Should you retire overseas?
“We pay a fraction of what we’d pay in Australia and have a lot better lifestyle,” a friend John confided to me in Bangkok recently. “We’ve always loved Thailand and it’s a lot easier and more affordable to live here and go back to Australia for a holiday.”
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On the other hand, David, another friend, sold up in Sydney, moved to Bali then moved back to Australia again, partly for access to medical treatment but also because he didn’t relate to either the locals or Australian tourists in his adopted home.
The concept is beguiling. Have you enjoyed your beach holiday in Malaysia or perhaps eating your way through the restaurants of Pattaya so much that you wonder why you are going home? You could always simply stay in the sun.
How to know if it is the right move
Of course there’s more to deciding to move overseas than climate. Costs of housing, food, transport and entertainment are important. But so are the standards of health care, infrastructure and safety. Most importantly, there’s your compatibility with the society in which you’ll be living.
One great tool for making these assessments is International Living’s annual listing of the World’s Best Places to Retire. In 2016 the country that came out on top is Panama followed (in order) by Ecuador, Mexico, Costa Rica and Malaysia.
Consider the cost of living
If you think the best starting point in the decision-making process is the cost of living, you should take a look at this tool at Expatistan that allows you to compare the cost of living between different cities over food, housing, clothes, transportation, personal care and entertainment. Sadly, it suggested that Paris costs about the same as Sydney so I’ve cancelled the move.
For most who may be contemplating relocating, access to Australia is likely to remain important. If not, Pitcairn Island is seeking immigrants to the remotest place on earth – its population is declining and it wants to reverse the trend – see here.
Would you like to retire to the beautiful coast of Costa Rica?
Of course, much of the information available on relocation is America-orientated and provides a lot of information about Mexico plus the countries of Central and South America. For us, the most convenient countries to move to are those of South East Asia – particularly Malaysia and Thailand but more recently Vietnam, the Philippines and Cambodia. In each case there are direct flights back to Australia so you can be home within the day.
Work issues and superannuation
Presumably, if you’re retiring overseas you aren’t planning on working there. If you are going to be working in your adopted country, even part time or casually, a whole new series of bureaucratic obstacles arise. You’ll need to be sure of your status before you move or it could end very messily. On the other hand, no possibility of working may leave you idle and bored, no matter the improvement in your golf handicap.
If you’ll be relying on your Australian superannuation to support you overseas that won’t be a problem and you’ll be able to access your bank balance wherever you are. On the other hand, if you will be relying on your Australian Government Age Pension there are specific rules depending on your circumstances – see here. And you need to consider potential future changes as there have been several government moves in recent years to reduce – or cut – access to the pension for Australians living overseas.
Housing: to rent or to buy?
Another consideration is housing. Not all countries (including Australia) simply allow foreigners to arrive and buy property. Often the way around this is to become a co-owner with a local citizen but if there’s a later dispute the local law is likely to strongly favour the local. Renting, of course, is the more flexible option.
Alternatively, think laterally. Quite a few Australians are owners of canal barges in France. They can even be stored for the northern winter and brought out when spring arrives. If your funds are boundless (I’ve heard the figure of $150,000 per year) you could simply move onto a cruise ship that regularly circumnavigates the world.
The Central American nation of Panama rates as the best place to retire
The decisions to be made are considerable but perhaps no more than organising an extended holiday around the world. Some of the advantages of living overseas may not even be on the radar of the average Australian. While we count ourselves lucky if we can afford cleaners to come once a week, most expats have live-in staff. If you’re finding it harder to cope by yourself, cheap full-time staff can be quite a boon.
There are more than 80,000 Australian age pensioners receiving their payments outside the country. That’s considerably more than the mere 23,000 receiving it in 1993. Most of them (in decreasing order) are in Italy, Greece, Spain and the UK. The largest group residing outside Europe are in New Zealand.
Close to home, and well serviced, Thailand's Chiang Mai could be the perfect place to retire
Finally, if you are planning on living overseas permanently you need to consider how your health needs will be covered as you age and your health declines. International health insurance is expensive, particularly if you are past retirement age – and it’s likely to be impossible to obtain for any pre-existing condition. You may wish to gamble that, in the event of a health issue you can simply return home for treatment. That will only work if you are in condition to travel or can afford the often six-figure sum of medical emergency repatriation. Or, consider the option of keeping an untouched nest-egg (effectively self-insuring) and access the best private hospitals locally.
Before committing to a move overseas do some research and look online or, better yet, talk to expats who have made the move. Overall, I’d say that, of my friends who have relocated to another country (whether Thailand, France or Vietnam), 80 per cent are very satisfied with their new lives.
What about you? We’d love to hear about experiences from you or from someone you love who has retired overseas (or considered it). Email us at email@example.com
Have you ever thought about moving overseas to retire? Let us know in the comments section below.