Expatriate Financial Considerations For Retiring Abroad

More than a million British citizens are collecting their state pensions from destinations abroad. With the sights, sounds and local flavour of countries as diverse as Spain, New Zealand or even Belize attracting retirees, getting in on the trend or retiring abroad appeals to more than one up-and-coming retiree.

If the countryside of France or the mountains of Bulgaria sound too good to pass up to you, you’re going to need to make sure you have a few things in order. Finances of course are one of the main considerations and in this article we’ll examine expatriate financial considerations for retiring abroad.

For Britons who want to move out of the UK in retirement, there’s more to planning for the financial future than just making sure a pension is in place; some of the top considerations no matter the retirement destination include:

• Exchange rates. This is a very big concern - in countries where the pound spends very well today, there is no guarantee that this will be the case tomorrow. Retirees are often urged to take advantage of opportunities to transfer assets into euro-based accounts (where applicable) and to lock in to a specialist exchange rate for direct deposits of pensions where possible…speak to your financial adviser about what’s right for you.

• Basic banking concerns. Plan on having to juggle two accounts if you intend to keep a British bank account open (which is a sensible thing to do if you are eligible). Make sure you have online access to this account as time differences might make contacting the bank directly via telephone a little tricky at best. It’s also always a good idea to inquire about local banking in your retirement destination as well; having a local account will make paying routine bills a whole lot easier.

• Pension concerns. If you intend to stay within the European Union your state pension shouldn’t be too much of a concern. If you move out of the EU however, there is a chance that inflation increases will not be credited to you and your pension will be frozen. Take care to research the ramifications before selecting a retirement destination.

• Taxes. This is a sticky situation to say the least! Typically you will find you are taxed at the local level within your country of choice but you might still find HM Revenue & Customs tax you as well. Countries where there is a double tax treaty can help make this issue go away. Destinations that have a tax treaty with the UK include the popular retirement countries of Portugal, France, Spain and Italy. Pay close attention to the tax issues however, or you might find your retirement pension doesn’t go as far as you thought it might.

Buying property abroad and moving aboard during retirement is a major British trend. With the whole world waiting to be explored and many countries offering a better standard and lower cost of living than the UK it certainly makes sense. To ensure you have your finances in order, closely research the regulations and situation in your country of choice. Sometimes the grass isn’t always greener on the other side of the fence…make sure you cover the expatriate essentials relating to all aspects of your financial situation before you commit to retiring abroad – where necessary speak to a financial adviser about your personal situation.