How to Retire in Turkey: Costs, Visas and More

How to Retire in Turkey: Costs, Visas and More – SmartAsset

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Turkey is filled to the brim with beautiful architecture, art and a melange of cultures that reaches back thousands of years. It’s home to artifacts from communities like the Hittites, Ancient Greeks, early Christians and Mongols, which fill this nation of some 82 million, with a rich sense of history. Lying as it does at a crossroads of Europe and Asia, visitors can see a unique blend of Western and Eastern influences. Its Mediterranean and Black Sea beaches are renowned for their beauty. Istanbul’s Grand Bazaar extends across 58 covered streets hosting some 1,200 shops. If you’re considering retiring in Turkey, here’s an overview of some basic information you’ll need. A financial advisor can offer valuable guidance as you consider retiring abroad.

Cost of Living and Housing

It’s much less expensive to live in Turkey than it is to live in the U.S. Without accounting for rent, Turkey’s cost of living is 53.56% lower than in the U.S. on average, according to Numbeo, a cost-of-living database.

U.S. rent prices are 556.13% higher when stacked against those in Turkey, on average. To rent a one-bedroom apartment in a city center will run you around $215.26 in Turkey, whereas a comparable setup in the U.S. would run about $1,340.16. If you wanted to pursue purchasing an apartment in Turkey, you would find that the price per square foot in a city center is averaged out to $83.07. In comparison, the same square footage in a similar city location in the U.S. would cost about $328.96.

To further illustrate the contrast, we can compare Istanbul, Turkey’s most populated city, to the U.S.’s New York City. To maintain the same standard of life, you would need around $8,203.10 in New York, which contrasts starkly to the approximately $1,960.45 necessary in Istanbul, assuming you rent in both.

So, if you’re looking for a country to retire in with both affordable renting prices and lower property costs to make the most out of your savings, Turkey may be a solid option.

Retire in Turkey – Visas and Residence Permit

Turkey doesn’t have a visa specifically for retirement, so you have to apply for a residence permit instead. This requirement applies to anyone who intends to remain in the country more than three months. You’ll first have to apply for a short-term residence permit, and you must do so within a month of your arrival in Turkey. There is an online application you fill out at the Turkish Ministry of Interior’s website. Once you finish, it will prompt you to make an appointment with the nearest DGMM office to continue the process and pay the fee your visa requires.

A short-term residence permit is issued on a two-year basis. After you’ve lived in Turkey uninterrupted for eight years under your short-term visa, you can apply for a long-term residence permit. These extend indefinitely.

No matter what residence permit you are applying for, you will likely need to show proof that you possess adequate assets. This can shift whether or not you have dependents, but a single person is generally required to have the equivalent to a month’s worth of Turkish minimum wage. As of early 2021, that would be around $400.

Retire in Turkey – Healthcare

The World Health Organization ranking of national healthcare systems puts Turkey’s at 70th out of 191. The central government body responsible for healthcare and related policies is the Ministry of Health (MoH). There is also a private sector and university-based care; however, the MoH is the main body responsible for providing healthcare. You can expect the quality of healthcare in Turkey to vary between regions. Although it’s cheaper than some of its European neighbors, access is limited in more rural areas. You’re more likely to have high-quality care in major urban locations like Istanbul – as well as the ability to communicate with your healthcare providers in English. This increase in quality is why most expats choose to go to private medical facilities over public ones.

All residents under 65 must have either public or private health insurance. Expats who have resided in Turkey for over a year under their residence permit can apply to have public health insurance through the state-run Sosyal Güvenlik Kurumu (SGK). Expats usually choose to supplement this with private insurance (or just choose private) to cover additional fees at private facilities.

As Turkey has grown as a country and political entity, it has experienced a great deal of reform around its healthcare system. It likely will continue to experience further changes in the future.

Retire in Turkey – Taxes

Like many countries, residents and non-residents are subject to different taxes in Turkey. Residents pay taxes on their worldwide income, whereas non-residents only have to pay taxes on Turkish-sourced income. The country uses a progressive tax scale, ranging from 15% to 35%, depending on your income bracket.

Turkey does possess a tax treaty with the U.S., which can provide some relief. You will only have to pay into one country’s Social Security program as a result, which in Turkey is a 14% flat tax for employees. Otherwise, there are also tax exemptions that may allow you to pay less on your U.S. income taxes. One example is the foreign earned income exclusion, which lets you exclude the first (approximately) $100,000 for foreign earned income if you can prove your Turkish residency.

Retire in Turkey – Safety

Each expat’s experience is unique. Some may travel through Turkey and find they encounter little to no issues on a security level. That’s not to say you shouldn’t be cautious. The U.S. Department of State’s travel advisory warns travelers either visiting or moving through Turkey to be wary of both terrorism and arbitrary detentions. The advisory heavily suggests that you avoid the Sirnak and Hakkari provinces, which are in the southeastern part of the country, as well as any area within six miles of the Syrian border to avoid terrorist activity. The State Department’s most recent report on human rights practices in Turkey bears a close reading, especially sections 1 and 6.

Although you should speak with locals and enjoy the culture, you should also be wary of your surroundings and keep an eye on political developments. It is also advised that you don’t engage with political topics online either since that can still be a red flag.

The Takeaway

Turkey is still in the process of significant political change, making settling down difficult for the average retiree. That, along with terrorism concerns, may encourage you to look at other countries instead. However, Turkey has a strong sense of identity with a warm populace who wants to share their cultural. That sense of belonging, along with the country’s beautiful features and its low living costs, may make the challenges worth it to you.

Tips on Retiring

  • Finding the right financial advisor who can help address your needs doesn’t have to be hard. SmartAsset’s free tool matches you up with local financial advisors in as little as five minutes. If you’re ready to be meet with advisors in your area that will help you achieve your financial goals, get started now.
  • Planning your retirement comes with its challenges, especially if you intend to move abroad. While Turkey may have low living costs, there still may be other financial burdens you have to address. To get an idea of what to expect, stop by our retirement calculator.

Photo credit: ©iStock.com/hadynyah, ©iStock.com/Nikada, ©iStock.com/TEZCAN

Ashley Chorpenning Ashley Chorpenning is an experienced financial writer currently serving as an investment and insurance expert at SmartAsset. In addition to being a contributing writer at SmartAsset, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.
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How to Retire in Finland: Costs, Visas and More

How to Retire in Finland: Costs, Visas and More – SmartAsset

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For those considering how to retire in Finland, you have one of Europe’s finest countries waiting to be explored. As of 2020, Finland topped Gallup’s World Happiness Report for the third consecutive year and that ranking comes with good reason. Known as the Land of a Thousand Lakes, this country has natural beauty that stands out among the rest. Finland boasts a strong economy and healthcare system for its residents, some three-quarters of whom can speak English.

A financial advisor can help you achieve your goal of retiring abroad.  

Cost of Living and Housing

While the cost of living in Finland is 8.36% higher than in the U.S., not all expenses are higher than in the U.S., according to Numbeo. The website also shows that the rent in Finland is significantly lower on average, 32.02%, than in the U.S.

A one-bedroom city center apartment’s rent in a highly populated city such as Helsinki can run about $1,171.77 month. Alternatively, the same-sized apartment can cost around $927.86 outside that central hub. The further you look outside urban areas for rental properties, the less expensive you’ll find them to be. When compared to costs of living in a city like New York City, rent may cost upwards of $2,650.00 inside the city center and $2,375.00 outside the city center.

If you are looking to retire in Finland or spend years there, it might be best to consider buying your own home. Interest rates on housing loans in Finland have been on a steady decline for years. Helsinki, the nation’s capital, has (at time of writing) the lowest mortgage interest rate in the eurozone.

Retire in Finland — Visas and Residence Permit

One of the main things to know about retiring abroad is getting a residence permit. The process is fairly straightforward. However, it has to be done on a personal basis; no one can apply for another person.

There are two types of residence permit categories: Temporary Residence Permits and Permanent (Extended) Residence Permits. You can get Permanent Residence after living in Finland with a permanent residence permit for four or more years. You should seek out an application for the permit from the Finnish embassy located in your country or the embassy of a Schengen country representing Finland. Also, you can apply using the Enter Finland online service to help book an appointment and begin the application process.

You will have to go through a background check to obtain your permit. You’ll also have to prove specific requirements down the line to become a Finnish citizen, such as fluency in the national language.

Retire in Finland — Healthcare 

The Finnish healthcare system focuses on preventing illnesses, in part through effective health and nutrition-focused education.  Before an expat can utilize Finnish healthcare benefits, however, they have to register for the National Health Insurance (NHI). You can only do this after four months of living or working in Finland. Once you register, you’ll receive a Kela card, which can be brought to pharmacies and clinics to help you get instant reimbursement for any payments. However, the amount paid back is decided on a case-by-case basis, which can underline the importance of private health insurance for some.

Each municipality is responsible for the healthcare of those living within its boundaries. Thus, doctors are responsible for a specific number of patients and create longer-lasting treatment relationships. Patients’ needs are addressed more quickly, and they work with a practitioner they know. Public hospitals can mean wait times, however, so some supplement with private healthcare as well.

Retire in Finland — Taxes 

A person’s liability to pay for Finnish tax is dependent on their residence status. After someone has stayed in Finland for six months or has a permanent home in the country, they’re deemed a resident. Finnish residents pay progressive income tax rates based on their total assessable income and the municipality they live in. These taxes are applied to their worldwide income, or money they make both inside and outside the country. Conversely, a non-resident is only taxed on income earned from sources in Finland and pays a flat 35% tax rate. Depending on the circumstances, a non-resident can apply to pay progressive tax rates instead.

Finland is a rare country that pursues double taxation treaties with foreign countries, providing some relief to people seeking dual citizenship.

Retire in Finland — Safety 

Finland is one of the safest countries, if not the safest, to travel in. The country even has one of the world’s, “most effective and trusted police forces,” according to the U.S Department of State. As with any country, you should be aware of the possibility of petty crimes such as pickpocketing, which tends to increase during the tourist season. However, other certain low-level crimes such as bicycle theft and car burglaries have been trending downwards since the early 2000s.

If anything should concern a newcomer, it’s Finland’s winter rather than its crime rates. The country experiences extreme levels of cold. In Helsinki during February, the average temperature ranges from 19 degrees F to 28 degrees F. So, travelers and visitors should prepare for the weather with appropriate clothing and research how to handle any snow or ice ahead of time.

The Takeaway

Finland is often seen as one of the best countries to retire in, especially for anyone who wants a safe, comfortable location to retire in. Those who love being surrounded by pristine nature will feel most at home here. However, harsh winters and a high cost of living can keep the more frugal retiree at bay. Your personal situation will decide if this haven of education and the midnight sun is the right place to spend your golden years.

Tips on Affording Retirement

  • Moving abroad takes more than financial stability. A financial advisor can work with you to break down all the necessary preparations, such as what to expect with tax implications. However, finding the right financial advisor for you doesn’t have to be hard. SmartAsset’s free tool only takes five minutes to match you with financial advisors in your area. If you’re ready to work with an advisor who will help you accomplish your financial goals, get started now.
  • Depending on the individual, one’s Social Security benefit’s value may be enough to cover these expenses. Using this Social Security calculator, you can estimate your benefit amount.

Photo credit: ©iStock.com/basiczto, ©iStock.com/Sasha_Suzi, ©iStock.com/ssiltane

Ashley Chorpenning Ashley Chorpenning is an experienced financial writer currently serving as an investment and insurance expert at SmartAsset. In addition to being a contributing writer at SmartAsset, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.
Read next article

About Our Retirement Expert

Have a question? Ask our Retirement expert.

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Didn’t Save Enough for Retirement? 10 Tips for Making it Work

If you think you haven’t saved enough for a truly secure retirement, think again.  The impossible could become possible with these 10 creative ways to retire.
ways to retire

You see, saving diligently your entire life and then quitting work to play bridge is only one way to get to retirement. And, the odds are that it is not YOUR way.

There are literally of hundreds if not thousands of different levers that can be used to pull off financial independence in your 50s, 60s and beyond.

Here are 10 ways to retire: even without adequate savings:

If you are emotionally or psychologically ready for retirement, but your finances are not quite there, you might explore taking a mini retirement – an extended (3-12 month) vacation from work.

Many people nearing retirement age find that an extended break from work is enough to recharge and re-energize.  The trick is convincing your employer to let you have this precious time off. According to the Society for Human Resource Management, unpaid sabbatical leave is offered officially by only 12 percent of employers and only 4 percent of employers offered paid leave programs.

However, it may be worth exploring your individual situation with a human resources manager.

Quitting your job with the hopes of finding a similar job upon your return is another option. However, many people who take a retirement gap year actually discover an encore career and new passions during their mini retirements.

If this idea interests you, learn more about taking a sabbatical, mini retirement or gap year…Or, model a gap year in your retirement plan with the NewRetirement Planner.

Living frugally is never going to be easy street, but it can be extremely rewarding to stay focused only on the things that are truly important to you.

Most financial advisors make the assumption that we need to maintain our lifelong spending habits when we retire. While this IS true for most of us, many people redefine themselves in retirement and can dramatically reduce spending – one of the best ways to retire securely.

Retirement is an excellent time to take stock of what you have and what you want. If you know what is most important to you, you can set goals and figure out a way to achieve your highest priority.

A few tips:

Look Carefully at Your Current Spending: When you have established what is important to you, assess your current budget.  Take a really detailed look at everything you spend money on – many people are surprised to learn how much little things that don’t really matter in the long run can add up over the course of a month.

Create Detailed Projections: Use the NewRetirement Planner to create a detailed budget for your projected spending.  When you get specific about your needs and how those will vary over time, you may find out that you are much better off than you thought.

Cut Costs: Figure out how to slash both the big (eliminating your car can create sizeable savings) and small costs.  Get rid of anything and everything not related to your top priorities.

Assess Lifestyle: Take a look at where you live, who you spend time with and what you do on a daily basis.  If these aren’t in line with what is important to you, then make changes that can save you money and help you live a more meaningful life.

Remind Yourself About What is Important: Write down your retirement priorities and refer to them daily.

It may even be helpful to write a list every day about what you want to accomplish and why.

These simple tasks can help you stay on track.

Huh?

Yes, your heard me right. You could perhaps spend more in retirement and still have a secure future.

You see, a lot of people plan retirement thinking that they will keeping spending the same amount forever into the future as they do now.  However, that is probably NOT what is going to happen.

You might need and want to spend more right after you stop working when you are relatively young and want to travel or engage in new hobbies.  But, your spending will likely drop off as you get older.

Thinking through the details of your retirement spending — and giving yourself some leeway to spend more (maybe just a little bit more) in certain years and less (perhaps much less) at other times might just enable you to retire sooner than you had planned.

The NewRetirement Planner helps you think through detailed budgeting for your future and you can vary your overall spending as well as your spending in individual categories to get to reasonable projections.

Many people don’t think much about their home when creating a retirement plan.  However, your home is probably your single greatest expense. According to the Employee Benefit Research Institute, the cost of home and home-related expenses accounts for about 43% of spending for those who are 65 to 74. Reducing this cost could be one of the best ways to retire securely.

Furthermore, if you own your home, then it is also probably your most valuable asset and one that could be used to help fund retirement expenses.

Rent Out Your Home or a Room in Your Home: House sharing is becoming more and more common.  And, Airbnb has absolutely exploded in popularity.  Renting out a room in your existing home (or your whole home when traveling) – either on a permanent or short term basis – can be a great way to help fund retirement because it uses an existing resource to generate money. Learn how to become an AirBnB host here.

Downsize:  If reducing housing costs and releasing your home equity interests you, downsizing may be a great option for you.  When you downsize you sell your existing home and buy or rent something less expensive.  It can be a smaller home or a residence in another community. Learn more in this complete guide to downsizing.

Go Teeny Tiny:  There is downsizing and then there are tiny homes.  If you think that you could live in 500 square feet or less, then a tiny house could simplify your lifestyle and finances.   And, did you know that about 40 percent of tiny houses are inhabited by older adults?  Is a tiny house the big solution for your retirement plan?

Get a Reverse Mortgage: A reverse mortgage is a loan against your home equity. However, unlike traditional mortgages, you do not have to pay back the money borrowed as long as you are living in the home. If you want to stay in your existing home, a reverse mortgage is an interesting way to eliminate ongoing monthly mortgage payments and get access to cash to use for retirement expenses.  More about reverse mortgages.

Hit the Road: A few retirees sell most of their possessions – including the home – and hit the road.  Could you imagine living in a motorhome or houseboat and traveling during retirement?

Besides housing, taxes, debt and Social Security — especially Social Security — are probably the biggest levers you have for making retirement work with inadequate savings.

Debt: Imagine if you could spend the money you are currently using to pay down your debts every month!  Being debt free costs a bit up front, but it is key to being financially free in the long run.  Paying interests on debt is akin to lighting money on fire. Get rid of your debt as soon as possible.

Here are 7 Reasons to Pay Off Every Penny Before You Retire…

Taxes: Being tax smart with your retirement plans can mean more accurate projections and more money in your accounts.  From where you live to income planning, there are many different ways you can reduce your tax burden. The NewRetirement Planner will help you discover opportunities.

Social Security: So, what could you do with an extra $100,000?  A lot I’ll bet!  Waiting to start Social Security could potentially get you that kind of cash.

The longer you wait to start benefits, the more you will receive monthly and this can add  up to a $100,000 extra at your disposal — depending on how long you live.

You don’t want to work – working is not “retirement.” However, maybe you enjoy cooking, woodshop or spending time with dogs.  There are more and more ways to make money from these types of hobbies.

If there is something you enjoy doing, you can probably figure out a way to get paid for it.

Explore 50 more passive income ideas!

The United States, especially certain parts, are extremely expensive places to live.  Retiring abroad can offer adventure and a dramatic reduction in cost structure for your retirement.

There are affordable places to live in all corners of the world – places where the climate might be a little warmer, where the cost of housing might be a little (or a lot) less expensive, and the healthcare might be more affordable.

But is it realistic to think you can afford to spend your retirement years living in some exotic locale? Not only is retiring abroad plausible, the number of retirees who have actually done this has more than doubled since 2006. And the kicker? They’re doing it for a lot less money than you might think, some as low as $40 per day!

Explore:

Once upon a time, long long ago…  we set a date and planned a big party for retirement. You went to work one day and then never again.

These days more and more of us have a different perspective on a retirement date.  Retirees today transition into retirement either by going part time for a few years or we find a retirement job.

Some retirees spend more in their lifetime on out of pocket healthcare costs than they earn in Social Security.  You can do a lot to cut those costs by staying healthy and by choosing Supplemental Medicare Coverage carefully.

Shopping around for the best supplemental Medicare plan should be done every year.  Plans change.  Your health needs change.

Here are 12 ways to save on retirement healthcare costs.

Creating a retirement plan might not seem like one of the most “creative” ways to retire.

However, only 30% of Americans have a long-term financial plan that includes savings and investment goals and a detailed outline for their retirement finances. So, if you have a plan, you are at least unique – if not creative!

And, the good news for planners? The retirees who went through a rigorous planning process to figure out “how to retire” expressed the most satisfaction with retirement.

The NewRetirement Retirement Planner makes it easy to create a detailed plan and discover ways to retire securely. Beyond these “creative” ideas – explore how delaying the start of Social Security or optimizing investments can give you a better future. Start by entering some basic information and get some initial feedback on where you stand.

Then you can add a lot more detail and really get an accurate estimate for how much you need.

Best of all, you can try an infinite number of scenarios. See how downsizing, a retirement job or reducing expenses will impact your finances.  Forbes Magazine calls this system “a new approach to retirement planning” and it was named a best retirement calculator by the American Association of Individual Investors (AAII) and CanIRetireYet.

Source: newretirement.com

Didn’t Save Enough for Retirement? 10 Tips for Making it Work

Senior couple signing mortgage paperwork
Monkey Business Images / Shutterstock.com

This story originally appeared on NewRetirement.

If you think you haven’t saved enough for a truly secure retirement, think again. The impossible could become possible with these creative ways to retire.

You see, saving diligently your entire life and then quitting work to play bridge is only one way to get to retirement. And, the odds are that it is not your way.

There are literally hundreds if not thousands of different levers that can be used to pull off financial independence in your 50s, 60s and beyond.

Following are several ways to retire even without adequate savings.

1. Take a mini-retirement or gap year

Happy senior woman
Darren Baker / Shutterstock.com

If you are emotionally or psychologically ready for retirement, but your finances are not quite there, you might explore taking a mini-retirement — an extended vacation (three to 12 months) from work.

Many people nearing retirement age find that an extended break from work is enough to recharge and re-energize. The trick is convincing your employer to let you have this precious time off.

It may be worth exploring your individual situation with a human resources manager to see if unpaid sabbatical leave or paid leave programs are available.

Quitting your job with the hopes of finding a similar job upon your return is another option. However, many people who take a retirement gap year actually discover an encore career and new passions during their mini-retirements.

If this idea interests you, learn more about taking a sabbatical, mini-retirement or gap year.

2. Prioritize what’s important and dramatically scale down expenses

happy senior couple eating breakfast
Rawpixel.com / Shutterstock.com

Living frugally is never going to be Easy Street, but it can be extremely rewarding to stay focused only on the things that are truly important to you.

Most financial advisers make the assumption that we need to maintain our lifelong spending habits when we retire. While this is true for most of us, many people redefine themselves in retirement and can dramatically reduce spending — one of the best ways to retire securely.

Retirement is an excellent time to take stock of what you have and what you want. If you know what is most important to you, you can set goals and figure out a way to achieve your highest priority.

A few tips:

Look carefully at your current spending: When you have established what is important to you, assess your current budget. Take a really detailed look at everything you spend money on — many people are surprised to learn how much little things that don’t really matter in the long run can add up to over the course of a month.

Create detailed projections: Use the NewRetirement Planner to create a detailed budget for your projected spending. When you get specific about your needs and how those will vary over time, you may find out that you are much better off than you thought.

Cut costs: Figure out how to slash both the big (eliminating your car can create sizeable savings) and small costs. Get rid of anything and everything not related to your top priorities.

Assess lifestyle: Take a look at where you live, who you spend time with, and what you do on a daily basis. If these aren’t in line with what is important to you, then make changes that can save you money and help you live a more meaningful life.

Remind yourself about what is important: Write down your retirement priorities and refer to them daily.

It may even be helpful to write a list every day about what you want to accomplish and why.

These simple tasks can help you stay on track.

3. Or, spend more! Just not every month

Seniors with money and paperwork
Syda Productions / Shutterstock.com

Huh?

Yes, you heard me right. You could perhaps spend more in retirement and still have a secure future.

You see, a lot of people plan retirement thinking that they will keep spending the same amount forever into the future as they do now. However, that is probably not what is going to happen.

You might need and want to spend more right after you stop working when you are relatively young and want to travel or engage in new hobbies. But, your spending will likely drop off as you get older.

Thinking through the details of your retirement spending — and giving yourself some leeway to spend more (maybe just a little bit more) in certain years and less (perhaps much less) at other times might just enable you to retire sooner than you had planned.

The NewRetirement Planner helps you think through detailed budgeting for your future, and you can vary your overall spending as well as your spending in individual categories to get to reasonable projections.

4. Think outside the box (rethink housing)

Senior couple at home
wavebreakmedia / Shutterstock.com

Many people don’t think much about their homes when creating a retirement plan. However, your home is probably your single greatest expense. Reducing this cost could be one of the best ways to retire securely.

Furthermore, if you own your home, then it is also probably your most valuable asset and one that could be used to help fund retirement expenses.

Rent out your home or a room in your home: House sharing is becoming more common, and Airbnb has exploded in popularity. Renting out a room in your existing home (or your whole home when traveling) — either on a permanent or short-term basis — can be a great way to help fund retirement because it uses an existing resource to generate money.

Downsize: If reducing housing costs and releasing your home equity interests you, downsizing may be a great option for you. When you downsize, you sell your existing home and buy or rent something less expensive. It can be a smaller home or a residence in another community. Learn more in this complete guide to downsizing.

Go teeny tiny: There is downsizing and then there are tiny homes. If you think that you could live in 500 square feet or less, then a tiny house could simplify your lifestyle and finances. Is a tiny house the big solution for your retirement plan?

Get a reverse mortgage: A reverse mortgage is a loan against your home equity. However, unlike traditional mortgages, you do not have to pay back the money borrowed as long as you are living in the home. If you want to stay in your existing home, a reverse mortgage is an interesting way to eliminate ongoing monthly mortgage payments and get access to cash to use for retirement expenses.

Hit the road: A few retirees sell most of their possessions — including the home — and hit the road. Could you imagine living in a motorhome or houseboat and traveling during retirement?

5. Pay attention to the big opportunities

Senior woman preparing for retirement
insta_photos / Shutterstock.com

Besides housing, taxes, debt and Social Security — especially Social Security — are probably the biggest levers you have for making retirement work with inadequate savings.

Debt: Imagine if you could spend the money you are currently using to pay down your debts every month! Being debt-free costs a bit upfront, but it is key to being financially free in the long run. Paying interest on debt is akin to lighting money on fire. Get rid of your debt as soon as possible.

Taxes: Being tax-smart with your retirement plans can mean more accurate projections and more money in your accounts. From where you live to income planning, there are many different ways you can reduce your tax burden.

Social Security: Waiting to start Social Security, up until age 70, can increase your monthly retirement benefit significantly.

6. Find work that feels like play

A bearded senior in a hat sings and plays piano music
DGLimages / Shutterstock.com

You don’t want to work — working is not “retirement.” However, maybe you enjoy cooking, wood shop or spending time with dogs. There are more and more ways to make money from these types of hobbies.

If there is something you enjoy doing, you can probably figure out a way to get paid for it.

7. Retire abroad

Happy retirees at home
Dragana Gordic / Shutterstock.com

The United States, especially certain parts, is an extremely expensive place to live. Retiring abroad can offer adventure and a dramatic reduction in cost structure for your retirement.

There are affordable places to live in all corners of the world — places where the climate might be a little warmer, where the cost of housing might be a little (or a lot) less expensive, and the health care might be more affordable.

But is it realistic to think you can afford to spend your retirement years living in some exotic locale? Not only is retiring abroad plausible, but you can also do it for a lot less money than you might think.

8. Don’t set a date — transition into retirement

A senior worker checking his laptop
StockLite / Shutterstock.com

Once upon a time, long long ago, we set a date and planned a big party for retirement. You went to work one day and then never again.

These days more and more of us have a different perspective on a retirement date. Retirees today transition into retirement either by going part-time for a few years, or we find a retirement job.

9. Stay healthy and make good insurance choices

Senior exercising in a park
Jacob Lund / Shutterstock.com

Some retirees spend more in their lifetime on out-of-pocket health care costs than they earn in Social Security. You can do a lot to cut those costs by staying healthy and by choosing supplemental Medicare coverage carefully.

Shopping around for the best supplemental Medicare plan should be done every year. Plans change. Your health needs change.

10. Have a detailed retirement plan and make smart retirement decisions

Senior couple studying retirement tax information online
goodluz / Shutterstock.com

Creating a retirement plan might not seem like one of the most “creative” ways to retire.

Few Americans have a long-term financial plan that includes savings and investment goals and a detailed outline for their retirement finances. So, if you have a plan, you are at least creative.

The NewRetirement Planner makes it easy to create a detailed plan and discover ways to retire securely. Beyond these “creative” ideas — explore how delaying the start of Social Security or optimizing investments can give you a better future. Start by entering some basic information and get some initial feedback on where you stand.

Then you can add a lot more detail and really get an accurate estimate of how much you need.

Best of all, you can try an infinite number of scenarios. See how downsizing, a retirement job, or reducing expenses will impact your finances.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

How to Retire in Denmark: Costs, Visas and More

How to Retire in Denmark: Costs, Visas and More | SmartAsset.com

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If happiness is contagious, think about retiring in Denmark. Danes are routinely held to be some of the world’s happiest. Indeed two of the top five cities in a global survey of happiest cities occupy this tiny Scandinavian nation. Perhaps that’s due to the country’s generous social safety net. Or maybe it’s Danish devotion to outdoor recreation and culture. Children’s book author Hans Christian Andersen, composer Carl Nielsen, tennis star Caroline Wozniacki and some of the world’s most avid sailors all hail from Denmark. Its capital, Copenhagen, is the most bike-friendly city in the world and home to the second-oldest continuously operating amusement park, the 177-year-old Tivoli Gardens. Here’s what you need to know about visas, healthcare and cost of living in this nation of some 6 million, virtually all of whom speak English.

Cost of Living and Housing in Denmark

Like its neighbors, Denmark is generally more expensive than the U.S. Consumer prices are 28% higher than in the U.S., according to Numbeo, a cost-of-living database. However, the cost of renting is lower than in the U.S., but purchasing a home may prove to be more expensive depending on where you choose to live.

You could expect to pay about $3,415 per month to rent a one-bedroom apartment in central New York City and about $2,000 for a one-bedroom outside of Manhattan. In Copenhagen, a one-bedroom apartment costs about $1,671 per month in the city center and about $1,302 outside the center. If you want a bit more space, a three-bedroom apartment in central Copenhagen costs about $2,930 per month and about $2,218 per month outside the city center.

If you want to purchase an apartment in Denmark, the average cost is about $551 per square foot. In central Copenhagen, an apartment costs about $727 per square foot. Outside of the city center, you can expect to pay about $510 per square foot.

Retire in Denmark – Visas and Residence Permit

If you plan to retire in Denmark, you’ll need more than just a tourist visa. If you plan to stay in Denmark for more than three months, you’ll be required to get a long-term visa. Denmark does not offer a retirement visa, so you will have to get a student visa, a worker visa or be a Danish citizen’s partner.

The most common option for American retirees is the worker or partner visa, the latter of which is relatively straightforward. If you are married to or in a long-term partnership with a Danish citizen, they can sponsor your visa.

If you want to work in Denmark, you must apply for a residence and work permit in Denmark. You must have a company that is willing to sponsor you and provide information on your work and personal history to be considered for a visa. You can find all the requirements on the New to Denmark website.

Retire in Denmark – Healthcare

The World Health Organization ranks Denmark’s healthcare system as the 34th best in the world (out of a total of 191 countries), which is slightly better than America’s rank of 37. The World Population Review ranks the health of Danes as the 23rd best in the world.

The healthcare system in Denmark is universal and decentralized. The government provides money from tax revenues to all the regions and municipalities to ensure that health services are delivered throughout the country. Therefore, non-taxpayers are not automatically enrolled in the system and must pay with private insurance or out of pocket.

Denmark has a social healthcare scheme called the Danish Health Security Act. It covers foreign nationals who stay in Denmark for over three months, provided they are registered with Citizens’ Services and have a CPR (Det Centrale Personregister) number. If a person is not yet covered or does not have access to a CPR number due to their visa status, the Danish healthcare system will still see them if they have health insurance in their country or can cover their healthcare costs.

Retire in Denmark – Taxes

If you can get a work or partner visa in Denmark, you will be taxed on your income from Denmark sources. Your tax rate will range from 8% to 56%, depending on your income.

Denmark also has a sales tax on items that can reach 25%. This is known as a value added tax (VAT). Additionally, capital gains taxes on investments in Denmark can be taxed between 27% and 42% of the gains, including bought and sold properties at a higher value. This is higher than most taxes in the U.S.

Additionally, American citizens are required to file expatriate tax returns annually. Your income earned in Denmark may be subject to tax, so be sure to work closely with an accountant or other financial professional to learn about the Foreign Earned Income Exclusion and other potential tax credits.

Retire in Denmark – Safety

In a global analysis of nations in which residents felt safe walking home, Denmark got the fifth highest score. And in the same study’s Law and Order Survey, Denmark got the sixth highest score. According to the U.S. Department of State, Copenhagen is a medium-threat location for crime.

Not only is crime significantly lower than in the U.S., but the superior public healthcare system is also widespread. Therefore, if someone is injured in physical activity or otherwise, excellent healthcare will always be available to citizens and foreign nationals.

The Takeaway

Denmark checks a lot of boxes for outsiders seeking a retirement home. The social safety net is about as strong as exists anywhere. Expats will find the country safe, civilized and full of encouragements to ride a bike, enjoy a beach, hike a centuries-old path through a conifer forest or hunker down on a cold evening to savor hot mulled wine – all with some of the world’s happiest people. They might even help you pronounce difficult Danish phrases (try saying “red porridge” in their language). The combined effect of these distinctly Danish pleasures is sometimes called “hygge,” a term that evokes international admiration.

Tips on Affording Retirement

  • Consider talking to a financial advisor about retiring overseas. Finding the right financial advisor who fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors to help you achieve your financial goals, get started now.
  • Retiring in Denmark has many intricacies. In general it’s more expensive than the U.S. But your Social Security and, if you have it, a pension could cover the costs. You can estimate your benefit amount with this Social Security calculator.

Photo credit: ©iStock.com/scanrail, ©iStock.com/pixdeluxe, ©iStock.com/Westersoe

Ashley Chorpenning Ashley Chorpenning is an experienced financial writer currently serving as an investment and insurance expert at SmartAsset. In addition to being a contributing writer at SmartAsset, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.

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How to Retire in Slovenia: Costs, Visas and More

How to Retire in Slovenia: Costs, Visas and More – SmartAsset

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Slovenia, a country known for its castles and caves as well as a high number of bee-keeping aficionados, shares borders with Italy, Austria, Croatia and Hungary. While it isn’t one of the most popular retirement destinations, this predominantly Roman Catholic nation of some 2 million has a lot to offer expatriates looking for a quiet retirement, either along the shores of the Adriatic Sea, in the mountains or in one of its cities. If you’re wondering how to retire in this central European country, consider working with a financial advisor who understands your goals of retiring abroad.

Cost of Living and Housing in Slovenia

Slovenia is generally less expensive than the U.S. For example, according to Numbeo, a cost-of-living data base, consumer prices in the U.S. are about 20% higher than in Slovenia, and rent prices are on average 117% higher in the U.S. Therefore, your retirement budget may stretch a lot further in Slovenia than in the U.S.

Ljubljana is one of the most popular cities in Slovenia for retirees. If you choose to live in Ljubljana, you can expect a one-bedroom apartment in the city center to cost about $718 per month. If you want to live outside the center, the same apartment will cost about $557 per month. In contrast, a one-bedroom in New York City will cost between $2,000 and $3,500 per month, depending on where you choose to live in the city. A three-bedroom apartment in central Ljubljana costs about $1,321 per month, and outside of the city center, a three-bedroom costs $984 per month on average.

If you want to purchase an apartment in Slovenia, you can expect to pay about $413 per square foot in central Ljubljana and $314 outside of the city center. In comparison, apartments in central New York City sell for about $1,589 per square foot.

Retire in Slovenia – Visas and Residence Permits

Slovenia does not have a designated retirement visa for non-EU citizens. However, U.S. citizens can get a one-year temporary residence permit to Slovenia before leaving home. This permit is renewable annually, and after five years of living in Slovenia with the temporary residence permit, you can apply for permanent residency.

To apply for the temporary residence visa, you must prove that you have a monthly income equal to Slovenia’s basic monthly income. This amount changes but is currently around $1,000 per month. You will also be required to submit a copy of your bank statements among other financial documents. You can apply for your temporary residence visa via the Slovene embassy or the Slovene Ministry of Foreign Affairs.

Retire in Slovenia – Healthcare

As part of the European Union, Slovenia has good healthcare. Numbeo ranks it No. 46 out of 93 countries, and Photius ranks it at No. 38. Slovenia has a public healthcare system and includes private healthcare and physician access as part of public health insurance. All residents of Slovenia who pay taxes are covered by the country’s compulsory health insurance scheme. The public health scheme also covers retirees. Many people choose to purchase private health insurance to cover visits to private physicians and pharmacies.

The cost of health insurance will vary but typically costs less than $300 per month. Visits to doctors are typically fully covered by insurance, and prescriptions are available at about 10% of the cost of prescriptions in the U.S., depending on the drug.

Retire in Slovenia – Taxes

Slovenian residents are taxed on their global income. Income taxes range from 16% to 50%, depending on a person’s income. Capital gains tax is 25% in Slovenia. Therefore, if you earn an income in Slovenia or buy and sell assets, you will be taxed.

To avoid being taxed in both Slovenia and the U.S., you should work with an accountant or financial professional that understands both countries’ tax codes. This will help you prevent being taxed by both governments on your retirement income.

Retire in Slovenia – Safety

Slovenia is among the safest countries in the world. The 2020 Gallup Law and Order report says there are only four other countries in which people feel safer walking alone. It also got the sixth highest score in Gallup’s 2020 Law and Order Index. According to the U.S. Department of State, the capital city of Ljubljana is a low-threat location for crime. Although many travelers don’t encounter crime, popular tourist locations can experience non-violent petty crime.

It’s important to note; crimes can take place anywhere. But, travel throughout Slovenia is safe, and there are no areas you should avoid when touring.

The superior healthcare system makes Slovenia a safe country to retire to as access to quality medical attention is readily available.

The Takeaway

Slovenia is a beautiful and safe country to spend your retirement. Although Slovenian is the main language spoken in this country, many people, especially younger people and urban residents, can speak English, too. The taxes in Slovenia are similar to those in the U.S., but the cost of living is significantly lower. Therefore, you can live a similar lifestyle as you would in the U.S. at a much lower cost.

Tips on Affording Retirement

  • It can be challenging to plan your retirement, especially if you would like to move abroad. A financial advisor can also help you understand the finer points of relocating, including the tax implications. Finding the right financial advisor who fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors to help you achieve your financial goals, get started now.
  • The minimum monthly income required to retire in Slovenia is about $1,000 per month. For many people, this is equal to or less than their monthly Social Security benefit. You can estimate your benefit amount with this Social Security calculator.

Photo credit: ©iStock.com/Ababsolutum, ©iStock.com/Alenka Vujkovac, ©iStock.com/MikeMareen

Ashley Chorpenning Ashley Chorpenning is an experienced financial writer currently serving as an investment and insurance expert at SmartAsset. In addition to being a contributing writer at SmartAsset, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.
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How to Retire in Brazil: Costs, Visas and More

How to Retire in Brazil: Costs, Visas and More – SmartAsset

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Brazil, which has a population of some 213 million, is known for its passionate and fun-loving people, beautiful beaches and pristine rain forests that are home to an array of fauna and flora. Portuguese is the national language, and proficiency in English is rare, especially outside the main cities. Americans will find the cost of living favorable, and in some cases, one’s Social Security check may be enough to live on. The right financial advisor can help you plan for your Brazilian retirement as well as help you navigate some of the tax laws and other implications of moving abroad. Here’s what you need to know about South America’s largest nation.

Cost of Living and Housing in Brazil

According to Numbeo, a cost-of-living database, Brazil’s consumer prices are about 54% lower than in the U.S., and rent prices in Brazil are about 80% lower than in the U.S.

The most popular destination for retirees in Brazil is Rio de Janeiro. If you were to rent a one-bedroom apartment in central Rio de Janeiro, you could expect to pay about $325 per month. If you chose to get a three-bedroom apartment in the same area, you could expect to pay about $675 per month. By contrast, in central New York City, a one-bedroom apartment costs about $3,416 per month and a three-bedroom apartment goes for about $6,600 per month.

However, if you didn’t want to live in the city center, housing in Rio is still significantly cheaper than in the U.S. A one-bedroom outside of the city center costs about $237 per month, and a three-bedroom costs about $675 per month. In contrast, a one-bedroom outside of central New York City costs about $2,006 per month, and a three-bedroom in the same area costs about $3,482 per month.

Retire in Brazil – Visas and Residence Permit

Americans can retire to Brazil on a retiree visa. To obtain a retirement visa, you must be over age 60 and have a pension that earns at least $2,000 per month. To apply for the retirement visa, you must apply at least four to eight weeks before arriving in Brazil. You must apply through a consulate general office or the Brazilian embassy and provide several personal documents, including a copy of your birth certificate.

You can find more information on the website of the Brazilian Consulate General.

Retire in Brazil – Healthcare

Brazil runs a universal healthcare system that is administered by cities and states and funded by local, state and federal taxes. Healthcare, including primary, outpatient specialty, mental health and hospital care, as well as prescription drug coverage, is available to anyone who is legally in Brazil, including people living there on retiree visas. Although universal and free, wait times to access care can be very long. And the quality of care is not highly regarded: The World Health Organization ranks the nation’s healthcare system as 125 out of 191 nations.

Private hospitals can be found in all major cities and are significantly less expensive than in the U.S. For example, private insurance costs up to $250 per person and covers physicals, medicine and hospitalization.

Retire in Brazil – Taxes

All Brazilian residents are required to pay taxes. Income taxes on global income are taxed at a progressive rate that maxes out at 27.5%. In the U.S., depending on how much you earn, you may pay up to 37% of taxes. However, pensions are often taxed differently.

Sales tax in Brazil is up to 17%. This is compared with the U.S. tax rate of 7.25%, so sales taxes are significantly higher in Brazil.

All American citizens must file taxes each year. It is wise to work with a tax professional or other financial professional to ensure that your pension earnings are not taxed in both the U.S. and Brazil.

Retire in Brazil – Safety

From petty theft to violent crime, Brazil has a problem with personal safety, especially in the country’s larger cities such as Rio de Janeiro. According to the Gallup Law and Order 2020 Report, Brazil is a country in which people feel least safe walking alone. Likewise, the U.S. Department of State assessed a critical-threat location for crime. It’s crucial to exercise extreme caution in December and January. During the holiday season, Brazil experiences crime increases because of Brazil’s prison furloughs when prisoners are allowed to leave during the holidays.

So, when visiting or living in Brazil, it is wise to travel with a partner. This is especially true at night. It’s also wise to avoid high-risk areas. Brazil’s neighbors, including Venezuela, Bolivia, Colombia and Guyana, are known for having high crime rates. These crimes do cross borders and include illegal drug trade and personal crime. Therefore, it is advised that people avoid border areas.

The Takeaway

Brazil is a beautiful country full of people ready to welcome American retirees. Its people are ranked as the 32nd most happy in the world, according to the World Happiness Report. It is much less expensive than the U.S., which helps explain why it is such a popular place for foreigners to retire in. Violent crime is a problem in the largest cities. It is recommended to visit the nation several times before making a final decision to settle down.

Tips to Help You Afford Retirement

  • A financial advisor can help you understand the finer points of relocating, including the tax implications. Finding the right financial advisor who fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors to help you achieve your financial goals, get started now.
  • Because Brazil is so inexpensive, you can retire comfortably on a little more than the average Social Security benefit. You can estimate your benefit amount with this Social Security calculator.

Photo credit: ©iStock.com/zxvisual, ©iStock.com/TK, ©iStock.com/Global_Pics

Ashley Chorpenning Ashley Chorpenning is an experienced financial writer currently serving as an investment and insurance expert at SmartAsset. In addition to being a contributing writer at SmartAsset, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.

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How to Retire in Austria: Costs, Visas and More

How to Retire in Austria: Costs, Visas and More – SmartAsset

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From Oktoberfest to the Salzburg Summer Festival, Austria seems to have festivities year-round. This German-speaking nation of some 9 million has a rich cultural heritage and can boast of such fabled composers as Wolfgang Amadeus Mozart and Ludwig van Beethoven, among others, as former residents. Citizens and visitors also come to Austria for the Alps, which offer some of the best snow skiing in the world. As you weigh whether to retire in Austria consider working with a financial planner to make sure you can afford it and handle your taxes in the most efficient way possible.

Cost of Living and Housing in Austria

The cost of living and housing in Austria is very similar to the U.S. In general, consumer prices are 6% higher in Austria, according to Numbeo, a cost-of-living database.

However, rent prices in the U.S. are about 44% higher, on average, than in Austria, so your housing costs could be significantly lower if you decide to live in Austria. Compare rental costs in Vienna and New York City: If you choose to rent a one-bedroom apartment in the heart of New York, you will likely pay about $3,415 per month. The same apartment in the heart of Vienna costs about $1,089 per month. A three-bedroom in the heart of New York City costs about $6,610 per month, and the same apartment in Vienna costs about $1,969 per month.

If you choose to purchase an apartment in Vienna, you can expect to pay about $845 per square foot in the city center. The cost outside of the city center is about $504 per square foot.

Retire in Austria – Visas

Austria offers several visas to Americans, but the most popular one for retirees is a settlement permit. To qualify for a settlement permit, a person must prove that he or she has sufficient funds, health insurance and a place to live.

Additionally, Austrian residency requires a language test to prove that you comprehend the German language. The settlement permit is for financially independent individuals who do not intend to work while in Austria. You may apply while in the country on a tourist visa or while still in the U.S. It is best to work with an immigration lawyer as the application process is entirely in German and can take several months.

Retire in Austria – Healthcare

Austria has affordable access to high-quality facilities for most residents, citizens and visitors. According to Knoema, an index that assesses the countries with the best healthcare globally based on life expectancy and health expenditure, Austria ranks 27th. In comparison, the U.S. ranks 49th.

Private health insurance in Austria costs about $240 per month, and a doctor’s visit may cost you up to $70. You must obtain health insurance to get a residence permit or settlement permit, and you can purchase health insurance policies for expats from Austrian or American companies.

Retire in Austria – Taxes

All U.S. citizens are generally required to file a tax return each year regardless of whether they are in the country or not. The foreign earned income exclusion (FEIE) can be applied depending on how much time a person spends outside of the country. For example, on your U.S. expatriate taxes you can exclude up to $105,900 of your 2019 foreign earnings.

If you earn an income while in Austria, that income may be taxed up to 55%. However, your foreign earned income will not be taxed by Austria. Therefore, your tax on your retirement income will be taxed as it would be if you were in the U.S., and any income you earn in Austria will be taxed separately.

Retire in Austria – Safety

The 2020 Gallup Law and Order Index ranks this Central European nation as the sixth safest in the world. According to the U.S. Department of State, Austria has low crime threats and is one of Europe’s lowest-crime countries.

The most common crime experienced by U.S. citizens is purse and wallet snatching, typically in crowded public areas, according to the State Department. Other crimes of opportunity occur in trains, restaurants, shopping areas and crowded tourist areas where criminals distract a victim who usually was not in direct physical control of valuables.

In general, road safety is not a concern. The threat of terrorism, though, is currently listed as Medium when directed to or affecting official U.S. government interests.

The Takeaway 

Austria ranks among the top three most livable countries, according to the Global Peace Index. In fact, a recent study by the Economist Intelligence Unit ranked Vienna as the most livable city on Earth. This city alone offers a seemingly endless array of museums, fine art and world-renowned architecture. The cost of retiring in Austria will be similar to the cost of retiring in the U.S. So whether you choose to waltz through Vienna or ski in Innsbruck, this land-locked country, which shares borders with Italy, Switzerland, Germany and Hungary, has a retirement lifestyle for almost everyone.

Tips on Affording Retirement

  • Consider working with a financial advisor about the cost of retiring abroad. Finding a financial advisor doesn’t have to be hard. The SmartAsset matching tool can connect you to several advisors in your area in just minutes. If you’re ready, get started now.
  • Many American will be able to retire in Austria on a combination of their Social Security benefit and a pension. You can use a free Social Security calculator to see what to expect from Uncle Sam in retirement.

Photo credit: ©iStock.com/benedek, ©iStock.com/Marcin Wiklik, ©iStock.com/CHUNYIP WONG

Ashley Chorpenning Ashley Chorpenning is an experienced financial writer currently serving as an investment and insurance expert at SmartAsset. In addition to being a contributing writer at SmartAsset, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.

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How to Retire in Honduras: Costs, Visas and More

How to Retire in Honduras: Costs, Visas and More – SmartAsset

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Honduras is known for it’s beautiful beaches and low cost of living. The country is home to one of the largest cities in Central America, Tegucigalpa, and plenty of quaint mountain towns and a popular island called Roatan. In recent years, Americans have flocked to this Central American oasis of some 10 million people because their retirement savings can go much farther than in the U.S. A financial advisor can help you plan your retirement abroad and help you stretch your Social Security and other retirement funds while in Honduras.

Cost of Living and Housing in Honduras

According to Numbeo, a cost-of-living database, the cost of living in Honduras is about 41% lower, overall, than in the U.S., not counting housing costs. Rent in Honduras is about 73% lower than in the U.S.

Let’s look at a specific example. One of the most popular places to retire in Honduras is Roatan. Rent on a one-bedroom apartment in Roatan’s center will cost an average of $250 per month, and a three-bedroom apartment in the same area will cost about $967 per month. In contrast, an apartment in New York City will run about $3,452 for a one-bedroom and about $6,767 for a one-bedroom in downtown Manhattan.

If you want to purchase property in Honduras, the average price per square foot is about $93.79. In the U.S., the average cost per square foot to purchase a home or apartment is $292.35.

Retire in Honduras – Visas

Americans do not need visas to visit Honduras as tourists. However, if you want to retire in Honduras, you will need to get a retirement residency card, of which there are three types. The Secretary of Justice processes these in Tegucigalpa. You will need to work with a Honduran attorney to get your residency card.

It takes up to nine months to process an application for a retirement residency card, but Americans may enter Honduras on a tourist visa and begin their application process in country. Be prepared to spend about $2,500 to complete this process.

Be sure to bring your passport, police record, a health certificate, a passport photo and any residence-related documents with you when you enter Honduras as your residency application will require them. You must also be able to prove that you have at least $1,500 of lifetime monthly income if you are applying for the retirement visa.

Retire in Honduras – Healthcare

Honduras does not have a robust public health system. The World Health Organization ranks it 131st out of 191 countries. Therefore, many retirees choose to get private healthcare insurance and live near private hospitals. People can purchase healthcare insurance in Honduras or before leaving home. There are several 24-hour hospitals in Tegucigalpa and San Pedro Sula, all popular with American expats.

Most pharmacies will offer the same prescriptions as in the U.S., especially in a tourism hotspots. It is important to note that rural healthcare is scarce in Honduras.

Retire in Honduras – Taxes

If you earn an income in Honduras, it will be taxed between 10% and 20%. If you purchase a home in Honduras and then sell it, your real estate capital gains will be taxed at 10%. Additionally, your property will be taxed each year at about 0.4% of the total property value.

Money received from the U.S., like a pension, tax-advantaged account or Social Security retirement benefits, will not be taxed as income by Honduras.

Don’t forget that as an American citizen the U.S. government will tax you on foreign-earned income.

Retire in Honduras – Safety

According to the U.S. Department of State, violent crime, such as homicide and armed robbery, is common in Honduras. Additionally, gang activity, street crime and narcotics and human trafficking are pretty widespread. In large cities such as Tegucigalpa, violent crime exists and riots or protests are expected. However, there are plenty of gated communities and large pockets of expats living in Honduras that employ security staff to maintain a safe living environment.

The Takeaway

Honduras is a beautiful tropical location to visit or live in. It is home to mountains, beaches and more, so there is a bit of something for everyone living in Honduras. It is important to remember personal safety in Honduras and not take unnecessary risks when traveling throughout the country, mainly because private hospitals are only available in cities and tourist hotspots.

Tips on Retiring

  • Consider talking with a financial advisor before moving abroad. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free advisor matching tool can connect you to several financial advisors in your area. You can find the perfect financial advisor for you in as little as five minutes. If you’re ready, get started now.
  • Retiring comfortably in Honduras is entirely possible, even on Social Security retirement benefits. For some people, Social Security is even enough to provide disposable income for recreational purposes. Calculate your Social Security retirement benefit here.

Photo credit: ©iStock.com/Robert_Ford, ©iStock.com/Jodi Jacobson, ©iStock.com/dstephens

Ashley Chorpenning Ashley Chorpenning is an experienced financial writer currently serving as an investment and insurance expert at SmartAsset. In addition to being a contributing writer at SmartAsset, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.
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