This content is for information and inspiration purposes only. It should not be taken as financial or investment advice. To receive personalised, regulated financial advice please consult us here at Elmfield Financial Planning in Padiham, Burnley, Lancashire.
Do you dream of retiring abroad – e.g. in Spain, Canada or even further afield? Or, you know someone who does? This guide could be for you.
It is estimated that 247,000 Britons aged over 65 are living in EU countries (not Ireland or the UK). Tens of thousands more reside in other states such as Australia, India and Thailand.
Retiring overseas is a big decision offering many risks and opportunities. Careful planning is required, ahead of time, to ensure that it is possible for you – and meets your goals.
Below, our Burnley financial planners share some insights and ideas about how to sensibly retire abroad – especially from the perspective of wealth and finance.
Why retire abroad in 2023?
There are many attractions to retiring overseas. Perhaps you want to experience a new culture, cuisine and way of living. Certain countries may offer a lower cost of living (e.g. housing and food), letting your retirement savings stretch further.
You may be able to enjoy a better climate – warmer weather, beautiful scenery and outdoor activities, such as watersports on the beach. You could learn a new language and make new friends – both local and foreign – offering the chance of a “new start”.
What are some risks of retiring abroad?
Retiring abroad is definitely not for everyone and it can backfire if you are not careful. Firstly, some people may underestimate how much they will miss friends, family and “home comforts” back in the UK.
It may be hard to make meaningful, long-lasting friendships in a new country. Fellow expats might relocate a lot. Language, wealth and cultural barriers may inhibit your ability to connect deeply with local people.
Moving abroad means leaving behind your established social networks and support systems. You also need to be mindful of local laws, regulations and norms in your new country of residence, integrating properly and respecting the country that has welcomed you as a guest.
Access to quality healthcare is also important, especially as you get older and your need for such services might rise. Most countries do not offer a healthcare system like the NHS – i.e. “free at the point of use” – so you are likely to need good insurance to access private services.
In the more distant future, you may also require good quality care services. For instance, how will you be cared for if you get Alzheimer’s disease and need round-the-clock care?
Also, consider the possibility that you may want/need to repatriate to the UK in the future. How easy would this be and, in particular, what kind of wealth and financial implications would this have (e.g. for your pension)?
Retiring abroad – some ideas
If you are interested in retiring to a particular country, consider how much time you have already spent there. Perhaps you have only made a short visit in the past. This might not be enough to be certain that you would enjoy retirement there.
Could you take a longer amount of time to stay there? After all, travelling in/around a country for a week or two is very different to living there for 6-12 months. By this time, many of the novelties have worn off and you have a better sense of what “normal life” would be like.
Consider reaching out to British expats who are already retired in your target country. Perhaps you can find them by joining a Facebook group or other online community forum.
For instance, Saigon International Families is a group dedicated to foreigners moving to Vietnam. Here, you could post questions about what it is like to live, eat and socialise in the country, particularly for those in retirement.
To retire abroad, of course, you need money. It is often possible to access (or even transport) your pension(s) overseas. However, this may be more complicated than retiring in the UK – e.g. due to currency fluctuations and conversions.
A financial planner can help you with your expat retirement planning, addressing key questions such as “How much do I need to retire in X country?” and “Am I on track to achieve this?”
A professional can also assist with navigating the complex world of international pension planning. For example, how will you receive your State Pension income? Will it go up each year, under the “triple lock” system, or will it gradually lose “real value” if you retire in a country which does not meet the UK government’s triple lock criteria?
Should you keep your pension(s) in the UK and make withdrawals from overseas via a foreign exchange account? Or, should you transfer it internationally – taking it with you? If you think there is a chance you may repatriate one day, perhaps the former is the best option. However, a financial adviser can help you explore the best choice.
Consider the scenarios that might pull you back to the UK, such as a death in the family or you need to enter specialist care. A robust financial protection plan with an adviser will help you conduct appropriate contingency planning for such “what if?” scenarios.
Invitation
If you are interested in starting a conversation about your own financial plan or investments, then we’d love to hear from you. Please contact us to arrange a free, no-commitment consultation with a member of our team here at Elmfield Financial Planning in Padiham, Burnley, Lancashire.
Reach us via:
T: 01282 772938
