Regardless of where you’ve lived or how old you are, retiring can be an opportunity for you to create a new life — perhaps, even, the life you’ve always dreamed of. Over 5.5 million Brits live overseas, and while 2 out of 3 leave the country for career purposes, the rest are looking for more appealing locations when they retire.
But whether you choose to retire abroad or in the UK, this next phase of your life should be rewarding — which is why you need to make careful decisions. So if you’ve been living as an expat, here are some things you should be asking when preparing for retirement.
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When are you going to retire?
In addition to retiring at the State Pension age, you can choose between retiring early or working beyond the retirement age. LHH claims that retirement is a unique experience for everyone.
According to them, retirement is a deeply personal experience that will look different for everyone. So when it comes to living out the retirement that expats want, you need to plan out your finances to meet your goals and expectations depending on when you do actually choose to retire.
The UK allows you to take your State Pension at 66, regardless of whether you’re living in the country or overseas. However, if you choose to live in the UK or other more expensive countries, it might not be enough to sustain you.
If you have a private or workplace pension, you should weigh up whether the amount can support your plans — taking currency fluctuations into account — or whether you would need to consider relying on your savings. If you do need to rely on savings, then it’s best to start early.
Which country will you retire in?
Considering your financial resources, you have to evaluate whether you can afford the cost of living in your country of choice, whether in the UK or elsewhere. If you’ve been living in a foreign country for a while then you probably already have some semblance of stability if you chose to stay there.
You can also choose to continue travelling or settling down in a different country, taking into proper account the finances available to you. For instance, retired expats can afford to stay in countries like Cuba and Turkey that have lower costs of living. More expensive countries might require you to be more critical about how you’ll be allotting your finances.
Of course, for UK citizens, there is always the option of returning home. Age UK states that moving back home may take a few months to re-establish your rights to services like benefits and housing (if you need them).
You might need to prepare to support yourself. However, depending on what you qualify for, moving back to the UK may make it easier to get benefits such as pension credit, housing benefits, or a reduction in council tax.
Will you have healthcare and social security?
Healthcare and social security benefits are necessary to reduce some of the expenses you might need to make. This is especially true for people about to retire who are more likely to develop illnesses or already have pre-existing conditions. Getting the necessary support is much more convenient, cost-effective and accessible if you choose to retire in the UK.
You might also be in luck if you choose to retire abroad.
The UK has reciprocal health and social security agreements with certain countries. Healthcare agreements mean that you only have to pay for the same costs that locals do. Social security agreements, on the other hand, reduce gaps in benefit provisions, such as old age or retirement pensions.
Moving to countries with these benefits may help make your finances more manageable and provide you with greater security, especially when considering other expenses.
Retiring is a reward for the hard work you’ve put it over the years, which makes it an exciting project. Whether you choose to continue travelling, settle down back home, or move abroad, knowing what options and factors to consider can help usher in a fulfilling new phase in your life.
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