Work Abroad Before You Retire

If you are well aware of the retirement crisis in the first world or worried about your own retirement, then you have come to the right place.  In an earlier post, we saw how a simple decision to rent, while giving you the opportunity to be globally mobile, can help accelerate your journey towards financial independence.   Once you learn to move and thrive in your new role for work in a new place, you will not worry about doing the same in retirement to enjoy a higher quality of life.

Retiring abroad can save you money.  But do you think you can suddenly pack up and move to an exotic lower cost country for retirement?   Forget the off-beat places like Cambodia or Ecuador, even well-worn countries like Thailand or Mexico with a large expat population are not easy to live in if you have never ventured outside your home territory.   Most people who live and work in one state or province (or even one country) all their lives cannot suddenly decide to move to a developing country to stretch their golden years.   This is such an impractical thought and yet, that’s what a number of people who never even moved for a job are deluding themselves with, perhaps inspired by the alluring beach pictures like this one.  

The alluring Sihanoukville beach, Cambodia.

Sihanoukville beach, Cambodia.

Cultural shock can be difficult even for younger people to handle, do you think you can do that in your 50’s and 60’s if you have never lived abroad?  In case you think your travel abroad for work has prepared you to deal with culture shock, you have no idea.  As a multi-year expat, this is what I have learned.  The 1-2 week international trips in luxurious hotels paid for by your employer don’t count as cultural immersion abroad.  They certainly don’t prepare you for a long retirement abroad.  Retiring abroad can work well, if done right.   There is a better way to prepare yourself for this exciting and affordable adventure.  

If you have an opportunity to move to a different country while working, please consider it seriously or find such an opportunity at least once in your career.  Aside from the income boost, this will test your ability to adapt to a different culture.  Adaptability to new cultures and situations is easier when you are younger.   Unless you live for at least a year in another country, you cannot claim to have adapted to its culture or count on your ability to retire there in the future.   The developing world is complex, changing and at times, unforgiving place even for natives, so the idea that a western retiree without strong roots will retire happily in a low cost country is simply a pipe dream.  It is not enough to research that the place has decent medical facilities – that’s important but that’s something you will use only rarely.  Your everyday comfort with the cultural immersion, daily hassles and also, the natives’ perceptions about you and your lifestyle are key factors that will make or break your retirement in your dream destination.   Retiring to another country to save money (‘geographical arbitrage’ in corporatespeak) can give you a better retirement than possible in your home country, but this is no walk in the park.

For those who can make the transition when they are relatively young and as part of their work experience, the rewards can be great.  I have an American friend who works and lives in Bangalore, known as India’s Silicon Valley.  Now, Bangalore is no paradise but it is a large city with a sizable expat population, good weather year-around, reasonable amenities and an international airport.  He recently sent me this picture of the house he plans to rent.  

SFH home in AsiaThis is a 4-bedroom, 3-bath single family house of 2100 sq. ft. living space, offering both patio and street parking, small garden area, and an open terrace, in a relatively quiet, presumably upscale, neighborhood.   Guess what the rent is?  $500 a month.  Bangalore is considered a relatively expensive Indian city, so if you venture into smaller towns in India, similar houses can be rented for $200-300 a month.  India doesn’t offer a retirement visa like Malaysia, Panama, Thailand, Ecuador and other countries, but you can stay for 3-6 months in tourist visa and come back again next year for similar length of stay.  If you can prove you have Indian ancestry, India gives you a ‘permanent residency’ visa for indefinite stay in the country.   

Now picture this for a moment.  You haven’t lived in India but maybe visited there for work occasionally.  The longest period you stayed there, let’s say, was 3 months of backpacking as a young carefree student.  You have fond memories from those days.

Love the culture! Can I retire here? First, let me graduate...

Love the culture! Can I retire here? First I must graduate…

Do you think you are now prepared to relocate based on just the low rent/cost of living?  Can you deal with frequent power cuts, rationed water supply, street dogs, tropical insects/mosquitos, disturbances from peddlers, potholed roads, red-tape and generally sub-par civic infrastructure?  The house pictured above could be from any developing country, which has similar issues.   On the other hand, you would consider relocating for retirement if you had lived in that country for a considerable time in the past because the above issues wouldn’t faze you the second time.  So, this international work opportunity, should your employer provide, is rare and you should grab with both hands.   

Yes, the American retirement crisis is real and it would help immensely if you can retire on, say, $2000 a month rather than twice or thrice that figure in your comfortable home town.   But be careful what you bargain for.  Living in a developing country with far less conveniences than what you are used to is the daily price you pay for this affordable retirement.  Being prepared for it in an Excel spreadsheet is one thing, living there for years is a completely different matter.   The world offers some amazing places to explore and live your retirement years, but we need an open mind for the adventure and for the real, immersive cultural experience – no spreadsheet or internet rental listings can prepare you for that.  Doing this while working is the smarter way to prepare.  Enjoy your own 10! journey.  

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12 comments on “Work Abroad Before You Retire”

  1. By Xyz from Our Financial Path.

    Another thing to consider is your returns back home. You probably want to return to see family for holidays or major events. Unless you are heavily churning and collecting reward miles, traveling back and forth might cost you dearly. You can always consider Central or South America instead of Europe or South-East Asia and find cheap flights on sale. Not considering the flight costs can quickly offset the savings expected from a lower cost of living.

  2. By ZJ Thorne

    YES! I get so worried when people assume that retiring abroad is simple on any level. You need visas, you need plans, you need to understand what is safe (for now) in that country. One of my friends was a student briefly traveling through Turkey this summer and she got stuck because of the coup! She does not speak the local language and did not understand the emergency orders being given. That’s scary.

    A family member lives overseas with his wife from that country. Even with her, and having lived in the country for a few years before they married, he is frustrated by the country’s government and how hard it is to do anything on a reasonable schedule. Culture is real. Expectations are real. Your adaptability is real and maybe not as high as you think.

    • By TFR

      Absolutely ZJ. Anyone impressed merely by Excel costs and plan to transplant themselves during their golden years to a foreign country where they have never lived as an adult is fooling themselves. Thanks for sharing your examples.

  3. By Staci @Streamline365

    I never thought of this! I’ve always encouraged people who talk of retiring abroad to just do it, but a trial run is brilliant! You’re right, it can be quite an adjustment. We’ve had no problems transitioning to Kuwait, but we’ve lived abroad before, and we are working so don’t plan to stay long-term. I have a friend who recently moved to Germany-most people love living there-and she thought she would, but she is planning her move back home. Trying it out for an extended period is a wise decision! And PoF-I hope Australia or NZ is up next for us, I love the Aussies and Kiwis we meet here, so friendly, I’d live there if I had the chance! Go for it!

  4. By Physician on FIRE

    I’ve been exploring the possibility of working a year overseas as a transition to an early retirement. Not so much as trial run for an overseas retirement, but simply for the family experience of living somewhere different.

    New Zealand and Australia have a need for US medical doctors, and the transition to another first world country would be easy. I also hear the physicians there don’t have to deal with a lot of the headaches we have in the U.S.

    Thanks for the thoughtful writeup, TFR!


    • By TFR

      Thanks POF. Australia and NZ are relatively easy places to live in for Americans so if you get that chance, it would be a great experience for your family. The recent weakness of their currencies against USD also helps! Good luck in your 10! Journey.

  5. By Jacq

    I am not yet near traditional retirement age, yet just last week a friend and I were discussing how tough it can be to make new friends as we get older. Forget grabbing a beer after work, even a burger isn’t possible with a dog to let out, a spouse and or kids waiting for your new friend (you hope)to get home to.
    I’ve seen my parents in retirement make some friends with neighbors, or church groups, or through friends but it’s still not easy. I can’t imagine trying to do that in a completely new place / country.

    I moved ~4 hours from the state where I grew up and most of my friends and family still live. My parents visit, a handful of friends. Most haven’t. It’s not even a plane flight! It’s the dog (s), kids, working weekend, hobbies on weekends etc. Sure there is a chance when you are retired your friends are retired too. With aunts & uncles and some of my mom’s friends they are the caregivers for their grandchildren. They or their spouse or their dog isn’t in great health making a long drive or flight out of the question.

    I’ll see what happens when retirement age rolls around. In the meantime gotta finda job with year long international stints!:)

    • By TFR

      Good story, thanks for sharing. Your example is reality for most old folks, yet many tout lower cost international retirement as if that’s easy. If you haven’t lived abroad during your working years, the likelihood of uprooting yourself suddenly and moving to a tropical foreign country in retirement is just fantasy.

  6. By Sikasem

    That was a good piece although it appears to be the opposite for me as I rather hail from the developing world and working abroad.

  7. By Vicki@Make Smarter Decisions

    We have friends who have taught at schools in many places in the world and they have incredible stories from their travels! They also earned great wages and were able to live very cheaply along the way. I wish this is something I would have done as well!

    • By TFR

      Yes Vicki. Working abroad is a rewarding experience in more ways than one!

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