The Pros and Cons of Retiring Abroad

From The Week,

After working as an environmental engineer for nearly 40 years, Ann Kuffner had had enough of corporate politics. She and her husband, Michael Brunette, who owned a contracting business, were overworked and burned out.

"We made good money but worked like dogs. We had little free time for family, friends, or hobbies," says Kuffner, 68, via email from her home in San Miguel de Allende, Mexico. "Once we figured out that we could retire early due to the low cost of living overseas, we took a risk and went for it."

While still in their 50s, the couple left California and retired to Belize in 2008, where they pursued their passion for scuba diving and other water sports. They decided to relocate to Mexico last year because they wanted more cultural stimulation and Kuffner says the health care in Belize was not adequate for people their age (Brunette is 69).

The couple is among a growing segment of Americans opting to retire abroad. As of April 2019, the Social Security Administration was sending 685,000 payments to beneficiaries overseas — a 40 percent increase over the past 10 years — but that's likely just the tip of the iceberg.

"Most people continue to bank in the U.S. and have their Social Security checks deposited at home, even if they themselves are physically abroad," says Jennifer Stevens, executive director of International Living, a website and publication that advises people on living, working, and retiring overseas.

It's impossible to know exactly how many people retire abroad, but Stevens — who has been at International Living for 23 years — says the numbers are increasing. And not just for Baby Boomers or those who retire completely.

"We're definitely seeing more people retiring part-time abroad, in part, because they want the flexibility, and also because they have older parents they need to attend to," Stevens says. "The other trend we're seeing is people retiring earlier. People are saying, 'I'm not going to wait until I'm 65; I hate my job. My accountant is saying I have to stick it out for another 8 years. No, I don't. I'm just going to retire now and go overseas.'"

In many of the hot retirement spots around the world, the cost of living is substantially lower. Food, housing, and domestic help are often cheaper. Plus, many other countries boast excellent health care at a fraction of the costs found in the U.S., which makes retiring abroad sound awfully appealing. But how is it done? Can you really just pack up and move to a different country?

Looking at a globe and choosing where you want to retire can be overwhelming, particularly if you've not traveled extensively. Stevens recommends making a list of priorities, such as proximity to the U.S., language, and climate. The dollar will buy an extremely high standard of living in southeast Asia, for example, but it's far away and can be scorchingly hot.

"The first order of business is to profile yourself and be really honest about it," Stevens says. "If speaking English is important, if you do not under any circumstances want to learn a new language, that needs to be on your list."

Next, do your research. Look at published lists of retirement destinations and match them to your priorities. Go online, but be mindful of the sources you use. A country's tourism site is naturally going to give a slanted view. Stevens recommends joining expat Facebook groups, where you'll get honest information and can ask questions.

You'll also want to visit the U.S. State Department's website, which has information on the legal logistics of retiring abroad. Each country has its own visa requirements, which can be found through their embassy or consulate's website. Some countries have a special visa to encourage foreigners to settle. For example, Malaysia's My Second Home Program offers 10-year visas for individuals over 50 who have at least $84,000 in liquid savings and a monthly offshore income of $2,400.

When you've narrowed your choices down, hop on a plane.

"Go and check out the places that are on your short list, but don't just go for a week," Stevens says. "Go for a month or two or three and see if you like living there. You may be surprised that the place that intellectually checks all your boxes, doesn't speak to your heart." She adds that one inexpensive way to explore is through house-sitting.

When Chip Stites, 72, and his wife Shonna Kelso, 59, decided to retire overseas, they visited three of the nine countries on their short-list, and settled on Italy in 2015.

"We have other connections to Spain and France but we loved Italy" writes Stites from his home in Reiti, about 90 minutes outside Rome. "The pace of life here, the Italian love of living, a different way of thinking, and living in a culture that is more than 3,000 years old is incredibly appealing to us."

Stites, who spent 40 years as a certified financial planner, notes that there are downsides to such a dramatic move. As much as he loves Italy, he says dealing with the bureaucracy is tough, and that he had to learn new ways to do basic functions like making a phone call and drying clothes without a dryer.

"Retiring overseas isn't for everybody," cautions Stevens. "No place is America-light. If you are looking for a place that's just like where you live now, only cheaper, you're not going to find that and retiring overseas may not be for you."

For those with an adventurous spirit (and kids and grandkids who don't mind traveling), however, retiring abroad can be transformative.