Baby Boomers Retiring Abroad: 10 Drawbacks
123RF
Millions of Americans of varying ages live abroad in foreign countries. Many Baby Boomers are also retiring abroad to make their retirement dollars last longer. You can experience new cultures and potentially make your retirement fund last for the rest of your life by retiring to a stable and safe foreign country.
Such decisions should not be made hastily. If you don’t research, make short experience sampling trips, compare currency exchange rates, and make many other considerations, then retiring in a foreign country could be more frustrating than enjoyable. Here are 10 drawbacks to consider.
1. Leaving Everything Behind
123RF
One of the core benefits of retiring is the ability to enter post-working life while surrounded by family and friends. Unless you’re retiring abroad to a relatively close Central or South American country, the thought of retiring even further away can be an anxiety-inducing proposition. Only consider retiring abroad in a foreign country if you have an adventurous personality, a natural wanderlust, and can endure being so far away from everything familiar in your life.
2. Paralysis of Choice
123RF
The hardest part of retiring abroad could be the initial decision process. Where would you go and why would you go there? You and your spouse or partner should think strategically before retiring to a foreign country to potentially live out the rest of your lives. Don’t make such decisions on a whim. Spend months or even years beforehand researching such countries or sampling their environments through shorter visits.
3. Language
123RF
If you have never learned a second language or are amenable to learning one now, then you should reconsider retiring abroad. While there are numerous foreign countries where English is spoken in varying degrees by the local population, like the Philippines for example, you may still want to learn the local language. Learning the local language after retiring abroad will bolster your independence and empower you in times of emergency.
4. Destination Regret
123RF
As previously mentioned, you should not just spin a globe and retire anywhere your finger lands. It will be a very costly and foolish error to finally retire abroad and then regret your destination choice almost instantly. If you’re considering retiring abroad then you should consider choosing from countries where you traveled in the past. Or, make short visits to countries on your list before making a choice.
5. Currency Conversion
123RF
One of the main benefits of retiring abroad is making your retirement fund last decades longer by moving to a country where the dollar is used or is much stronger than the local currency. There are over two dozen countries outside the United States is where the U.S. dollar is the main currency or accepted alongside the local currency.
Research suitable foreign countries where the dollar is regularly stronger than the local currency. If you retire to a foreign country where the dollar is weaker than the local currency, or the cost of living is higher than in the U.S., then your retirement savings could evaporate sooner than expected. Choose wisely.
6. Living in Developing Countries
123RF
Retiring abroad is a big decision to make and should be treated as such. You will be exchanging a much more familiar and comfortable life in a First World country to live in a developing country. This is not necessarily a bad thing. Many former “Third World” countries are now fast emerging and developing countries that can offer comfort to expatriates. Make sure to research foreign countries with developing economies and cities before retiring abroad, especially if you can’t see yourself living in a foreign and rural countryside.
7. Adapting to Local Culture
123RF
Are you the type of person who is stuck in their ways? Do you always go to the same restaurant, order the same meal, and arrive at the same time? If you are an Americana-loving type of personality then retiring abroad may not be for you. Once you retire abroad, you will have to adapt to the local cultural norms, customs, and laws. You won’t lose your identity, but not adapting will only make your retirement frustrating and impossible to enjoy. If the idea of adapting to a local foreign culture just enough to get by is anathema to your ideals, then retiring abroad is not for you.
8. Weather
123RF
Study the local weather patterns of any country that you are considering for retirement as an expatriate. Suppose you’re used to experiencing four seasons in the United States. Can you really adapt to experiencing the rainy and hot seasons or pervasively humid weather you may experience in Central and South America, Africa, and many parts of Asia? Some federal studies suggest that weather can affect people psychologically. How would you feel if you never saw snow again or the changing of the seasons? Could you handle the monsoon and typhoon seasons in Asia? Think about these things before rushing into retiring abroad.
9. Medical Care
123RF
Many citizens from the West regularly go to developing, “Third World,” countries as medical tourists to get quality health care or elective surgery cheaper relative to local currency exchange rates. Brazil, India, Singapore, Costa Rica, Malaysia, Turkiye, and especially Thailand are noted for being preferred destinations for international medical tourists. The point is not to promote medical tourism, but to assure you that most of the foreign countries you consider for retiring abroad will most certainly have quality medical centers in their large cities. Still, you will be leaving behind the best medical industry in the world, relatively speaking.
10. Potential Double Taxation
123RF
You will have to pay taxes as an American citizen retiring abroad if you have a pension you withdraw from, a retirement fund, or are still working. If you generate a second income of any kind on foreign soil while working for a foreign government then you could be liable for double taxation by the American government. Consult with a tax expert or a financial advisor about these issues before retiring abroad.
Baby Boomers Retiring Abroad
123Rf
Retiring abroad is not just an activity for fringe, New Age Baby Boomers. Over 450,000 Americans were drawing upon their Social Security benefits from outside the country in 2022. These statistics only count expatriate S.S. recipients, not the millions of Americans living abroad voluntarily for work, study, or retirement. While you should never rush into such a decision, there could be a lot of benefits to retiring abroad you should consider before counting it out.
Read More
10 Difficult Realities of Retirement Planning
Living In Your Car? 10 Safety Precautions You Should Take Right Now
Allen Francis is a full-time writer, prolific comic book investor and author of The Casual’s Guide: Why You Should Get Into Comic Book Investing. Allen holds a BA degree from Marymount Manhattan College. Before becoming a writer Allen was an academic advisor, librarian, and college adjunct for many years. Allen is an advocate of best personal financial practices including saving and investing in your own small business.
