If you’re thinking about retiring abroad, you’re in good company. While a Florida retirement might sound ideal for some, there’s nothing like enjoying your final years sipping Mai Tai’s on a beach in Tahiti. Still, if you’re going to spend your golden years in paradise, there are some financial issues you need to get in line right now.

Here are five critical financial issues you need to address if you want to retire out of the U.S.:

1. Medical insurance. Your employer’s medical insurance policy probably isn’t going to cover you if you retire in South America. Medicare won’t cover you either. While some retirement destinations may have a national health system, you may or may not have access to that system as an expatriate retiree. You need to find out ahead of time whether you’ll qualify, and then be prepared in case the situation changes. If you need to purchase medical insurance, you need to include the cost of that insurance as a component of your retirement planning.
2. Social Security. If you qualify for social security, there are specific sorts of rules you need to follow. Just like Medicare, your residency matters when it comes to whether or not you receive social security benefits. Talk to the social security office and see what the rules are for expatriate retirees, and if you’re counting on social security as a portion of your retirement income make sure you follow the proper rules and laws.
3. Currency issues. The dollar moves up and down in value. While today’s dollar may be able to buy you a steak and lobster dinner in the Philippines, don’t count on that lasting. What goes up must come down, and if the value of the dollar drops significantly in your destination location you’re going to wind up much less comfortable in retirement than you’d planned.
4. Taxes. If you retire in Cypress, you’re going to pay very little on retirement income. The same holds true for Dubai. If you want to retire to a villa in the south of France, however, you’re going to pay quite a bit more. Check into the tax structure in your retirement location, and think about how you want to reduce or defer taxes on your current income.
5. Inheritance and Life Insurance. If you’re leaving loved-ones behind in the states, you need to be prepared to address the kinds of issues they’ll face when you pass away. You need a will that’s legally viable in multiple jurisdictions. The inheritance laws vary from one place to the next, so you’ll likely need professional legal advice from an attorney who’s experienced in dealing with these kind of multi-jurisdictional issues. You should also choose a life insurance provider that will cover your family, even if you pass away outside of the U.S.

Photo via davidnofish