Home TravelAustralia Lots of Americans are Semi-Retiring Abroad

Lots of Americans are Semi-Retiring Abroad

by Paul Ebeling

#Americans #retire #planning #offshore #overseas,

There is a lot of Americans are choosing to experience different cultures and lifestyles by moving abroad in semi and retirement.

In Y 2019, a total of 431,883 retired beneficiaries received their Social Security checks from abroad. That’s up almost 40% in the last 10 yrs.

Making such a move to live overseas will be an exciting new life chapter, planning ahead to manage finances is Key. Adding a new complexity into the planning process requires research, guidance plus a savvy financial plan.

Should you be thinking of making the leap to live offshore here is what to consider 1st, as follows:

1. Will you be semi-retired or fully retired?

Many people choose to continue to work past the traditional retirement age, whether for financial or personal purposes. If you plan to work part of the time in retirement, keep in mind this might not be an option overseas if you need to obtain a work visa.

That means you will likely have to prepare to be fully retired and without work after you move abroad. If you move to a country with a lower cost of living, you can reduce your living expenses and make your savings stretch further each month.

But you should put yourself in the best position possible to do this, which includes maxing out your 401(k) to save enough money for a retirement where you do not need to work.

2. Prepare for taxes

All American citizens need to file US taxes whether they reside in the US or not. While your retirement income and Social Security are exempt from state tax if you move overseas, you must still pay federal taxes on your total income.

Keep in mind, if you’re renting out a property or still earn funds from a business in the United States, then you would likely be taxed on the state level for this income as well, unless you live in a state that doesn’t have a filing requirement.

If you move to a country that does not have a tax treaty with the United States, there is a chance you could be taxed in both countries, so be sure to talk to a tax professional in advance of your move.

If you do earn income in a foreign country, you could qualify for a foreign earned income exclusion, which would exclude this amount from your United States taxes. In Y 2021, the limit for a foreign income exclusion is $108,700.

3. Budget for health expenses

While statistics show that consumers under 65 anni spend about 20% less annually than their younger counterparts, they spend 32% more annually on healthcare than other Americans.

While healthcare in the country you are moving to might be socialized for citizens or permanent residents of that country, the quality of healthcare can vary by region. Not just that, but private healthcare costs could turn out to be more expensive than you expect, and coverage might be more limited than what is available through Medicare.

Many expatriate pay for Medicare Part B and private health insurance, often adding an option to be airlifted to the United States in case of an emergency. But, private insurance policies often have an age limit. A popular policy by GeoBlue only offers insurance to those 74 anni and younger. You can also consider a group plan through the Association of Americans Resident Overseas.

While you might feel comfortable covering small costs out of pocket, it is the large expenses to be wary of, and these expenses tend to increase as you age if you want to live overseas permanently.

4. Don’t rely on your credit score in a foreign country

When you move abroad, you won’t have any credit history built up in your new country. While some countries could take into consideration your American history, most of the time this will not be the case. This could make it challenging to obtain credit if you need it.

Many people dream of moving abroad for retirement, and if that is your goal, it is possible to obtain. It requires advanced planning and more research than a traditional retirement in the United States.

Consider that while you might save money in some areas, such as living expenses, you could end up paying more in other areas, such as for healthcare or taxes in a country that does not have a tax treaty with the United States.

Have a prosperous day, Keep the Faith!

You may also like

logo-white

Your Trusted Source for Capital Markets & Related News

© 2024 LiveTradingNews.com – For The Traders, By The Traders – All Right Reserved.

The information contained on this website shall not be construed as (i) an offer to purchase or sell, or the solicitation of an offer to purchase or sell, any securities or services, (ii) investment, legal, business or tax advice or an offer to provide such advice, or (iii) a basis for making any investment decision. An offering may only be made upon a qualified investor’s receipt not via this website of formal materials from the Knightsbridge an offering memorandum and subscription documentation (“offering materials”). In the case of any inconsistency between the information on this website and any such offering materials, the offering materials shall control. Securities shall not be offered or sold in any jurisdiction in which such offer or sale would be unlawful unless the requirements of the applicable laws of such jurisdiction have been satisfied. Any decision to invest in securities must be based solely upon the information set forth in the applicable offering materials, which should be read carefully by qualified investors prior to investing. An investment with Knightsbridge is not suitable or desirable for all investors; investors may lose all or a portion of the capital invested. Investors may be required to bear the financial risks of an investment for an indefinite period of time. Qualified investors are urged to consult with their own legal, financial and tax advisors before making any investment. Knightsbridge is a private investment firm that offers investment services to Qualified Investors, Members and Institutions ONLY. Qualified Investors are defined as individuals who have met those Qualifications in the relevant jurisdictions. Members are defined as individuals who have been accepted into the Knightsbridge membership program. Institutions are defined as entities such as banks, pension funds, and hedge funds. If you are not a Qualified Investor, Member or Institution, you are not eligible to invest with Knightsbridge. All investments involve risk, and there is no guarantee of profit. You may lose some or all of your investment. Past performance is not indicative of future results. Knightsbridge is not a registered investment advisor, and this disclaimer should not be construed as investment advice. Please consult with a qualified financial advisor before making any investment decisions. By accessing this website, you agree to the terms of this disclaimer. Thank you for your interest in Knightsbridge.