Many of us harbor dreams of retiring overseas in some far-flung, exotic country. Whether it’s for pure adventure, to make retirement dollars stretch further, or both, retiring abroad is becoming more common. But choosing exactly where to go can be difficult. Without proper planning and consideration, a country that appears perfect on the surface could end up being a nightmare. (See also: 9 Things to Know Before Retiring Abroad)
I know just how daunting the task of choosing a country can be. I’ve been living a semiretired life in multiple countries over the past eight years and I’ve written many articles on early retirement. I’ve found it helps to start with a list of all the countries where you can envision yourself living. Maybe it will be made up of places you’ve fallen in love with while visiting in the past. Perhaps you’ll include countries you’ve never visited, but have heard are great retirement havens for Americans. From there, follow these guidelines to shorten your list and eventually pin down the perfect retirement destination for you. (See also: Retire for Half the Cost in These 5 Countries)
Figure out your finances
Finding a country that fits your finances is probably the most important part of the puzzle. It’s crucial that you opt for someplace where you can enjoy the lifestyle that you dream of without draining your bank account in the process. (See also: 5 American Cities Where You Can Retire On Just Social Security)
As a first step, you need to calculate exactly how much you have in your retirement savings and how much you can withdraw every month. Then, project how much income you’ll have from other sources, such as Social Security or any private pension or annuity plans you have. Account for any taxes you might have to pay, and come up with a ballpark figure for how much you’ll be able to spend every month during retirement. (See also: 5 Incredible Places to Retire Abroad That Anyone Can Afford)
Rule out unaffordable destinations
Once you have your estimated income, start researching the cost of living in each place on your dream list and determine whether it fits your finances. Tools like Numbeo and Expatistan are great for estimating the cost of living in different countries. Cross out the places you can’t afford. This will naturally narrow down which countries are realistic to put on a short list. (See also: 5 Countries Where You Can Retire on $1,000 a Month)
Check out the quality and affordability of health care
Health care is one of the most significant factors to take into account when choosing a retirement destination. Medicare generally won’t cover you outside of the U.S., so you need to put a plan in place for how you’ll afford any medical requirements. Fortunately, some of the most affordable countries to live in also have top class medical services, but it’s something you’ll need to research for each country on your list. (See also: Don’t Let These Expenses Spoil Your Retirement Abroad)
If the health care is cheap, it may be possible to just pay as you go, but you should also look into suitable insurance plans. In particular, think about how you’d pay for treating a major illness or catastrophic injuries.
Take your hobbies and interests into account
No doubt you have a good idea of how you’d like to fill your free time once you’re not working anymore. But make sure you double check that you’re able to do the things you love most in the country of your choice.
If you’re a keen golfer, there’s no point in selecting a country that has no golf courses, as it’s probably something you’ll want to do more of in retirement. Don’t just assume that every country will have the facilities or resources you need for your hobbies and pastimes.
Consider your security
Unrest and crime are two factors that can quickly endanger your life, affect your finances, and hamper your dreams. Though it’s impossible to predict what will happen in the future, it is possible to make educated assumptions based on the historical and current security situation in the city, region, and country you’re considering. Is it somewhere prone to civil unrest, gang activity, or petty crime? Are there upcoming elections that may significantly alter the political landscape?
Check out the U.S. State Department’s travel website, which provides advice on every country in the world. Also read articles and check with local residents to see whether any problems reported in the media ring true in real life.
Research visa options and other relevant laws
Residency laws differ from country to country and can come with significant costs attached. Check these requirements thoroughly. In most cases, you can find information put out by the country’s immigration office online. You can also contact the closest consulate or embassy of the country you’re considering. Often, you will need to apply for residency while you’re outside that country, but check first. (See Also: 5 Countries That Welcome American Retirees)
Consider other relevant laws and regulations, too. Perhaps you won’t be allowed to work if you’re on a retiree visa, or you won’t be allowed to buy property in certain areas. You may or may not be subject to local taxes, as well. Remember also that moving overseas does not preclude the requirement to pay taxes in the U.S., even if it’s necessary to pay them in your new home.
Consider cultural fit
Moving to a new country, not understanding the language, and trying to adjust to the culture all at the same time can be a singularly isolating experience. Ask yourself if you’re ready to learn a new language if necessary, and whether you’re able to change to fit in with the culture of the places you’re considering. Are there things that you don’t like about a particular culture that you think you’d grow accustomed to? On the other hand, could annoying local biases or customs that you’ve put up with on a vacation grow unbearably wearisome once you’re living in that place full-time?
Get to know the weather
It’s a good idea to check year-round weather forecasts, too. Even if you think you’re familiar with the outlook somewhere, it could drastically change throughout the year. If you’ve always visited during high season, make a conscious effort to check what the weather is like during low season. There’s often a reason why tourists don’t visit then. Temperatures may rise or drop to uncomfortable levels, storms may make living dangerous or at least inconvenient, and drawn-out rains may just make everyone miserable. Many weather websites or destination-specific websites have data on historical temperatures and precipitation for every month of the year. (See also: 33 Places to Retire If You Love the Rain)
Do a test run
Possibly the biggest mistake that retirees can make before heading abroad is to take the plunge without having tested the waters first. Do yourself a big favor and complete a test run in the country that you settle on. It may cost you a little extra, but the expense is usually worth it.
Consider where you’ll go if you don’t like your new retirement country. Maybe you’ll want to move back to the home you own in the U.S. If so, it makes sense not to sell right away. Perhaps you can rent it out temporarily while you do your test run.
Then make a semi-permanent move. Rent a temporary home, preferably furnished, and get by with whatever you can take in suitcases. Give yourself enough time to experience different seasons, get to know a few people, and see if your monthly budget will really work. If it doesn’t work out, you may be disappointed, but at least you’ll have minimized your moving expenses and you’ll have a place to go when you move back. (See also: 4 Questions You Need To Answer Before Relocating in Retirement)