Retiring Outside US

Abby, I will watch this thread with interest. My question to you is: are you thinking it will be cheaper to live in Spain or Italy, or is this just a lifestyle choice?

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The impact of currency fluctuations on your investment value might be considerable. You should diversify the denomination of your savings and investments to moderate those effects, just as you diversify the classification of those investment.

I think at this time the most impact on your finances will be the value of the US dollar vs the Euro. You need also consider health coverage if you are on Medicare.

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Despite having been to Spain several times I can't address retiring in that country. Since retiring 17 years ago my wife and I have spent almost six months of each year in New Zealand. We choose to not live there longer for several reasons. One being the weather, California and New Zealand summers. Secondly, living there for more than 6 months would make us residents an thus require us to not only file U.S. Income Tax returns, but NZ as well. The NZ returns would have to include all U.S. Income and pay taxes on part of it with both countries giving a credit for Foreign Taxes Paid (don't want the hassle). The currency exchange rate has always been quite favorable to the U.S. dollar even with the current .78 cents US to the NZ Dollar. I liked it much better when it was .58 cents US to the NZ Dollar of a few years ago. We have some funds in a simple savings account with a large bank operating all over the Pacific that earns 8.2% (no FDIC) and we report the account and the interest on our US Tax return. Most of the info that you are seeking is available on the web by doing Google Search. For example. Spain Immigration, Residency, living in Spain etc.

Good luck,

Lon

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My wife and I have lived in Canada for about the same length of time you have lived in NZ. One difference is that, during most years, we are in Canada for longer than 6 months, and the tax situation is similar. We file tax returns in both countries. Just an opinion, but I would say the tax situation may not be quite as bad as you think, even in NZ. We get tax credits and the total tax bill is usually not much different from what it would be if we did all our business in one countrty or the other. At least, I would say that the hassles of tax filing certainly do not outweigh the benefits of residing in both places. If she likes Spain a lot, she shouldn't cross it off solely because of taxes or other financial issues without further investigation.

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Where in New Zealand? I looked at the area around Nelson but the air fare ($2K each) was a bit high and it was too much like the US. On the other hand is it true they don't have mosquitoes? I am bug fodder and that is major consideration in where we settle.

I also looked at Costa Rica, Mexico (Baja and Oaxaca), and Tuscany plus some quick looks at eastern Europe. Japan would be interesting but much too expensive. None of the warmer parts of the US interest us (we live just outside Boston).

Spain is a popular vacation and retirement destination for the English so there is a lot of information on the net. I did have a helpful conversation with an English real estate agent. However I found little about issues specific to Americans such as the consequences to Social Security and Medicare. Can you help, Lon?

I am painfully aware of the slide of the dollar relative to other currencies. Houses that were affordable a few years ago are now outside our target. We are working to protect ourselves from any further slide. The 12 to

20% in fees and taxes for real estate transactions in Italy and Spain are also a problem. Spain has 2% mortgages for foreigners but we might not qualify.

Thanks, Abby

Moderators: The first attempt at this post resulted in a fragment. I apologize and assume you will filter it out.

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