International living is a serious retirement consideration for a growing number of young Americans. Why?
International living in retirement has become more alluring to younger Americans, a sign of how deeply the recession has impacted millenials: More than one-third of individuals 40 and younger are considering retiring overseas.
International living can help retirees reduce housing costs, and easily afford services such as gardeners and drivers. Some countries give retirees favorable tax treatment, and others provide its citizens free health care. Websites, such as Retiring Overseas provide specialized retirement calculators to help retirees weigh the financial advantages of international living and to narrow the search for the country that would best meet their retirement needs.
The advantages don’t appear to be strong enough to prompt most Americans to move overseas in retirement, though age and wealth levels do influence how investors view the issue, according to a Millionaire Corner survey of 1,100 investors conducted in September.
Only 12 percent of participants say they are considering retiring to another country, though the share is higher for younger and less affluent investors. Millionaires, at 11.4 percent, are the least likely to consider international living in retirement, but nearly 17 percent of investors with less than $100,000 are considering the move.
Younger investors, who have suffered disproportionately in the recession and are the most likely to be unemployed, are also the most interested in retiring overseas. More than one-third of investors age 40 and younger say they are considering international living in retirement. The same is true for 27 percent of investors in their 40s.
“The research reveals the deep insecurity younger investors are feeling about their financial situation,” said Catherine McBreen, president of Millionaire Corner. “The fact that more than one-third of young investors would consider moving to another country when they retire shows how deeply the recession has cut into their ability to save for future needs.”
Millionaire Corner research on the retirement market has found that many working Americans were forced to make early withdrawals from their retirement funds during the recession, while at the same time employers reduced or eliminated matching contributions to the funds. Workers coping with layoffs and salary cuts often borrowed against their retirement funds, or cashed them out altogether.
That leaves even the most affluent investors worried about running out of money in retirement. A March survey revealed that 46 percent of investors with $1 million to $5 million worry about having enough money set aside for retirement, but the concern is even more intense among non-Millionaires. Sixty-three percent of investors with $100,000 to $1 million worry about running out of money in retirement.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.