Retiring overseas has become a popular trend. The first question many people ask is “how much money do I need to retire overseas?” This blog post will help answer that question by telling you the things you will need to know before retiring abroad. We’ll also go over some of the best places in the world for retirement, and how much money is needed on average for living there.
1. Consider your retirement goals.
Where are you retiring to? What do you want out of retirement? A warm climate or a place where the cost of living is low.
What does your ideal day look like in retirement? How much time will be spent traveling, working on a hobby, volunteering, etc.?
2. Determine how much you need to retire overseas
The amount of retirement savings needed to live abroad will depend on three factors:
-The cost of living in the country you’re retiring to.
-How much income you’ll lose when taking your retirement savings out of the U.S., and into a different currency.
-“Your desired lifestyle.” The more luxuries, such as travel or eating out at restaurants, you want to afford, the more money your will need.
-The amount of retirement savings needed for living abroad will depend on three factors: The cost of living in the country you’re retiring to; how much income is lost when taking retirement savings out of the U.S., and into a different currency
3. Evaluate the cost of living in different countries
Spend some time doing research on the cost of living in different countries. There are websites that provide information on how much money you’ll need to retire abroad, based on what country and city you’re retiring to.
-Keep your eye out for “fiscal cliffs” – places where the cost of living is very low but there’s not a lot of work.
-If you want to retire on a beach, think about how much money you’ll need in order to live there.
-Look at the cost of housing as well – it’s not just living expenses that count when determining where your retirement savings will go
Costa Rica: $1500-$2500 US per month
France: $1500-$2500 US per month
Thailand: $2000 -$4000 USD per month
Singapore, Malaysia, Hong Kong: $3000-5000 USD monthly income in order to retire abroad.
Australia and New Zealand: $1200-1800 AUD or NZD/month for a comfortable lifestyle
4. Figure out what type of lifestyle you want while retired abroad
How you plan to spend your time is a big factor when figuring out how much money you’ll need to retire abroad. For example, if you want to travel and explore the world but don’t know where your retirement savings will come from, this could be an issue.
Are you planning to spend time doing cheap activities, such as volunteering or cooking? Or will you be spending a lot of time on entertainment, such as going out to restaurants and seeing shows? Or will you spend most of your time reading and writing? These are cheaper ways to spend your time than traveling or seeing shows.
If you’re planning on doing a lot of volunteering, it is possible that you won’t need as much money for retirement since food and housing are often provided in these situations. In addition, if you plan to work part-time with the same company while living abroad, this could also reduce the amount of money you need.
Do research on what those daily activities might cost in the place you’re moving to. This will help give you an idea of how much money is needed when considering your retirement savings and budgeting while abroad.
5. Decide whether or not to invest in property abroad and if so, where?
Research buying property in the country you want to retire in vs. purchasing abroad and take into account factors such as currency values, tax laws, location of properties within a country (i.e., are there mountains? beaches? cities?)
Would I be able to manage big repairs or renovations on my own if needed?
What are the costs for furniture and other household items in my new country of residence?
Can I find a job there if need be or can I set up an income-generating activity abroad?
Will living in one country lead to me being less mobile than if I invested elsewhere, potentially limiting my ability to visit family members on either side of the Atlantic Ocean?
6. Understand that there is no “right” amount of retirement savings for everyone – it all depends on your personal circumstances
The cost of living overseas will depend on a number of factors including where you live, the type of lifestyle you lead, and what your personal circumstances are. For example:
• If you’re living in an expensive city such as London or New York City then it will cost more to maintain your standard of living overseas than if you were based elsewhere like Panama City.
• Your monthly income might be higher than someone else’s, so you’ll need to save more
• You may have a big mortgage in your home country which can’t be paid off while living overseas. This might mean that the amount of money needed is higher
7. What are some of the best places to retire with a low cost of living?
Here are some examples of countries with a low cost of living :
India (Southern States)
The cost of living in these countries is around 50% less than the average country and much lower than the US, Canada, or Australia. If you are looking for a more remote location to enjoy your retirement, you can also check out parts of Asia and Central America.
There are many countries with a low cost of living, and any number of them could be the perfect fit for you. The best approach is to research where your interests lie and select from there. There are really no wrong answers in terms of which country will give you an affordable retirement.
How much money do you need to retire overseas? It depends. If you retire abroad to a location like Thailand or Portugal, you’ll need fewer retirement savings. If you retire to London, then the amount will be much more expensive. Research your ideal retirement destination to see what the difference in cost of living is and then crunch those numbers to find out how much you need.