In this report we discuss overseas retirement mistakes you will regret forever. Today I was thinking about things that could happen, or choices you could make, that could cause a complete and irreversible failure of your early retirement overseas. These are not theoretical mistakes. Hundreds, if not thousands of ex-pats have already made these mistakes.
Normally, I am a more positive guy. But I want to talk about the six big decisions and actions you need to think about carefully so you don’t end up making a mistake that you will regret forever. Some of these mistakes you may be able to come back from, others may turn out to be permanent.
In my opinion, when you are making these decisions, you need to get some professional advice about how to protect yourself, and others, so you won’t regret these decisions forever. I am not telling you what to do, I am just telling you what to watch out for, and what to get local professional advice about.
You see, laws are different all over the world. Just a few hundred dollars in advice from the right professional in a foreign country could change whether you (and others) end up poor and hungry or sail smoothly through your remaining years of life.
I have been living outside the USA since 2007. I have lived in and visited 67 countries. I will show you images of my travels while I explain overseas retirement mistakes that you may regret forever. Mistakes that could send you home early with only your hat in your hand, or worse.
I will cover the most consequential and long-lasting mistakes last so make sure to listen until the end. After I discuss the mistakes, I will give you a strategy for picking a local professional advisor that is less likely to have a conflict of interest with you.
Overseas retirement mistakes you will regret forever
Six. Low Strength, Flexibility, or Mobility. The truth is, most of the retire cheap in paradise world is not as handicapped friendly as your home country. There are large holes in the roads, broken and missing sidewalks, fewer street signs, fewer or completely missing crosswalks, and very few if any pedestrian signals that tell you when to walk or don’t walk. Very few even have ramp sidewalks at street corners for wheelchairs.
None of this is a big deal for healthy people in their 60s and 70s. But as we age we lose strength and flexibility and it becomes more difficult for us to maintain the ability to remain mobile as we walk around in these less developed countries.
That means that you have to begin exercise now so you will maintain your ability to move safely through poorly developed infrastructure. You have to be able to step up on steep curbs, step over holes in sidewalks, and get across streets rapidly in many parts of the world to remain safe.
Exercise that maintains your strength, balance, and flexibility must be introduced into your daily life now so you can live in less-developed parts of the world as you get older. If you have remained sedentary until now, that means you can easily add another 5 to 10 years of mobility to your retirement years if you take it seriously in your 50s and 60s.
But, if you wait until your 70s or 80s to introduce exercise that increases balance, strength, and flexibility, then it will be much harder to get your body back into shape each passing year.
On the flip side, if you live in one of these retire cheap in paradise countries, you may be able to afford to hire a full-time assistant to help you with daily life, and later even hire a full-time and or live-in nurse. In some of these countries, a live-in nurse may cost thousands of dollars less per month than assisted living would cost in your home country.
The important thing is to get started sooner maintaining your strength and flexibility so you can remain mobile longer as you age. You should also begin to at least think about what it would cost, and how you would pay for, assistance as you begin to lose your mobility and or memory.
The truth is, qualified nurses and personal trainers often work for a fraction of what you would expect to pay in your home country, but they are not free. So you need to think about how to add these two strategies to your overseas retirement so you won’t regret having ignored these two mistakes when you are older and have less time to adjust.
Five. Giving Away Your Assets Multiple Times My father was a marrying man. He was married four times and gave away half of his assets four times. Even if you start with a million dollars, which my father didn’t have, and you divide it in half four times, you won’t have enough to survive left over. So you need to think carefully about decisions that give away assets.
This is not a man or woman-hate thing, this is just math. Two of my sisters made more money than their husbands and one had to give hers half when they divorced.
You don’t even need to get married and divorced multiple times to give your assets away. You might just build a house for someone you love and then they ask you to move out. Your legal rights vary in each country and you need to understand what the local laws are when you make these decisions. The laws are different all over the world.
In almost every country in the world, there is a way to structure your life and your transactions in a way, that will protect your expectations whether things go good or bad. For example, in many countries, you can structure real estate ownership so the house goes into your spouse’s name upon your death, but if they leave you for another person before you die, you get to keep the house.
There are various ways to protect both personal and real property. But you need to set the transaction up properly with advice from a local lawyer. In some cases, it may only cost you a few hundred extra dollars to set things up in a way that you are protected if things don’t turn out how you expected.
You see, if you lose a good part of your assets at 80 years of age because of some nuance of law that you didn’t fully understand when you structured a transaction in a foreign country, it will be almost impossible for you to recover. The older you get, the harder it is to recover from bad decisions.
Some of you are probably thinking, but I really love my spouse. I want to take care of them. I think that is great. But if they really love you too, they are unlikely to object to setting things up so there are some basic protections in case things don’t turn out how the two of you expect.
You can even talk through these scenarios and agree on what should happen in the event things go bad at various stages. Your plan can take care of both of you at each stage if you get the right advice. Just letting things happen without any advice from a professional could put you in a vulnerable position when you are older and have no earning capacity.
These kinds of decisions could turn into mistakes you will regret forever. Just spend a little time getting it right so regrets are less likely when you are older. Also, you should read another report relevant to this topic, “Why retired ex-pats should not buy real estate overseas,” link provided.
Four. Unplanned Children. When I travel around the world, I see ex-pats in their 60s and 70s with small children and babies. That can be a good thing. One said to me, “I really screwed up with my kids from my first marriage. It feels great now to have a second chance.”
Other ex-pats are not as delighted. One said, “The baby was unplanned, and now I am worried if I will live long enough to get this kid through college.” If you are an older ex-pat and you are not interested in raising a new family in retirement, you need to have a strategy for that.
If you do not want to have children, you need to have a foolproof birth control strategy. If you just trust your partner to handle birth control, you may end up with young children when you reach retirement age. This is not as big a problem for ex-pat women reaching retirement age for obvious reasons. But if you are a man, the only way to be sure is to get a vasectomy.
If you want a new family, all the power to you. But do think about what the strategy will be to pay for the costs of raising that child so they can have a great life even if you pass away sooner than you expect. Can you get some life insurance that will pay your spouse to raise your child in a way that will give them a decent life? Just think it through before it is too late.
Three. No healthcare strategy. As we age healthcare expenses can become one of the most significant parts of our budget. In some parts of the world, the government covers healthcare costs for their seniors. But that is rarely the case if you decide to retire outside your home country. So you need to have a strategy to pay for healthcare expenses if you decide to retire overseas. I will give some example strategies people use for healthcare.
When we were in Panglao in the Philippines about 18 months ago, we met an American man that had been in the Philippines for over a decade. He had recurring back problems that were serious enough that he had to fly home to the USA to get an operation about every other year.
So his healthcare strategy was to just keep his senior Medicare health insurance in the USA and fly back whenever he needed treatment. He would just fly home to the USA for expensive back treatments.
He also said he went to the doctor from time to time in the Philippines but that those bills were never more than a few hundred dollars. He just paid those out of his pocket. He also said he purchased his medicine in the Philippines. He saved as much as 80% compared to what he would have to pay for the exact same drugs in the USA.
Because the Pharma industry is allowed to make political donations to US politicians, and those politicians subsequently favor Pharma over US Citizens, US Citizens routinely pay some of the largest drug prices in the world. So he was just buying his drugs in the Philippines where prices are much lower.
Other ex-pats around the world just get private healthcare insurance in whatever country they decide to retire. Private health insurance outside the USA is routinely 50 to 80% cheaper than in the USA.
Health Insurance is often so much cheaper in many parts of the world because the cost of medical treatments is so much cheaper outside the USA. So when something goes wrong, the insurance companies don’t have to pay the hospitals as much.
I was once in the hospital in India for 5 days and my entire bill was $1600. That was for services that could easily have cost $40,000 to $60,000 back in the USA. Insurance companies have all this data. That is why health insurance is so much cheaper outside the USA.
There is also a growing industry called medical tourism. Medical tourism is when people fly to other countries to get medical care, because it is often better and or just cheaper in other countries.
Finally, some ex-pats have decided to just self insure. Self-insurance is not for everyone, but that is what I have decided to do. I have another report that explains why I have decided to self insure and how much money I have decided to put aside in case I have large medical expenses while living outside my home country. I explain that in another report, “The two Biggest Risks of Retiring Cheap Overseas,” link provided.
You have to have a strategy for health care expenses so you don’t end up with a health care mistake that you will regret. You don’t want to have a life-threatening illness you have no resources to pay for.
Two. No inflation strategy. You have probably been reading in the news recently that after 30 years of very little inflation, things are changing rapidly. Inflation has begun to be a significant worry for people as prices have been rising rapidly over the last few weeks and months.
If prices continue to accelerate in the coming years, the buying power of your retirement or pension would likely be eroded making it harder to maintain the same lifestyle as you get older.
Inflation in your home country is not likely to go at the same rate as in whatever part of the world you decided to retire. So, if the Dollar, Pound, or Euro remains strong relative to inflation where you are living, you are likely to be fine.
The real trouble would be if the purchasing power of your home country’s pension erodes relative to your cost of living overseas. That could be a real problem.
So you need to discuss your situation with a qualified financial advisor to make sure you have a strategy for both income and inflation protection. You see, as you get older and older, it becomes more difficult to start another source of income or return to the job market.
In addition to speaking to a financial advisor, try to live on less now while you can, and begin to acquire some of the inflation-proof investments your advisor suggests. Some advisors suggest dividend stocks, gold and silver, and real estate as inflation hedges. They may suggest ways to invest in these kinds of assets.
To fight inflation, I decide to make extra money teaching my hobby online. In fact, my online hobby presently makes about three times as much money as I need to live overseas and travel the world To find out more about how to turn any hobby into an income stream, watch my video, “The best online business for retirees,” link provided.
Before I tell you the final mistake you may regret when retired overseas, I want to tell you how to pick an advisor that doesn’t have a conflict of interest with you.
How to Pick a Professional Advisor
When making decisions overseas that could turn out to be mistakes you might regret forever, you need to pick the right advisor.
Seek advice from a licensed professional, lawyer or otherwise, that works only for you, and that is a specialist in the subject matter of the transaction in the country you are retired. You should not accept advice from someone that has a conflict of interest with you. It is not unusual overseas, for someone that is encouraging you to make a life-changing decision, to refer you to a lawyer for advice. In that case, the referral itself may be a conflict of interest.
For example, if your real estate broker in a foreign country, refers you to a lawyer, that lawyer may sugarcoat the advice they give you, so the deal closes. The lawyer is motivated to do that because they know the broker will keep referring people to them if deals keep closing.
So, find your own lawyer to reduce the possibility of a conflict of interest.
Another example is when you are structuring some other kind of premarital or other relationship agreement. Don’t use a lawyer referred to you by your new love, their family, their friends, or anyone else that would be motivated to influence the terms of that agreement. Find your own lawyer. This is likely to lower the chance of a conflict of interest.
One. Attaching too deeply to a country too soon. Some of us get this idea stuck in our heads that there is one perfect place for us in the world. I think it is great to do research to reduce the number of countries down to 3 to five countries to visit before we pick our favorite to retire.
But I don’t think it is wise to reduce the number of countries you are interested in down to one country and just move over there without visiting other countries. Experience tells me that if you reduce it down to one country, and you just go to that one country and retire, you will never really know if you are in the right place.
Imagine if you married your high school sweetheart and never had sex with anyone else before you got married? Don’t you think you would wonder what sex was like with others? I would.
I just think if you date a few other countries before you get attached deeply to a new country, you will know why you picked that country. When things get rough from time to time, you will remember what you loved about that country more than the others. Not just on paper but also in real life. I think an informed decision like that has a better chance of lasting longer.
I suggest doing what I call an exploratory visit to your top three to five favorite countries before getting attached too deeply to any one country. I know what some of you are thinking. Dan, I can’t afford to travel all around the world as you do. I suggest you read my report on what we spent in 2020 traveling around to multiple countries before you decide whether or not you have enough money (link provided).
Thanks for reviewing my report, overseas retirement mistakes you will regret forever.
Make sure to grab a free copy of my eBook, “How I Fired My Boss and Traveled the World for 14+ Years.” This is Dan of Vagabond Awake, the YouTube Channel for VagabondBuddha.com. The world is your home, what time will you be home for dinner?