluff
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If you’re trying to figure out when you’ll be able to retire, chances are you’ve considered living overseas. With over 8 million Americans living overseas, moving abroad has become a popular pastime for expatriates.
But before you decide to cash in your retirement, sell your home, and move to Portugal, it’s important to do some planning. After all, you don’t want to make the wrong choice and run out of money.
We consulted with some world travelers from the baby boomer generation and other traveling experts to find out what tips they have for those considering retiring overseas. Here are the top five tips shared by our experts.
1. Visit a Few Places First
Retiring abroad is attractive and can save you a lot of money, but don’t just move to the place you think is the cheapest. It’s important to visit a few destinations and get to know the area before making the decision to retire overseas.
World traveler Hassan Said said it’s important to research a few options before moving. “Make sure to visit potential retirement destinations, connect with other expats, and understand the legal and financial implications,” Said said. “Remember, retiring abroad is a major life decision. It’s not just about the cost, but also about your comfort, happiness, and access to the amenities and services you’ll need as you age. So, weigh your options carefully.”
2. Some Countries Offer Retiree Tax Benefits
Living overseas can actually benefit you financially, as many countries offer incentives for expats. This can help stretch your retirement dollars a bit further, lowering the amount of income you need to afford living overseas.
“Researching and choosing countries with advantageous tax regulations for expatriates can also help you maximize your pension and Social Security benefits, ensuring you earn the most income possible during retirement,” said Ralph Abundo, operations specialist at Canberra Bond Cleaning.
3. The Cost of Living Can Be Much Lower Abroad
Over 500,000 Americans receive Social Security benefits while living overseas, according to the Social Security Administration. The rise in American expats in countries around the world isn’t surprising, as many countries offer a much lower cost of living.
Yulia Saf, a travel blogger who has visited over 70 countries and met with many retirees, said that the low cost of living is attractive to many American expats. “Many retirees have found that they can retire earlier by taking advantage of the lower cost of living in various parts of the world,” Saf said. “They have moved their base to countries like Portugal, Mexico, or Thailand, where everyday expenses and healthcare costs are significantly lower compared to the United States or Western Europe.”
Said also believes that low living costs are the top reason for retiring abroad. “Places like Mexico, Thailand, and Portugal offer a quality lifestyle at a fraction of the cost,” Said said. “This can help your retirement savings stretch further, enabling you to retire earlier than planned.”
4. Living Abroad Can Offer a Simple Lifestyle
When you have only ever lived in one country your entire life, you might not understand the lifestyle possibilities that exist outside of your world. Visiting other countries can impact how you see life, and help shift your priorities to a simpler way of life.
Abundo also believes that this shift in perspective can save you money and help you retire earlier. “Traveling overseas can bring vital perspectives that help to early retirement success,” Abundo said. “Interacting with people from other cultures and lives will teach you to accept a more basic and experiential approach to retirement. Focusing on meaningful experiences and making connections with locals and other expats can lead to a more rewarding retirement while eliminating needless material costs.”
Saf said that living abroad helps retirees realize how little they actually need to retire. “[Retirees] immersing themselves in diverse cultures has taught them valuable lessons on thriftiness, minimalist living, and overall simplicity,” Saf said. “These factors have inevitably expedited their retirement journey. From living in seven countries, I can attest to the enrichment these global experiences offer beyond cost savings. It leads to a wider worldview, free from singular ideologies or societal trends, often a welcoming feature in their retirement phase.”
5. Be Flexible
Flexibility is the name of the game when retiring overseas. From the initial adjustment phase to new experiences, it’s important to remain open to change.
Abudno agrees, saying, “adjusting to changing surroundings and being adaptable in your retirement plans will allow you to overcome unanticipated financial obstacles more efficiently, maintaining financial stability throughout your retirement years.”
If you have to have things a certain way, or can’t “roll with the punches” when something unexpected happens, you might end up wasting money. But if you can deal with some inconvenience and pivot when needed, it can help your retirement dollars stretch further.
Bottom Line
Living abroad can definitely help lower your cost of living and allow you to retire much sooner. But it can also be massively difficult and uprooting your entire life and moving to a foreign country come with many challenges. Our experts all agree that being flexible and making a plan can help alleviate some of the stresses of moving abroad. And a little bit of research can go a long way to making sure you enjoy your early retirement overseas.
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