How to Prepare Financially for Retiring Overseas
Here are five ways to make your overseas move go smoothly.
There can be a lot involved with making a move abroad for retirement. One of the biggest steps is making sure arrangements are in place to make managing finances as secure and efficient as possible. Here are five ways to accomplish this.
1. Get Online Access
Have as much of your financial life online as possible. Snail-mail deliveries abroad can often get delayed or even lost, so go paperless with as many of your investment accounts, bank statements, credit cards, and state-side billing accounts as possible.
There are now very few places on the planet where it’s impossible to find an internet connection, and the most popular expat destinations are popular in part because they offer reliable internet connections. If you have electronic access to your accounts, you’ll never be blindsided by a paper statement or bill that fails to reach you.
2. Set up a Mail Forwarding Service
If you do have paper mail that you must reliably receive, get a mail forwarding account. A quick Google search on “mail forwarding and scanning” turns up several services. Your snail mail will be delivered to a state-side address from which it can be scanned for you, forwarded to you, recycled, or disposed of.
3. Set up Internet Telephone Services
Arrange for internet telephone service. You will need to make calls from abroad… to family, friends, bankers, brokers, airlines, and other contacts. The easiest and cheapest way to make those calls is with one or more of the Voice-Over Internet Protocol services… Vonage, MagicJack, Skype, etc.
For a modest fee, you can have a state-side telephone number that allows you to make and answer calls from your home overseas.
4. Decide if you Need a Foreign Bank Account
Once you are sure you have easy and instant access to all your financial resources back home, decide whether or not you’ll want a foreign bank account in the country you’re moving to.
Banking is different abroad… you often need personal references to open an account, and rules and timelines for deposits and withdrawals often vary, as do the amounts, if any, covered by local bank insurance. Also, very often branches of the same bank in different cities will not have access to common records, making it difficult to access funds outside your hometown. For this reason, many expats use the ATM cards of their state-side banks to access daily or weekly funds. Several U.S. banks now offer ATM services that refund foreign transaction fees, making the service essentially free. (Many overseas banks will accept direct deposits of Social Security and other automatic payments, but not all do.)
5. Set Aside Cash Reserves and Start Up Costs
Most importantly—well before you actually make your move--make sure you set aside an amount of cash equal to six months to a year of your projected overseas budget. Some expats make the mistake of thinking their cost of living will be instantly cut in half the moment they step off the airplane. In reality, there will be start-up costs… rent and rental deposits, visa and legal fees, fees for anything shipped to you, start-up costs for furnishings and appliances, etc.
Make sure you have enough cash set aside to handle these costs… and any other unforeseen costs such as emergency medical situations… before you make your move.
This article comes to us courtesy of InternationalLiving.com, the world’s leading authority on how to live, work, invest, travel, and retire better overseas.