Full Article: Barron’s – Thinking of Retiring Overseas? 8 Things to Do Before You Pack Your Bags
Retiring abroad offers the allure of new experiences and potentially lower living costs, but it necessitates thorough financial and tax planning. Key considerations include understanding the tax implications of moving, managing investments across borders, and ensuring compliance with both U.S. and foreign tax laws. Healthcare access and insurance coverage are also critical factors to evaluate before making the move.
Key Takeaways:
- Tax Obligations: Even when living abroad, U.S. citizens are required to file annual tax returns and report worldwide income. It’s essential to understand the tax obligations in both the U.S. and the destination country to avoid double taxation.
- Investment Management: Managing investments from abroad can be complex due to differing regulations and tax treatments. Consulting with a financial advisor experienced in cross-border issues is advisable to navigate these challenges.
- Healthcare Considerations: Access to quality healthcare varies by country. Researching the healthcare system and securing adequate health insurance coverage in the destination country is crucial for retirees.
- Cost of Living: While some countries offer a lower cost of living, it’s important to assess all expenses, including housing, utilities, and taxes, to ensure they align with your retirement budget.
- Legal Residency and Estate Planning: Understanding the legal requirements for residency and how local laws affect estate planning is vital. This includes recognizing how assets will be treated under the destination country’s legal system.