Thursday, August 5, 2010

Is retiring abroad the right decision for you?

The prospect of retiring in a warm exotic locale overseas can be very alluring. And indeed, it can be a wonderful life changing experience for many. But we also hear of people who seek out overseas retirement only to become disillusioned after a few months or years. Worse, although some are lured by the relatively low cost of living in some overseas retirement destination, they actually end up getting financially burned. How should you prepare for retirement abroad, or find out if it's the right step for you? Here are some things to consider:

  • First and foremost, are you the sort of person who enjoys travel and foreign cultures? Retiring abroad is not just a financial decision, but a major lifestyle change. Some thrive on exposure to new cultures, others take comfort in the familiar. While there may be expat communities and fellow-retirees from your country in your new place of residence, you will feel very closed in if you confine yourself to just these communities. Before taking any other steps towards retiring abroad, make sure you have the right mindset for it.
  • Will you be okay living far away from family and old friends? Some people can't wait to put enough distance between themselves and their old circles, but for others, as the reality of relative isolation from your loved ones sinks in, you might find yourself having second thoughts.
  • Because of these reasons, you might want to consider going on an extended vacation in your intended retirement destination before you commit to moving there. Or you might consider spending part of the year there for a couple of years, before you decide to move there full time.
  • Also consider the fact that many amenities you take for granted in your current place of residence may be harder to come by in your country of retirement. You might face issues like power outages, slow internet and slow service. Then again, part of the charm of retiring abroad is a simpler and slower pace of life, so many people would gladly trade in a few modern conveniences to live in a languid tropical paradise.
  • There are also financial issues to consider - things like cost of living and health care, ease of banking, access to your retirement funds and so on. More on these in another article. 
But I hope these tips will help you think through whether retirement abroad is right for you. Many people will probably say yes, and join the ranks of happy retirees abroad. But thinking through these issues will help you have a fulfilling overseas retirement, rather than a stressful one.