Countries offering retirement visas

[Alan]

It’s a minimum 1 year visa right?

So stay 5-6 months in one country and then move on to another country, try to get a 1 year visa there or just maximize the 90 day Schengen limit?

The visa we had was strange, we could stay 6 months but not contiguous, 3 months at a time. It was an ESTA and free, so no need to send off passport to Australian embassy. Worked fine for us as we had a week in Vanuatu out of Brisbane, returning and resetting the clock on the visa. We also took a 2 week cruise from Sydney to New Zealand. The visa was on our British passport even though we flew out from the USA where we were living at the time.

 

[explanade]

Another article on retiring abroad. Brief summaries of various topics but it has a lot of links, not all of which I've tracked down.

It did have this section that perked my interest:

In Italy, small towns have been selling homes for one euro to attract retirees, while the country’s southern portion is enticing them with a seven-percent flat tax rate incentive. This overrides Italy’s national income tax, which ranges from a whopping 23 to 43 percent. Greece has also been working to secure its own seven-percent flat tax rate for pensioners from abroad.

https://www.cntraveler.com/story/how-to-retire-abroad

It did have a link to AetnaInternational health insurance.

So I tried to get a quote (beware, you have to give up your contact info and I've gotten a couple of pestering emails within 24 hours).

I plugged in my birthdate and chose France as the country I'd be living in.

$4 million limit with $1000 deductible, either 80% or 100% coverage on a lot of items like CT scans.

So either $1100 a month or $1362 a month.

Talk about sticker shock.

An American on Medicare or even an ACA plan would really have to want to live overseas to pay those kinds of premiums, which presumably wouldn't have the tax benefits that ACA plans have.

 

[Letj]

Right you are. I had my heart set on moving to Spain, a country I know well. At first, it seemed like a no-brainer: higher quality of life and lower cost of living. However, the deeper I looked, the riskier it seemed financially. A tax attorney there confirmed the worst, adding that many expats move to Spain oblivious of what will hit them.

To mention just a few issues: Spain's tax rates are essentially double the U.S.'s. The country taxes Roth 401k/IRA withdrawals. It forces you to file an "information only" annual form detailing all of your worldwide assets, and it imposes a significant wealth tax on those assets (although Madrid currently gives you a pass). It is the very opposite of retirement friendly, unlike neighboring Portugal.

Agree totally. I had my sights set on Portugal or Spain. It’s quite onerous in Spain and it’s quite a bit in Portugal after 10 years. Portugal also taxes Roth IRAs so the Roth would be included in the 10%.

 

[Dd852]

Another article on retiring abroad. Brief summaries of various topics but it has a lot of links, not all of which I've tracked down.

It did have this section that perked my interest:



https://www.cntraveler.com/story/how-to-retire-abroad

It did have a link to AetnaInternational health insurance.

So I tried to get a quote (beware, you have to give up your contact info and I've gotten a couple of pestering emails within 24 hours).

I plugged in my birthdate and chose France as the country I'd be living in.

$4 million limit with $1000 deductible, either 80% or 100% coverage on a lot of items like CT scans.

So either $1100 a month or $1362 a month.

Talk about sticker shock.

An American on Medicare or even an ACA plan would really have to want to live overseas to pay those kinds of premiums, which presumably wouldn't have the tax benefits that ACA plans have.

Insurance will cost you! If you can settle in a place where you have national heath as basic, that’s good. We do have NHS in the UK but we’ve supplemented with an international gold plated coverage from BUPA （which gives us full coverage everywhere in the world except for the US, where it is emergency only) and it is by far our largest monthly expense. But it has proved its value for sure and it would be the last thing I’d ever cut back on.

 

[explanade]

How do you get NHS benefits?

Did you acquire citizenship or something like permanent residency?

But it sounds like you have to spend a lot for your own insurance.

 

[Alan]

How do you get NHS benefits?

Did you acquire citizenship or something like permanent residency?

But it sounds like you have to spend a lot for your own insurance.

Once you get a visa to stay you have to pay about $1k per year as part of the visa which gives full NHS coverage. Once you get the equivalent of a greencard to stay indefinitely it is included at no additional cost.

We are in our mid sixties and pay £120/month for the 2 of us for private health insurance including vision and dental. The coverage is worldwide including the USA emergency care. However it is only if there is a 6 week delay on the NHS, so for example my heart AFib care and ablation surgery was done on the NHS, plus the removal and testing of suspicious moles, but this year I went private for my knee surgery to repair a torn cartilage. My wife went private on her first cataract surgery but the 2nd was more complicated and needed a toric lens so the surgeon asked her if he could do it on the NHS as it would be more expensive since the NHS would cover the special lens and insurance would not. As she was on his list already then no delay.

 

[Kroeran]

How are foreigners able to open US based accounts when I have heard it is so hard to do once you are an expat ? Yes, I know having a US based address helps in some cases for expats, but how can foreigners do it without SS number ? Maybe money talks based on the amount for those foreigners, not that I am suggesting anything.

Pretty routine for Canadian snowbirds with no SSN to have accounts in US.

 

[ItDontMeanAThing]

And in Portugal, you are considered a tax resident if you spend more than 183 days per year in the country (there are other criteria, but this is the clearest).

Commonly believed, but not quite true. The law says in Article 16 of CIRS (translated by Google Translate):
"1 - People who reside in Portuguese territory are those who, in the year to which their income relates:
a) There have been more than 183 days, consecutive or interpolated, in any 12-month period beginning or ending in the year in question;
b) Having stayed for a shorter period of time, there, on any given day of the period referred to in the preceding paragraph, have housing under conditions that suggest that they currently intend to maintain and occupy it as their habitual residence;"
...
"3 - Persons who fulfill the conditions provided for in paragraphs a) or b) of paragraph 1 become residents from the first day of the period of stay in Portuguese territory, except when they have been resident there on any day of the previous year, in which case they consider themselves to be residents in this territory since the first day of the year in which any of the conditions provided for in paragraph 1 are met."

http://info.portaldasfinancas.gov.p...codigos_tributarios/cirs_rep/Pages/irs16.aspx

 

[explanade]

So if you own property or even lease one, you could be liable for income taxes?

 

[ItDontMeanAThing]

So if you own property or even lease one, you could be liable for income taxes?

Not if you spend less than 183 days in a 12 month period in Portugal AND you maintain a permanent residence outside the country.

 

[rt-texas]

Portugal also has, think they still have it, something called Non-habitual resident tax treatment for 10 years, but you had to apply. IIRC no taxes on pension income and cap gains from another country that Portugal has tax treaty with. Haven't check it recently since lock downs started.

 

[ItDontMeanAThing]

Portugal also has, think they still have it, something called Non-habitual resident tax treatment for 10 years, but you had to apply. IIRC no taxes on pension income and cap gains from another country that Portugal has tax treaty with. Haven't check it recently since lock downs started.

NHR is for 2 types of people who have not been tax residents in Portugal for the previous 5 years. First are those Portugal classifies as 'highly skilled workers'. They have their own set of tax incentives. Second are those who come to Portugal with a D7 visa (own income, be it pensions, investments, or self-employment). The following info is for this second group.

Dividends & Interest are tax exempt.
Public pensions (from Govt) are tax exempt
Beginning last year, Social Security has a 10% tax. Before it was tax exempt.

Traditional IRAs - 15% of sales/withdrawals are taxed, but I won't know the rate until my tax preparer finishes my 2020 taxes.
Traditional IRAs - If you take out the same amount at the same frequency, e.g. monthly, it's 'long life income', which Portugal treats as a pension. So it would be taxed 10%
Roth IRAs - how they're taxed depends on who you talk to...
All IRAs - Unrealized investment gains, e.g., automatically reinvested dividends, are not taxed.

 

[rt-texas]

NHR is for 2 types of people who have not been tax residents in Portugal for the previous 5 years. First are those Portugal classifies as 'highly skilled workers'. They have their own set of tax incentives. Second are those who come to Portugal with a D7 visa (own income, be it pensions, investments, or self-employment). The following info is for this second group.

Dividends & Interest are tax exempt.
Public pensions (from Govt) are tax exempt
Beginning last year, Social Security has a 10% tax. Before it was tax exempt.

Traditional IRAs - 15% of sales/withdrawals are taxed, but I won't know the rate until my tax preparer finishes my 2020 taxes.
Traditional IRAs - If you take out the same amount at the same frequency, e.g. monthly, it's 'long life income', which Portugal treats as a pension. So it would be taxed 10%
Roth IRAs - how they're taxed depends on who you talk to...
All IRAs - Unrealized investment gains, e.g., automatically reinvested dividends, are not taxed.

Thank you sir for this. Intended to come to Portugal last year but...

Worked over there many, many years ago and really liked it. Wanted to take a longer term test drive and see if the vibe still resonated and get the wife's take.

 

[Thomas3857]

NHR is for 2 types of people who have not been tax residents in Portugal for the previous 5 years. First are those Portugal classifies as 'highly skilled workers'. They have their own set of tax incentives. Second are those who come to Portugal with a D7 visa (own income, be it pensions, investments, or self-employment). The following info is for this second group.

Dividends & Interest are tax exempt.
Public pensions (from Govt) are tax exempt
Beginning last year, Social Security has a 10% tax. Before it was tax exempt.

Traditional IRAs - 15% of sales/withdrawals are taxed, but I won't know the rate until my tax preparer finishes my 2020 taxes.
Traditional IRAs - If you take out the same amount at the same frequency, e.g. monthly, it's 'long life income', which Portugal treats as a pension. So it would be taxed 10%
Roth IRAs - how they're taxed depends on who you talk to...
All IRAs - Unrealized investment gains, e.g., automatically reinvested dividends, are not taxed.

Interesting thread. We had set our sights on Spain (Valencia) but due in large part to tax treatment, especially wealth tax, have shifted to Portugal but have never visited. Been to Spain a number of times and had planned on a Portugal scouting trip last year but obviously that was delayed. Hope to get there sometime this winter. Thanks for the info

 

[Thomas3857]

Right you are. I had my heart set on moving to Spain, a country I know well. At first, it seemed like a no-brainer: higher quality of life and lower cost of living. However, the deeper I looked, the riskier it seemed financially. A tax attorney there confirmed the worst, adding that many expats move to Spain oblivious of what will hit them.

To mention just a few issues: Spain's tax rates are essentially double the U.S.'s. The country taxes Roth 401k/IRA withdrawals. It forces you to file an "information only" annual form detailing all of your worldwide assets, and it imposes a significant wealth tax on those assets (although Madrid currently gives you a pass). It is the very opposite of retirement friendly, unlike neighboring Portugal.

We are in the same exact position. Had our sights set on Spain (Valencia) after visiting Spain a number of times but after researching tax issues, especially wealth tax, our focus has shifted to Portugal.

 

[Focus]

We are in the same exact position. Had our sights set on Spain (Valencia) after visiting Spain a number of times but after researching tax issues, especially wealth tax, our focus has shifted to Portugal.

Smart to check it out in person before packing your bags. Spain and Portugal may seem like Iberian Peninsula siblings, but their cultures are quite different. Of course, if you plan to socialize mainly with expats, it may not matter much.

 

[explanade]

Does UK have some kind of retirement visa?

Thing about UK is that it doesn't tax income from outside the UK right?

So all those Russian oligarchs, oil sheikhs and various other kleptocrats can buy expensive apartments in London and live well but they're not paying a lot of UK income taxes?

 

[Alan]

Does UK have some kind of retirement visa?

Thing about UK is that it doesn't tax income from outside the UK right?

So all those Russian oligarchs, oil sheikhs and various other kleptocrats can buy expensive apartments in London and live well but they're not paying a lot of UK income taxes?

The UK taxes are on worldwide income so no easy way of escaping foreign taxes here. There used to be a pretty liberal approach to non-domicile taxation where you could only pay taxes on the money you “remitted” to the UK but those rules have tightened up significantly. To be non domiciled you have to prove that your real home is overseas and pass the statutory residence test. We live in the UK and have no home in the USA and minimal family ties there so we are domiciled in the UK and pay tax on our worldwide income including our income from the USA. Being US citizens we also pay US taxes on our worldwide income and since the US-UK tax treaty states that the UK is the primary taxing authority for all of our income we take Foreign Tax Credits for the taxes paid to the UK (IRS form 1116) to reduce our US taxes.

https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt

 

[ItDontMeanAThing]

Interesting thread. We had set our sights on Spain (Valencia) but due in large part to tax treatment, especially wealth tax, have shifted to Portugal but have never visited. Been to Spain a number of times and had planned on a Portugal scouting trip last year but obviously that was delayed. Hope to get there sometime this winter. Thanks for the info

You're welcome. Taxes was one of the reasons I ruled out Spain. The others were the ridiculous difficulty of obtaining a visa[1], the less than friendly people, no coastal area with a city that had: 1) A climate like that found between Santa Barbara and San Luis Obispo California, and 2) An international airport within a 2hr ride on public transport that was served by major airlines offering flights all over Europe and across the Atlantic.

[1] I blogged about it in detail https://fourletternerd.wordpress.com/2016/11/21/my-next-country/

 

[jim584672]

Svalbard has no visa requirements, anyone can come in and stay. 78 degrees north, 4 months of straight night in the winter and 4 months of day in the summer. Polar bears roam so you are required to have a gun if you are outside the town. Don't know about the taxes.

 

[Letj]

List of countries offering retirement visas?

Svalbard has no visa requirements, anyone can come in and stay. 78 degrees north, 4 months of straight night in the winter and 4 months of day in the summer. Polar bears roam so you are required to have a gun if you are outside the town. Don't know about the taxes.

[emoji23]With a population of 3,000, there’s a lot to keep a retiree busy especially fighting off polar bears.

 

[ItDontMeanAThing]

Traditional IRAs - 15% of sales/withdrawals are taxed, but I won't know the rate until my tax preparer finishes my 2020 taxes.
Traditional IRAs - If you take out the same amount at the same frequency, e.g. monthly, it's 'long life income', which Portugal treats as a pension. So it would be taxed 10%

D'oh!
I made a mistake. Sorry about that. Didn't realize it until my tax preparer sent a copy of my 2020 Portugal tax return.

The IRA tax info above is for those without NHR status. With NHR, sales/withdrawals from Traditional IRAs are tax exempt.

 

[ItDontMeanAThing]

Thank you sir for this.

You're welcome.Did youseethe post where I corrected the error I made in the post you quoted. It's at https://www.early-retirement.org/fo...ng-retirement-visas-23742-19.html#post2603899

 

[Markola]

List of countries offering retirement visas?

Svalbard has no visa requirements, anyone can come in and stay. 78 degrees north, 4 months of straight night in the winter and 4 months of day in the summer. Polar bears roam so you are required to have a gun if you are outside the town. Don't know about the taxes.

Thanks but we already have most of that ambience in Minnesota and I’d gladly pay the taxes rather than have to worry about polar bears while I’m walking over to Ace Hardware.

 

[rt-texas]

You're welcome.Did youseethe post where I corrected the error I made in the post you quoted. It's at https://www.early-retirement.org/fo...ng-retirement-visas-23742-19.html#post2603899

Yes I did. Thanks again.