What advice do overseas retirees have for others considering retiring abroad?

"The question seems simple enough but I doubt if one simple response can cover the multitude of factors that need to be taken into account. However, I have now reached 50 years expatriation in one country, or another, and I believe the following two factors are all important: (A) COVER YOUR REAR. So often, expats relocate convinced "That is it forever", only to discover nostalgia, or other arguments lead them back "home". There is nothing shameful in such a decision, but its possibility would be best attended to by retaining the keys to the doors of a return "home" by NOT investing everything on a forthcoming, "forever expatriation"; but leave something behind, like a property that allows you to retain one foot on the property accession ladder. (B) IT MAY LOOK CHEAP NOW BUT WILL IT STAY LIKE THAT? I retired 23 years ago and was aware my pension incomes would not be uprated at the same rate as inflation. Those 23 years have not only confirmed my original precaution, but demonstrated how much I had underrated this factor; all the more so, when the inflation rates of the source pension incomes, and the country of expatriation are different. Thus, if the average inflation rate in your "home" pension source country is 3% p.a., but the inflation rate in your expat residence is 10% p.a., then you will have to bear a constant decrease in your capacity to control your cost of living, unless the differential between the relative exchange rates can compensate (Which can never be guaranteed)," commented one expat who made the move to Colombia.

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"To my mind there are many, well known reasons for retiring as an expat in Colombia, but it would be prudent to not overlook some disadvantages that may, sometimes apply.Firstly, whilst your pension incomes when you first arrive in Colombia may make you feel very comfortable in comparison with that you enjoyed in your "home" country. However, beware; this initial advantage may (will?) erode over time. The rates of inflation in your "home" country and Colombia are usually very different so your COP based living costs will increase much faster than your (say) US$ based living costs in the USA. Unfortunately, this differential in inflation rates links directly to your pension incomes which will normally be based on inflation in the USA. Result, your COP living costs are increasing at a faster rate than your pension incomes. In my case, this has been a significant factor over the 20 odd years I have been living in Colombia and my initial "comfort" level has gradually been decimated. Of course, this disadvantage can (will?) be offset by the relative strength of the US$ to the COP, but this can be very variable and, in any event, the US$’s relative strength may be useful in this "costs" context, but it will be prejudicial if you have Colombian tax liabilities arising on your US$ pension incomes.So, the other factor to take into account is your liability to Colombian taxes. If you intend to live in Colombia, the famous 183 day rule on determining where you are deemed a tax resident will apply. This is a very complex and much debated factor which very few people, me included, do not fully understand. What is sure however is that the higher graduated tax rate levels will quickly impact any Colombia tax liabilities. For instance, if you are deemed a resident of Colombia for tax purposes, your USA based incomes will very quickly attain the highest tax rates in Colombia (say 35%) once your USD incomes are converted to COP. You could, very quickly end up being taxed at high rates in Colombia, whereas your equivalent taxes in the USA were nil, or very little. The above is just the darker side of the Pension Rainbow; there are plenty of good factors to add flavor to the overall taste," remarked another expat in Colombia.