Once you've built your nest (years of hard work) and, in it, laid your nest egg (a sizeable pension plan), you spend a large chunk of your time trying to protect it from predators (mountain lions, great horned owls…and excessive taxes/fees). Now you're ready to fly the coop, or least migrate South for the winter, and you're not alone. According to wealth management specialists, retiring overseas is increasing in popularity every year.
No matter where you're headed – Spain, Japan, Malta, Mexico – it certainly helps to take a little advice from other birds of feather. Making the most of your retirement benefits has practically become an art form, albeit an extremely tricky one when it comes to navigating the rules and regulations of living abroad.
Access to lump sums, avoiding double taxations and having investment freedom are top concerns of recent retirees. Many have apprehensions about their family's ability to access their retirement benefits after they're gone. Another big factor is health care, which can be more affordable overseas than at the clinic across town. Also, Medicare routinely refuses coverage for those living abroad. Renouncing citizenship is no longer thought of as political grandstanding; it's a solid financial chess move for tax efficiency.
Qualifying Recognized Overseas Pension Schemes, or QROPS, are flourishing as a form of security. A financial market advisor or wealth manager is likely the key to matching up the best-suited QROPS jurisdiction (there are around 3,000 schemes on the market) to your preferred country of residence, leaving you to focus on making the most of your money.
Asset protection is a hot-button topic. Acquired foreign property and assets are frequently not recognized by domestic attorneys and courts, so crafting the right estate plan can become extremely important. Getting familiar with international tax treaties and the fluctuating regulations is a little bit of a chicken-and-the-egg scenario. Which comes first? Should you wait until you're swamped with heavy-duty fees? Or jump in feet first and fight for your right to relax? It's your retirement, after all.
Mario Vitanelli is an international finance, travel and investment blogger who specializes in retirement and long-winded metaphors. When he's not writing, you can frequently find him losing at bridge to his wife and inventing creative pasta dishes (chipotle-tarragon-cream sauce, anyone?).