Are you thinking of retirement lifestyle
abroad? Dwindling pension
benefits are forcing many Canadians to rethink how they’ll spend their golden
years, but that doesn’t necessarily mean giving up their dreams of a sun-soaked
retirement. Some experts say that with proper planning, uprooting to an exotic
locale can actually help cash-strapped seniors stretch their retirement dollars.
Here
are a few of the advantages & disadvantages to consider. Most people
feel that the perks outweigh the pitfalls!
PERKS
Climate
For
most people, the main advantage of retiring abroad is a more moderate climate,
which may include southern Europe, the southern states of the USA (e.g.
Arizona, California and Florida), Central and South America, the Caribbean and
the southern hemisphere in general (e.g. Australia, New Zealand and South
Africa) The advantages of living in a warmer climate usually result in an
improved quality of life and often an increased life expectancy for retirees. A
better climate also provides ample opportunities to enjoy outdoor activities,
such as gardening, golf, tennis or walking, during your increased leisure time
Lower taxation
Some
countries provide generous, tax-free concessions for retirees, while others
have considerably lower tax bills than North America and northern European countries. Many
popular retirement countries have low direct and indirect taxation, including
property taxes, and no wealth or inheritance taxes. Note, however, that
citizens and residents of some countries (e.g. the USA and South Africa)
are subject to tax on their world-wide income, irrespective of its source, and
residents of certain countries must declare their foreign assets (e.g.
property) to the tax authorities in their country of origin.
Lower cost of living
Many
popular retirement countries have a relatively low cost of living, often
considerably lower than North America or northern Europe (although
countries from these regions are also popular destinations!). This is
particularly true as far as real estate is concerned and many goods also aren't
subject to such high levels of duty or tax. The cost of fresh food (e.g.
produce and meat) and locally-produced wine is generally reasonable in popular
retirement countries, where dining out is also an affordable option.
Higher standard of living and better quality of life
If your retirement destination has favorable
tax rates or concessions and a low cost of living, the chances are that your
standard of living will rise proportionately. When this is added to the
benefits of a warmer year-round climate, your quality of life will also improve
significantly.
Lower property prices:
Property
prices in North America and northern Europe (and in most of the world's capital
cities) have risen considerably in recent years, and many people find
themselves caught in a spiraling property market, unable to buy a home that
represents good value for money. In contrast, many popular retirement countries
offer affordable homes and in some real bargains can be found. You may be
surprised to discover that for the price of a small apartment in Toronto,
you can buy a detached home with a swimming pool in many countries!
Increased leisure and sports options:
The
availability of a wide range of leisure and sports activities at an affordable
cost is an added attraction of many popular retirement destinations. Most have
excellent leisure facilities, such as golf and tennis clubs, with affordable
membership prices.
Pitfalls
Being Away From Family
For
many, the main disadvantage of retiring abroad is the separation from family
and loved ones, particularly from grandchildren who have a habit of growing up
fast. This barrier can be reduced by keeping in touch regularly by phone (many
countries now offer inexpensive international calls), by e-mail/Skype (most
countries provide widespread Internet access) or by choosing a country within
easy travelling distance of your home country.
Culture Shock & Language Problems
Many
retirees underestimate the cultural isolation that you can feel living abroad,
particularly if you're planning to move to a country with a different language
where you will have few compatriots. Many people find that coping with
retirement and the lack of structure to life without a daily work regime is
made doubly stressful by the sense of isolation (and possible frustration)
created by a new culture and language. Are you prepared to be in a minority and
to be treated as a foreigner? Are you open to different ways of doing things?
Do you make friends easily? Can you cope with a much slower pace of life and a
high level of bureaucracy? Culture shock can be significantly reduced if you
retire to a country with an established expatriate community, as there is in
most popular retirement destinations.
Boredom & Isolation
Although
most people look forward to retirement, many find the reality of not working
difficult and the prospect of full-time leisure daunting. The question of 'what
are you going to do all day?' can become difficult to answer - even more so
abroad, where there may not be the same facilities and familiar leisure
activities that you have in your home country. You may miss your social life
back home and find it difficult to be accepted into (or to accept) your new
expatriate or 'native' community. It's advisable to visit your prospective
retirement destination a number of times at different times of the year and to
rent a property before buying a home and making a long-term commitment.
Financial Problems
Without
careful planning, retirement abroad can involve financial problems, such as
those caused by exchange rate fluctuations, poor investments and possible loss
of pension indexation. Tax and cost of living benefits may also turn out to be
lower than originally thought.
Immigration Laws
Some
countries have strict immigration laws regarding the status of foreigners and
how long you can remain there at a time. You may find that you cannot stay
longer than six months or that a retirement visa isn't indefinite, which can
heighten your insecurity. Some countries impose high permit and visa fees or
require that you meet certain, usually financial, criteria.
Old Age & Infirmity
Before
planning to live abroad you should consider how you would cope if your mobility
was restricted. Many countries have inadequate facilities and support for those
with disabilities, and social services may provide little or no help for the
elderly and infirm. Another consideration is the provision of retirement homes
or sheltered accommodation, which are either non-existent or in their infancy
in many countries, and even when available places may be in short supply.
Research
Do
as much research as possible on your prospective retirement destination. I am also here to
help with any of your questions and concerns before making your big retirement
move.
I
also suggest checking out Government of Canada Site
Are you or someone you know buying, selling or investing in the Toronto Real Estate, call me!
