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 come to know about some important retirement factors 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 mixed 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 is 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 the 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 the 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 the USA or if he stays there more than 183 days a year, the taxes will be levied in the USA. If this is not the case, the tax will be made according to the tax convention linking the 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.