Should you retire overseas

[Accidental Retiree]

I hope you keep us posted on how this process works out for you.

Like you and LARS, DH and I are also 'dog people.' I read with interest about the cruise which allows you to take your dogs, and I also just read up on the pet passport.

I could do that.

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Originally Posted by DFA Sojourning, our plan is to live in Ireland long term, we planned for a year since most rental leases are a yearlong and we may not like the area we pick after a year, we may decide to move to another area in Ireland after that or if we like it stay put. We may also decide to move to the European mainland if we find some place we like better than Ireland. Just like you said “I just haven’t decided to leave yet” (it would be We for us) Our plan is to do two or three trips a year to the European mainland for a couple of weeks, but base out of Ireland. The only reason to come back to the US would be short visits with family every so often, not really a tightknit family. No other reason to come back to the US, been there done that. LARS, dogs are huge with us too.

[fh2000]

Very interesting thread.

DW and I are also dual citizens and plan to go back to our home country in Asia. DW has purchased an apartment back home close to her family. We flew back a couple of times in the last 18 months and prepared the apartment, local documents, auto-payment of all the utility bills.

We still keep our primary house in LA. Kids are likely to stay in US. So, we will be just snow-birding the 2 countries.

The challenges for us are:
1. The plane flight is about 13 hours one way, so as we get older this might not be comfortable. The cost of snow-birding also needs to be built in the budget.
2. We are paying double for everything for now: SS, health insurance, utilities, phone, internet.
3. The 2 housing will be left vacant appox. half of the year each. We may have to sell our LA house, but what to do when we come to US to visit the kids?
4. Funds in home country is subject to FACTA regulation so we need to pay close attention to it.

[Sojourning]

"We are looking into living in Ireland for a year or longer as a base for EU travel."

Aah, you did not mention a more permanent move DFA. That of course changes things.

It's good you plan to rent. As I wrote to begin with, there is no way to know if someone will 'stick' other than to try it. I had a minor concern that my wife might not stick when we moved to Canada. As it has turned out, she had no problem at all, but you never know.

Can I ask, why Ireland? Do you have a connection there? Personally, it is not a country I would choose from all of Europe. That's simply based on weather and cost of living.

Fh2000, the cost of maintaining two homes and the hassle in terms of taxes, healthcare, etc. have always made me believe that it just isn't worth it. I would rather visit the second place and rent as a tourist for as long as I wanted to. As a dual national, you can do that.

I would compare the cost to rent even for 6 months each year and avoid all the tax, healthcare etc. issues if possible.

[explanade]

Why is the cost of living so high in Ireland?

I thought they were economically hurting more than other EU countries in 2008.

[DFA]

Quote:

Originally Posted by Sojourning "We are looking into living in Ireland for a year or longer as a base for EU travel." Aah, you did not mention a more permanent move DFA. That of course changes things. Can I ask, why Ireland? Do you have a connection there? Personally, it is not a country I would choose from all of Europe. That's simply based on weather and cost of living. I would compare the cost to rent even for 6 months each year and avoid all the tax, healthcare etc. issues if possible.

We have no active connection to Ireland, DW Great Great Grandparents came from there so there is a little history.

As for the weather, it really isn't that bad, temperature ranges 30 to 70 degrees, rain (I like rain), but mostly light rain. I can't stand the extreme cold and snow or the extreme heat and Ireland rarely gets snow in the south and never gets over 100 degrees.

As for the cost of living, it is getting cheaper to live there and with the euro dropping it is even getting better. I know it can go back up, but the budget is ok with that too. Average wage in Ireland is 35k to 40k and I have planned a budget for around 80k with the added travel and such.

I have found the people to be some of the friendliest in all of Europe and that counts for a lot.

[Sojourning]

Explanade, Ireland went through the recession like everywhere else but they have pretty much recovered from that. In general, the cost of living in Ireland and the UK remains higher than in the USA. Compare numbers here:
Cost of Living Index by Country 2015

DFA, I agree you do not get 4 real seasons with real cold and real heat. I prefer 4 real seasons but if you are happy with more or less constant spring and fall, then it will suit you. What I found I missed the most was a real summer.

You can't 'plan' a barbecue for next Saturday for example as you would in July or August in the USA. You just can't count on the weather being any good. Here's an amusing tidbit. More convertibles are sold in the UK than in any other country in Europe and yet they pretty much get the lousiest weather for convertibles. Nothing like being optomistic I guess.

Your budget should be more than adequate, so I don't see any problems really. I just wondered why Ireland. sounds like you have covered the bases pretty well. No doubt you will find a few little surprises but that's to be expected. Your plan sounds fine to me as long as you rent for at least that first year.

[Meadbh]

Quote:

Originally Posted by explanade Why is the cost of living so high in Ireland? I thought they were economically hurting more than other EU countries in 2008.

Here are a few reasons.
1. Ireland is a smallish island. While the Republic of Ireland has an export driven economy (computers, pharmaceuticals, medical devices, agricultural products), many everyday items are not economically manufactured there and must be flown or shipped in.
2. There are few economies of scale.
3. As in many European countries, despite austerity after the banking crisis, there still is a more generous social contract with regard to benefits, wages, vacations, social services, education, etc. The unemployment rate rose from 3% in 2006 to over 20% after the crash. It is now 12.5% despite mass emigration in the past 7 years. That's a lot of unemployment assistance.
4. The Irish economy is dichotomous with a large globally competitive sector of multinationals with European headquarters there (e.g. Google, HP, Intel, Apple, Pfizer, Abbott) and smaller, often inefficient local industries. The global sector is strongly tied to the USA economy. Such enterprises are attracted by low corporate tax rates and an educated, science focused, English speaking population.
5. Personal income taxes in Ireland are quite high due to #s 1-3.
6. Land and property ownership are enormously important in the psyche of Irish people. There are complex historical reasons for that. It was a contributing factor to the property bubble during the Celtic Tiger. While property prices crashed in 2007-2010 to ~50% of their previous heights, they are creeping up again and have never been "cheap" by US standards in recent times.

[explanade]

I remember the sticker shock of going to some restaurants in Ireland, almost 20 years ago.

This was before they adopted the Euro but was really surprised.

[Alan]

DFA,

I was thinking about your plans to try out Ireland and would like to make the following comments.

1. I think it will be a great adventure. We've been to Ireland 3 times, last time for 4 weeks in May, 2013 when we rented 2 different houses in Donegal and Connemara. We love Ireland, the countryside and the people.

2. In 2013 we sailed over on the QE and back on the QM2 and it was excellent. 8 days at sea so we booked inside cabins, $500 each going over in March on the QE and $1,100 coming back in October on the QM2. I think it is a great choice for taking your dogs with you.

3. You've obviously looked into the tax implications of a permanent move, but could I suggest that you may not be liable for Irish taxes the first year you are there, particularly if you go over on the March sailing of the QE. That first year living away from the USA you will probably be resident for tax purposes in the USA as well as Ireland so the tie-break is where you are domiciled for that year, and if you weren't born in Ireland, plus your income is derived in the USA, then I expect you will only have to pay US taxes. (you also say that you have not made a decision to make Ireland your permanent home). See the "substantial presence test" on the IRS website.

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You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States on at least: 31 days during the current year, and 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting: All the days you were present in the current year, and 1/3 of the days you were present in the first year before the current year, and 1/6 of the days you were present in the second year before the current year. Example: You were physically present in the United States on 120 days in each of the years 2010, 2011, and 2012. To determine if you meet the substantial presence test for 2012, count the full 120 days of presence in 2012, 40 days in 2011 (1/3 of 120), and 20 days in 2010 (1/6 of 120). Since the total for the 3-year period is 180 days, you are not considered a resident under the substantial presence test for 2012.

4. One last note is to check to see if you will be liable for the local taxes in the house you rent for a year. (equivalent to US property taxes). I mention this because I don't know Irish rules, but in the UK if a rental house is not a holiday home (many tenants in a year) then it is the tenant that is responsible for paying the local taxes. This is no big deal, just beware of the possibility and check ahead of time so you don't get surprised when you get there.

All the very best of luck in your endeavors.

[Sojourning]

Re Irish unemployment, I have read some articles about how desperate some have become.

Many young people who are eligible for a WHV (working holiday visa) are using the WHV route to go to places like Canada and Australia with the intent of trying to stay beyond the terms of the WHV. Read more here: 10,000 Canadian visas expected to be snapped up by the Irish

It gets them in the door and with some luck they may be able to turn it into something more permanent. Of course many will not and will have to return to Ireland where they will of course have no job.

[nuke_diver]

Super interesting read here. I would like to retire overseas as it would feel like a great adventure but I think the odds are near 0 for that. I would very much like to move back to Canada for the same reasons as quoted below

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Living in another country, even one that speaks the same language, is always going to be a culture different to what you grew up with.

However I think it is unlikely as well since while my wife is not US born this is her country and the only one she's ever been a citizen and in addition she concerns herself with both the cost of living in Canada (which isn't as great as she thinks when you factor in the cost of HC here in the US) and the tax situation which is more complex (US citizens living abroad). I've tried to play the global warming card too since we live in a very nice area weatherwise and everywhere in Canada will be wetter/colder than here at least for now but no luck yet.

In her case the best would be to move there for a few months and see if her opinion changes. Because I've been here for over 20 years now I would not get too much of a pension in Canada but it would be non zero

[sengsational]

Quote:

Originally Posted by Alan I listened to a recent podcast of Invisibility called "categories" and one section in the 2nd half of the program pretty much summarized our situation. Even though we have now lived nearly half of our lives in the USA, we have developed a very strong pull to move back to the UK since just before we retired. This is very natural and happens to many folks once they get older, this desire to be back in the familiar surrounds of where they grew up, and it is quite independent of weather, finances, language, race etc. Living in another country, even one that speaks the same language, is always going to be a culture different to what you grew up with. Eventually you may end up simply being tired of always having to explain yourself (I still fail miserably at a drive through after living in the US for 28 years, and after one spoken word people know I'm not from around here). We have had a great life in the USA, raised 2 children here, have been really welcomed everywhere we've lived and worked (in Louisiana and Texas). But we still don't feel like we fit in. Over the last 5 years we have spent weeks or months at a time in other parts of the USA, Canada, Ireland, Australia, France and England. (escaping the Texas summers). We are luckier than most because we have been able to afford these experiences and starting 2016 we plan to set up a permanent place in England (North Yorkshire) and split our time between there and here.

If England is where you feel most relaxed, then you'll probably be better off there. That is, if leaving your kids behind doesn't cause any angst.

If one is "chill", one will probably be happier and live longer. That's not to say "bored", but as long as you've got something to get out of bed for each day (usually that's "your peeps" aka your close friends and family and your true interests), then living in a place that has less stress is probably better.

Your situation is quite different than some people that want to move for financial reasons, or think they'll "like it there". Hedonic adaptation means the warm days will fade into the background. There's a guy I know who is moving out of the country that gets all red in the face when the cable guy is a couple hours late. This guy will certainly shorten his life if he moves to a place where you are doing good if you get cable connected in a month, after spending 40 hours arguing with people, and bribing a few along the way. Stress is a killer, and if living overseas is stressful, then you're not doing yourself any favors by subjecting yourself to it. But if you can be in a situation where you are not made uncomfortable by the true locals talking in another language, not made uncomfortable by not fitting-in, not made uncomfortable trying to pick-up on local customs, then maybe all of that "work" fitting-in is simply "something to do" for you, and not stressful. One must look inward and admit it if the activities of being somewhere else is really "fun" or just different (and stressful).

[Alan]

Quote:

Originally Posted by sengsational If England is where you feel most relaxed, then you'll probably be better off there. That is, if leaving your kids behind doesn't cause any angst. If one is "chill", one will probably be happier and live longer. That's not to say "bored", but as long as you've got something to get out of bed for each day (usually that's "your peeps" aka your close friends and family and your true interests), then living in a place that has less stress is probably better. Your situation is quite different than some people that want to move for financial reasons, or think they'll "like it there". Hedonic adaptation means the warm days will fade into the background. There's a guy I know who is moving out of the country that gets all red in the face when the cable guy is a couple hours late. This guy will certainly shorten his life if he moves to a place where you are doing good if you get cable connected in a month, after spending 40 hours arguing with people, and bribing a few along the way. Stress is a killer, and if living overseas is stressful, then you're not doing yourself any favors by subjecting yourself to it. But if you can be in a situation where you are not made uncomfortable by the true locals talking in another language, not made uncomfortable by not fitting-in, not made uncomfortable trying to pick-up on local customs, then maybe all of that "work" fitting-in is simply "something to do" for you, and not stressful. One must look inward and admit it if the activities of being somewhere else is really "fun" or just different (and stressful).

Good summary.

In the USA our 2 children, now in their 30's, live well apart (Santa Monica and Houston), neither want or expect children, both have their lives and careers and this last 5 years have both enjoyed visiting and staying with us in the places we have stayed. This year our daughter and her Australian SO will be joining us on an Alaskan cruise and then later in the year at Yellowstone. Our son will be coming to join us for a couple of weeks in the Canadian Rockies. In the recent past they have come and stayed in places with us in Canada (Lake Huron one year, Quebec City another), Yorkshire, Cornwall, Ireland, France and Spain. We have shown them plenty of places when they were children and now in retirement we still enjoy entertaining them in faraway places. We usually look to renting a place with enough space for visitors, and many times we have had other friends and family come join us.

From a base in England we plan on doing a lot more European travel but still plan on wintering in Texas. We'll see how it goes, this new phase in our life. A good thing about having both US and EU citizenship is that it provides a big range of places to live.

[sengsational]

Yes, having the extensive experience, not to mention the flexible citizenships, you are some folks going into it with your eyes wide open. And I'm sure some folks that stumble into it also can turn out to have an intersting and have a "healthy stress" time of it. I think I would also like it, but my DW wouldn't have any of it. You probably can't be thankful enough if the both of you are on the same page with respect to how/where to manage this phase of your lives.

[Alan]

My wife and I have been soul mates since we first met at college in 1973, and we are very lucky indeed to have the same desire for travel.

[Sojourning]

Nuke_Diver, when you write, "my wife is not US born this is her country and the only one she's ever been a citizen", what does that mean? Was she not a citizen of the country in which she was born?

[DFA]

Quote:

Originally Posted by Sojourning I just wondered why Ireland.

Here are some of the reason Ireland boiled to the top of the list.

1. We looked at Italy, but earthquakes, landslides, volcanoes, and flooding over the last couple of years changed our mind. Language is another issue.
2. We looked at Germany, gets very cold and hot with the four seasons in play, DW spent 6 months there and got to see a lot of it. I visited a lot of place in Germany for work. Language, although not bad b/c most speak English too.
3. We looked at France, I just did not like the place the times I had been there.
4. We looked at Spain, pretty nice places that I got to see, but language was an issue and a lot of tourists.
5. We looked at UK, four seasons again, and very high cost of living near the cities.
6. I lived in Okinawa for four years and visited Korea, Japan mainland, Philippines and I enjoyed myself, but did not feel the need to go back.
7. I traveled a lot of the central and south America for work, but the heat and humidity were just to much for me.
8. I have been to most of the islands in the Caribbean, but cost, heat, and humidity were issues for me. I don't scuba or fish all that much and that seems to be most of the activities there, and you can only read so many books and hang out on the beach.

So we decided Ireland:
1. We love the people like I said some of the friendliest we have met in our travels.
2. Weather is just right for me, not to hot not to cold.
3. Easy travel jumping off point for EU trips to see some of the things we missed on our previous visits.
4. Cost of living is not that much higher then we are used to and we have the budget to afford it.
5. There is a lot of history in Ireland and some of the DW ancestors come from there.
6. Felt pretty comfortable getting around shopping on the economy.
7. Driving is no problem for me.
8. Taxes work out for us because of the treaty.
9. International flights are available as needed.
10 Adventure, adventure, adventure.....

I have seen most of the US and there isn't as much history here, only a couple of hundred years for the most part.

Not a very tight knit family and if we need to come home flights are available.

Hope this answers the question of "why Ireland"

One question I have is do expats buy a car, lease one or long term rental?

[nun]

Quote:

Originally Posted by DFA Here are some of the reason Ireland boiled to the top of the list.

On what basis can you retire in Ireland? I can see you getting an extended "leave to remain" with enough income and insurance, but that's not very permanent. Would you intend to stay a long time or just be a long term visitor?

[nun]

Quote:

Originally Posted by sengsational Yes, having the extensive experience, not to mention the flexible citizenships, you are some folks going into it with your eyes wide open. And I'm sure some folks that stumble into it also can turn out to have an intersting and have a "healthy stress" time of it. I think I would also like it, but my DW wouldn't have any of it. You probably can't be thankful enough if the both of you are on the same page with respect to how/where to manage this phase of your lives.

Having both US and EU citizenships give one the ability to move to lots of countries easily. However, that just removes residency and visa issues.

[Alan]

On the question of the cars I only have limited information for Ireland. The last 3 times we have spent a lot of time in the UK then we got around mostly by bus and train, renting cars only when needed.

In 2011 while living in England we didn't have a car and when we went to Ireland we traveled by train and plane, spending a week in Dublin, then took a train to Cork where we stayed for a week and as in Dublin got around from there for a week using buses before flying from Cork back to England.

In 2013 while staying in England with no car we had a month booked in very out of the way places in Ireland so we rented a car in England and drove there, car ferry over the water.

Next year in England we will either buy a car or do a 6 or 7 month lease. We haven't decided yet, but there are companies in the UK, including Enterprise, that cater for folks wanting long term car hire. An advantage of a long term hire is that insurance is included, if you buy a car then you have to find private car insurance in a country where you have no insurance history.