The average retiree may need $45,000 annually to pay their cost-of-living expenses throughout retirement. That may sound high, but it actually may not be enough money if you retire to large cities with the high cost of living standards.
Have you considered buying property abroad and living out your retirement abroad? More than 432,000 Americans are living abroad based on where they receive their Social Security benefits.
Buying a home abroad may be a relatively affordable way to live out your retirement. Here’s how to get started.
Get a lay of the land
Spend a few weeks or months living in the country you plan to retire to. Get acclimated to cultural and standard of living changes that you must get used to and took for granted in the United States.
The medical care system, public transport infrastructure, language barriers, and weather may be vastly different and challenging.
Make sure you want to live in the country you choose to retire in before buying a house there.
Assess the local economy
Consider retiring to a developing country with a low cost of living and a currency exchange rate that augments the buying power of the dollar.
If you have $250,000, half a million, $1 million dollars or more saved, then you can buy or build a great house at a fraction of the U.S. cost.
Keep your cost-of-living expenses low, anywhere between $15,000 to $22,000 annually relative to the currency of the country you retire to.
If you can do that your retirement fund could last decades as it pays for your retirement lifestyle and overseas property maintenance expenses.
Hire a lawyer
Unless you are a lawyer yourself and understand the intricacies of international real estate purchases, then you would be wise to hire a lawyer.
Hire a lawyer with international real estate expertise in the United States, or a well-vetted English-speaking lawyer in the country to which you are moving.
Every country has laws and regulations dictating how, and if, foreigners can buy, own, or rent a property. If some countries, foreigners can’t own real estate unless they marry a citizen of the country or pay high regulatory fees.
A good lawyer may be able to guide you on the right way to buy a home relative to the country you are moving to. It may be cheaper or financially more practical to buy a plot of land and build a house instead of buying an existing property, for example.
And a good lawyer should be able to guide you on your tax obligations. Depending on your personal circumstances, you could be doubly taxed by the United States government through your home state and the income, or properties you acquire, while living overseas.
Get a good lawyer before you attempt to buy property abroad for your retirement, or risk wasting retirement funds by paying unknown fees, taxes, or penalties.