We’re sure many of you put Bali on the list of ideal retirement destinations...and until December 2022, you were safe in pursuing that dream. Conditions for long-term visas have changed; we’ll explore that later. Perhaps your dream is to return to Portugal and use your new home as a base for exploring Europe. We too have dreams so we thought we’d explore them this month.
Three key considerations for retiring overseas
First up, we have to advise that moving overseas full time, unless it’s your birth country or you have lots of family, can be tricky. Talk to legal advisers and they’ll recommend the 6+6 option: six months in Australia and six months overseas. While airfares are expensive, you’ll gain other financial benefits to offset these.
Number one is tax: in Australia, superannuation income isn’t taxed after you turn 60. However, in most of Europe, the US, Canada and Japan, your superannuation income will be subject to taxation. If you stay six months or fewer, you won’t be classed as a tax resident.
Number two is the Age Pension. If you intend to rely on this income, you will need to apply in Australia. You can still receive the Age Pension when you live overseas but if you’re gone for six months or more, you’ll receive your pension monthly rather than fortnightly. You may find, too, that you are getting less than you would have if you resided in Australia.
Number three is health services. For most countries, with the exception of those with which Australia has a reciprocal health agreement, you’ll need private health insurance. See the list of countries with health agreements with Australia.
Places to retire overseas
Thailand
We love Thailand, the Thai people and culture and the food. Who wouldn’t want to find a roomy apartment in Bangkok or a Phuket villa for retirement? Thailand is still affordable and the conditions for retiring in the country aren’t too onerous.
Anyone wishing to retire in Thailand must obtain a retirement visa. It’s relatively easy to obtain a retirement visa once you’re aged 50 or older if you have either a Thai bank account with a minimum of 800,000 Thai baht (around A$34,000) or a monthly income of 65,000 Thai baht (around A$2,700) or a combined total of A$34,000. You’ll need health insurance, too.
Disclaimer: the information provided was correct as of 22 February 2023. Check government websites to ensure conditions remain the same.
Malta
While you need a net worth of about A$777,000 for a permanent residency visa, Malta has much to recommend it, with its wonderful history and a balmy climate.
Colombia
Extraordinarily beautiful, the people are friendly and witty and the city of Medellin, popular with expats, is known as the ‘city of eternal spring’. With an M-11 Retirement Visa, you can live in Colombia for three years. You can renew the M-11 an unlimited number of times and after five years, apply for permanent residence. You must be aged 57 if you’re a woman and 65 years if you’re a man, prove a monthly income of about A$1,000 and carry health insurance.
Retirement places better for part of the year only
Bali
Until late last year, Bali had been one of our top picks as it’s familiar and the conditions for long-term visas weren’t too onerous. However, the new Indonesian Second Home Visa requires foreigners to deposit 2 billion rupiah (call it A$200,000) in a local bank for the duration of the visa (five or ten years). Could you afford to have that much sitting idle in a foreign bank? You’re better off spending some months of the year in Bali and returning to Australia or travelling for the remainder of the year.
Greece
Greece also was one of our go-to destinations with its Golden Visa but we hear that the home purchase minimum purchase price is due to rise from around A$390,000 to A$780,000. You could rent out your purchased home but we think it best to use Greece as a base for a few months in the year only.
Belgium
With fast internet, offering easy access to the rest of Europe, Belgium is an overlooked retirement destination. However, given the difficulty of long-term residency and the cold winters, we think this is another destination that could be for a few months only. The cost of living is relatively high, but the food and location might more than makeup for it, though. Australians wishing to stay up to 90 days don’t need a visa.
Our conclusion
While our back-up plan once might have been to live in a country with a lower cost of living, most governments overseas aim to attract only the wealthy. Countries like Portugal and Ireland have ended their Golden Visa schemes to avoid real estate speculation. The situation might change once inflation globally is under control but for now, many countries previously welcoming retirees are off limits.
Having done a deep dive into many alternatives, we believe you’re better off investing your money into a retirement village or land-lease community in Australia and, if you must, spend some months overseas but maintain Australia as your base. That way you get the best of both worlds.
Want to learn more about making the most of your next 30 years?
We’re committed to making life better for the over 55s. Check out downsizing.com.au for more insights and great advice on living life to the fullest.
