The Option of Retiring Abroad

8.29.25: Audio automatically transcribed by Sonix

8.29.25: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker1:
Welcome back to the federal retirement Show. I'm your host, Val Majewski with American Benefits Exchange. I really appreciate, as always, you taking the time out of your busy schedule to view our content, to see what we have to share with you, because that's what it is for. It's for you, the federal employee that's out there looking for accurate information when it comes to your benefits and retirement. You might have questions and you're looking for answers. And hopefully this episode, if it attracted you to it or any of the other episodes that we have recorded, we've got, uh, almost 150 of them now and it's all there for you. So it's a lot to digest. But I would say go back. You can start from the beginning. Check out all of our content. Chances are your question will get answered throughout the episodes that we've recorded. And if for some reason it hasn't, please reach out to us and we will record an episode specifically to answer your question. And that's how these things come about. It's either listeners just like you, that reach out to us and say, hey, would you mind doing an episode on this? Or it's federal employees that I've talked to either at a conference or a convention or in a meeting, or who did a one on one benefits review, and something came up that we haven't covered here before that I think would be beneficial for you, a federal employee that's looking for information. And that's where today's topic comes up, right? So when we have these conversations, when we do the one on one benefit reviews, um, situations come up that maybe I've never seen before, situations come up to, uh, episodes or scenarios and things where we have not yet discussed on the federal retirement show.

Speaker1:
And I think it would be beneficial for other federal employees, just like you. Who's watching this? Um, that being said, if you are interested in and would like to get a personal benefits and retirement review completed, what that is, is we take a deep dive into your situation. We look at what you have, what you don't have, how things will change over time, what the costs are. We project out what your future retirement is going to look like. The idea is to give you a full and complete understanding of where you currently are. Show you how you're trending as you get closer and closer to retirement, so you can see if you're on the right track. And that's the whole goal of anybody that's working in the federal market, at least from my perspective, is to ensure that you're on the right track, that you're going to retire how you want, when you want, with the lifestyle that you want. Eventually, when that time comes, whether it's as early as possible or you want to wait until a certain age. That's what we do. So go to our website. It's federal retirement Show.com fill out the form. And one of our experts, if it's not me personally, will be reaching out to you to discuss your entire benefit situation.

Speaker1:
Answer all your questions. Make sure again that you are set up properly. So a conversation recently came up with a federal employee client of mine we've talked for years, and this particular person was looking to or is looking to retire abroad. They're looking to retire in a different country, and it's not the first time that this has come up, but it's the first time that it came up to the point where we talked about this. We need to have an episode about this. And this particular person was looking to move to another country, looking to move overseas, was going to get a visa, or is planning on getting a retirement visa in this particular country, and was looking at the positives, the negatives and all the things that were involved in doing so. And there's a lot, right? There's a lot that retirees from the US, you know, expats what they're going to be going through when it comes to being or living in another country in retirement. And it got me thinking, you know, what are some of the best countries for our listeners to retire in? And this is this is going to be a a pure opinion based based on fact, right, based on information that we've gathered. But it's opinion based. So I don't want you to take this as this is advice for me telling you this is where you need to retire.

Speaker1:
But it got me thinking and got me thinking. What are what are the top three countries that somebody from the US that's going to be retired as a federal employee can retire in? And I just want to share that with you in the positives as to why, we could also go over some of the negatives that you need to look out for when it comes to moving to a different country in retirement. So let's dive into today's content and talk about and discuss retirement abroad. So what does this mean? Retirement abroad just means that you're going to be retiring in another country, right? You're you're in the US. You've had your working career. You said I want to retire somewhere else. And that could be based on the location. Maybe you want to be on a beach. Maybe you want to be in a different climate. Maybe you want to be where it's a little more remote. Maybe you want to be in a in a country that you've loved forever. You just didn't grow up there, didn't work there. Now you want to retire there because you have the means, the ability you've planned on doing that. There's a lot of different reasons why people would want to leave the US and go retire somewhere else, or spend most of their retirement somewhere else. And that can be a little more than half the year. You can vacation somewhere. You can travel the world. I've seen it all.

Speaker1:
I shouldn't say seen it all, but I've seen a whole lot. When talking to federal employees about their retirement plans and the question that I asked myself, and this is a question that that I did write this, this stemmed from a conversation with a federal employee. But these are questions that I've now asked myself if I were a federal employee and I wanted to retire abroad, what are the best countries to do so? And what should I be looking for when it comes to retirement abroad? So let's take a look here. Which countries are the best to retire in. And I'm going to go into a little bit of why. Right. So this is not again this is not an all encompassing list. You can certainly do your own homework. You can take a peek, you can take a look. But these are some of the things that I found in my research. And I was researching a lot of different lists. Right. Google can be your friend when it comes to this, but where can I retire? That's going to have a minimal effect or impact on my retirement savings. And that's where I came in. I came at it from a financial standpoint where am I? Where is my dollar? Where is my money going to go the the best? Where is it going to last the longest? Where is my dollar going to get the most value when it comes to retirement? And what are the things that I need to look out for? So which countries are best to retire in? I want to share with you what I found were were the top three, and I may have again in my research.

Speaker1:
Uh, this is this is very subjective, right? I want to make this clear again that this is not advice. You have to talk to your tax professional, you know, talk to your family. You can dig in a little bit deeper, but just on a surface level, surface level. Here are some of my findings as to why these countries could be good to look at for retirement. First one Portugal. I never thought that this would be a thing. Right I think of. I've seen people go into other countries, but Portugal didn't seem like it'd be the top of my list. I did some research myself, like I said, and found that Portugal was near the top of a lot of different lists. Why is that? Well, under the tax treaty with the US and there's several countries that that this applies for or applies to. But under the tax treaty with the US there's no tax on Social Security. That's a big thing because that's a big part of people's retirement income. You're going to get taxed in the US, but you don't want to hit that double tax or you don't want to be taxed. Also, because you're moving to another country, pension should only be taxed in the US, right? You're not going to get hit with that that double double taxation as well.

Speaker1:
Uh, Portugal. Very affordable cost of living right now. It depends on where you live and how you want to live. Right. If you want to get a mansion on the water, you know, facing out into the Atlantic Ocean out there, then, okay, you're going to be paying more. But just in general, affordable cost of living, top rated healthcare. That was a big thing. That's a big concern for retirees. But no matter where they are. Am I going to have good and affordable healthcare? Now, you've also got to look at which of your Fhlbb plans will provide some coverage internationally. Right. So not only could there be good private healthcare where your dollar is going to go further for you when it comes to paying for your own healthcare, but what kind of coverage also can you get from your fhlbb in retirement international? Just making sure that you have the appropriate plan. Uh, there's something called a D7 visa that you're going to need to fill out or apply for in order to retire in Portugal, but these countries are trying to incentivize. Right. They want you to spend your dollars, spend your time in their country. They want to make it easy for you to do so. And a big thing is just not being hit with extra taxes. They think, all right, if you come into the country, you're going to retire there, you're going to live there, you're going to have expenses, you're going to pay for things, you're going to contribute to the economy.

Speaker1:
But it's just not your tax revenue that they're going to get. Now, there are other countries that have not listed on here that can hit you with a double taxation. Right. There's a there's a thing out there that can be you're going to get taxed on your, your pensions or your income that you have coming in outside of what the US is going to tax you. There's also things in other countries called a wealth tax, where you might just get taxed on your assets every year. So you have assets built up, and every year based on the cumulative total of those assets depending on where they are. But in some countries, a lot of them, if not all of those assets could be considered taxable. And you might, uh, might get hit with what they would call a wealth tax just by the amount of money that you have. You can get hit with a tax at the end of the year, on top of being taxed as now a resident of that, that country. What does the resident mean? Means you spend more than six months there per calendar year. If you're going to retire there, chances are you're going to be spending the majority of your time there. So these are places that I'm talking about for you to look into. Take a peek, dive a little bit deeper, do your research. But these could be beneficial for you to look at in retirement to have your dollar go further.

Speaker1:
Have less coming out of your pocket in additional taxes and fees and other things. Reduce your cost of living. Still have great health care coverage, which is what a lot of federal employee retirees are looking at or looking into for retirement and just be able to live comfortably, right? Um, some of these countries, you know, since the cost of living could be affordable, uh, you might be able to live well above your means, or it may not seem like you're seeing a decrease if you're making less money. Right? If your Social Security and your pension are less than they were when you were working, but now your dollar is going further for you. Well, you might not need to dive into or take as much from your TSB if you're looking to retire in these places. So just just understand that part of it here. All right. Number two on my list. And this is in no particular order. No particular order is Costa Rica. Now, I've heard of a lot of folks that vacation there that have gone there. I've got colleagues that's that are from there. I've heard a lot of great things about Costa Rica. I've never been there personally, but there's no tax on foreign income. Right. So no tax on foreign income or that Social Security. Those are pensions. It's there's no extra tax. Right. Affordable healthcare. Um, believe it or not, that's a that's a big thing.

Speaker1:
I would not have thought Costa Rica great affordable healthcare, um, affordable cost of living. You know, I've heard again, Costa Rica, um, in some areas though, you know, it could be a little less developed in other areas and others, the cities, not the the suburbs or going out into the countryside. Um, it could be just like you're used to, right? Depending on where you want to live. I said, do you want to be remote and kind of out where nobody's around? Do you want to be on the coast? Do you want to be in a big city? That's up to you. But all these things very similar to Portugal. Um, no extra tax, good healthcare, affordable, um, you know, cost of living. And there's something called the Pensionado act. Act visa that you would apply for, um, in order to get kind of your retirement visa, if you will. So Portugal is the D7 visa. This is the Pensionado, uh, visa. And this is what you'd apply for in order to, um, live in Costa Rica and retirement. Now, what are these visas for? Right. It basically just says that you're going to you have to follow these certain rules. And a lot of cases, you've got to live there for the majority of your time. So over six months you've got to be making some sort of income. And that's going to be covered by your pension. And Social Security should be enough to qualify for these things.

Speaker1:
So fairly simple process there. And if for some reason you wanted to also become a citizen of that country down the road, there generally is a path to citizenship and a lot of these places. Um, but just understand, you know, the benefits of going to these countries. Not only do they you want to go there because you like the place, but also your dollar is going to go further. So that's Costa Rica. The last one. This was surprising too because, you know, I just I didn't not realize that a lot of folks were were retiring to Mexico. And there's a lot of different areas. There's a lot of different places you can go to. Um, when it comes to Mexico, uh, the proximity to the US was definitely a positive bullet point, right? Costa Rica, not that it's super far. Portugal's across the ocean from the US, so that could be a deterrent for some. If you want to come back and forth and visit family or visit friends or you're going to be doing that. But the proximity to Mexico, easy to get in and out of, um, there's no tax on US Social Security pensions or TSP, which are which is great. So you want to make sure that, uh, again, not being hit twice on your taxes, affordable healthcare, a lot of people already cross the border to to do procedures or get medical care in Mexico. So if you're living here, you can have access to affordable healthcare.

Speaker1:
Again, affordable cost of living, depending on where you're at. Um, there's a lot of places you can go in order to live, uh, you know, by on a beach. Live in the countryside. Live wherever it is you want to. Um, in Mexico, you just got to apply for, again, the visa to be there. But that was a big thing. Was the proximity to the US. The fact that it's close. The fact that it's affordable. Now, the only negative that was going on, and this is based on, you know, message boards and things that you see out there. And the research I was doing, uh, for these three countries is of the three, you know, safety can be a concern, right? So just ensure that in any of these places that you're looking at, that you do your digging, you do your research, uh, obviously you want to make sure that you are safe in retirement, that you're in a place that, um, has, you know, security, that you're not going to be looking over your shoulder, you're not going to be in harm's way. You're not going to be in a war zone. You're not going to be in, you know, fill in the blank there for yourself, right. So safety security comfortability is definitely key. So you want to do your research. You want to visit. You want to ensure that you're choosing the right place. But you can see the theme here with these three countries that I mentioned.

Speaker1:
Again, not the only three, just the top three that I saw based on the digging I was doing. I'd love to hear from you. If you have another country that you want to dig into and research and check to see if it's a good spot for you. So please reach out to us. Let us know what other countries you are thinking of. But of these three, what are the common themes? No extra taxes, affordable healthcare, and good healthcare, right? Portugal's top rated healthcare. Costa Rica still very good healthcare. Um, Mexico. A lot of times you don't just think, hey, solid healthcare there, but you can find, um, great places to get treatment at a fraction of the cost. Um, so just looking at those then cost of living is my dollar going to go further in these countries? That's the thing that you want to look at, right. If you're planning on leaving the US I mean, people do that in the US all the time, right? They move from state to state and retirement because maybe that state doesn't charge state income tax. Uh, maybe the cost of living is less in that particular state. Your dollar is going to go further. Now moving to a different country. If you're looking to do that, this can be a benefit for you. So retiring abroad, those are the first three that I saw. Now what should you avoid when retiring abroad. What should what should be some red flags? Because there are places that a lot of people would like to go, but, uh, it's not beneficial to do it for a number of reasons.

Speaker1:
So avoiding double taxation, you know, getting hit with extra tax. I saw that in France. France was a place where people get hit with double taxation. Right. You might get taxed, uh, again in France, on top of what the US taxes are. So that's an example of of getting hit a couple of times. And your dollar is actually going less. You may love it. Hey, I want to live next to the Eiffel Tower. I want to go to south of France. I want to go here. I want to go. There may not be in your best interest or a country like that. Higher cost of living. Now, if you're not making as much money in retirement, it may sound awesome to get the the place right on the Mediterranean or, you know, the the place in Hawaii or wherever it is, but it could be a higher cost of living. Now, I know Hawaii is not a broad. I'm just using that as an example of a place where cost of living is higher. But if you're looking at a country or a location in general of where to live, you want to ensure that the money you have coming in is going to last, right? It's going to take care of your living expenses and then some. We've talked about this on other podcasts, where you want to guarantee and ensure that you have enough lifetime income, guaranteed lifetime income to pay for your basic living expenses, and you're not going to be strapped for cash in retirement.

Speaker1:
Well, finding a place where your cost of living goes down is going to extend the life of that dollar, which is great. Poor or inaccessible health care. There are other countries that may seem desirable, but the health care is expensive, is poor, or just you can't. Right. It's not something that you have the ability to get as an author. So just understand healthcare is a big thing, especially if you're going to retire, right. You're going to be aging. You're going to be getting older. Um, chances of things going wrong are you getting or chances that you're going to need medical attention go up in retirement. So you want to be in a place where healthcare is either, uh, very, very high quality and hopefully in combination of reduced costs for that, for your health insurance coverage is going to cover you at all outside the US and where that can cover you. And then the other thing is unstable or unsafe. Countries. I know a lot of people would probably just not even have those on the list. But there are other places I know I've been to Argentina, uh, before Argentina was was. Uh, we found the cost of validity was very, very low while we were there. The dollar went very far there. But countries sometimes can be a little unstable and there's high inflation.

Speaker2:
You never know.

Speaker1:
What's going to happen as far as regime changes and what's going on. And you want to be there for a little bit, then find out, boom. All these things get changed on you. So looking for a place that's been stable, that's got a long track record of being good to expats, good to retired us folks, uh, when it comes to, again, finances and safety, security, making sure your dollar as far as possible. So with that, I know this is a very general we're scratching the surface, right. We're not we're not diving deep into each one of these countries, but just in general. And there's a longer list that you can have with this. But in general, ensure that you have, uh, a place where you're going to be safe and secure, a place where you're not going to be hit with double taxes. A place where your dollar is going to go longer for also a place where you desire to be. Right. Because you can get all those things and it might not be the most attractive place. So do your research, do your digging, and let me know. What other places are you looking to retire? We can take a deeper dive.

Speaker1:
We can look into it and see if it's beneficial for you. So as I mentioned earlier, I really appreciate you taking the time out of your busy schedule. To view our content, go back and view our almost 150 episodes that we have. Those are for you. It's educational material. Hopefully your question gets answered. If you do not get your question answered, reach out to us. Let us know what that question is and we'll do a whole episode on it. We'll do a personal Benefits every Time review for you and go over your situation one on one. That's what we're here for. That's the service and the information that we want to provide you. So again, I really appreciate you joining us. If you like the content, subscribe. Uh, get notified when a new episode comes out. And do me a favor. Share us with your colleagues. You work with other federal employees that need this information. Do not keep us a secret. Share this information with them and we'd be happy to chat with them as well. So thanks again and look forward to seeing you soon on a future episode.

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