Five top destinations to retire abroad
Choosing where to spend your retirement - almost a third of your lifetime - is an enormous decision. Remaining within the EU could be convenient, as many of the laws are the same, so there would be few nasty surprises.
Going further afield to Australia and New Zealand might also be relatively easy as there is no language barrier and the state, social and welfare systems are fairly similar to those in the UK.
But really the world is your oyster, and it's worth thinking about some of the more exotic countries.
If you're looking for cheap living costs, Panama, Belize, Turkey, the Philippines and Argentina are five places highlighted by expat website shelteroffshore.com as countries where retirees can live like millionaires.
Panama is a favourite with American retirees attracted by the inexpensive living costs. There is also arguably little risk of political or economic upheaval in Panama due to its important canal that the US watches like a hawk.
Belize, where English is the official language, boasts an appealing Retired Persons Incentive Programme that enables retirees to live tax-free. You have to be over the age of 45 and have at least $2,000 monthly income to qualify. Around 20,000 people have already taken advantage of it.
According to Shelter Offshore, there is ample opportunity to buy a cheap property in Turkey. It also benefits from its closeness (and cheap flights) to the UK. However, political volatility is a potential problem.
Like Belize, the Philippines offers an attractive package for retirees: the special resident retiree's visa. This allows you to work there as well as receive your pension and annuity tax-free.
The cost of living in Argentina is a lot cheaper than it is in the UK, even with the decline in the pound. Red wine and steak lovers will be delighted with the quality of food and drink as well as the low prices.
Whichever destination you choose, it's vital you do your homework. For more help read - Keep your overseas retirement dream alive.
This article was originally published in our sister publication Money Observer
The practice of locating your financial affairs (banking, savings, investments) in a country other than the one you’re a citizen of, usually a low-tax jurisdiction. The appeal of offshore is it offers the potential for tax efficiency, the convenience of easy international access and a safe haven for your money. However, offshore is governed by complex, ever-changing rules (such as 2005’s European Union Savings Directive) and, as such, is the exclusive province of the wealthy and high-net-worth individuals.
In exchange for any lump sum – usually your pension fund – an annuity is “bought” from an insurance company and provides an income for life. When you die, the income stops. Annuity rates fluctuate daily and depend on your sex (although from 21 December 2012 insurers will no longer be able to use gender as a factor when calculating annuities), age, health and a number of other factors, so you have to pick the right one and, once bought, its terms cannot be altered, so seek financial advice.