Planning for retirement can be a difficult process. From working out your finances to deciding on a destination to retire to, the process of leaving the workforce to live on your own terms can be nerve wracking and stressful.
It’s no wonder that many of today’s professionals – even those reaching ‘retirement age’ – are choosing to stay at their jobs and put in their forty hours per week rather than stepping away for their retirement period.
Adding to this stress is the period of economic transition that much of the world is caught up in. With many economies contracting in size – that is, getting smaller on the whole, rather than growing larger and more prosperous – many people have been forced to put their retirement planning on hold not by themselves and their own situation, but by the status of their ‘secure’ retirement investments.
Because of this, retirement planning has grown significantly more difficult, and significantly less common. While this may make the idea of retiring seem bad, it’s actually quite the opposite. With so many professionals staying in the workforce, the cost of retiring overseas to a more affordable location has never been lower.
If you plan to retire domestically, particularly to a region near you, your choices are relatively simple. Keep your house or move? Live with your family, or on your own? Reside in the city or in the suburbs? For those that plan to retire internationally, the choices are significantly more difficult and much more important to plan carefully.
Retiring to an Asian country requires some careful planning and intelligent, well thought out reflection. Firstly, you’ll need to pick a retirement destination that can fit in with your interests, your situation, and your priorities. For example, if you’re a fan of bustling, fast-paced cities and have significant assets, a city like Hong Kong or Singapore would be a fantastic choice for retirement.
However, if you’re a nature buff that loves summer living and tranquility, a coastal town in Thailand or Vietnam may be a better choice. While these locations have an assortment of trade-offs in commerce and convenience, they’re also more affordable than somewhere like Singapore or Hong Kong.
Secondly, you’ll need to assess your financial situation and research the best way to maintain your financial autonomy overseas. Numerous Asian banks, particularly the banks of Singapore and Hong Kong, deal with Western customers and offer a great deal of experience in international banking. By using these banks, you can keep your finances close to your new home, while still using a reliable, Western-focused bank network and a just, fair legal jurisdiction.
Thirdly, you’ll need to invest the local laws for renting property, owning property, and investing in other areas of the economy. Many countries, including Thailand and Malaysia, have restrictive laws preventing foreign residents from owning large plots of land. In these countries, you will either need to create a business or corporation to purchase land, to purchase it in another person’s name, or to lease your property instead of purchasing it.
It’s essential that you research the laws of the country that you’re planning to retire to. In some countries, foreign visitors are able to drive using their local license or on an international drivers license. In others, you will need to acquire a local license – a process that sounds easier than it often is in reality.
Other issues can include language – a massive factor in determining your quality of life in any given destination. In some countries, such as Japan and Thailand, English is rarely spoken outside of major tourism destinations. Language or communication issues can often prevent you from enjoying life in an otherwise pleasant country, so be sure to investigate language proficiency – and consider taking lessons – before you leave to a new country.
An extra factor that may surprise some people is corruption and safety – two factors that can be prevalent issues in many countries. In developing countries, safety isn’t a certainty. Gangs and dangerous police can be an issue for your personal safety and can easily turn your dream paradise into a nightmare for living.
Likewise, corruption – both on a local and government level – can make life a lot more frustrating for those that plan to build property in their new location. When you take the costs of corruption into account, many locations can become more costly than your home country, even if they rank below it on the development index.
Taxes and legal obligations can often turn moving away into a more complex and demanding process than it otherwise would be. Some countries, including the United States of America, require expatriates to submit information on their income to the Federal government for taxation. While there are some options to minimize your tax obligations overseas, the process of filing is mandatory for some nations.
Proximity to your family and loved ones is an important part of retirement planning that’s often overlooked. Do you really want to live twelve-plus hours away from the people that are most important to you, even if it offers an otherwise greater quality of life? Many destinations – even those that seem close – can be days away from you by airplane and require multiple uncomfortable stopovers.
Beyond this, all of the typical domestic retirement planning also comes into play. Do you have grandiose plans of a luxurious existence or do you prefer a simple life. To enjoy a stress-free retirement that’s free of any financial difficulties, it’s important to plan this kind of information well in advance of actually retiring.
Despite the downsides of retiring – the massive amount of planning and the stress that it can produce – there are many reasons to retire abroad. Whether you seek a peaceful life or simply a change of scenery, going through the steps listed above in advance of your retirement will dramatically improve your experience. After all, isn’t retirement about enjoying yourself and maximizing your life experience? Take the extra steps, do the extra work, and enjoy your retirement as much as possible.