Have you thought of retiring to Baja, Mexico?
It’s not a real a question, because of course you have. If, like many Americans, you have worked your knuckles bare, or spent a lifetime building a business, you haven’t done so just for the love of it. You will have dreamed of spending more time on your morning coffee watching the sun rise over the mountains, or appreciating the sound of waves crashing on the beach as you get ready for a round of golf on a Tuesday – or any day, or every day – without having to worry about the stresses of work.
If you are thinking of retiring to the white beaches of Baja California in Mexico, or just looking to buy a second home, somewhere away from it all, here’s a guide to help you plan it.
Financial planning when retiring abroad
If you want to make the most of your money when you move abroad, it is essential to get the financial planning right in order to achieve your financial goals. Many people are put off from financial planning, thinking it’s too complicated. But break it down into manageable steps, and it can be a simple process.
Set your goals
What are your short and long term goals?
- Retiring early
- Buying property
- Renting or selling your home property
- Making savings and investments tax efficient
- Ensuring your children are well provided
- Slowing the pace of life down
- Playing more golf
- Seeing the world.
Always set goals – as you are more likely to achieve them – and then base your decisions on what is a priority and what is not.
What is your current situation
Your current situation can dictate how financially tied you are. What is happening in your life and is there anything looming that might change your finances?
- Assess your current monthly budget
- Do you have adequate savings, investments and pension plans?
- What financial commitments will remain back home and where you are living abroad?
- Do you have family commitments – dependent children, grandchildren or a wedding to pay for?
- What is your tax position and how will it change when you move?
Always create a plan and include everything.
- Have you checked how the cost of living compares with where you’re living now?
- Do you have an emergency reserve to cover any disaster on your rental property at home?
- Do you know where you want to live and what amenities it has?
- Do you have life insurance – will it cover you abroad?
- Do you have a health plan in place?
- How will your assets be affected by local regulations?
- Does your family know your goals?
Savings and Investments
If you are thinking about building an investment portfolio, including property, consult a financial adviser and always include what your plans and goals are.
- How much risk are you prepared to take?
- Can you take advantage of any potential tax benefits of living abroad?
- How are your insurance policies and inheritances affected if you move?
- Will you need to sell your house, or can you rent it?
Be sure to write down all your options, considering the pros and cons of each. Stay realistic about what you can afford and how much you will need to live on.
Putting your plan into action
After assessing your financial situation you can now take steps to implement your plan. Use your goals as a motivator and your finances as a moderator.
- You will feel more positive about your future, especially your retirement
- It encourages you to save and invest for the most important things in your life
- It will help you find opportunities to grow your wealth – and perhaps make your savings and investments tax efficient
- It will ensure you and your family are protected wherever you are
- You will worry less about your family’s financial security, because it is included in your plan.
And remember, always revisit and review your plan, circumstances can change, especially where money is concerned.
For more information on what type of property might be best for you call 520-509-9040 or submit the form on our home page to find out how you can enjoy life to the full at Diamante Cabo San Lucas.