Retiring Abroad? What Should You Consider?

| February 22, 2014


By Alan Turner

Many people in the UK (and indeed elsewhere) will harbour a dream of retiring abroad one day.  After a lifetime of work this is seen by many as the perfect reward.

What could be better than retiring overseas, in this case, Italy? In most cases there will be lower taxation, improved living standards, cheaper property and the lure of better weather, scenery and lifestyle. These are all indeed valid reasons to make the move abroad. But what other key things should you be considering when deciding about moving abroad?

Your Long Term Healthcare

Healthcare can be a major issue for retirees, regardless of location. But it is almost certainly more frequently an issue for expatriate retirees. You have to make sure that you understand exactly what will be covered as standard so that you can then plan for any supplementary private health coverage that you may need. Of course if you don’t prepare for this properly then what initially seems to be a relatively cheap cost of living could very quickly be corrected by high accumulating healthcare bills.

The Influence of Currency Exchange Rates

Your income in retirement is usually going to be lower than your income during your working life. This means that your pension income has to be optimised wherever possible. One way of doing this is to make sure that you are always taking into account the current exchange rates of the location you are moving to against the currency of your pension and investments.

The ideal situation of course is to move to a country where the cost of living is easily within your retirement income budget.

Local Integration

Those retiring abroad will often specifically look to retire to locations where there is already an established expat community. Doing this of course will give you ready-made opportunities to network and make friends. It will also normally mean that there will be sufficient and suitable facilities for you to make use of and enjoy. The pressure of learning a foreign language quickly may be reduced, although you should always look to embrace the local language and culture. You would though have at least the option to mix with people of your own culture which may well be the element of security that makes the difference between your move working out or not.

Will You Purchase a Retirement Property?

If you are looking to purchase a property to move into overseas, then you need to consider your needs. Access to shopping and medical facilities will be important. You will also probably want access to opportunities to socialise and enjoy certain activities. These sound like simple points, but the perfect property and the perfect view doesn’t always come with the level of facilities and access to amenities that you really need. Give serious thought to the presence and access to public transportation such as trains, buses and an international airport.

Consider Your Tax Position

It is a generalisation, but it is probably fair to say that a common characteristic of expatriate retirees is that they do not like paying tax. Some countries that you may consider relocating to are fiscally welcoming and will provide a clear benefit to your retirement income by levying low taxation (or in some cases no tax at all) on your income. On the flip-side, other locations may present an unwelcome surprise to your income and your overall assets in terms of how they are treated for tax purposes. You also need to be aware that just because you are no longer living in your home country, this does not necessarily mean that you can completely escape paying all taxes in your home country. You may also want to consider intentionally maintaining a tax residence in your home country so as to make use inheritance tax reliefs for example.

Always Consider Taking Advice on Financial Issues

When you are looking to move abroad you are taking on many unknown factors. Tax and financial considerations will be among the most important elements of your move working out well, and any assumptions that financial matters will work in exactly the same way as at home are simply misguided. Besides anything else, it is highly likely that there will be very little literature available to you direct from providers in English when you arrive in your new location.

Take your time to find a suitable adviser that has experience in dealing with clients of your type and of your nationality. This will ensure that they can give advice specific to your circumstances and take due consideration of the effects that any decisions you make will have on your tax and/or financial position in Italy and in your home country.

Alan Turner writes for, a very informative website where you can find must have information for all people who live or would like to move abroad. So wherever you’d like to live in the world, make sure you have a look at first!

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