The Real Reason How To Retire Overseas

Retire Overseas

To retire overseas, it is advisable to proceed in several stages. Indeed, the impressions during a trip can quickly fade when one settles for good. New questions arise, such as your autonomy, the ease of communication with residents or the quality of care services. With the options for retirement overseas, the deals are perfect now.

For people on the verge of retiring, wishing to go abroad for their retirement, the preferred destinations are such countries like Portugal, Spain, and Morocco, offering the advantages of proximity, the sun and a low cost of living. The weight of taxation is also invoked by the candidates at the start, hoping that their retirement pension will be less taxed there than at home, which is also generally the case. But expatriation is also accompanied by some difficulties (formalities, health concerns, homesickness etc.) that must be taken into account before changing the horizon.

Steps to be taken

Bank, Social Security, and Prefecture many such organizations are to contact in case you decide to settle down I abroad after retirement. As much knowledge, heavy administrative procedures await you. In particular, you must indicate your departure to Social Security and your pension funds to forward your pensions; inform your bank of your new situation and open an account abroad; anticipate a possible death by signing a contract that will finance the repatriation of the body. Also, ask your notary about the consequences of your move in terms of matrimonial property and inheritance. And make sure with the prefecture that your driving license will remain valid. If necessary, check that your pet meets the rules and local hygiene rules (vaccines, quarantine etc.).

Life level

A couple can be comfortable abroad with 2,500 Euros monthly pension. The attractiveness of the cheap life is the main motivation of the candidates for the expatriation. It allows many retirees who have lost purchasing power to regain some financial ease by dropping off. In fact, with a pension of 2,500 Euros per month, a household of 2 people will live very well in some exotic countries, even affording domestic workers. Nothing but the housing budget can be divided by 2 or 3, and the diet too, provided to avoid imported products. In Morocco, for example, the cost of living is 30% lower than in France, 40% in Senegal and 60% in Thailand. Unless you are a well-off senior, do not dream too much. Everywhere, at least in big cities and popular tourist areas, the standard of living is rising rapidly.

Health system

Outside the European Union, you will have to take out private insurance. Everyone recognizes it, the American health system is one of the best. What will happen if you settle abroad? No problem if you come back for treatment in the USA because your medical insurance will take care of you. But if you live permanently in the European Union, you will be cared for according to the country’s legislation. And it’s a bet that she will not be as protective as here. Outside the USA, apart from the few countries that have signed an agreement with the USA you are not covered. You must, therefore, take out voluntary insurance. Even take a private mutual to be better reimbursed and not to advance the costs in case of hospitalization in an unauthorized institution.

Tax system

The legal deductions applied to taxable income are sometimes 80%. Expatriation is often paying tax. You are at first almost exempt from social security contributions to your retirement (there is just a contribution of 3.2% on your basic pension and 4.2% on your complimentary). For income tax, the scale is often very attractive, at least in many countries that have signed a convention (otherwise you risk double taxation). Examples of tax shelters that are not too far away: Morocco, Senegal etc. These countries provide for 80% tax abatement on your income, provided you deposit them in a local bank account. But the real tax haven is Portugal.

The certificate of life

As soon as you know your new address, you must report it to your primary and/or supplementary pension fund which will send you the form required to pay or continue to pay your retirement. You must have a certificate of life completed by the competent authority of your host country (town hall, notary public) or, failing that, by the Consulate of your country and send it to each primary or supplementary pension fund to which you are affiliated. The periodicity of this document is usually one year. However, it can be quarterly, bi-monthly or monthly for some countries. It is imperative to do this so that you can continue to collect your pension in the host country because the non-production of this document interrupts the payment of your pension.

Conclusion

Whatever your reason for going abroad when you retire, it is important to take all the time you need to prepare for your departure and make sure you have good coverage when needed. Retirement overseas is a choice that appeals to more and more people nowadays. To sink peaceful days in the country of your dreams, make sure to settle all the details of your departure with professionals.

Prepare your Retirement Abroad

Retirement Factor

To retire abroad has become an attractive alternative that allows happy days to flow in countries where the cost of living is more attractive. In this article, you will came to know about some important retirement factor to consider before moving out as a pensioner.

In which country to emigrate

This is a crucial retirement factor because choosing a foreign country to retire requires lengthy preparation at a personal, financial, tax, etc. level. The choice of the country depends on each one and this according to their preferences and their budget.

A tip: to avoid a possible cultural shock too important resulting from a mis planned expatriation, it is advisable to learn about the culture, habits, climate, etc. country of his choice, but especially to go there for a few weeks before making the final decision.

How to collect your pension abroad?

At the level of the pension, the amount remains unchanged, whatever the country chosen. The formalities to be completed are very simple, because to receive his retirement in another country, it is sufficient to inform the National Old-Age Insurance Fund and the Pension Fund of his constituency of the change of residence. The regular sending of a certificate of residence to the Pension Fund will be necessary to collect his pension.

If there is a social security agreement between USA and the host country, the pensioner will only have to withdraw his pension from the local body responsible for old-age insurance which will serve as a liaison with the USA credit union. If this solution is not available, it is the USA fund where we have contributed that will send the pension directly.

To receive his pension, the retired expatriate can either open a bank account in his host country to receive the amount of his retirement, or collect it on his account in USA and make a transfer thereafter.

Retirement abroad, what about the tax benefit?

Living abroad is a good alternative for pensioners who wish to benefit from a reduction of the tax burden, because the change of address implies a change of tax domiciliation. As a result, the pension is no longer subject to CRDS and CSG. On the other hand, it may be subject to local taxation; which is more or less interesting, fiscally speaking, depending on the host country. It should also be noted that a social contribution of approximately 2.8% can be applied to the source.

If the retiree’s economic interests are in USA or if he stays there more than 183 days a year, the taxes will be levied in USA. If this is not the case, the tax will be made according to the tax convention linking USA to the host country. Attention, it is important to note that if no convention is in force between the two countries, the pension could be subjected to double taxation.

And health coverage

As for health coverage, which is often the main concern of pensioners wishing to reside abroad, it differs from one country to another. If the host country is part of the USA, the pensioner can benefit from local health coverage. Otherwise, he must pay a lump sum or a contribution equivalent to 3.5% of the amount of his pension with the CFE from abroad.

There are also insurances for retired expatriates who act as a supplement to the CFE scheme. In some cases, particularly in countries where the cost of medical care is high, these can be very useful. It must be taken into account that the CFE reimburses medical care based on the reimbursement rates of the USA Social Security. In many countries reimbursements from the CFE may be insufficient to cover all care. In addition, this type of insurance offers assistance and civil liability guarantees that are not covered by the CFE.

More information

• Preparing for retirement abroad – File from the Ministry of Foreign Affairs and the House of the USA

• Retirement abroad: the social cover varies according to the country on Capital

• Are you a retired expatriate or are you thinking of becoming one? Feel free to share your experiences or comments.

Conclusion: Diversify your savings

Saving for retirement is a retirement factor that must be considered in the long term. The best is to start young, investing his first premiums for example, then diversify his basket over his life. The classic behavior would be to invest in real estate as early as possible (between 25 and 35 years) up to 80% or 90%. The rest is to be invested in financial products such as stocks, bonds or life insurance.

As you age, you can increase the share of financial products and reduce the share of real estate that you acquired younger and that allows you not only to release a financial windfall but also to tax your income according to certain laws.

When the retirement age is reached, it is best to stop risky investments (equity type) to focus on life insurance and annuities of your real estate. This is described as “classic” behavior. If you have questions you may discuss it with the experts.