There are a number of financial planning issues pe
There are a number of financial planning issues people face that are unique to retiring abroad as compared to retiring in your home country:
- If your retirement savings are held in your home country they may be denominated in a different currency from that in which you will spend. This can lead to considerable currency risk. As an example, consider that the Euro has strengthened by 30% vs. the USD over the last decade or so.
- Inflation rates are generally higher in developing countries than developed countries. So if you plan your retirement expenses using a 2.5% or 3% inflation rate but move to, say, Mexico, where inflation is typically around 5%+, your savings may not support your lifestyle throughout retirement.
- You may not be able to keep the bank or retirement accounts you now have in your home country once you are no longer a resident. This is especially an issue for Americans moving abroad since many US financial firms no longer will deal with non-US residents.