retirement Outside the US More Rhetoric than Reality

[MasterBlaster]

Retirement Outside United States More Rhetoric than Reality - Yahoo! Finance

However, despite lots of talk about moving outside the country to retire, there is little compelling evidence that Americans are doing so in large numbers. The U.S. State Department estimates there are 6.3 million Americans living outside the country. A spokeswoman says this is a soft estimate based on an interpretation of voluntary and unaudited data provided by some Americans. The agency stopped producing detailed estimates more than a decade ago. There are firmer traveler numbers that find roughly 65 million of us travel outside the country each year. And a third of all Americans--110 million--have passports

 

[H2ODude]

6.3 million may be "living outside the country" but how many of them are retired? I don't see anything to indicate that. I don't know anyone who's retired living abroad (well, other than on boards like this!). But I do have a son and a daughter both living abroad as far as tax purposes. So they're in the 6.3 but not retired.

 

[nun]

The most interesting figure is the roughly 500,000 SS checks that get delivered abroad. 6.5 Million Americans live outside the US, but the number of SS checks gives the level of US expat retirees.

I've always be dubious about the articles that promote the idea of Americans retiring abroad. They are mostly just advertising for books and how to guides. The complications of taxation, investments and health insurance often discourage many that think about it.

because of geography Canada and Mexico will always be the most popular foreign places to retire, but, IMHO the number of naturalized Americans leaving the US to retire is going to increase if the costs of US healthcare continue to grow. For myself I don't see American as a good place to grow old. It's good as a young healthy person looking for opportunity, but I will retire back to the UK as I think it's better to grow old there.......NHS being a big factor.

 

[Gone4Good]

Only about 30% of all Americans even have passports - and that amount basically doubled once they started requiring passports to enter Canada. With so few people even expressing an interest in visiting foreign destinations, only the very rare American wants to actually live somewhere else.

No surprise here, really.

 

[jebmke]

Only about 30% of all Americans even have passports

And half of those probably don't know where they are.

 

[harley]

And half of those probably don't know where they are.

Much less where their passports are.

 

[rodi]

I agree with Nun about healthcare being a reason to retire elsewhere... but the taxation situation scaring a lot of people off. Heck - the thread on that here scared the poop out of me... We'd had that as a possibility in our head. (hubby and kids are dual citizens, and I'm working on mine.) I'd done enough research to know that if we lived in southern Italy we could buy into the healthcare system - even as retirees. (Northern areas, not so much... ) And that cost is roughly half what insurance will run here. (And the cost of living is less in the south - because there are no jobs... which doesn't affect us since we'll be retired.)

But a lot of people want to be surrounded by the familiar when they retire. If you don't have family/friends in the place you're retiring too - it can be stressful. And who wants stress in retirement. We have family in Italy, so that helps.

It's surprising how many people I know who've never left their home state - let alone the country. These are people who will never retire abroad.

 

[MasterBlaster]

Per the US tax issue of Expats. You are indeed taxed on your wholewide income. But you are given credit for any foreign taxes paid.

You don't have to pay full income taxes in Italy (for example) as well as the US. At most you'll just pay what you normally would in the US.

 

[rodi]

Per the US tax issue of Expats. You are indeed taxed on your wholewide income. But you are given credity for any foreign taxes paid.

You don't have to pay full income taxes in Italy (for example) as well as the US. At most you'll just pay what you normally would in the US.

I understand that. It's the other reporting issues that concern me. I learned about them from this thread.

http://www.early-retirement.org/forums/f28/taxes-and-the-american-citizen-61046.html

It's the FATCA and FBAR things I need to research more.
(And from what I read FBAR might be better named FUBAR. LOL)

 

[nun]

Per the US tax issue of Expats. You are indeed taxed on your wholewide income. But you are given credit for any foreign taxes paid.

You don't have to pay full income taxes in Italy (for example) as well as the US. At most you'll just pay what you normally would in the US.

Double taxation treaties generally mean that your tax bill will be the same as the greater of the two countries that have signed the treaty. You only end up paying more tax in the case where a tax free investment is not recognized by one of the countries. However, the burden and cost of compliance and the fines that the US imposes for incorrect filing of forms like FBAR and FATCA make US expat taxation a mine field. Combine that with the severe restrictions that the US expat has on offshore investments and the situation can quickly become complex, scary and expensive. Careful planning prior to moving abroad can mitigate the issues, but it takes a lot of research and a willingness to read some pretty dry tax and treaty documents unless you want to pay thousands of dollars for professional advice.

 

[tuixiu]

I've always be dubious about the articles that promote the idea of Americans retiring abroad. They are mostly just advertising for books and how to guides.

Yup, or real estate.

 

[james7]

Originally Posted by nun
I've always be dubious about the articles that promote the idea of Americans retiring abroad. They are mostly just advertising for books and how to guides.

Yup, or real estate.

And don't forget outrageously expensive seminars with real live expat Americans telling you how wonderful life is in that overseas country that they are trying to sell you on.

 

[marko]

If people can't find the US on a map, how will they know when they're out of the country? Oh, yeah... People will not be speaking English...oh wait!...they'll know they're in a foreign country when people speak perfect English.

 

[ejman]

If people can't find the US on a map, how will they know when they're out of the country? Oh, yeah... People will not be speaking English...oh wait!...they'll know they're in a foreign country when people speak perfect English.

Actually, you'll know you are in a foreign country when everybody there seems to need a hearing aid because they don't understand what you are saying until you yell at them

 

[Finance Dave]

I certainly have no issue with people wanting to retire outside the US, but I could never do it. All of the best parts of life for me are here in the US. I love NFL football...no good watching Monday Night Football at 2 AM in the UK. I am a car enthusiast, and own two musclecars...not much of a following of cars in Mexico or Costa Rica. And the microbrew scene in the US is blossoming...no way I'd leave that! I'm also a hobbyist woodworker, and I know many countries where lumber is so expensive that it's impossible to afford the hobby....not to mention in some countries I'd have to buy $20,000 worth of new tools to plug into their outlets and run on 220V power.

I like visiting other countries (went to Germany last year), but as far as a permanent thing...I'm staying here!

 

[ShortInSeattle]

I've always be dubious about the articles that promote the idea of Americans retiring abroad. They are mostly just advertising for books and how to guides. The complications of taxation, investments and health insurance often discourage many that think about it.
.

We're still along ways from retirement, but we're slowly shifting away from the idea of retiring overseas. Realizing that we love our home, community, and friends, we're thinking about 6 months travel, 6 months at home alternating. Best of both!

 

[nun]

We're still along ways from retirement, but we're slowly shifting away from the idea of retiring overseas. Realizing that we love our home, community, and friends, we're thinking about 6 months travel, 6 months at home alternating. Best of both!

Financial considerations should not be top of the list when deciding where to retire. IMHO, family, friends and loving where you live should come first. They'll always be a small number of adventurers who love travel and are really excited to retire abroad, but unless you are really committed to living outside the US it's not the way to go.

In my case the US has been a 25 year temporary thing. I may have got married, divorced, bought houses and picked up US citizenship, but home is still the UK and my plan is to return. Of course I've been saying that for 25 years.

 

[Ed_The_Gypsy]

Today, I don't give a r*t's *ss where I retire. (DW has other ideas which will control what we do.) I just do not want to end up destitute. I am not sanguine about my prospects. If I am lucky, I will be dead first.

 

[W2R]

Today, I don't give a r*t's *ss where I retire. (DW has other ideas which will control what we do.) I just do not want to end up destitute. I am not sanguine about my prospects. If I am lucky, I will be dead first.

I feel confident that you can and will improve your prospects, no matter how grim they seem right now. It may not be easy, but then I get the sense that you have accomplished quite a few things in your life that weren't easy. Retirement is a goal worthy of great effort.

Back to a general comment on the topic at hand, the budgets posted in the forum by expats often amaze me. While individual budget items may be markedly lower, it seems like few if any of them are living on less for their overall retirement expenses than the median income of working people in many parts of the US. I guess they feel they need more than the median lifestyle here, or perhaps reasons other than frugal living contributed to the decision.

 

[Ed_The_Gypsy]

I feel confident that you can and will improve your prospects, no matter how grim they seem right now.

I am sure you are right. Still, I need to keep turning up Monday mornings for quite a while yet.

Back to a general comment on the topic at hand, the budgets posted in the forum by expats often amaze me. While individual budget items may be markedly lower, it seems like few if any of them are living on less for their overall retirement expenses than the median income of working people in many parts of the US. I guess they feel they need more than the median lifestyle here, or perhaps reasons other than frugal living contributed to the decision.

Interesting. I just checked. Our income (at a 3% SWR) will be less than the median of our state of residence, but probably in line with the outlying area where we live. I have to start looking for trailer parks.

 

[W2R]

Interesting. I just checked. Our income (at a 3% SWR) will be less than the median of our state of residence, but probably in line with the outlying area where we live. I have to start looking for trailer parks.

Median per capita income in Springfield, Missouri is listed at census.gov as $20K, and median household income is listed as $33K. Those include working people, too. For a retiree, often SS can help and there is no longer any need to save for retirement so less $ is needed IMO.

And, there are many other midwestern and southern locations that are as cheap or cheaper from which to choose, if one does not prefer retiring abroad.

 

[Ed_The_Gypsy]

We have lived in the South before. We could do it again. Living in a third-world country (my amigo calls it two-and-a-half world) today may make DW a little more flexible when the time comes.

 

[mortal]

My main reason for moving abroad would be related to the insane cost of private health insurance in the united states for someone with my 'pre-existing condition'.

On the other hand, the costs of living in British columbia (where I've considered moving) are equally insane, so it comes out a wash financially.

I will say that in my travels to the pacific north west I've really taken a liking to the area. Were it not for family, I would not live in the south. The climate, job market, culture, etc seem more agreeable elsewhere, but that could just be 'the grass is greener' talking.

 

[haha]

We have lived in the South before. We could do it again. Living in a third-world country (my amigo calls it two-and-a-half world) today may make DW a little more flexible when the time comes.

Taker her to Niger or Chad for a spell; that could help too.

 

[obgyn65]

When I retire, I plan to spend some time in Western Europe (where I have a condo) and some time in Central America for medical mission work. However, I am still not sure how best I can take advantage of EU citizenship as far as healthcare insurance is concerned. In my case, living abroad when I FIRE is more reality than rhetoric.