Are you thinking of spending the rest of your retirement days in another country? Below are some of the things you need to consider.
1. Rent Before Buying Property
Opting to sell your home in a bid to facilitate your move abroad is understandable; however, it should not be something done in haste. You should take the time to assess whether or not the decision to move to another country is the best one and if it is a likely long-term decision. As such, consider renting while overseas so wade through the waters during the first few months of your stay. It can be the perfect time to discover the cost of living there compared to back home. Conversely, you have rent out your property back at your home country; it ensures that you still have somewhere to call home in case you opt to come back. Keep in mind that the rental income will also reflect on your income tax bill and thus can influence your finances.
Your health will always remain a paramount subject irrespective of where you are; as such healthcare will be a significant concern when moving abroad. Keep in mind that the healthcare standards and codes of ethics different from one country to the next. Therefore, take the time to research about how it state or city operates healthcare as you also look into public and private insurance options. You can start by checking out the country’s NHS (National Health Service) to find out more.
3. Claim State Pension
State pensions are payable if to candidates that retire while abroad. If you are within four months of state pension age, you qualify to claim your state pension. You will get in touch with the International Pension Centre. You should consider where you want the pension payment sent, to your new overseas home if you stay there is for a substantial period, or to your UK home if your overseas stay is for a short time. You need to take this into account as you also factor in currency fluctuations so that you pick the most convenient option for you. If you move abroad then you can get UK pensions advice in the US or wherever else you’ve gone to.
4. Keeping Pace With Cost Of Living
Whether or not you benefit from the annual state pension increments is a matter subject to the country you moved to; you will get a yearly increment to your state pensions if you retire to a country such as Gibraltar or Switzerland, or any other in the EEA (European Economic Area). You also stand to enjoy the same increments if you move to a nation that has a social security agreement with the United Kingdom.
You are exempted from these increase if you move to countries, such as Australia, that does not have the social security agreement. Canada and New Zealand are two nations worth a mention because they also fall under this category yet they have a social security agreement with the UK in place, but you will not receive a state pensions increase if you retire to these two countries.
You can check the government website to know the state of the republic you are planning to retire to before you move so that you are aware if you will or will not enjoy the state pension increments.
5. Workplace Or Private Pensions
A workplace or private pension will see you enjoy more than just your state pension when you decide to live out the rest of your life abroad. You can move the private pension overseas with you, and this shields it from the currency fluctuations. However, the HMRC enacted new changes that levy a 25% tax on the transfer of private pensions to an overseas pension scheme. If you are faced with such a thing, then it is wise to consider the traditional route that will see you take a pension income.
6. Don’t Let Your Income Get Too Taxing
Our state pension is still subject to income taxation even when you are abroad. For most countries, there is a “double taxation agreement” that protected you from being taxed twice as you play your part to honor the tax law of that republic. However, the rules differ based on the agreements the country has with the UK.
As you plan for your retirement destination, you need to have the above things in mind. Understand that taxes can complication your finances as you settle in overseas even if your stay is a short one or you are between different countries. Consider the advice of financial experts that will help you stay on the right track as you plan to retire abroad.