Some retirees have managed to stretch their dollars by moving overseas, but it takes careful planning to make it work.
Step 1: Make a list Make a list of countries that you are interested in. Carefully research them by consulting books, magazines, and web sites.
Step 2: Check visa requirements Find out about visa requirements. A few countries go out of their way to welcome U.S. retirees. Others won't let U.S. citizens take up full-time residency.
TIP: Mexico and some Central American countries have fairly simple immigration procedures and are popular retirement destinations for U.S. citizens.
Step 3: Consider your finances Consider your finances. Foreign countries may require proof that U.S. retirees have a minimum monthly income. You may also need money to pay for trips between the retirement country and the United States.
Step 4: Research the tax laws The United States has agreements with more than 50 countries so that U.S. citizens living abroad are taxed at a reduced rate. U.S. citizens may also be exempt from paying U.S. income taxes on some foreign income.
Step 5: Consider access to health care Consider access to health care in the foreign country. Medicare coverage will not help U.S. citizens who need health care in a foreign country.
Step 6: Visit the country Visit any countries of interest. If you find one that you like and decide you want to retire there, consider renting a place for an extended stay before moving.
FACT: Did you know? Panama’s foreign retirees’ program offers property tax exemptions, a mortgage reduction for a primary residence, and discounts on utility bills.