Living in another country is a save-your-retirement move that few people consider.
For Edd and Cynthia Staton, it was a lifesaver. During the 2008-2009 financial crisis, they took a hard look at what retirement might look like if they remained in the U.S.
Staying would have meant severe belt-tightening. After some research and an exploratory visit, they moved to Cuenca, Ecuador, and haven’t looked back.
They learned so much about retiring abroad they’ve written books and created a program, Retirement Reimagined, that details most of what you need to know and pops holes in a few common misconceptions.
Get ready to put your organizational skills on steroids, because you’ll need at least three months of planning and organizing. Expat Info Desk has a 90-day checklist of tasks to help orchestrate your move.
You’re also going to need to prepare for the other end, and online is a good place to start. The U.S. State Department has information on retiring abroad, including links to resources on visas, medical insurance, paying taxes and voting while overseas.
The website International Living likes to use local correspondents in many countries to detail their personal experiences and share helpful tips. Escape Artist is a somewhat more money-focused site with info for expats. Expatistan and Numbeo are two sites that give cost comparisons and prices for living in hundreds of countries.
Moving abroad may be the ultimate in using your brain in new ways. “We’ve always been pretty resourceful but when you put those skills to the test it’s comforting to know you can do it,” Cynthia Staton said.
The most surprising thing about their move was how quickly the Statons found themselves thriving. “We embraced the change and felt like it was a great decision,” she said.
Here are five key topics to focus on.
1. Learn the language
“We arrived with Taco Bell-level Spanish and thought we were going to perish,” Edd Staton said. Instead, they found Ecuadoreans appreciated any attempt to speak Spanish.
You may not need to be fluent. “Becoming functional is a more realistic goal,” Edd Staton said.
At the very least, you need some basic skills so you don’t remain an outsider. The Statons recommend as much study and practice as you can cram in before you leave. Take classes or learn online.
Load up on apps such as Duolingo or Memrise. The free versions may be limited but they keep you on track. Every little bit helps. Read articles online for more tips, such as partnering up and using flashcards.
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If you show up without any skills, find a class and enroll ASAP. “At the very least, it can be a chance to make new friends,” Edd Staton said.
2. Money talk
Get comfortable with online banking. First, put your financial accounts online and notify your bank you’d like all statements and correspondence sent to your email address.
You might want to keep a bank account open in the U.S. for credit card payments and to receive Social Security checks. You can claim your Social Security benefits no matter where in the world you live, says Suzan Haskins, an International Living editor, so don’t worry about losing eligibility.
Many overseas banks will accept direct deposit of Social Security checks. The SSA website has a list of countries that have overseas direct deposit, and the percentage of banks in each country that do this.
The Statons recommend having a local checking or savings account. But be careful. You will need to file the appropriate documents, such as the Foreign Account Tax Compliance Act, also known as FATCA, to let the U.S. government know you have assets in an overseas financial institution. You will still have to file a U.S. tax return.
Don’t forget about foreign transaction fees. Some larger U.S. banks can charge 3% for debit card purchases or ATM withdrawals abroad plus a flat $5 fee per transaction. Those fees can add up.
3. Residency visa
Once you step off the plane, you are basically a tourist and you’ll have to go through a formal process to apply for residency.
Different countries have different requirements and opportunities. In the Netherlands, for example, you can get a permit to work and live if you’re self-employed using a Dutch residence permit. There’s no maximum age, and you can sponsor your spouse and minor children. They require a minimum business investment of 4,500 euros (at press time, about $5,030), and the permit is good for two years.
Check websites such as AARP, Retired Brains, Transitions Abroad and Expat Info Desk for general visa information as well as specific retirement visas that some countries offer.
Before you leave, gather and complete paperwork, such as marriage licenses, birth certificates and proof of income. Some may have to be authenticated.
Scan and email your completed docs to a qualified visa attorney for review. Showing up with incomplete or incorrect paperwork will cost you lots of extra money and delay the process.
4. Medical matters
You’ll need health insurance, and requirements and access vary from country to country.
France, for instance, has made it easier for all residents, including foreigners and expats, to access health services. The website Cuenca High Life outlines costs for buying health insurance in Ecuador.
International Living has lots of anecdotal experiences about buying health insurance and the cost of medical services in other countries.
Many countries require proof of health insurance to enter as a visitor. This requirement may also be part of the application process for your residency visa. Check with your visa attorney regarding this matter.
Have a checkup before you leave the U.S., so you can head off a health emergency. You don’t want to have to scramble while you are getting settled.
5. No place like home
Even if you plan to buy a house or apartment, the Statons recommend renting first. Adjusting takes time, and what you thought you wanted at first might well change once you’re more acclimated.
Don’t put down any money without seeing the place for yourself. Instead, stay in a hotel to start, if you must, and move up to a short-term, furnished rental. You’ll need some time to learn what documentation is needed to rent a place and how bills will be paid.
You may find after a few weeks or a few months that the place you’ve chosen isn’t your dream retirement place after all. It’s much easier to move without having to sell a property.
Disclosure: Invest in You: Ready. Set. Grow. is a financial wellness and education initiative from CNBC and Acorns, the micro-investing app. NBCUniversal and Comcast Ventures are investors in Acorns.