Many people look forward to retirement as an opportunity to live comfortably. And for those who want to make the most out of their savings or pensions, living abroad is a common consideration. Some countries are ideal for retirees, especially when it comes to affording a simple lifestyle. But, transferring to a foreign country also means you need to transfer your source of funds. As such, you can either leave your pension fund in your home country or take the money with you.
Accessing your money while living abroad
If you leave your pension fund in your home country, you might be able to access your funds if the provider allows it. The good thing about this option is that you can take advantage of all pension schemes available in your country. Depending on the guidelines, your provider may not allow direct payment to a foreign bank account. Even if they can, there are exchange rate fees and other charges that will apply.
An alternative would be to cash in your pension and put the money in a bank account in your home country. You can then access the funds while living abroad. If you open a foreign bank account, transferring your money will be less of a hassle.
Should you transfer your pension abroad?
Having an overseas pension is another choice, as long as your pension provider allows it. You need to check if the pension scheme is qualified, and you also need to verify if taxes will apply. Similar to transferring your money, there may be fees and charges that apply. As such, the transfer could significantly diminish the amount you get when you retire.
Instead of transferring your pension directly, what you can do is consider offshore investments. Nonetheless, you need to be aware of the risks. A financial adviser can help you assess your current financial circumstances and determine if making an offshore investment is the best move for you.
Paying taxes when you transfer your pension abroad
Even if you live abroad and bring your pension fund with you, you still have tax obligations to your home country. In addition to that, you’ll also need to pay taxes in your current residence. If you live in a country with a tax agreement to your home country, it may eliminate the possibility of paying taxes twice on your pension. So, before choosing a country where you want to retire, you need to thoroughly verify tax rules and how they will affect you financially.
Getting the help you need
While planning for retirement abroad, you’ll need all the expert help you can get. There are services that specialise in helping pensioners who are considering living abroad. These services are either private or public, hence there’s no shortage of information if you exhaust all available resources.
Moreover, you can hire a fund manager or a financial adviser to take care of all the technical matters. Make sure that you choose a specialist from a reputable firm. If possible, get an adviser from your home country and one from the country where you plan to retire.