No one should take the decision to retire abroad lightly. It’s a big move that involves a huge amount of careful planning in order to execute it successfully. But even people who believe they’ve covered every aspect of their move abroad can still overlook some important details. Here are five planning details you shouldn’t neglect when retiring overseas. (See also: 9 Things to Know Before Retiring Abroad)
1. Health care
Having a plan in place for how you’re going to cope with any adverse health complications that may arise is absolutely paramount. Each country has its own individual health care system in place. Some of these are complicated to access and understand. Some are private, some public, and others are a mixture of the two.
Health care is also potentially extremely expensive if you choose to pay out of pocket, meaning you’ll need to get familiar with those costs before choosing where you settle. As a U.S. citizen living abroad, you will not be covered by Medicare in your chosen country, so it’s important to have an alternative plan. (See also: 4 Affordable Retirement Spots With World-Class Health Care)
With the majority of U.S. health plans, you won’t actually be covered when you’re abroad. Depending on the country you’re in, you should either get an in-country insurance plan or comprehensive international insurance coverage.
Another thing to consider is the standard of health care in your chosen destination, as well as where you would have to go for treatment. Even those countries that boast world class health care may have very few clinics and hospitals in more rural areas, making them far harder to access. (See also: How to Choose the Perfect Country to Retire In)
2. Local laws
Before making your big move, you need to have thoroughly researched the local laws in your country of choice and how they might affect you when you’re living there. It’s best not to assume anything without knowing the legal realities, as regulations are very different in each country.
Your will may not be legally enforceable in the country of your choice, and if you have assets, investments, and properties in different countries, things can become extremely complicated. Each country’s laws need to be taken into account when the will is being finalized to ensure that your wishes are carried out correctly.
An example of this is forced heirship laws in some European and Latin American countries. These laws state that certain relatives cannot be disinherited from your estate, usually a spouse, children, and grandchildren. There are also lots of tax implications to be considered.
But legal matters go beyond those referring to your assets. Think about other things like driving and traffic laws, and the legality of your license if you intend to drive. Even political and civil freedoms you take for granted at home might be entirely different. (See also: 5 Countries That Welcome American Retirees)
3. Tax requirements
Unfortunately, if you remain a U.S. citizen when you retire abroad, your U.S. tax obligations are an inescapable reality, regardless of where you go in the world. As long as you meet certain income and status requirements, you’re still required to file your tax returns every year with the IRS exactly as if you were still at home.
These rules stand even if you relocate all of your assets to your country of retirement, or any other country for that matter. Depending on which country you are in, you’ll more than likely have to fulfill tax obligations there as well, which will potentially mean you’ll end up being double taxed.
There are a number of countries around the world that have policies in place to address double taxation. For example, Portugal offers Non-Habitual Resident Status, which exempts retirees from paying taxes there. Even so, you will generally still need to continue to pay taxes in the U.S. (See also: Retire for Half the Cost in These 5 Countries)
4. Future assistance to loved ones
As a retiree, you may have children and grandchildren, and even if they’re no longer dependent on you, you might still wish to help them out from time to time. If this is the case, then include a contingency for these expenses in your retirement plan.
You might want to contribute toward your children’s weddings, help them with a deposit for their first house, or to come and visit you as a family. Grandchildren might have school trips, first cars, or college expenses that you want to assist with, as well.
Wherever these costs may come from, you’ll need to have a plan for how you’re going to pay for them. This is a separate contingency from your own personal one and you should consider how you can pay for these expenses without denting your own savings. (See also: Don’t Let These Expenses Spoil Your Retirement Abroad)
5. An exit plan
Even the best laid plans can go awry, so though it will probably be the very last option you want to consider, it’s important to have an exit plan in place. No matter how thorough you are, there are lots of outside factors that could turn your dream sour, and the fact is that it may not work out.
Political instability, drastic fluctuations in exchange rates, financial scams, and even wars could all affect your experience. Homesickness could affect you in ways that you never thought possible.
Without allowing it to negatively impact your retirement by making it a constant consideration, it’s still a good idea to make a robust plan for retreating, if need be. Put together a strategy and then forget about it until it’s absolutely required. (See also: 9 Retirement Hotspots That Are Cheaper Now Than Ever Before)