Aspiring expats are motivated to move abroad due to COVID

Wanting to retire abroad is easier said than done. It involves a lot more than looking for a home and getting a visa. Creating a checklist to determine what you’ll need planned can be particularly helpful, especially if you’re just starting.

The first step is choosing an appropriate destination. And no, deciding based on what you’ve heard or the images you see online is not enough. Pick a destination that meets your needs from a personal and financial perspective. Is there an amenity or service that you can’t do without? Does your insurance extend to this country? How easy or difficult will it be to adjust to the cultural differences? Once you have comfortably narrowed down the destinations based on the above and a host of other considerations, you can move to the next step. There are also a few places that pay you to move there, but always be clear on the terms and conditions that may come along.

Whether it’s moving domestically or internationally, finding a place to live is will be important. Choosing between buying or renting, you will have to account for the cost that you will incur. Similarly, the proximity to local transport, healthcare facilities, and more are also important. Usually, after retirement, daily expenses show a downturn influenced by reduced commuting and fewer holidays. You need to analyse how far along your pension and savings can carry you into retirement. For those who are yet to retire, chances are that you may need to manage your investments more actively for your retirement. Three aspects that you should look into are diversifying, reducing risk, and preparing for volatility.

As we briefly touched upon, there are a few investments that you may not be able to take with you abroad. Insurance is the most important among them. Some companies may not extend coverage overseas, thereby requiring you to lock in one that does. Tied into this is the accessibility of your investments. Your investments should be within reach regardless of your physical location.

Exchange rates often slip our minds while planning moves, particularly when we are accustomed to earning and spending in a stronger currency. A British expat may not have to worry too much about this, but if living expenses in the destination country are higher compared with how much you may be comfortable spending post-retirement, the currency rate difference may act as a cushion.

Unlike a temporary move to further your career, retiring abroad demands farsighted planning. The population that is already retiring previously had a lot of benefits. They had children, bought a house, and hit their peak incomes much earlier than the current working populace. In a sense, this gave them more time and better financial stability to plan for retirement. 

In contrast, today, you need to earn far more to meet daily expenses. The good news is that you have an ocean of information at your fingertips and varied opportunities to make the most of your finances. Demand for passive income options is on the rise as is the demand for the certainty of income. Buying an annuity later in life may also offer better interest rates.

Clear blue skies and golden sand or a cosy cottage nestled in an alpine haven, retiring abroad has a lot to look forward to.

Start planning, your future awaits.