Jan 07, 2020

Retiring as an Expat

Retiring as an expat brings on many changes and challenges. We recently asked our expat client base to share their experiences with the process and posed the question, “If you were sitting down to counsel an employee about to retire, what sort of advice would you give them?”

We thought it might be helpful to share their input. In no particular order of importance, these were the most frequent responses:

1. Pre-retirement Planning.

It’s important to start this process early and have a detailed plan before making any decisions – many started 2-3 years before retirement. Find a financial advisor with experience in retirement planning and specific knowledge of your company plan. Talk with a few to get various opinions, most credentialed advisors will provide pre-retirement advice free of charge. The most important input to the process? Estimating costs of living in retirement. Time devoted to this task may be the most productive thing you can do.

2. Costs of Resettling.

he cost to resettle was higher than expected. Depending on expat status, you generally receive a lump sum fee to cover those costs – don’t be surprised if actual costs are higher. Repair or refurbishment on an existing house or the cost to purchase a new home could be substantial. New vehicles will often need to be required, be sure to include those costs in your analysis.

3. Detailed Inventory of Personal Belongings.

It’s not uncommon for items to be damaged or “go missing” in transit. Detail of inventory is essential in filing insurance claims. Take the time to itemize and value all belongings prior to transit and keep accurate records. Be careful bringing back too many unique furnishings and belongings from your travels – they may not have a place in your new surroundings.

4. Tax and Legal Advice.

On the tax side, generally returns are covered by the company for the first few years to recover foreign credits. Don’t be surprised if your returns are a bit opaque for that period. Once the company is done, you may decide you want to engage a tax advisor on your own – your financial advisor or former colleagues would be good sources for referral. Regarding legal advice, make sure you have an updated will. Work with an attorney who specializes within the state you plan to relocate and that your updated will is written to that state’s requirements. Again, referrals will be helpful.

5. Adjustment/Resettlement.

Depending upon how long you’ve lived abroad, be prepared for cultural change even when returning to your home country. Differences that may seem minor (dining hours, current cultural references, political views etc.) will be more pronounced early in relocation. Most found it took a good six months to adjust even when resettling in a familiar environment.

6. Social Activity.

Everyone found it essential to retire with a purpose and find a community where you can be actively involved. Many preferred living in an environment that mixed both retirees and younger people. Many found that they enjoyed working with charitable organizations. Others found that retiring close to family, though not too close, was important to quality of life.

 
Robert W. Baird & Co. Incorporated

Contact Us

To set up a meeting with a member of the
Baird Retirement Management team