As a frequent watcher of House Hunters International, I ponder what retirement would be like in a foreign exotic/low-cost destination. As is usually the case there are many items to consider before taking such a bold step. Here are some items to consider.
Satisfying Uncle Sam
As a U.S. citizen or permanent resident, you are required to continue to file a U.S. tax return. Certain income may be excluded if you are a “Bona Fide Resident” or meet the “physical presence test” of a foreign country. BUT you are still required to file a tax return and report foreign bank accounts.
Medicare typically does not cover medical care you receive outside of the U.S. You will need to determine what is available in your new country of residence. In addition, a Medevac policy may be advisable. Not only is this an additional cost to consider, but don’t give up on paying for monthly Medicare Part B, because paying the premium to keep Part B when abroad will ensure that Medicare will cover your care whenever you travel to the U.S. Additionally you will not face premium penalties or gaps in coverage. If you fail to pay for Part B while abroad, when you move back to the U.S. you may go months without health coverage. This is because you may have to wait until the General Enrollment Period (GEP), which runs January 1st through March 31st each year, with coverage starting July 1st.
Securing Social Security Benefits
Benefits can be transferred to retiree’s bank account thanks to advances in technology. This is available in most countries, but there are some exceptions. Make sure your new country of residence is not a restricted jurisdiction.
Before buying real estate make sure you work with honest, knowledgeable professional as there are sometimes restrictions on what foreigners can buy and what if any financing is available.
Keep Your Investments Here
The U.S. financial and banking system is regarded as the safest and most reliable in the world. We would strongly advise keeping your assets invested in the U.S.A., avoiding major currency fluctuations and arranging for funds to be electronically transferred to your new domicile. This will ensure your funds are not subject to exchange rate fluctuations and political upheaval.