Countries offering retirement visas

[eta2020]

Yeah a lot of European countries offer retirement visas but it sounds like if you wanted to buy a property, the tax laws could be draconian to navigate.

Less headaches staying the max 3 months at a time but it may not be easy to rent housing on favorable terms for only 3 months at a time.

I don't think so. No country can join European Union unless they allow free ownership of property.

That means anybody can buy house in any EU country.

Now to get residency you may need to demonstrate some income

 

[eta2020]

Taxation of foreign sourced income by the country you live in is very common. It stems from that country having primary taxation authority over your money. The US does this because of citizenship, almost all other countries do it on the basis of residence. There are sometimes some exclusions that depend on the exact nature of residence or whether you bring the income into the country, but if you are in a country with a tax treaty with the US expect to navigate the cross border tax rules to avoid double taxation.

US is exception to tax based on Citizenship instead of based on Residency. I don't know any other country that does that.

That is one thing I don't like about US Citizenship.

 

[nun]

Yeah a lot of European countries offer retirement visas but it sounds like if you wanted to buy a property, the tax laws could be draconian to navigate.

Less headaches staying the max 3 months at a time but it may not be easy to rent housing on favorable terms for only 3 months at a time.

Yes the exact nature of residence is crucial.....and of course benefits like health insurance often only come with a type of residence that will demand you pay more tax locally.

Countries like Thailand have visas that exempt a lot of foreign income from taxation, but you still have to pay US taxes and deal with the issues of living in a developing economy. Also, if you have money in US accounts you will have to deal with the increasingly restrictive rules that US investment firms have for foreign residents......it will probably be best to keep a US address in a state with no income tax.

 

[eta2020]

Countries like Thailand have visas that exempt a lot of foreign income from taxation, but you still have to pay US taxes and deal with the issues of living in a developing economy.

From travel experience to me it looks like it is no great life to retire in developing country. I would rather stay in US or retire in UK like Alan.

Looks like people do it to save money. But you get what you pay for. Yes we need to pay taxes to have good roads, public safety, street lighting at night etc etc and if I can get good deal in developed country then it really is good deal

No offense to people who like to live in Thailand. I guess it may be adventure for some but is not for me.

 

[daylatedollarshort]

I put 4K for our taxes because of our businesses and business retirement plan. It was expensive in the U.S. when we used a CPA, and I don't know if we could learn to do our taxes ourselves with the current set up for two different countries.

Between that and paying for Medicare it does make moving less financially attractive than it would seem at fist blush, at least for us if we continue to work part-time. Plus some countries have restrictions on working even if it just lap top type work not really taking a job away from a local.

 

[daylatedollarshort]

From travel experience to me it looks like it is no great life to retire in developing country. I would rather stay in US or retire in UK like Alan..

There are some EU locations in the Caribbean. Have you considered that as an option?

 

[M Paquette]

US is exception to tax based on Citizenship instead of based on Residency. I don't know any other country that does that.

That is one thing I don't like about US Citizenship.

The USA is in fine company , as Eritrea also collects international taxes based on citizenship. They also use fairly aggressive means to collect such taxes.

 

[explanade]

OK I just FIRE'd this year so I haven't done taxes without earned income yet.

What do you mean by paying for Medicare? Do you pay Medicare taxes on dividends, interest, cap gains, distributions?

 

[nun]

OK I just FIRE'd this year so I haven't done taxes without earned income yet.

What do you mean by paying for Medicare? Do you pay Medicare taxes on dividends, interest, cap gains, distributions?

You don't pay Medicare taxes on the things you mention.....but you do have to choose whether or not to pay Medicare Part B when you reach 65.

 

[explanade]

Medicare Advantage or those supplementary plans?

 

[Alan]

Hmm, a shame about Australia taxing people on retirement income from assets held outside of Oz.

My brother was complaining about this to me this summer when we were staying with them. He is 57 and receiving a private pension from the UK, but is a very high earner and in the top Australian tax bracket (47%?). When I asked him if he could have let the UK pension grow until he retired and was in a much lower bracket, rather than taking it when he did at 55, he said he could have let it grow but wanted to get his hands on it in case anything bad happened. (The UK has the equivalent of PBGC so losing it isn't really a big concern).

 

[kramer]

From travel experience to me it looks like it is no great life to retire in developing country. I would rather stay in US or retire in UK like Alan.

Looks like people do it to save money. But you get what you pay for. Yes we need to pay taxes to have good roads, public safety, street lighting at night etc etc and if I can get good deal in developed country then it really is good deal

No offense to people who like to live in Thailand. I guess it may be adventure for some but is not for me.

Having lived in four developing countries, I think I can provide some perspective on this. People retire to developing countries for all sorts of reasons. And one reason many do it is for a lower cost of living but this is just one reason among many. In fact, I count quite a few multi-millionaire friends in my social group here in the Philippines. But I have friends clustered around both ends of the spectrum -- even within the same social group. It is one of the fun things about living abroad.

An American friend is on his way to my place right now -- he is living on around $26,000 per year (retired military) although that will go up to about $34,000 when he turns 62 in a year. And he only has a high school education. I think very highly of him and he is one of the reasons I originally stayed here. Another close friend just flew in this morning, he has a fabulously successful business in the USA that only requires his attention half the year. So he lives here half time, has well over $3 million assets invested and is raking in money from his part-time business. Still, he plans to retire in the next couple of years and just end the business (it's hard to sell). Another close friend was president of two different universities, one in the USA and one in Europe -- and he is a silent partner in some businesses here. But he lives near me in a small-ish rented apartment that has a great location and he completely remodeled. Except for his new SUV, one would never really know that he had that much money. My American neighbor is a chiropractor but his American mom regularly sends him money to keep his young family afloat. I play a regular game of cards every weekend pool-side in the mansion of another friend who lives here full-time.

What I learned early on with living abroad is that there are all types. Some are running or escaping from something back home. Some came for the lower cost of living. Some come for the adventure and to try something different. Some come for a better climate or for beach/island living or to find a younger woman to start another life with. Some come to establish a base for travel. All kinds of reasons -- but definitely not always or even mostly for a lower cost of living.

 

[braumeister]

Having lived in four developing countries, I think I can provide some perspective on this.
...
All kinds of reasons -- but definitely not always or even mostly for a lower cost of living.

Great summary, kramer.
And perfectly in tune with the American expats I knew when I lived in Brazil.

 

[eta2020]

Some come for a better climate or for beach/island living or to find a younger woman to start another life with.

I like this one

 

[papadad111]

Great summary, kramer.

And perfectly in tune with the American expats I knew when I lived in Brazil.

+2

Great post Kramer. Consistent with the expats that I've encountered living across 5 developing economies since late 1980's. Most do it for way more than financial reasons. That may be an incremental motivator but most often not the primary reason someone sets out to live in emerging environments in retirement. At least half that I know do it for the sense of adventure and/or desire for younger spouse and re-booting their life.

 

[bmcgonig]

Kramer, may I ask where you are in the Phillipines?


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[Rob]

Kramer, that truly was an excellent summary of the reasons people retire abroad. Personally, it was the opposite for me. I was overseas for 42 years as an international school teacher living in 12 countries, but in the process met numerous people who retired in the countries I was in and for the same reasons you listed. In my case, I actually wanted to explore my own country, the US, at the age of 68, the year I returned to the States.

I'm not done exploring my own country yet. I still have to see the Grand Canyon, Yellowstone, and just about every other sight most of us have seen but I haven't. I'll probably re-settle overseas. It's easy to do, and that option is always there if your mindset is a citizen of the world and you're used to doing that anyway.

Rob

 

[kramer]

bcmgonic: PM sent!

I am glad that other expats have had similar experiences abroad compared to what I described.

 

[eta2020]

Kramer, that truly was an excellent summary of the reasons people retire abroad. Personally, it was the opposite for me. I was overseas for 42 years as an international school teacher living in 12 countries, but in the process met numerous people who retired in the countries I was in and for the same reasons you listed. In my case, I actually wanted to explore my own country, the US, at the age of 68, the year I returned to the States.

I'm not done exploring my own country yet. I still have to see the Grand Canyon, Yellowstone, and just about every other sight most of us have seen but I haven't. I'll probably re-settle overseas. It's easy to do, and that option is always there if your mindset is a citizen of the world and you're used to doing that anyway.

Rob

Rob,
Can you tell us which one of the 12 countries you lived in was your favorite and why so.....

 

[Rob]

I lived and taught at international schools in wartime Vietnam (was evacuated at the fall in 1975), Thailand, Saudi Arabia, Iran (just before Shah overthrown), Korea, Venezuela, Liberia, Egypt, Jordan, Cambodia, and Singapore. I included teaching in the US also.

I was in Singapore for 25 years, but only teaching 20 of those years while calling it home. I maintained my home there and traveled to Egypt and Jordan to teach. I returned to Singapore last year only to decide to not retire there but live in the States. My own country is a foreign one for me, and I always have the option to return overseas again. Travel is always available.

I would not recommend retiring in any of those countries, although Singapore was home for me, and I was a permanent resident there. The housing situation can be expensive, and it is very densely populated, quite different from the Singapore I knew in 1988. However, I traveled summers in Malaysia. I even got the Malaysian retirement visa, called MM2H. I gave that up, knowing that it is easy to get later on. I gave it up mostly because I disliked the requirement of having US$50,000 in a local bank. Next time I would go there on the pension scheme. Also, being a dog lover, Malaysia is not the place to be. I visited Thailand, and met so many expats retired there, and they love it. That's always a possibility in the future for at least part of the year.

Rob

 

[papadad111]

I recently learned that Cambodia is offering an investors/retiree visa which requires approx 75k usd. I will search for more details and update this post.

Cambodia is a fast developing nation and while my opinion is that it is not a place for a beginner expat retiree- traveler it does offer some interesting experienced and low cost of living.

 

[papadad111]

Rob. Pm sent to you. Thanks sir.

 

[Sojourning]

This thread might be of interest to some people. If you are talking about visas, then presumably you have already considered the initial question, 'should you retire overseas'.
http://www.early-retirement.org/forums/f29/should-you-retire-overseas-75792.html

 

[brett]

Portugal has some very attractive offers for retirees who are willing to purchase real estate (I think 200K euros). My understanding is that new residents under this program will not pay any income tax on retirement income for a period of 15 years.

 

[Grammymissy]

We are US citizens who have retired to Portugal, and purchased a house recently. The retirement VISA that is applied for in the states gives you 4 months to settle in. Then residency permits are applied for here, being Non EU, a 1 year is issued, and then 2 Two years, followed by Five year permits after that. One can take a Portuguese Test, reading, writing and speaking, after 5 years, to apply for permanent residency . We will still have to file and pay US taxes, and as residents of Portugal we will have to file annually here with Portugal IRS. We are applying for the Non habitual resident tax status, which provides 10 years tax credit, so taxes here will be minimal, depending on dividends collected, since pension will be tax free . Also, Portugal does have a tax treaty with the U.S. Portugal does offer a Golden VISA also. English is the second language here, and the Portuguese are the nicest people we have ever met in our travels, they try hard to understand if they can. We do have to carry private health insurance, however it is a complete plan, health, vision and dental at a third of the cost of just a health plan in the states. We did spend a substantial amount of time researching this move. The weather here is amazing compared to Pennsylvania and New York, the food is so fresh and delicious! We wanted to improve the quality of our lives, and we have!


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