You can’t just decide to retire in any country without a plan

One of the myths (?) or ideas floating around early retirement folks is the idea that you could save maybe $300K and fly off to another country to retire like a queen on $10K a year, until your timely passing at age 90 or so. I am not here to burst any bubbles or get into arguments of WHICH country and how much YOU have saved personally, but more to talk about the few reasons why this may not be such a great idea, nor feasible for some.

I feel like people say these things, and don’t come up with a plan on how to execute them. It’s one thing to say: I will just retire in [ insert cheap country here ], and it’s another thing to actually do it.

WHAT IS YOUR ENTRY PLAN?

Don’t have one? Uh oh. How are you going to get into the country? How much will it cost? It’s one thing to research out in the country how cheap homes are there and so on, it’s another to actually immigrate there and live as if you’re a citizen. ALL countries have immigration policies.

It is much easier if you already have family there (phew), or friends who can guide you, but let’s say you aren’t as connected. Let’s talk about First World countries for the moment, if you’re let’s say thinking of Portugal:

Generally speaking, these countries either want you if you are young (age 40 and under) so that they can see that you will be able to squeeze out at least another 20+ years, or if you are rich, so you can invest money into their economy and buy businesses there to employ locals, or what have you.

What they do not really want, is retirees with $300K in their bank accounts, thinking they will move there and help the local economy by spending and living, but to do not much else. Worse, that they’ll also get to go on the healthcare plan (if there is one), without having paid into it via taxes your whole life.

So in Portugal for instance, a popular retirement destination, you need 500,000 EUR purchased in real estate, or 1 million EUR capital transfers to the country.

Too rich for your blood? Then let’s look at Third World countries, Thailand requires 800,000 Baht or about $31K CAD to get a retirement visa there. Pretty cheap right? But what you are giving up, may be access to things you are used to already, most notably universal healthcare, though you could just buy a healthcare plan I suppose. But these are all questions that have to be answered, because as you age, you will need medical attention – how will you get it? Is it accessible? How much will it cost? None of this is “free” even in a cheaper country.

Whatever it is, you need an entry plan to get there, and countries want your money or your work potential.

HAVE YOU CONSIDERED THE CHANGES?

Aside from getting the Retirement Visa, have you considered the language barrier, cultural changes, lack of access to “basic” necessities you may be used to…? There are lots of things to consider, and it would be best to take at trip there, stay more than a few weeks, and to really see what it’s like to be a local; it may not be your thing. Many people just traveling abroad, feel homesick after a while (I know I did, when I traveled extensively).

You may also not want to be so far from your family, knowing that an ocean is away if you want to visit (or they want to visit). You may come up with positive spins on it like: you could come spend your vacations with me here!…. but in reality, your family MAY NOT want to travel to the same spot every year when they only get 2-3 weeks of vacation and may want to go to .. Disney World for instance. You need to scale back your expectations.

WHAT ARE THE TOTAL COSTS?

So we’ve covered that you need the Retirement Visa, to consider Healthcare (a plan or otherwise), the cost of travel back and forth to see family, and then the cost of actually moving to a whole new country (get a new car? home? furniture? things?). You may also need to consider that as a foreigner (at least for the first while), you may not be eligible for many things in the country, and you may be stuck only being able to rent or buy in certain areas, which means the prices could be higher than expected as a result. Then on top of all that, your actual retirement costs – how much you will need to spend each year to eat, pay the bills and live.

COUNTRIES MAY CHANGE POLICIES IN THE FUTURE

Don’t just assume that all the countries want you. Just recently, I read an article that Malaysia in 2021 out of the blue, changed the policies on immigrants. They’re now expecting

• Applicants must first of all prove they have liquid assets worth MYR1.5 million ($483,000) – a substantial hike from the previous range of MYR350,000-500,000, depending on the applicant’s age.
• Need to have an offshore income of at least than MYR40,000 ($12,880) per month – a four-fold increase over the previous MYR10,000 monthly income – and must reside in Malaysia for at least 90 days per year.
• Must maintain a fixed deposit account in Malaysia with a balance of MYR1 million ($322,000) from which they can withdraw no more than half during their stay – with those withdrawals only permitted for real estate, health care and the educational fees of any children.

So “cheap”? Maybe not as cheap as you think, once you consider the rules to live there, and that in the future, they can change on a whim and suddenly you may not have enough to stay, or have to leave altogether. You. Never. Know.

CONSIDER RETIRING DOMESTICALLY

An alternative to this, especially in North America is simply to find a cheap, tiny town, hours from metropolitan areas, and retire there. You will need less money, you’re already a citizen, and the only downside is you are farther from the action (urban areas).

The point is, that you need to consider more than just “what do I need to live on”, to retire outside of your country.

Thoughts?