How Moving Abroad Can Help You Save Money in Retirement
For many Americans, retirement isn’t as secure as it once was. With rising inflation and increased cost of living, people are looking for ways to stretch their retirement savings. One solution that has gained popularity in recent years is moving abroad. Not only can this provide a more relaxed and comfortable lifestyle, but it can also significantly reduce monthly expenses. This article will explore the benefits of retiring abroad, including personal anecdotes and examples, available visa options, and tax incentives.
The Experiences of Retirees Abroad
Moving to another country may sound daunting, but for some retirees, the experience has been life-changing. The Wall Street Journal spoke to six retirees who took the leap, and their stories offer useful insights into the benefits of retiring abroad. Here are a few examples:
– Halisi Vinson, 58, and Ricardo Crawley, 67, had nearly $25,000 in credit card debt and less than $50,000 in retirement savings six years ago. After analyzing their spending habits and expenses, the couple spent six years slashing their spending and increasing their retirement savings. About a year ago, the duo moved to Portugal, where they quickly realized how much less they spend in daily life. Between rent and dining out, the couple spends about $2,600 a month, which is significantly less than they would spend in the US.
– Matthew Coe, 60, moved from Washington state to Barcelona 13 years ago and says his monthly expenses total about $3,000. The former corporate attorney told the wsj that if he still lived in Seattle, his monthly expenses would be almost $6,500, including travel and medical care. During his retirement in Barcelona, Coe invested in local real estate and even started his own business, helping international buyers find and renovate homes in the city. “My stress level in Spain is much lower as a result of the lower cost of living and overall better quality of life,” he told the outlet.
These stories illustrate how moving abroad can offer a more comfortable and affordable retirement for those who plan and strategize their finances.
Visa Options and Tax Incentives
One of the most significant advantages of retiring abroad is the visa options available in various countries. Many nations offer visas specifically designed for foreign retirees. For example:
– Portugal’s Non-Habitual Resident regime grants eligible foreigners tax benefits, such as exemption from local taxes for ten years on income earned outside of Portugal, including social security, pension income, salary from outside the country, and more.
– In Spain, where Coe lives, there are two main options for potential retirees: the Investor Visa in Spain, which grants residence to those who invest in local real estate, companies, or personal business, and the Non-Profit Residence Permit, which grants residence to eligible foreigners if they demonstrate sufficient income to support themselves and their dependents.
Aside from visas, many countries offer tax incentives and exemptions for retired expats. This can make a significant difference in your finances and should be researched thoroughly when planning a move.
Why Moving Abroad is Worth Considering
Retiring abroad may not be for everyone, but it’s worth considering if you’re struggling to make your retirement income stretch far enough. Here are several benefits to keep in mind:
– Lower cost of living: As the personal stories mentioned earlier illustrate, lifestyle expenses like rent and dining out can be significantly cheaper in other countries.
– High quality of life: Many countries offer a better quality of life than in the US, with better weather, beautiful scenery, and a more relaxed pace of life.
– Uncommon experiences: Living in another country can provide new opportunities and experiences that you wouldn’t have in the US.
– Personal development: Moving to another country forces you to take on new challenges and adapt to a different way of life, which can be highly rewarding and stimulating.
– Health benefits: Many retirees move abroad for the health benefits, such as proximity to natural areas, sunshine, and fresh foods.
Summary
Retirement isn’t always secure, but moving abroad can offer a practical solution for those looking to save money and improve their lifestyles. With lower costs of living, visa options, and tax incentives, retiring in another country can provide a better quality of life at a lower price. Citing real-life stories and examples, this article explores why retirees should consider moving abroad and how doing so can provide unique opportunities and benefits.
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Retirement It’s a hot (and stressful) topic for millions of Americans, as high inflation has pushed up the cost of living and squeezed savings accounts. However, some retirees have found a way to live comfortably and save money at the same time: by moving abroad.
As of the end of 2021, nearly 450,000 retirees received their Social Security benefits outside the US, up from 307,000 in 2008, according to the Social Security Administration.
The Wall Street Journal spoke to six retirees who have moved abroad (with savings ranging from $70,000 to $1.8 million) debunking the myth that moving abroad requires a large amount of savings.
Six years ago, Halisi Vinson, 58, and Ricardo Crawley, 67, had nearly $25,000 in credit card debt and less than $50,000 in retirement savings. After analyzing their spending habits and expenses, the couple spent six years slashing their spending and increasing their retirement savings. About a year ago, the duo moved to Portugal, where they quickly realized how much less they spend in daily life. Between rent and dining out, the couple spends about $2,600 a month, they told the wsj.
Related: US retirement outlook falls to lowest level since 2012
Another retiree, Matthew Coe, 60, moved from Washington state to Barcelona 13 years ago and says his monthly expenses total about $3,000. The former corporate attorney told the wsj that if I still lived in Seattle, her monthly expense would be almost $6,500, including travel and medical care.
During his retirement in Barcelona, Coe invested in local real estate and even started his own business, helping international buyers find and renovate homes in the city.
“My stress level in Spain is much lower as a result of the lower cost of living and overall better quality of life,” he told the outlet.
While moving abroad may seem expensive, many countries have visas and tax incentives designed specifically for retirees. For example, Portugal Non-habitual resident The regime grants eligible foreigners tax benefits, such as exemption from local taxes for 10 years on income earned outside of Portugal (including social security, pension income, salary from outside the country, and more).
In Spain, where Coe lives, there are two main options for potential retirees: the Investor Visa in Spain, which grants residence to those who invest in local real estate, companies or a personal business, and the Non-Profit Residence Permit, which grants residence to eligible foreigners if they demonstrate sufficient income to support themselves and their dependents.
Related: $1.2 Million in 6 Months: Retirement Strategy Secrets Revealed
https://www.entrepreneur.com/business-news/some-retirees-are-saving-money-by-moving-abroad/453150
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