Should you retire overseas

[Aus_E_Expat]

You will find restaurants everywhere in southern Bali. It is probably an advantage and more desirable to have a villa away from the "action" as parts of Bali are crowded and over developed. Many parts are still beautiful but you have to travel further to get to them.

The other thing with Bali is that for his $350k he would not get a land title. Bali villa sales are one of the biggest scams going around. It is very difficult for a foreigner to get a title over land in Indonesia, particularly for a non resident foreigner. So if you spend $350k you are probably one getting a long term lease (which you can sub let), not ownership.

 

[daylatedollarshort]

The other thing with Bali is that for his $350k he would not get a land title. Bali villa sales are one of the biggest scams going around. It is very difficult for a foreigner to get a title over land in Indonesia, particularly for a non resident foreigner. So if you spend $350k you are probably one getting a long term lease (which you can sub let), not ownership.

There was just a segment on a local Bay Area news station on why so many Chinese investors are buying homes here and one of the reasons they gave was in China they would only get a 70 year lease on homes, not outright ownership like they could get in the U.S.

 

[Rob]

I was in Singapore for 25 years and retired there, and worked part-time as a retiree. That was all part of my itinerant existence since 1970. I fully expected to call Singapore home until I died, but I moved back to the States at the age of 66, bought a home (maybe to quickly), and miss to some extent that itinerant lifestyle of 43 years in 12 countries.

Some of you mentioned health insurance. Medicare definitely is the main reason I remain here in the States. Going to the doctor and being absolutely covered is something you have to pay for overseas. When you are an early retiree, it's ok, as it was for me in Singapore, but eventually it's nice to have that health insurance security. The US is my homebase. It is nice to have a place that can't kick you out, and by that I mean that even with a retirement visa as I had in both Singapore and Malaysia, the rules can always change based on whoever is in power. There's always a little uncertainty, so at this point in my life, I prefer the certainty of the US, my home, and the adventure of visiting for extended periods somewhere near the US.

I'm having a hell of a time deciding where to spend a few months every year. I'm single, have good friends, and a very good yellow Lab to keep my company.

Good thread.

 

[Sojourning]

Explanade, the problem with tv shows like House Hunters International, is that they are a tv show with an agenda. They never show you the other side of the coin. They only ever paint a rosy picture where everyone lives happily ever after.

If you watch carefully, it often isn't hard to see that the home the are looking at is owned by someone else who bought their 'vacation paradise' and is now trying to sell it. As I wrote above, locals know when foreigners want out and the only chance you have of selling anywhere near your purcahse price is if you can find some other foreigner who still has rose coloured glasses on. The question you need to ask and get the true answer to is, 'why is this house for sale?' My experience is that if you could get the answer to that question for say 100 properties, they would fall into categories. The majority would be people who bought with the same ideas as you had and have now discovered that the reality is not as they expected.

My advice is always to rent before you buy and live there for at least a year. That's for people planning a more or less permanent move.

For people in your situation iac1003, my advice is however hard it is to find a place, rent for that first season. Somewhere that you find you like once a year for a few weeks might not turn out to be somewhere you really want to live for 8-9 months a year.

There is a little place called Borrego Springs in the S. California desert area that I have been visiting on and off for over 30 years. I love it there for the hiking and when I took my wife there for the first time about 10 years ago, she loved it as well. So we decided to try it on a longer term basis. The first time we rented for a month and were very happy. The second time we rented for 2 months and my while we had no problem finding things to do and enjoy, my wife felt it was a bit too long. We'll do a month again or maybe 6 weeks but that's it.

The problem with buying before you find out and then discovering it's not for you, is obvious. Yes, "If it doesn't work out, we can always move back.", is true but the question is at what cost? Owning may cost you less over the long term than renting, but ONLY over the long term. Rent, rent, rent, before you buy.

"Having just been there we found that long term rentals are not that easy to find but cheaper condos for sale are plentiful." Take another look at what you wrote. First, long term rentals are NOT hard to find. You're talking about Puerto Vallarta where there are thousands of rentals available. But what you may not like is the price of renting long term. You see that cost as being a sizeable chunk of money you could put onto buying instead. That's true, but again it assumes you buy and remain happy for 5-10 years at least before you want to sell.

You say, cheaper condos for sale are plentiful. OK, WHY are they plentiful? If you buy and then at some point want to sell because as you say, " there will most probably be a time when we would not be able to live independently there.", implying you would sell and return to living in the USA, how easy do you think it would be to sell? Are you assuming you will be able to sell and recoup your money, perhaps even make a profit? What projections for the future of Puerto Vallarta as a vacation destination have you looked at that give you confidence?

Read this article: http://tourismintelligence.ca/2006/11/14/is-your-destination-in-decline/

Where would you say Puerto Vallarta is in it's life cycle? It seems pretty obvious to me. Personally, I see it as a losing proposition. IF I were interested in buying in Mexico at all, it would be in an emerging destination.

You say, " I look upon this as an adventure to be had while still able to enjoy it.", but in fact you appear to be a 'dependable', (Stanley Plog's Model in article) having vacationed in PV for 15 years. That's hardly adventurous. Maybe it's time to try somewhere else. Huatulco or even Puerto Angel or Puerto Escondido which are more built up. All still on the rise, not the decline.

This of course is all just my personal opinion iac1003.

 

[Sojourning]

Rob, I have ended up back in Canada for basically the same reason. In Canada of course healthcare is even better than in the USA in terms of cost. Basically, for a senior it's free or nearly free.

What kind of place are you looking for to spend a few months a year and with what interests and what kind of overall budget in mind?

 

[mpeirce]

Explanade, the problem with tv shows like House Hunters International, is that they are a tv show with an agenda. They never show you the other side of the coin. They only ever paint a rosy picture where everyone lives happily ever after.

We watch that show too.

There are a lot of folks who are just setting themselves up for disaster. Often, younger folks moving to expensive places with little or no visible means of support. Sure, there are a few living off the family fortune back home, but the number of folks who move to, say Paris(!), "just because" is, well, entertaining.

In our house we're always rooting for the folks to pick the one that's within their means. Sometimes it happens, more often it doesn't.

And while we know it's a constructed TV show, it is interesting to get a small glimpse into other places.

 

[Sojourning]

I like watching that show mpeirce. Another one much the same is Place in the Sun which is a UK program. I consider them interesting for the glimpses of the places they are looking at and overall a comedy series.

 

[daylatedollarshort]

I like watching that show mpeirce. Another one much the same is Place in the Sun which is a UK program. I consider them interesting for the glimpses of the places they are looking at and overall a comedy series.

We watch both those shows. I get that they are not the full story, but the prices seem legitimate for the type of housing we could buy or rent, at least in the years the shows were made.

The rent is what intrigues me, since our income is the same now no matter where we live these days and many of the places on those shows would be much less expensive than where we are at. Plus, I believe we can live any place in the EU, so it seems like a good opportunity we should consider testing out before we are too old to want to give it a try.

 

[Meadbh]

This. I will, from time to time, think about moving to England or Ireland.

You might want to read this....

Ireland is one of the worst places in Europe to retire right now

 

[Totoro]

If you are not a US citizen it's quite easy to cut tax ties with a country. I'm British and in my 53 years I've never paid a penny in UK income tax. IMHO it's great to dream about retiring overseas, but doing it as an American requires far more financial planning than any other nationality because of how they are taxed, so they need to think about that more are earlier.

Also, the US tax authorities and related pressures are a real pain. So much in fact that many banks will refuse to do business with you if you are an american national.

 

[Aus_E_Expat]

Sojourning - what age were you when you returned to live in Canada?

I was going to pull the pin and return to Australia this year but now I think I will wait a couple more years. Take it as it comes.

 

[Sojourning]

Daylate, what does you 'believe' you can live in the EU mean? Either you can or you can't. Does either one of you have a passport from an EU country? If so, you can and if not, you can't.

Be careful when you say, "our income is the same now no matter where we live these days". It may be the same at HOME but it's buying power will vary depending on the currency exchange rate on any given day, in any other country. So no, it's not the 'same no matter where you live'. I wrote about currency exchange in the OP here.

There are still countries in the EU where the cost of living is lower perhaps than in your home country but you do have to plan for currency fluctuations. Do you have some kind of budget in mind? How long would you want to try it for and what criteria and interests would you have in terms of the place?

For example, I lived in Greece, in this place for several years. They rent some apartments to tourists in season through tour companies but also rent directly and for longer periods of time. All it takes is a phone call (English is spoken) to find out what rent would be by the month and in what months. Out of season is obviously cheaper than in season. Niki Hotel Apartments

 

[LARS]

You might want to read this....

Ireland is one of the worst places in Europe to retire right now

Interesting. Thanks. Went to source data and interestingly the US is ranked 19. Just above Slovenia.

 

[nuisance]

This is an interesting thread. Never really considered retiring abroad, but might consider going somewhere for 3 months with an eye on getting some exposure to the culture, and spending a little less than we would at home. DW and I did this once in Egypt where we rented a flat for a few months, took language lessons, and generally enjoyed working out where to buy groceries, cooking some of our food, eating out some, and seeing the sights.
Our standard of living was a bit lower than in the US, but it also cost less, and it was a great experience.

 

[Sojourning]

Aus_E, I was 60 and my wife was 53 when we moved to Canada. There were various factors that drove that decision.

One was pensions. Canada has two government pensions. One called CPP and another called OAS. CPP is based on employment contributions in Canada. OAS is based on residency in Canada afte age 18. To qualify for the maximum OAS you need 40 years residency. For each year less of residency you lose 1/40th. There is also a minimum residency requirement if you move to Canada, of 10 years. So at age 65, my wife will qualify for 12/40ths of the Canadian OAS pension if we are still domiciled here. Many Canadians who are expats and then return do not realize they will not get the full OAS. If you do the math, between age 18 and 65, you can only have been out of the country for 7 years and still get the full pension.

I don't know what the rules are in Australia but I'd suggest checking it out obviously to see if there is any advantage to you one way or another.

We were moving from the UK and there is around a 20-30% lower cost of living in Canada vs. the UK.

 

[flyingaway]

This is an interesting thread. Never really considered retiring abroad, but might consider going somewhere for 3 months with an eye on getting some exposure to the culture, and spending a little less than we would at home. DW and I did this once in Egypt where we rented a flat for a few months, took language lessons, and generally enjoyed working out where to buy groceries, cooking some of our food, eating out some, and seeing the sights.
Our standard of living was a bit lower than in the US, but it also cost less, and it was a great experience.

One has to sell the U.S. home or rent it out in order to make this slow travel financially affordable for many early retirees, I guess.

 

[Aus_E_Expat]

Sojourning - I know I will not qualify for an Australian pension. It is tested based on assets and income rather than length of residence and I will not qualify (unless I make some very bad investment decisions).

Australian heath care is universal regardless of income. There are some tricky residence rules about rebates for private health cover but I did something about that 15 years ago which should mean I qualify.

Of course, for people retiring overseas, you need to cover everything yourself.

 

[Sojourning]

Meadbh, that has to be read in the right perspective. It's primarily talking about an Irish retiree in Ireland, not someone from another country retiring there. I'm not saying it isn't relative, just that you have to interpret it accordingly.

For example, it talks about 'having the material means to live a comfortable life'. So it's saying the average Irishman may not have much income relative to the cost of living. That means nothing to LARS or anyone else from outside Ireland considering it as a retirement location. Access to good healthcare on the other hand would apply to anyone living there, wherever they came from.

What gets me when I read about people considering retiring to Ireland or the UK, is the weather. I don't know about Ireland but the other factor that gets me about the UK, is the culture. The negative aspects of the culture are numerous. I lived in the UK from 99 till early 2006. Much as there was that I liked, there was no way I wanted to continue living there. Cost of living is also higher. Basic numbers are UK and Ireland 92, Canada 82, USA 76, Australia (for Aus_E) 99. See here for a full list:
Cost of Living Index by Country 2015

Nuisance, you raise a point when you say, "Our standard of living was a bit lower than in the US, but it also cost less, and it was a great experience."

People often only look at 'cost of living' as per the link I just gave here. But there is also 'standard of living' and 'qualify of living' to consider along with the 'experience' that you also mention.

When people retire from say the UK to Spain and live in a near 100% expat enclave, they tend to be people who are not interested in local culture or the 'experience'. They go for the weather and the cost of living only. Frankly, I think they should stay home but I'm not in charge unfortunately.

Lower cost countries are lower cost for a reason. They generally are going to provide a lower standard of living in terms of infrastructure, choice of goods, healthcare, etc. etc. All kinds of things are not up to what you might be used to. You have to accept those differences or leave.

 

[Meadbh]

Meadbh, that has to be read in the right perspective. It's primarily talking about an Irish retiree in Ireland, not someone from another country retiring there. I'm not saying it isn't relative, just that you have to interpret it accordingly.

For example, it talks about 'having the material means to live a comfortable life'. So it's saying the average Irishman may not have much income relative to the cost of living. That means nothing to LARS or anyone else from outside Ireland considering it as a retirement location. Access to good healthcare on the other hand would apply to anyone living there, wherever they came from.

What gets me when I read about people considering retiring to Ireland or the UK, is the weather. I don't know about Ireland but the other factor that gets me about the UK, is the culture. The negative aspects of the culture are numerous. I lived in the UK from 99 till early 2006. Much as there was that I liked, there was no way I wanted to continue living there. Cost of living is also higher. Basic numbers are UK and Ireland 92, Canada 82, USA 76, Australia (for Aus_E) 99. See here for a full list:
Cost of Living Index by Country 2015.

Sojourning, I agree with you that retiring in Ireland (or anywhere else) as a lifelong resident is going to be a very different experience from moving there late in life, bringing one's finances and cultural baggage. As an Irish-Canadian living in Canada I have that option and have given it much thought. If I do return "home" it will mean trading a middle class lifestyle for a relatively modest one. Some of the frustrations that I felt while growing up in Ireland would still irk me. Of course there are aspects of life there that I miss. I feel that regular visits may be sufficient.

By the way, the Republic of Ireland is not part of the UK. Republics do not have monarchs.

 

[daylatedollarshort]

Daylate, what does you 'believe' you can live in the EU mean? Either you can or you can't. Does either one of you have a passport from an EU country? If so, you can and if not, you can't.

It means I personally don't know if we can since I haven't actually tried it yet and and I am not sure how the health care, hobby job income, taxes and other aspects would work.

I am not sure where we would move to. Just something we are thinking about. I get the currency fluctuations. If we moved, we wouldn't be on a tight enough budget for it to be a show stopper.

 

[Focus]

Read this article: http://tourismintelligence.ca/2006/11/14/is-your-destination-in-decline/

Really interesting article.

 

[Sunset]

What gets me when I read about people considering retiring to Ireland or the UK, is the weather. I don't know about Ireland but the other factor that gets me about the UK, is the culture. The negative aspects of the culture are numerous. I lived in the UK from 99 till early 2006. Much as there was that I liked, there was no way I wanted to continue living there.

I’ve certainly thought about retiring abroad, but this thread is making me think of lots of other choices like just taking long vacations instead.

I'm wondering could you elaborate on the negative aspects of the culture in the UK that you have mentioned ?

 

[Meadbh]

It means I personally don't know if we can since I haven't actually tried it yet and and I am not sure how the health care, hobby job income, taxes and other aspects would work.

I am not sure where we would move to. Just something we are thinking about. I get the currency fluctuations. If we moved, we wouldn't be on a tight enough budget for it to be a show stopper.

Far from "trying it", it seems that more research is required.

 

[Chuckanut]

I’ve certainly thought about retiring abroad, but this thread is making me think of lots of other choices like just taking long vacations instead.

Yep. I figure the same thing. In the past I have talked to people who often 'visit' the same city for 3-4 months year after year after year. They soon are recognized and the natives look forward to their return.

 

[flyingaway]

I plan to do a lot of travels when (and before) I retire. I hope to travel to every countries that I possibly could. I now travel to at least one new country each year, and will do more when my younger son goes to college this year. After my son gets out of college, my wife will retire and we will do slow travels to cover many countries each year. I only work less than 8 months each year. But I have no plan to retire to another country permanently.