Increasing numbers of people over the last years have decided to retire abroad. Two of the most common reason are more sun and a better standard of living in a places where a pension buys more. Popular destinations for Northern Europeans are Spain, France, Italy and Greece. North Americans are picking Costa Rica, Panama and Mexico. This trend has started to show a few problems though, as a place that may be perfect at 65 can become less attractive when you reach 80.
Plan your finances very carefully
If you are receiving a pension or other income in a currency different from the place you are living in, be very careful about predicting its future value. Exchange rates can change massively over the course of 5 years, never mind a couple of decades. You need to be aware that a 50% change is possible and think about how that would affect your standard of living. There are some ways to protect against currency fluctuations, but this can be quite complicated.
Looking after your other half
The probability is that one of you will die before the other. Depending on your financial situation, you might want to consider providing extra funds for your other half if you die significantly before them. Covering funeral costs by taking out some insurance isn’t a bad idea, there are various schemes out there and you should check out Aviva’s special life insurance plan for over 50s.
Think about future health requirements
You especially need to make sure you have your healthcare coverage as you get older. You need to make sure that you know you will have coverage in your country of residence. Check private insurance policies very carefully, some providers cease coverage after a certain age. For state insurance schemes, make sure you are ‘in the system’ and eligible for care. You may want to evaluate the quality and scope of care for the elderly. One of the worst things that can happen is to find out you are not covered or will not be able to get access to certain treatments.
Do you really want to spend the rest of your days in your adoptive home?
One problem retirees to Spain from the UK have found in recent times is that the Pound has risen against the Euro and the value of their home has fallen. Some are now in the situation where it would be very difficult to sell up and buy again in the UK. Another problem you may find when moving country is that you can lose the rights to healthcare in your home country. So you may not be able to just return home if you are chronically ill unless you pay for the treatment. Think very carefully about what it might like to be chronically ill on your own in a foreign country a thousand miles from your family.