Moving abroad to live out your golden years is a dream of many. Most people opt for Central or Latin America. They do so in search of a more laid back lifestyle, lovely weather, and beautiful nature. Even if your plan isn’t to stop working entirely, but invest in one of these countries, you’ll still get a pleasant change of pace and a fresh start in tropical paradise.
Deciding to move away in your retirement is quite a formidable decision. In many ways, you will be giving up all of the things that are familiar and stepping into the unknown. Before you do so, it is important that you prepare. Learning about the documents you need for a visa, local customs, as well as something as simple as knowing how to draw your pension overseas, are all necessary pieces of this big puzzle. Let’s take a look at how you can make sure you are able to draw your pension regularly even after you have moved away.
The benefits of retiring abroad
The benefits of retiring abroad are many. Firstly, getting a change of scenery after a lifetime spent in the same place will give you a new sense of excitement and purpose. Choosing to move from the US to other parts of the globe with more sunny days throughout the year will allow you to lead a more active lifestyle and really make the most of your new surroundings.
Next, if your plan is not to stop working entirely, there is a way to invest your money in your new home. In many of these countries, like Panama, it is possible to obtain a permanent visa if you open a business or purchase real estate. You do not only stand to make money if you invest in something like teak. You also stand to save a lot of money in the process. The cost of living is much smaller than back home.
Preparing for the move
If your upcoming move is making you anxious, the best thing you can do is battle that feeling by gathering information. Having already made a decision to move, you have probably already put a lot of thought into the whole process. Now is the time to get to the brass tacks. We should address any feelings of fear or confusion you may be experiencing. The more you learn about what you can expect once you move, the calmer you’ll feel while you wait for it to happen.
The information will not be the same for every country you might be choosing from. However, there are plenty of resources online that will answer any questions you may have. You might be particularly confused by bureaucracy. This is often the most difficult part for people to get used to. Arm yourself with nerves of steel and practice patience at every turn.
You can do more besides turning to the internet for help. Why don’t you can canvas your family and friends? Perhaps they have already moved away or know someone who has. Getting to hear first-hand experiences will be invaluable. In lieu of anything else, the Expat Info Desk has a 90-day moving checklist with tasks. This list will help you organize your move and ensure you don’t forget anything important.
How to draw your pension overseas
One of the key tasks during your preparation is coming up with a budget for the move and sorting out your finances. As the US has Social Security agreements with many countries, chances are you will be able to collect your retirement, disability, or survivors’ benefits while abroad. Countries that are exempt from this are North Korea, Vietnam, Ukraine, and Cuba.
If you wish to see if you are eligible to receive your benefits, you can use the interactive Payments Abroad Screening Tool on the SSA’s website. Generally speaking, the only thing you wouldn’t be eligible for is the Supplemental Security Income (SSI). You can only continue to receive this if you remain in the US or one of its protectorates. (These include Puerto Rico, the US Virgin Islands, American Samoa, Guam and the Northern Mariana Islands.)
Organizing your finances
If you are eligible to receive your Social Security benefits abroad, all you need is a bank account. You can have them direct deposited into your existing bank account in the US. The way you can access this account abroad is through ATM withdrawals. Alternatively, you can open an account in a local bank and have them deposited there instead. You do not need to return to the US every few months or keep a US address if that is not something you are already doing. You will keep receiving your benefits regardless.
When it comes to taking care of your bank accounts, if you are keeping your US account, you want to get comfy with online banking services. Ask your bank to send all your statements and correspondence to an email address. Online banking has become so ubiquitous that it’s quite possible you are already an avid user. If not, ask someone in your family to help you find your way around it. Most of the apps used for this are pretty intuitive so there shouldn’t be too much trouble.
One of the perks of opening a local checking or savings account once you have moved is managing to get around those pesky transaction fees. American banks often charge a 3% fee for debit card purchases or ATM withdrawals. They even add a flat $5 fee for every transaction. As you can imagine, these fees can add up, so having a local account will remedy that. On the other hand, there is more paperwork that comes with this. You will have to file FATCA (Foreign Account Tax Compliance Act) to let the US government know that you have assets in a financial institution abroad. Finally, having a local account might ease you into the process of investing in the future while abroad as well.
All in all, knowing how to draw your pension overseas is not really complicated. While important, it is just a small piece of the puzzle that is your international move. Barring some extraordinary circumstances, you will pretty much be able to draw your pension overseas with just a few simple clicks!