What do you want to do when you don’t have to work 9 to 5 any longer? Do you dream of using your hard-earned money to travel to and live in an exotic location abroad? Many people approaching retirement age have dreams of retiring abroad – and are successful in turning the dreams into reality. For a quick overview of the advantages and challenges of retiring abroad, read on.
Pro – a lower cost of living
If you live in a country with a high cost of living, then the advantages of retiring to a country with a lower cost of living and a higher quality of life are immediately apparent. A further bonus is if the currency exchange rate is in your favour – and you can make your hard-earned retirement funds go further.
According to the 2018 Annual Global Retirement Index by International Living, countries like Spain, Peru, Nicaragua, Portugal, Columbia, Malaysia, Ecuador, Panama, Mexico and Costa Rica are the top retirement destinations in the world that combine a great quality of life with a low cost of living.
Con – culture shock
If you have been living in one country for your whole life, then moving abroad to a foreign country with an alien culture can be a big shock – unless you are prepared for it. Countries that are favoured by retirees, like Portugal and Spain often have large expat communities that can help ease your transition into your new culture.
Things you need to consider before moving include – do you enjoy the local cuisine? Does the traditional way of life suit you? There’s no point moving to a country where barking dogs, noisy neighbours, loud parties and late hours are normal if you prefer the quiet life. Are you prepared to navigate the local bureaucracy – from organising visas, to getting a new driver’s license and opening up your new bank accounts?
Pro – Quality, affordable healthcare
If healthcare costs are high in your home country and you have to pay a large amount in private healthcare, moving to a country with a quality government-run healthcare system that provides low cost, but high-quality medical services can be advantageous. Countries like Mexico, Malaysia and Ecuador offer high-quality affordable healthcare to local residents and are often regarded as medical tourist destinations.
Con – leaving friends and family behind
If you have invested a lifetime in creating a wide circle of friends, leaving this network and your family can be a huge decision for someone approaching retirement age. Fortunately, today’s technology makes the move a lot easier and many retirees feel like their family and friends are almost next door with technologies like Skype and WhatsApp, which enable them to have face-to-face video conversations daily.
Pro – Accessing your retirement annuity before you turn 55
Many South Africans retiring abroad are unaware that they have the option to cash in their retirement annuity before they turn 55 by completing the financial emigration process. The cash can then be used for any purpose including buying a home or making the most of their retirement abroad.