Ep 33: Guided By The Stars No More: A Roadmap To Retiring Abroad! (Part 1)
Listen & Subscribe
dark+apple dark+spotify dark+youtube
There has been an uptick in the number of people looking to retire overseas. In Part 1 of this episode, we discuss the essential considerations for the decision.
We start by grouping those who want to move into the following groups
Those like us, who came to the US ages ago and are now retiring.
Those who have worked overseas and now want to return
Those who've only visited as tourists.
We explore the motivations behind such a decision, the importance of choosing the correct country, navigating visa and residency requirements, and the practical steps needed to prepare for the move.
Other topics that we cover here, amongst others, are:
Maintaining connections and communication while living abroad.
Safety and political stability are key factors in choosing a country.
Visa and residency requirements.
Visiting a country as a tourist for valuable insights before moving.
The cost of living to ensure affordability.
Maintaining a US address for various logistical reasons.
Healthcare access etc.
In part two of this episode, we'll address the financial and tax aspects of retiring overseas.
Episode Links & Resources
Are you Tax-compliant With Your Overseas Assets? - Free Guide - Scroll to the bottom of the page.
The speakers' views and opinions discussed in this episode should not be considered financial, tax, or legal advice. Consult your advisor for any legal, cross-border tax, and financial advice.
Be sure to join the conversation by following us on social media:-
-
Jane Mepham, Cfp (00:03.982)
We're back with another episode of the International Money Cafe podcast. In today's episode, part one, we're going to talk about retiring overseas. Lately, we've had a lot of people reach out to us asking us what is it that they need to think about when they plan to retire overseas. And we always talk about what's your why, why do you want to do it?
From what we're hearing, folks will talk about the cost of living is expensive here. We think it's going to be cheaper overseas, whatever the country is. The cost of health insurance here is really expensive. We want to be closer to family. We're adventurous. We want to travel. We want to see another part of the world. We're not sure about the political climate in the US. So there's a whole lot of reason why people want to do this. When it gets really challenging,
as you plan the move, knowing your why is going to be very, very key. Hence, we need to start with why, like Simon Sinek says, why, what's your why? Why are you doing this? To really get into the details of the discussion, there's three groups of US tax residents retiring or looking to retire overseas. And based on the group that you fall into,
your preparations may end up being a little different. So let's divvy this up into three major groups. The first group, which Manasa and I are solidly in there, is folks that came to the U .S. as adults. We've now grown old here, for lack of a better word. We have kids, we have families, we have our lives. We're now U .S. citizens. We enjoy life in the U .S.
But we're very in tune with what's happening home. And there's this huge yearning to return back to our roots. So we know exactly if we want to retire back home, exactly what to expect. Obviously we know things have changed, but we have a pretty good idea of what to expect. We'll probably be very comfortable with the culture, be very comfortable with the language and all that goes along with it. And then you have the second group.
Jane Mepham, Cfp (02:23.256)
This is a group that has lived overseas as expats. They may have worked at international companies or international schools, places like the UN, the World Bank. So they've really had a chance to experience life in these other countries. It's also a little bit easier, but they're things they also need to take into consideration. And then we have the last group. These are people who
only traveled as tourists or they may not have traveled to any of these countries and now they really want to start exploring the idea of moving overseas. So the question is what's the first thing you need to think about if you're thinking about or considering retiring overseas?
Manasa Nadig, EA (03:11.277)
Right, right. And so when, now that we have addressed the why, like Simon Sinek says, now we get to the how, which is sort of the logistics around visa, residency, citizenship, and all of that. But before we even get there, I think like the first important thing to think about is choosing the country. And when you are thinking about
which country you want to go and retire in. A couple of things that come to our mind, and we were discussing this is first of course, is how safe is this place where you can go and live your life safely? How is the political climate? Is it stable? Or at least it seems stable for now. How friendly are the people in the country to
expats and would you feel comfortable going and living there? And then, of course, the language. Do you know the language already? And if you don't, how willing are you to do the homework, to learn the language? Of course, these days there are all sorts of apps. There's the Duolingo, the Rosetta Stone, so many of them.
You could pick up a language pretty easily. And then how comfortable would you be using maybe a different system? Maybe they use a different system like a metric system. How would you be comfortable using that? Because that become a very important issue. And having thought of some of those basics, then there are the big questions, right?
Big one, if it were me, would be how easy is it to get back and forth to the US? Say for example now, right Jane, you travel to Kenya often and I go back to India. And for us, traveling to Kenya or to India would definitely mean 24 hours of air travel, you know? So that's pretty long time to do as journey. And...
Manasa Nadig, EA (05:37.737)
Then thinking about going back and forth, is your family still going to be here in the US? Are those going to be your kids, your siblings? How easy would it be to maintain connections? In our situation, we have family all over. Jane, for example, has siblings in many different countries.
And you should be able to maintain these connections with all of them. And of course, another really important thing to think about is the health care system in the other country. And the very fact that you're thinking of going somewhere to retire means that you will be growing older. Hopefully not, but you might face medical issues for which you need a good robust
healthcare system, which should be in place and you should be able to access it easily. And last but not the least, the cost of living. How is the cost of living there? Would it be affordable? And how easy it is for you to afford the different daily things and the rent or all of that. So I think that those are really important things when you're
thinking of choosing a country, right, Jane?
Jane Mepham, Cfp (07:03.766)
Yeah, yeah. And of course I love everything you've said so far. And as you point out, we are squarely in that situation with family all over the place and the things we've done to maintain some of those connections. But again, it's something to your point, you have to be prepared for. So you figured out, or at least you've considered the country. The next question is going to be what sort of visa
will allow you to go live in this country. So I like to think of this as the opposite of when we came to the US, we came on student visas and then they turned to work visas and finally they turned to green cards and then citizenship. Now thinking about going to another country, it's more or less the same process, but of course what you need to do is pick the country, figure out exactly what...
Manasa Nadig, EA (07:30.745)
Mm.
Jane Mepham, Cfp (07:58.426)
kind of a visa can you get? So you can figure out the requirements. for example, if you want to get a long stay or a retirement visa to a country like, let's say Brazil, they have something called the retirement visa. You need to show a certain amount of income. When I checked it last day, you needed like a hundred, a thousand US dollars of obviously passive income. You have other countries like Spain, which again,
The thing, the retirement visa is called elective residence visa. by the way, every country calls these visas something different. New Zealand, which I always thought this would be a fantastic place to move to, will give you their version of the retirement visa. You need to be 66 years old, but you need to invest 750k New Zealand dollars. So you need to look at every one of these countries, find out
Manasa Nadig, EA (08:36.704)
and
Jane Mepham, Cfp (08:58.298)
how old you need to be to qualify for that visa. Philippines, you can get it at 35, but most other countries, it's a retirement visa, 55 or 65 depending. Most of the visas will not allow you to work, and there are very specific requirements around being able once you get the visa to maintain it. So going back to your why, you need to figure out why are you willing to put up with what it will take.
to get that visa. Before this call, we were actually looking at this story on CNN where this couple planned to retire to Italy. They shipped everything and then they had to come back and apply for the retirement visa. But when they started the process, they realized there was something that wasn't gonna allow them to qualify. And so what they ended up doing was actually picking another country. I don't know how many people are willing to do that. So please do your homework.
Manasa Nadig, EA (09:53.955)
Hmm.
Jane Mepham, Cfp (09:57.71)
before is what we're talking about. And then of course, there's a few other countries that might make it a little bit easier for you. I'm talking about citizenship based on your ancestry. countries like, let's see, Germany, Ghana, Ireland, Italy, Spain, Romania, India, they will allow you to apply for citizenship based on having had relatives and family that lived there. But again, you need to consider the...
requirements, you need to consider the restrictions of what that citizenship entails. And most of them start with the equivalent of a green card, so a long -term residency card. So again, we were talking about this and we realized India, for example, you can get your OCI card, but it does not allow you to vote. It does not allow you to buy agricultural land.
So if your idea was to retire, integrate, vote, become a part of this life, you may have to consider either a different visa or a different country. And with that, we're going to take a quick break for an important message, but don't go away because when we come back, we'll continue the discussion on things to consider about retiring abroad.
Manasa Nadig, EA (11:23.639)
Welcome back as we continue to talk about all of the logistics of what it takes to retire abroad. So where we left off, Jane was talking about getting a citizenship by ancestry. There's also a way of getting your citizenship by marriage and many countries allow that.
have to find out the rules because obviously each one of them is different with the way how long you have to physically live in that country maybe and what kind of connections you need. And like we were talking about the visas, there might even be requirements for you to have a certain amount of investment in that country. So a bit of homework to do. So now that we have talked about, you've
picked a country, you know where you're going and you've got your visa and unlike that story of that couple in the CNN article. What are all the things that you need to do before you move? And, you know, while we were kind of planning for this episode, we realized that the first thing that you need to do before you move is actually to visit the country as a tourist.
if you've never been, you know? I think that that would be the most important thing if you were based on the group that you've never gone abroad or you don't have any connections right now is visit the country as a tourist and maybe even stay there for a longish period of time and start making connections. We have noticed that there are a ton of expats
groups, you have to find them. There are Americans in Germany, Americans in Switzerland, depending on which country you select. And some of these groups are also online. I recently found out that my firm's name was being tossed around in a group for Germans who are US citizens based out there. yeah.
Jane Mepham, Cfp (13:43.332)
awesome.
Manasa Nadig, EA (13:47.833)
That goes to say that there are these groups, maybe on Facebook, maybe online, and you should join them to get a feedback about what it means to be a retiree abroad versus be a tourist in that country. So that's important. And definitely, we have to bring this up. Know all your financial and tax nitty gritties of what it means.
to be in that country. Try and being a part of this group might actually help you find those connections where you can find a tax professional or a financial professional who is familiar with both sides of the border and know about what it means to file your taxes and financial information and kind of get you settled. So that's...
would be one of the things I think, right Jane? What are the things that, yeah.
Jane Mepham, Cfp (14:46.796)
Yeah, what I'm thinking is you talked about the finance and taxes and I know we'll talk more about it and moving to this country and finding connections. So a word that comes to mind is community. Find your community, which could be online and kinda start hashing out some of these things. So now we've talked about the logistics, we have visas. Hopefully you pick out the country and you figured out what it would.
Manasa Nadig, EA (15:00.697)
Mmm.
Jane Mepham, Cfp (15:16.652)
take, we're still in the US, okay? So what are now some of like the practical things we want to start considering as we plan the move?
Manasa Nadig, EA (15:27.597)
Yes. Yes, yes, yes, yes. So the first place where you would start is, I think that you would have to think about what do you got to do with all of the most important things that you have at home? These could be like your collectibles, maybe your things that are sentimentally important to you and a lot of your personal effects. What are you going to do with them?
maybe put them in storage. That would be one place to start. And as you're thinking about that, what are you going to do with your home? If you are a homeowner, are you going to rent it while you're away? Are you going to sell it or are you going to leave it locked up? And of course, if you leave it locked up, then there are other things that you have to think about, definitely maintaining the property.
and setting up maybe auto bill payments for this maintenance and other things, utilities, mowing the grass, cleaning the snow if you are in a state up in northern part of USA like I am. So that would definitely be something that you have to think about. And not to forget, the most important things of course are your financial stuff.
The biggest one is your brokerage accounts. How are you going to access your brokerage accounts if you are abroad? Not all brokerage firms let you access your accounts from outside the country. The first, the couple of ones that Jane and I know are interactive brokers and Schwab. They are the most friendly. There are others that might agree to do it, but you may have to have
a lot of money with them. We're talking millions of dollars here. And then the second thing that you have to think about when you're living abroad is how are you going to get your US dollars or your money back and forth from the US? The accounts that we see in common use are Wise Zoom, which is Zoom with an X, OOM.
Manasa Nadig, EA (17:50.285)
And there are other apps like Remit, et cetera, not really not endorsing any of these. These are what we've seen commonly in use. And definitely a big one is to get a credit card with no foreign fees. That's one that you should do a little bit of research and find out and make sure that you have at least one credit card which has no foreign fees.
Yeah, Jane, what are some of the other steps that you think are important?
Jane Mepham, Cfp (18:23.642)
Actually, there's one thing I just thought about that we should mention as part of the money movement. We have all these apps that can use to transfer money. You could also potentially use a bank transfer from your US bank to your overseas bank. And we'll be talking about banking. I think I know more in the next section, but you do have to keep currency exchange.
in mind as you do this. So one of the good things with WISE is you actually will know exactly how much you're going to get as you move the money and it's pretty almost instantaneously. So that's a good one.
Manasa Nadig, EA (19:06.617)
And it's a good one for the exchange rate as well, right?
Jane Mepham, Cfp (19:11.586)
Yes, that's a good one too. Yeah, that's a good point. so the other thing you asked me, I want to think about is maintaining a virtual US address. Now, if you're in the situation where you're going to sell everything, sell your home, sell your car, sell everything, you really do need to still maintain a US address. And the whole idea of maintaining it being virtual is you can actually
pay them to open some of your mail. This assumes there's nobody else that can do that for you. So that part is key. We also need to think about your state residency. And I keep thinking, Manasa and I talk a lot about, I think it's California and New York as being some of the highest taxed states. Because remember, as long as you're a US tax resident, green card holder or US citizen, you'll always be a US tax resident. So it doesn't matter where you are.
you're still expected to file taxes and not only the federal taxes, but also the state taxes. So find out the requirements for becoming a state resident depending on the state that you're going to. So we see a lot of people moving to states where they don't have income tax. So places like, let's see, Florida, I think New Hampshire, Texas, but find out what they require. What does it take for you to be considered legally
domiciled in that state. could be you might have to register to vote. You need to show some connection, like maybe you're a member of the library or you need to show something like you have a driver's license from there. So please find out before you actually switch states. The other one we talk a lot about, and we're actually going to talk about our personal experiences here is phone lines. People say, what do I do? Because I want to maintain my U S phone So
In my situation, what I tend to do, I have an international unlocked phone. I use a company called OnePlus. And the reason I use that particular phone, because it's dual -SIM and I don't mean the E -SIM, I mean the physical SIM So I have my T -Mobile SIM in there. I have my Kenyan SIM in there. And what I do is, as I travel back and forth,
Jane Mepham, Cfp (21:35.608)
I'll put my phone on airplane mode. When I get to the next country, I get onto wifi and I'm able to use my phones that way. It makes life very, very easy. So I don't need to get a different phone. And that way I'm still able to maintain the connection home. My family, like I said, they're pretty international and I know just about everybody ends up doing this. We also use Google voice, which again, as long as you have wifi, you should be able to do it.
And the one thing I do want to point out, this could be a cultural thing, communicating with our families or anybody outside the US, we use WhatsApp. WhatsApp is really the app. I think that's used by just about everybody. You now have business accounts on WhatsApp. You have personal accounts on WhatsApp. And so as soon as we get out of the country, you put your phone on airplane mode, you buy what they call data.
you understand what I'm saying depending on the country that you're in. And right away you got wifi and you got WhatsApp and you can communicate with anybody in any part of the world. But before I ask you, Actually what do you do with your phones? That's a good one.
Manasa Nadig, EA (22:49.175)
Yeah, and while you were talking about the SIM card, I suddenly realized, you know, I mean, we were out of the country just recently with our family. when we just, you know, as soon as we got out of the airport, I saw all these stores there. They were actually giving, selling tourist SIM cards. And I thought, now that you're talking about it, I made that connection. So that's how you could use that.
Jane Mepham, Cfp (22:53.64)
Mm
Jane Mepham, Cfp (23:13.796)
Mm
Jane Mepham, Cfp (23:18.253)
Mm -hmm.
Manasa Nadig, EA (23:18.617)
What do we do for phones? Well, we have a plan with T -Mobile. It's kind of like a world plan where if you go to the other country and you turn off your airplane mode, the cellular connection connects with the local cellular connection because I guess T -Mobile has all of these connections with different providers in different countries.
Let me say this, though, that you don't get 5G everywhere, and your data might be limited. But you can definitely use it for texting. And if you have an Apple phone, you could use it for iMessaging, et cetera. But to your point, WhatsApp calls and WhatsApp messages are usually your go -to, because if you have to order Uber, or you have to order some kind of local taxi service,
something like that and you don't want to give your number to everybody over there because like you said, culturally people outside the US just use WhatsApp for everything. So you do use that quite a bit. So sometimes I just use my T -mobile for using that data so I can make a WhatsApp call. So that's what happens. Yeah.
Jane Mepham, Cfp (24:39.96)
Right. And actually you do make a good point. All these cellular systems will work everywhere. The problem is if you don't have, for example, a plan, like an international plan, it tends to be very, very expensive for you to get on the local network. But we know all these local networks are there. And the other thing I do want to talk about is in one of our episodes, and we'll put a link in the show notes, we talked a lot about
Manasa Nadig, EA (24:47.843)
Yeah.
Manasa Nadig, EA (24:56.227)
Mm
Jane Mepham, Cfp (25:10.35)
your identity and protecting that. And one of the things we said is make sure all your apps, make sure all your systems are using two factor authentication. But what you find is most of them use your phone number. So that could be an issue if you're living overseas or you're traveling and you need for your system to send you a code. So
The other option you have is you will notice when they give you the option, they also Authenticator that app. So there's a whole bunch of apps. So what we'll say is try and switch most of your two -factor authentication to these apps because once you're in the other country, as long as you have wifi, as long as you have data, as long as you're on the network, you can still receive the message. It doesn't have to be on the phone, the cellular data, if that makes sense.
And now that I've mentioned that before you leave, if you haven't done it yet, please listen to that episode. You need to freeze your credit report. You need to put a lock on your credit reports. You need to make sure that nobody can use your data while you're gone. Is there anything else you want to add to this, Manasa?
Manasa Nadig, EA (26:30.921)
I was actually thinking that if you are planning to retire abroad, that means you're going to plan to live outside the country for a long time. Maybe it would be just a good idea to, while you're doing your research about other things, is to also research your cellular plans and see which one would be a good affordable one and where maybe you can make US calls and receive US calls for these kind of emergencies, know, like when you're trying to connect to your...
Jane Mepham, Cfp (26:47.674)
Yes.
Manasa Nadig, EA (26:58.765)
financial institutions. So that would be definitely one thing. Of course, there's a whole bunch of other things that we have to think about when you plan to retire abroad. And we're talking taxes, we're talking financial accounts, we're talking estate planning and gift planning. But we're out of time for that today. And we definitely already have it in the works and we're working on
part two of this episode. So do not miss that. We will come back to it. you know, retiring abroad is definitely a huge task. So Jane and I ask you to do your research. And until then, as you're doing your research, happy traveling, because I know you'll probably be going to all these different countries to see which one's a good fit for you if you haven't already. So with that,
Today we conclude this episode. Please go to our website, subscribe to be notified of all the episodes and something new that we are working on. And then of course, please go out and check out all our social media handles. We'd love to connect with you on Instagram or LinkedIn or Facebook or whatever's your jam. So until next time, bye.