Things To Think About Before You Retire To The Philippines

Things To Think About Before You Retire To The Philippines.

(Updated 18 October 2018)

Recently I read an interesting article about a USA couple who retired to Mexico.  Part of the title had the phrase “what no one tells you about starting a new life abroad.”

What PhilFAQS Will Tell You About Starting A New Life Abroad.

A lot of this article offered some good advice, much of which I have been advising people about for years.  (If you have questions or need help about moving overseas, email me, I’ll be glad to help.)

But sad to say a lot of this article presents a surprising degree of naivety and a lack of research, or basic understanding of how things work, both in the USA and in overseas locations.

So Here’s Your Homework Assignment  Do it Now, Please.

First, read the article here.

(Go ahead, I’ll wait here for you.)

Then take a look at my thoughts below on the article and the whole “retire overseas” question.

In the summer of 2012, Brad Johnson and his wife joined the thousands of Americans who each year decide to spend their retirement years living overseas.

They rented out their house in Phoenix, Ariz., got a six-month tourist visa that they anticipated renewing indefinitely, packed up their two cars, and set off southward, to the first of a series of rental homes in and around Puerto Vallarta, Mexico. “It was absolutely wonderful,” says Johnson, now 70 years old….

Well The Article Starts Out Just Great

Over the 15 years or so I have been advising folks on retiring overseas, and especially retiring to the Philippines, I have always been consistent on several issues:

  1. Don’t rush to sell your US house.  You may think you are moving for good, but “man proposes and God disposes”.  A great many foreigner couples who move to the Philippines “boomerang” back to the USA.  Your existing home can become a secure “parachute” is you have to make the decision to “re-enter”.
  2. Don’t rush into reams of paperwork and or investments to obtain a permanent retirement visa.  In the Philippines you and your spouse if s/h is not a Filipino/former Filipino) can get a tourist visa upon entry with no paperwork or hassle.  You can extend these visas every two months every two months or every 6 months for as long as 36 months, a full three years.

As of August, some 680,000 beneficiaries received Social Security payments at foreign addresses, the best way to gauge the trend of retiring overseas.

I Disagree With This Estimate, Strongly

First of all, the US Social Security Administration won’t even send Social Security payments overseas to many countries.  It’s a big hassle in many cases and I personally don’t recommend it.  Keeping a US bank or credit union account and having your benefits sent there is easy enough and also provides another important “parachute” to cushion your landing if you do “Boomerang” back.

Secondly, a heck of a lot of retirees I know are not yet old enough for Social Security or are not collecting it for some other reason.  I myself moved to the Philippines several years before I was even eligible for early (age 62)SS payments and when I finally did register, my payments have never gone anywhere except to my US credit union.

The Philippines (where I live) is only one of at least 100 countries where you can find US expats, so I doubt seriously that the 680,000 overseas retirees is accurate.  I’d venture to guess it is at least several million.

While there’s plenty of guidance available for wannabe expats on everything from picking the right destination to ensuring that you don’t mess up your taxes, there’s scant advice available for “boomerang” retirees who decide to move back home after a few years or after a decade or two. The best time to prepare for a possible return is before you leave in the first place.

Ric Edelman, a financial advisor in Fairfax, Va., agrees. He had one client move abroad in his retirement, only to return to the United States within a year. “It was a very costly and disruptive period of his life that took two or three years to sort out,” Edelman says.

So these are a few

Things To Think About Before You Retire To The Philippines.