What to Consider Before Retiring Overseas

Ever considered living abroad in your golden years? Many Americans not only consider it, they actually do it, buying beautiful homes in great climates overseas and never looking back. Some even find lower health care costs to boot. However, because of the global economic and political changes, retirement hot spots across the globe may be losing their luster.

As New York Times article points out, although places like Ireland, Thailand and Costa Rica were the most recommended countries in the past to retire, they are not any longer. But why? Well, Ireland is said to have a high cost of living, Thailand is said to have increasing anti-foreign sentiments, and the Costa Rican capital, San José, has growing crime rates.

Retirees are now urged to consider places like Panama, Uruguay, and Argentina – as well as France, Croatia, and Malaysia when looking for a place to settle during retirement. “It has very good tax breaks, although the cost of living can be high,” Ms. Hannah Coppersmith, managing director of Pure International, a global property company in London said.

Wondering how you would be able to afford to live abroad when you retire? Kathleen Peddicord of Panama City, Panama, and author of “How to Retire Overseas” recommends selling nearly everything you own. “Seriously. Think about it this way. If you were to liquidate every asset you have, where would that leave you? What lump sum of capital would you net?” Then, the next step is to take a look at your investments. What level of yields and dividends might those give you on a monthly basis?

Some countries are quite affordable. “In Panama, for example, your rent could be $1,500 a month for a two-bedroom apartment in a nice building in Panama City with a doorman and a pool,” Ms. Peddicord said, “or it could be $200 a month if you choose instead to settle in a little house near the beach in Las Tablas, a beautiful, welcoming region.”

Read the full article here for more tips and information.

Court Ruling: Antarctica Is Not A Foreign Country

A recent U.S. Tax Court ruling declared that Antarctica is not a foreign country for purposes of the U.S. tax code. The opinion of the court claims that since Antarctica does not have it’s own government or tax system it is not a foreign country in the eyes of the IRS, and therefore citizens working in Antarctica are not entitled to the foreign earned income exclusion (FEIE). The FEIE typically allows taxpayers living and working outside the U.S. for at least an entire calendar year to exclude up to $82,400 of their foreign-earned income from their federal tax liabilities. Although the taxpayers still have to pay taxes to the foreign country they work in, but since Antarctica does not require tax payments this rule does not apply.