Many of us dream of sitting on a sun-soaked beach sipping cocktails in our later years, but for many that dream will never become a reality.
Life and circumstances will conspire to shatter our dreams, but here are a few tips to help you find your place in the sun.
Can you afford to go?
Popular retirement destinations for expats include France and Spain, but even though European citizens have freedom of movement within the European Union, you will be asked to show that you have enough money to pay your way without becoming a burden on the benefit systems and health services of your new home.
Costly private health cover is a likely priority wherever you go.
Don’t forget to check out your state pension, which may be frozen without inflation-linking in many favourite retirement places.
Investigating shifting your UK personal pensions into a Qualifying Recognised Overseas Pension Scheme (QROPS) may help. QROPS pay out in most major currencies, like the Euro and US dollar, so can ease currency exchange fluctuations and bank charges.
Can you stay when you get there?
Temporary visas are offered by many countries, and wealthier expats can buy their way into many nations on favourable terms if the buy a home or invest in a local business.
The temporary visa option could let you have a split lifestyle – spending up to half of the year in warmer climes, while keeping your roots in the UK.
That will make you a tax resident of the UK – so if you rent your home out at either end, you may have to pay tax.
Wealth and wills
Moving permanently complicates tax and estate planning. Having assets, like homes, in two or more countries probably means you need to have a will at each end as inheritance laws will be different.
Managing money across different countries and currencies is also complicated, especially if your tax residence changes and those sensible tax-effective UK investments in pensions and ISAs now do not attract tax breaks.
Capital gains tax changes for expats as well. Non-tax residents do not pay capital gains tax on disposing of property or other assets in the UK – but you may have to pay in your new home nation.
Switching money
Look at a specialist foreign exchange firm rather than a bank or building society – report after report from consumer groups have shown these offer cheaper deals than other financial institutions, even if they promise 0% commission.
Even in retirement, taxes can be THE major expense. One must use all legal planning opportunities to have net income as close as possible to gross income. This makes international retirement much more possible…and enjoyable!