Retiring Overseas? 3 Things to know

Many current and soon-to-be retirees still struggling from the Great Financial Crisis have decided to pack their bags and spend their golden years overseas, according to a new survey.

“Nearly 3.3 million American ‘baby boomers’ plan to retire permanently abroad.” – Dr. David Vequist, Founder and Director of the Center for Medical Tourism Research. Travel Market Report [1]

There are more than 350,000 retired Americans currently receiving their Social Security benefits outside of the United States, are you planning on being one of them?  Before you pack your bag and retire abroad, you should research if that is the best option for you, here are three questions about Medicare coverage outside of the US.

1. Will Medicare cover me outside of the US?

Original Medicare, in general, health care isn’t covered while traveling outside the U.S.  The 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa are considered part of the U.S.

Medicare may pay for inpatient hospital, doctor, ambulance services, or dialysis you get in a foreign country in these rare cases:

  • You’re in the U.S. when a medical emergency occurs, and the foreign hospital is closer than the nearest U.S. hospital that can treat your medical condition.
  • You’re traveling through Canada without unreasonable delay by the most direct route between Alaska and another state when a medical emergency occurs, and the Canadian hospital is closer than the nearest U.S. hospital that can treat the emergency.
  • You live in the U.S. and the foreign hospital is closer to your home than the nearest U.S. hospital that can treat your medical condition, regardless of whether an emergency exists.

In some cases, Medicare may cover medically necessary health care services you get on board a ship within the territorial waters adjoining the land areas of the U.S. Medicare won’t pay for health care services you get when a ship is more than 6 hours away from a U.S. port. [4]

We recommend investigating your options with the embassy in your destination country prior to moving. [2] For an in-depth description of what Medicare covers outside the U.S. To learn how Medicare Supplement policies can cover you abroad, read this article.

2. Will I be accepted into another country for a long (or permanent) stay?

Every country has different standards about how they accept foreigners. Some even have special retiree visas! It isn’t uncommon for countries to need proof from a financial institution that you have adequate income. When in doubt, check with the country’s embassy. [2]

3. What about U.S. and international taxes and other healthcare costs?

You will still need to pay taxes on any income earned in the United States – whether living abroad or not. There is no easy way to simplify multiple-country taxes, so we recommend receiving tax advice from a CPA, financial advisor, or an agent with expert advice in international taxation. [2]

Dr. David Vequist, Founder, and Director of the Center for Medical Tourism Research says, “As many as 3.3 million U.S. baby boomers – out of a total of 78 million – are planning to retire abroad. People simply do not have the money to retire comfortably in the U.S.” [1] Retiring abroad is becoming increasingly popular year after year with rising living and healthcare costs. For a broad scope of how the U.S. fares against other countries in terms of health costs, read this article from PBS.[3]

Although the U.S. has one of the best health care systems in the world, it can be very expensive. Whether you plan to retire abroad permanently, plan to spend part of the year traveling, or you want to explore the option of retiring internationally; you should speak with embassy representatives both domestically and internationally before making any decisions.

Helpful Tip: Because Medicare has limited coverage for health care services outside the U.S., you should choose to buy Medical Travel Insurance to get further coverage.


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