Retirement is not a destination. It’s a post-working life budgeting lifestyle. Retirement is a living budget that must strategically calculated to last throughout a retiree’s lifetime. Depending on where you live, the local cost of living, and limits of your retirement account, most retirees exhaust their retirement funds prematurely. That is why an estimated 500,000 Americans are living abroad as expatriate retirees. If you retire abroad in a country with a preferred currency exchange rate, your retirement savings can last a lot longer. However, retiring abroad post-COVID 19 isn’t as easy as it used to be.
In fact, retiring at all has never been a very easy thing to do for most Americans.
That is why many Americans are considering retiring abroad post-COVID 19.
I will give you some tips on how you can do this.
And I’ll offer some cautious advice about why retiring abroad now will be more challenging compared to the pre-pandemic era of 2019.
Before all of that, here are some reasons why Americans may opt to retire abroad in the first place.
Precipitating Factors for Retiring Abroad Post-COVID 19
The average age of retirement is 63, but 55% of Americans plan to work at least part-time throughout retirement.
That is because their retirement funds ran out early or in the middle of their retirement.
The sad reality is that over 30% of Americans have absolutely nothing saved for their future retirement.
About 50% of Americans have a little less than $10,000 saved for their retirement.
Meanwhile, about 76% of Baby Boomers, the generation of Americans born between 1946 and 1964, are tragically confident they don’t have enough money saved for retirement.
To make matters worse, over 7% of senior citizens declare personal bankruptcy annually.
Retirement finances aside, you must consider that if you’re not healthy enough, you may not even live to exhaust your retirement fund.
If you live to the age of 65 then you only have a 50% chance of living another 20 years. You may live to age 86 if you are female or age 84 if you are male.
Did I mention that a retired couple end up spending over $390,000 to cover medical costs throughout retirement?
Additionally, the cruel financial reality of life is that longer you live, the more money you will require for health care.
No matter how healthy you are, the human body progressively breaks down and develops various ailments as we age.
If you are considering retiring abroad post-COVID 19, here is what you must know.
Your Options Are Now Limited – Choose Wisely
You have chosen quite a time in history to try retiring abroad.
The difficult reality is that most of the world has closed their borders to American Citizens.
Over 100 countries have banned or severely restricted access entry by Americans post-pandemic.
About 33 countries have outright banned Americans from crossing their borders.
For example, the entire European Union, Japan, Canada, Mexico, Australia, and New Zealand have banned Americans.
Now you must decide from a limited list of countries that would ever consider admitting Americans for tourism, let alone retirement.
Such countries include
- Barbados
- Bermuda
- Cambodia
- Costa Rica
- Ecuador
- Honduras
- Morocco
Make sure that you consult the embassy of your preferred countries to be apprised of visa requirements.
Now why did I choose these countries? If you live in a developing or 3rd world country, your retirement fund is bound to last much longer relative to currency exchange rates.
However, that is now not always the case when retiring abroad post-COVID 19.
Be Prepared to Pay Quarantine Entry Fees
Even if you qualify for a visa in your preferred country, you should be prepared to pay for entry quarantine requirements.
Most countries will require a negative COVID 19 test before entry. You will probably be tested at the airport when you arrive.
Even if you are negative, you may have to self-quarantine in government-controlled hotels at your own expense.
For example, if you travel to the United Kingdom or South Korea, you must submit to self-quarantining at an airport local hotel.
This could be for a period of up to 14 days or more. So, be prepared to pay $2,000, or more, for quarantine hotel fees before you can even start expatriate retirement life.
So, what if you retire to a developing country? Well, you can try Cambodia.
$1 USD equals 4,090 Cambodian Riels, so the currency exchange works in your favor.
Still, any foreigner entering Cambodia must now pay a $3,000 COVID 19 medical deposit.
The deposit will cover positive tests, medical care, and funeral costs for those who perish from COVID 19. So, if you intention is to retire there, this medical deposit would become non-reimbursable unlike for tourists.
The point is that you should be prepared to pay hundred or thousands in quarantine fees if you’re considering retiring abroad post-COVID 19.
Mobility, Quality of Life, and Medical Coverage May be Limited by the Pandemic
Remember how I told that you that retirees need to spend $390,000 for medical care post retirement?
That is just the beginning of your problems relative to medical care and safety when retiring abroad post-COVID 19.
I am freelance writer currently traveling through Asia. I was in Manila when the pandemic struck. In this country, you must now wear a facemask and a clear, plastic face shield at all times while in public.
Failure to do so could result in fines and non-admittance into retail stores and offices.
In the Philippines, national or regional lockdowns are determined by the president on a bi-weekly, monthly, or ad hoc basis.
Also, depending on where you retire to, many locals culturally perpetuate the stigma that Westerners created and spread the virus. Be prepared for to hear that.
If you’re retiring abroad post-COVID 19, you should talk to your insurance coverage representative. Make sure your coverage is still valid in the foreign country you are living in.
Wherever you end up, be prepared for sudden lockdowns and the inability to travel domestically.
Research the quality of medical care in the country you are considering retirement abroad. In almost all countries, medical authorities only advise going to hospitals in emergencies.
In most developing countries, the medical care offered in urban cities are usually adequate.
Still, it was difficult for Westerners used to convenience to visit a 3rd World hospital pre-pandemic. It is scarier now.
Retiring Abroad Post-COVID 19 – Plenty of Preparation Required
I don’t have to tell you that the world has radically changed in the aftermath of COVID 19.
However, the fact that retirement is an expensive ambition has not changed.
Remember how the golden rule of retirement was to have at least $1 million saved? That amount was brainstormed in the 1980s and misinterpreted as one-size-fits-all.
When considering rising inflation and the ever-rising cost of living, you may need $3 million to retire comfortably in the United States.
In you plan to live below $40,000 or less during retirement, your money will go a long way retiring abroad.
Just plan appropriately according to your circumstances in the age of COVID 19.
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Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.