Thinking About Retiring Abroad? Don’t Move Until You’ve Done These 10 Things

Retiring abroad can be one of the best decisions you ever make. It can also become a very expensive mistake if you focus on the wrong things before you leave.

Most people start with the obvious questions. Where should I go? How much is an apartment? What does a beer cost? Can I get a retirement visa? Is healthcare any good? What is the weather like?

All sensible questions, but they are not necessarily the questions that determine whether you’ll still be happy there five or ten years later.

After more than twenty years living across Southeast Asia, including Thailand, Malaysia and the Philippines, I’ve learned that moving abroad is actually the easy part. The difficult bit is building a life that still works when the novelty wears off.

A holiday can make almost anywhere look attractive. Retirement is different. You have to deal with the boring stuff as well as the beaches. Your health can change. Your finances can change. Relationships can change. Your family may need you. You may discover that the property you bought is difficult to sell, or that the life you imagined from thousands of miles away isn’t quite the life you want once you’re actually living it.

So before you start comparing Thailand with the Philippines, Portugal, Spain or anywhere else, there are ten things I’d want you to sort out first.

Some of them may even persuade you to slow down.

That’s probably no bad thing.

Key Takeaways

• Live in a country before committing to it permanently.
• Build a realistic retirement budget that includes healthcare and unexpected costs.
• Protect your money, property and legal position before you move.
• Think seriously about relationships, social life and what daily retirement will actually look like.
• Always keep an exit plan so you’re not trapped by your own decision.

1. Live There Before You Move There

This sounds obvious, but people still make this mistake all the time.

They spend two weeks somewhere on holiday, have a brilliant time, and come home convinced they’ve found the place where they’ll spend the next twenty years.

The weather was good. The hotel was comfortable. The food was excellent. Everyone seemed friendly.

“I could live here,” they decide.

Perhaps you could. But a holiday and a life are two very different things.

When you’re on holiday, you don’t have to find a dentist. You don’t have to deal with immigration. You don’t have to work out how to open a bank account or arrange reliable transport. You don’t have to sit in traffic on a Tuesday morning, sort out a problem with your landlord or find somebody to repair the washing machine.

And you certainly don’t have to discover what the local healthcare system is like when you’re ill.

That’s why I strongly recommend renting before you make any permanent commitment.

Ideally, spend several months in the country you’re considering. If you’re choosing between two or three destinations, spend time in each of them.

And don’t stay in a five-star hotel.

Rent an ordinary apartment in the sort of neighbourhood where you could realistically see yourself living. Go shopping. Cook for yourself. Use local transport. Visit the supermarkets. Find a doctor and a dentist. Deal with the bureaucracy. Work out what internet and electricity are actually like.

In other words, live an ordinary life.

There’s another useful test that people rarely consider.

Get bored.

Yes, deliberately get bored.

A holiday destination can keep you entertained for two weeks without any effort. Retirement is different. At some point, Tuesday afternoon arrives and you’ve got nothing planned.

That’s when you discover whether you actually like the place.

If you can spend three months somewhere, experience the mundane side of life and still think, “Yes, I could genuinely live here,” you’ve learned something useful.

And if you decide you don’t like it, you’ve saved yourself an enormous amount of money and aggravation.

2. Know Your Real Number

This is where retirement fantasies usually meet reality.

People often say things like, “I can live comfortably on £2,000 a month,” or “I’ve worked out that I only need $2,500.”

Fine.

But how did you arrive at that number?

There’s a substantial difference between what you can survive on and what you need to live the life you actually want.

Your retirement budget isn’t simply rent, food and a few drinks.

What about healthcare? Insurance? Flights home? Visas? Transport? Dental treatment? Replacing a laptop? Air conditioning? Insurance excesses? Supporting family? Unexpected repairs? A decent holiday once or twice a year?

And then there’s the question nobody likes asking.

What happens when you’re seventy rather than sixty?

Your financial planning needs to account for more than today’s prices. You need to think about what happens as your circumstances change and your needs become different.

I’d break the numbers into three basic categories.

First, your normal monthly living costs.

Second, your annual or irregular expenses. Things such as flights, insurance renewals, visas, major purchases, medical treatment and holidays.

Third, your emergency reserve.

Then I’d add some margin.

If your retirement plan only works when absolutely everything goes according to plan, you haven’t really got a retirement plan.

You’ve got a hope.

And hope isn’t a particularly robust financial strategy.

3. Keep Money Outside the Country

This is one of my biggest principles when it comes to living abroad.

Don’t move your entire financial life into the country where you’re retiring.

I understand why people do it. You move somewhere, open a local bank account and gradually everything starts flowing through it.

Your pension arrives there. Your savings move there. Your investments get rearranged. You buy property. Your relationship is there. Your entire life becomes tied to one country.

I don’t like that.

I want options.

That doesn’t mean you shouldn’t use local banking. In most cases you’ll need a local account for everyday life.

But there’s a big difference between having a local operating account and moving your entire financial existence into a country where you may not fully understand the banking system, legal framework or political environment.

If something goes badly wrong where you’re living, you want to be able to get on a plane with a passport and access to money somewhere else.

Liquidity matters.

So does diversification.

If you’re British, there’s another layer to this. Moving abroad doesn’t simply mean waving goodbye to the UK financial system and forgetting about HMRC.

Your tax residence can change. Your pension arrangements may have implications. Investments can be treated differently depending on where you live. Estate planning can become more complicated when assets and beneficiaries are spread across different countries.

Don’t guess.

Get proper advice before you move.

The objective isn’t to make your financial life complicated. It’s to make sure that moving abroad doesn’t accidentally remove options you may need later.

4. Sort Healthcare Before You Need It

Healthcare is one of those things that is wonderfully easy to ignore while you’re healthy.

Then something happens.

And suddenly it is the only thing that matters.

If you’re moving abroad in your fifties or sixties, healthcare should be part of your location research from the beginning, not something you investigate once you’ve already signed a lease.

Before you move, find out where the nearest decent private hospital is. Work out how you’d get there. Understand what treatment costs locally and what your health insurance actually covers.

And don’t stop at the headline premium.

You need to understand the exclusions, excesses, geographical coverage, policy limits, pre-existing conditions and renewal terms. You also need to understand what happens if you eventually decide to move to another country.

One particularly important question is where the policy is issued and what legal jurisdiction governs it.

That can matter enormously if you ever need to challenge a claim or make a complaint.

You also need to think further ahead.

The policy that looks attractive when you’re fifty-five may look very different when you’re seventy-five. Your healthcare requirements are likely to change as you age, and your insurance needs to be considered as part of the long-term retirement plan rather than simply another monthly bill.

I would never choose health insurance purely because it has the lowest premium.

That’s a bit like choosing a parachute because it was on special offer.

You don’t really find out what you bought until you need it.

If you’re researching international health insurance, Naked Expat has a free guide from international health insurance specialist Alex Routh. It is designed to help expats understand the issues they need to consider before choosing cover.

You can find the guide through the Naked Expat website and enquire about your own circumstances if you need more specific advice.

The important thing is that you understand what you’re buying before you need it.

5. Sort Your Visa and Legal Position

This is not the most exciting part of retiring abroad.

It may, however, be one of the most important.

You need to know exactly what gives you the legal right to live in the country.

Not what somebody on Facebook told you.

Not what an estate agent said.

Not what your mate’s girlfriend’s brother apparently managed to do ten years ago.

Your actual legal position.

How long can you stay? What happens when your visa expires? Can you leave and return? Can you work? Can you own property? Can you open a bank account? Can you drive?

And then there are the questions that become particularly important if your circumstances change.

What happens if you marry?

What happens if you divorce?

What happens if your partner dies?

What happens if you decide you want to leave?

These rules vary enormously between countries, and immigration rules can change.

That means you should check the current position rather than relying on something you read in an old expat forum.

Use the relevant immigration authorities. Take professional legal advice where necessary. Keep copies of your important documents and make sure you understand what happens if your circumstances change.

It sounds painfully obvious until you meet someone who has built an entire retirement around an assumption that turns out not to be true.

And that’s the wider point running through all of this.

Don’t build a twenty-year retirement around something you haven’t properly checked.

6. Protect Your Assets Before You Move

One of the biggest mistakes I see people make is treating asset protection as something they’ll sort out once they are settled abroad.

By then, it can be much harder.

If you have spent thirty or forty years building up a pension, savings, investments and property, you need to think carefully about what happens to those assets when you move into a different legal system.

This becomes particularly important if you are buying property overseas or entering a serious relationship after you move.

The rules governing ownership can be very different from those you’re used to at home. In some countries, foreigners face restrictions on property ownership. In others, the way a property is registered can have significant consequences for inheritance or what happens if a relationship breaks down.

And then there is the question of your will.

Don’t assume that the will you made years ago automatically deals with everything properly once you become an expat.

You may have assets in more than one country. You may have beneficiaries living in different jurisdictions. You may have a property overseas. Your tax residence may have changed.

Those things can turn what looked like a straightforward estate into something considerably more complicated.

This is one area where proper advice is worth paying for.

I use Jamie Lee for my own wills and estate planning. We’ve known each other for more than thirty years, going back to when he worked for me in the UK, and he now manages my own affairs.

The point isn’t that everybody needs some elaborate offshore financial structure.

Most people don’t.

The point is that you should know exactly what happens to your assets if you die, become incapacitated, divorce or simply decide to leave the country.

If you have spent decades building your wealth, don’t leave the final bit to chance.

7. Think Carefully About Property

Buying a property abroad feels like the natural next step.

You’ve found somewhere you love. The prices look remarkably cheap compared with home. The estate agent tells you that property values are rising. Perhaps you have friends who have already bought.

Suddenly renting feels like throwing money away.

I’d resist that thinking.

Renting isn’t throwing money away when you’re testing whether a country is right for you. You’re buying flexibility.

That flexibility can be worth far more than the rent.

A property that looks like a bargain when you’re viewing it on a sunny afternoon can become a very different proposition when you discover the local traffic, the noise, the flooding, the maintenance problems or the ten-minute walk to the nearest decent supermarket.

And there is another issue that expats often overlook.

You may not be able to sell it easily.

Property is not cash.

You might have £100,000 sitting in a bank account and, subject to the usual practicalities, you can generally access it fairly quickly. You could have £100,000 tied up in an overseas property and discover that finding a buyer takes months or years.

That matters when you’re older.

Your priorities may change. You might want to move somewhere cooler. You might need to be closer to a hospital. Your relationship might change. Your children might need you back home.

Don’t allow a cheap property to turn your retirement into a fixed commitment.

Rent first.

If you eventually decide to buy, make sure you’ve lived there long enough to understand what you’re buying and get independent legal advice before signing anything.

And never assume that the legal position is identical to the one you’re used to in Britain.

It probably isn’t.

8. Work Out What Your Social Life Will Actually Look Like

This is one of the areas people underestimate most.

They think retirement abroad means freedom.

No commute. No boss. No alarm clock. No office politics.

All true.

But remove work from your life and you’ve also removed a large chunk of your social structure.

For decades, work may have provided routine, friendships, conversations, challenges and a reason to get out of the house every morning.

Then you retire and move halfway around the world.

Suddenly you’ve got a lot of free time.

That can be wonderful.

It can also become a right mess.

I’ve seen people move abroad because they thought they wanted peace and quiet, only to discover that what they really wanted was people around them.

This is why I think the social side of retirement deserves as much attention as the financial side.

What are you going to do on a Tuesday morning?

Who are you going to have lunch with?

Are there sports clubs? Walking groups? Golf? Cycling? Volunteering? Language classes? Expat groups? Local community activities?

And, perhaps most importantly, are you capable of building friendships with people who aren’t simply there because they’re expats?

A strong social network is one of the things that makes a foreign country start to feel like home.

You don’t necessarily need hundreds of friends.

You need a handful of people you can call when something goes wrong, people you enjoy spending time with, and enough regular activity that your days have some structure.

This is another reason I favour renting first.

You can test the social environment as well as the property.

If you spend six months somewhere and find yourself sitting alone in your apartment most days, that is useful information.

Don’t ignore it simply because the rent is cheap.

9. Think About Your Relationship Before You Move

Moving abroad can be fantastic for a relationship.

It can also expose problems that were easier to ignore when you were both working, busy and living familiar lives.

If you’re moving with a partner, talk about what each of you actually wants from the move.

It sounds simple.

It isn’t always.

One person may want a quiet retirement near the beach. The other may want restaurants, nightlife and a large expat community.

One may be happy living somewhere remote because the property is cheap. The other may become miserable after three months because there is nothing to do.

You need to talk about money as well.

Who pays for what? Will you keep separate accounts? Are you buying property jointly? What happens if one of you wants to return home?

And if you’re entering a relationship with someone you met abroad, slow down.

This is particularly important when there is a significant difference in age, wealth or financial circumstances.

Don’t confuse affection with financial trust.

You can love someone and still keep your finances properly protected.

That isn’t cynical.

It’s sensible.

If marriage is involved, understand the local legal consequences before you sign anything. Marriage can affect property, inheritance, taxation and your wider estate planning.

And if you have children from a previous relationship, don’t assume that moving abroad somehow makes those responsibilities disappear.

They don’t.

A new life overseas still has to fit around the people and obligations that already exist.

10. Have an Exit Plan

This is probably the least romantic thing on the list.

It is also one of the most important.

Before you move abroad, work out how you would leave.

Not because you expect the move to fail.

Because circumstances change.

You might become ill. Your partner might become ill. Your financial situation might change. Your visa situation might change. The country itself might change.

Or you might simply decide that you’ve had enough.

There is nothing wrong with changing your mind.

But leaving is much easier if you’ve kept your options open.

Keep enough accessible money for an emergency. Know where your important documents are. Keep appropriate banking arrangements outside your country of residence. Understand what happens to your pension and investments if you return home.

If you own property, understand how you would sell it.

If you have a car, know what happens to it.

If you’ve accumulated possessions over ten years, think about what you’d actually do with them.

And perhaps most importantly, don’t let your entire identity become dependent on one country.

You’re an expat.

You’re not being adopted by the country.

That distinction matters.

The strongest expat position is usually one where you can say, “I love living here, but I could leave if I had to.”

That’s financial flexibility.

And it is also psychological freedom.

The Bit Nobody Tells You About Moving Abroad

There is a final point I’d add to all ten of these.

Moving abroad doesn’t solve problems you haven’t dealt with at home.

If you’re bored in Britain, moving to Thailand won’t automatically make you interesting.

If you’re lonely in Australia, moving to the Philippines won’t automatically give you close friendships.

If your marriage is struggling, a beach apartment isn’t marriage counselling.

And if you haven’t learned how to manage your money, lower living costs won’t magically turn you into a wealthy man.

The country you choose can improve your circumstances enormously.

But it can’t do the work for you.

That’s why I think the best approach is to strip the whole decision back to basics.

Look at your money.

Look at your health.

Look at your relationships.

Look at your legal position.

Look at what you actually want your ordinary Tuesday to look like.

Then find a country that supports that life.

Not the other way around.

The naked truth is that retiring abroad isn’t really about finding the cheapest country or the prettiest beach.

It’s about building a life that remains workable when you’re no longer on holiday and the novelty has worn off.

Do that properly and moving abroad can be an outstanding decision.

Get it wrong and you can spend years trying to unwind a decision that took you six weeks to make.

Frequently Asked Questions

Free Expat Guides

Want more practical advice before making the move? Visit the Free Expat Guides section for practical information on moving abroad, protecting your finances and avoiding common expat mistakes.

Protecting Your Assets When Marrying Abroad

If you’re moving abroad with a partner, or considering marriage overseas, read How to protect your assets when marrying abroad before making any major financial commitments.

How Expats Lose Their Assets Abroad

For a closer look at the financial mistakes that can leave expats exposed, read How Expats Lose Their Assets Abroad.