More and more Aussies retiring overseas: here’s how to plan for your golden years

By Katherine O'Chee ·

More and more Aussies are choosing to retire abroad - figures from the Australian Bureau of Statistics (ABS) last year show that numbers have shot up by 47% over the past 10 years. 

But retirement in a foreign country requires a lot of preparation, especially if you’re looking to enjoy your post-work days without any worries of running short on cash. From sending your retirement money overseas to figuring out how you’ll manage your expenses abroad, there are plenty of things you’ll need to plan for. 

According to international money transfer (IMT) specialist OFX, inadequate preparation and research could end up hurting your wallet. For instance, it’s costly to get your hands on essential documents once you’re already halfway across the globe. 

So what are some of the things to get under your belt to ensure you’re ahead of the game when setting up your finances overseas? Let’s take a closer look. 

Financial tips for Aussies planning their retirement

Aussies looking forward to a comfortable retirement should bear the following tips in mind: 

1. Estimate your expenses 

You may have an existing budget, but as IMT specialist CurrencyFair pointed out, “the expenses you face after retirement could be far more different than what you are spending now.” 

Creating a new budget for your retirement days is crucial, as it’s the first step to staying on top of your expenses while you’re galavanting around the globe or settling down in a holiday home by the beach. The key is not to underestimate how much you’ll be splurging in your retiree days.

“Pre-retirees often assume that they will spend less after they stop working, but that’s not always the case,” CurrencyFair said. 

2. Add up your income 

Next, work out how much money you’ll continue to receive under your name once you stop working full-time.

“Look at all your sources of guaranteed income, from company pension and annuities to Social Security. Compare that steady income to your estimated expenses to see if you are really ready to retire,” CurrencyFair said. 

This means checking to see if your guaranteed income sources would cover, at the very least, your basic costs of living in your post-work years. Other than your pension, you may also have other sources of income like dividends or interest on your savings

3. Open a transitional account 

It’s not easy taking the big leap from full-time worker to retiree, so giving your planned retirement budget a trial run first could be a smart move. 

CurrencyFair outlined one way you might approach this dry run. “When retirement is a few years away, set up a separate bank account to test out your financial life after work. Deposit amounts equal to your post-retirement sources of income, and pay all your bills from that account.” 

“If you have plenty of money to meet your monthly expenses, you can expect a financially stable retirement. If not, you may need to work a few more years and beef up your investment accounts before you say goodbye.” 

4. Consult a tax expert 

According to OFX, tax can get very complex when you’re living in another country, as you have to meet the regulations and requirements of both Australia and your new home. That’s why it’s important to consult a tax expert beforehand - being informed means you can take steps to make sure you aren’t hit by any penalties for wrongly reporting your income or bank accounts. 

“After you retire, you can no longer rely on an employer to withhold taxes and settle up with your respective tax office. Getting advice from a qualified professional is the best step,” CurrencyFair added. 

5. Shop around when moving your money overseas

Whether it’s sending your super or your life savings abroad, shopping around for a competitive rate for your international money transfer could help you save big bucks. The trick is to make sure you’re comparing final transaction prices, which includes the exchange rate on offer and any fees that may apply, as this can help you avoid any nasty surprises during the actual transfer. 

CurrencyFair said that shopping around also means looking out for other IMT account features beyond a good exchange rate. 

“Watch for what access you get to your funds, monthly minimums that you might have to keep to or even monthly account maintenance fees.” 

Keen to get started on planning for your retirement abroad? Take a look at our other money tips for moving overseas, or jump over to our international money transfer comparison page to compare your IMT options today.

Katherine O'Chee
Katherine O'Chee
Money writer

Katherine O’Chee is Mozo’s international money transfer and forex expert and business banking writer. She keeps Mozo’s readers on top of the latest news and writes in-depth features to inform and help Australians make smarter financial decisions. Her work has been published in major media outlets including Sydney Morning Herald, SBS News and Bangkok Post. She has a Bachelor of Arts (Media and Communications) from the University of Sydney.