Why the start of the financial year is a great time to retire abroad
Retirement is a time to relax, savour life, and make the most of the benefits you’ve earned during your working life. Many people plan to retire abroad, but few are aware that the time of year that you choose to retire abroad could save you money. The next financial year may be a few months away, but it’s the perfect time to review and organise your finances. Let’s look into why the start of a financial year is a great time to retire abroad.
What are the benefits of retiring abroad at the start of the financial year?
Be smart with your taxable income
If we assume the start of the financial year to be around the 1st of April, right now is a great time to start because your taxable income is at its lowest. Depending on how much you earn, you will be taxed between 20% and 45% on your income and pensions are taxable too. Depending on how much you have in your pension, retiring early on in the financial year means you will technically have earned less and be taxed less.
You could retire earlier
By paying less tax and having more money in your pocket, you could retire earlier. Being able to retire earlier is the reason many people choose to retire abroad. If you choose a country that has a lower cost of living, your retirement and financial options will be available to you earlier. For example, you may not be able to retire in your home country until you’re 65, but you could retire in Portugal at 55.
The start of the financial year tends to see a temporary pause in major currency fluctuation as the world’s finances are reviewed, meaning it’s a great time to secure a currency exchange rate. Your pension will be paid into your account in local currency, and we can ensure it is protected from currency exchange chaos. Although it’s impossible to predict the rates of the future, we are on hand to get you the best possible rates.
What taxes will I pay if I retire abroad?
This depends entirely on where you retire and where you originate from. You need to understand the tax requirements of the country you are leaving and how this will impact you when you emigrate. For example, US citizens are required to pay tax on their income no matter where they retire and Portugal has the popular Golden Visa programme available. To find out where you stand you should:
· Inform your local government as soon as possible
· Speak to a financial advisor
· Ask about your pension
· Consider becoming a tax resident in your destination country
Top 6 factors to consider if you’re retiring abroad
No matter which time of year you do it, retiring abroad is a popular and exciting option, but it isn’t for everyone. There are lots of important things to think about and plan. Here are 6 factors you should consider if your goal is to retire abroad:
1. Quality of life
Enjoying your golden years abroad means you can enjoy a better quality of life. Relaxing, enjoying hobbies, and spending quality time with loved ones. Gone are the days of commuting, traffic, and pointless meetings, now you can do exactly what you like. Early mornings and late nights can be on your terms. Think of retiring abroad as a fresh start and a chance to enjoy the later years of your life as fully as possible. You’ve earned this.
2. Cost of living
Retiring abroad to a country with a lower cost of living can boost your finances and give you more money in your pocket to enjoy. Portugal, Mexico, and Spain are popular choices for retirees who wish to lower their cost of living whilst still enjoying all the fruit of their years of hard work.
3. Weather
Weather is a huge reason people decide to retire abroad, especially if you currently live in a cold county like the UK. Thailand, Greece, and Australia are some of the sunniest countries in the world recording the most hours of sunshine each year. If you prefer the seasons or aren’t seeking sunshine all year round, places like France and Spain have more varied weather but still a great quality of life.
4. Currency Exchange
Our currency experts can support you will all aspects of currency exchange, ensuring your get the most for your money. We can secure fixed exchange rates, transfer money securely, and support you when buying property abroad. You will also have 24/7 access to your online account and a personal account manager, so you know where you stand with your money at all times.
5. Friends and Family
When you retire abroad there will be friends and family back home that you will be leaving behind. Think about how often you will see them and if you can travel back to see them. If you wish to travel back regularly or will be having visitors, retiring to a country that you can fly to in a couple of hours is more realistic in terms of timing and travel costs. You could also consider friends and family when you purchase your home. Is there enough space to accommodate friends and family?
6. Healthcare
In the UK, the NHS is a fundamental part of life, especially for older people. In your retirement years, you may likely need more support from healthcare services, so it’s essential to research the standard and availability of healthcare abroad. Other countries do not offer national health services and you may need to pay for private healthcare to purchase health insurance.
It’s important to note that everyone’s financial situation is different as well as retirement goals and preferences. There are no wrong answers here and you should do exactly what you want to do. Start your journey to a comfortable and well-lived retirement with us today.