More than 10,000 Baby Boomers retire daily, so we shouldn’t be surprised by this recently released news from the Social Security Administration (SSA):
More American retirees than ever – nearly 400,000– are living overseas.
The number of retirees moving to another country rose 17 percent from 2010 to 2015 and is expected to continue to increase for the foreseeable future.
The biggest reason for this exodus? Money.
Whether people are just starting their careers or ending them, they’d like to live in a place where they can get the most for their money. And most Americans who have moved overseas to retire say they did so to save money. (By the way, the SSA reports that the most common destinations for American retirees are Canada, Germany, the United Kingdom, Mexico and Japan. Many military retirees choose Germany and Japan if they were stationed there.)
The biggest savings overseas almost always is housing, which can cost half as much for comparable accommodations in the United States. It also usually costs less to hire people to cook and clean and launder clothes, among other things.
Many people don’t realize that American retirees who move overseas can collect Social Security benefits wherever they happen to live. And that money goes further in, say, Pachuca, Mexico, than in Portland, Oregon.
While this news is interesting, I have only seen a few Baby Boomer clients seriously consider moving overseas, even if they can afford to frequently fly to see children and grandchildren. More are choosing to downsize homes and use the extra funds to travel extensively instead.
Being unfamiliar with foreign languages and cultures deters many Americans from retiring overseas, but when it comes to dollars and cents, the most common hurdle is health care.
Unlike Social Security, you can’t receive Medicare if you retire overseas, and many Americans have no patience with longer waiting periods for treatments and surgeries that are common in other countries.
Like every major decision in your life, there are pros and cons to retiring overseas, and even if you think you know what they are, it still makes sense to talk with a trusted financial professional to run through all the costs and benefits before you decide to make a major move.