Are you considering retiring abroad? While spending some or all of your twilight years overseas can undoubtedly be an exciting prospect, there are some things you’ll need to think about and organize before making the move. Today, we’re exploring some of these factors to help you make a more informed choice:
Organize Your Super First
Before you even think about planning all the wonderful things you’re going to get up to during retirement, you need to know that you’ll be able to fund the lifestyle you desire. If this lifestyle is going to be based somewhere other than Australia, we strongly recommend engaging the services of an SMSF accountant to ensure that your super will be both accessible and suitable for your needs.
Have An Emergency Fund
The next essential step is to work on building up an adequate emergency fund to keep you in the lifestyle that you desire for at least three months. You don’t want to get caught out with no money if you’re in another country and you don’t receive an expected deposit, especially if that deposit was meant to last you for a while. Because of this, it is always a good idea to have cash assets at hand.
Don’t Forget Your Tax Obligations
Unfortunately, you don’t just automatically become exempt from your tax requirements purely because you’re living outside of Australia during your retirement. If you earn any kind of income from investments or other sources, they will generally still be taxed under Australian legislation.
It’s a good idea to talk things over with an agent or, at the very least, work out what your obligations will be using a tax calculator. The ATO will still charge unpaid debts in most countries around the world, so it’s better to simply stay on top of things rather than deal with the potential consequences.
You May No Longer Qualify For An Australian Pension
Another thing to be wary of is that you may no longer qualify for an Australian pension. If your assets already excluded you from receiving one, feel free to skip through to the next point. However, if you were expecting to receive a payment from the government, it’s important to understand whether you will still be eligible while living abroad.
Those who are only going overseas for a short amount of time will generally still be able to access payments, no matter where they’re headed. However, if you’re going to stay for a bit longer, it’s vital that you know whether you’ll still receive any income support.
Don’t Just Take The First Currency Exchange Offer You Come Across
Finally, when converting your assets for a long term stay overseas, it can be tempting to simply convert everything and get started with your new life. This would be unwise, however, as the first currency exchange option you come across probably isn’t going to be the best solution out there.
Always do your research before committing to any financial decision. If there are no currency exchange options that fit your needs, consider converting smaller amounts to get you by until you find the right option.
Now that you’ve got a better idea of the ramifications of spending your twilight years in a foreign country, you should be able to make a more informed choice about your destination and how long your stay will be. We hope you enjoy your well-earned break and that everything goes well for you moving forward.