Retirement oversea – Access to Earnings and Pensions
Once retired access to an income or a pension or both is just as vital as was the receiving of a salary or wage when working. During a short-term visit to a country this problem is easily solved. Travelers cheques, cash and access to A.T.Ms. or a combination of such facilities will be adequate for sustain during a tourist visit to a country. Exchange controls, the rules that a country’s government sets to control the amount of money that can cross the border and the financial form in which it can move, have been greatly relaxed all over the world. This situation has been brought about in part by the ease with which financial transactions and transfers can be made by companies, edges and individuals via the internet. The retiree needs certain, quick and cheap access to funds on a regular basis.
Government pensions are usually the most easy to reach funds but details should be sought from the paying authority. A British Government pension can be paid to almost any country in the world. Similarly the Australian Government will pay pensions to many countries but making arrangements with the paying authority, “CentreLink”, may not be so easy. Advice from a government on this point is usually easy to acquire. It will probably be more difficult to position payment oversea where private company pensions are concerned. The company or the entity by which its pension scheme is operated may just not be willing to pay funds into overseas edges. Things may be easier with large multi-national companies.
For British non-government pensions the Q.R.O.P.S. (Qualified Recognized Overseas Pension Scheme) arrangements offer an answer to the move oversea of a pension. These schemes are offered by a number of organizations to those who have not already converted their pensions into an annuity. Once in a Q.R.O.P.S. it is not necessary to take part of the pension as an annuity. Arrangements are approved by the British tax authorities. This is a way to move a pension entitlement overseas. Action to effect such a program can begin prior to retiring and emigrating. Accessing a Q.R.O.P.S. can also have inheritance tax benefits. There are many organizations that can provide Q.R.O.P.S. information and any good financial adviser can explain the benefits or otherwise of a Q.R.O.P.S. in any particular circumstance.
Different arrangements may have to be made for pensions from non-British supplies. This will average dealing with in any case bank receives the pension and charges will be incurred. Wire transfers and the use of debit or credit cards may be the easiest and most useful solutions. There will certainly be charges both by the sending and receiving bank for wire transfers. Debit cards attached to accounts are typically freely issued. Credit cards often attract an annual fee and such cards are not always easy to acquire unless one has had a continuing relationship with the bank for some years. It may not be desirable or advisable to move a large lump sum or the complete amounts of any regular payments, or, if the pension is a government one, the whole of the pension payments (weekly, monthly) to the new country of residence. The move of more than is necessary for reasonable living expenses should not be made to the country of retirement. Moving pension payments in part instead of in complete may not be possible. It is then important to deal with a local bank that can also move funds out to an offshore account. Some basic knowledge of any exchange control regulations is useful. Things can go wrong and it would be more than unfortunate to have to leave the new country but without all of the capital that was imported.
It is often not possible to take local employment as a retiree on a pensioner visa. Where such earning is allowed then it is probable that local income tax will be payable. In retirement complete-time employment will probably not be desired. For countries with a low cost of living local wages may make part-time employment simply not worthwhile. Income earned offshore is usually not taxable already if the proceeds are ultimately remitted to an onshore bank. Again it may not be best to remit the whole of the earnings to the place of retirement for the reasons stated above. The best answer to most of these financial problems real or expected is to open an offshore bank account.
The suggested solutions should permit a retiree to have access to financial assets with the least possible risk. Offshore income can be paid into an offshore account. Wire transfers and plastic card withdrawals will be obtainable for transfers to the retirement country. Banking for any local earnings, if the latter is allowed, can be handled by an onshore bank whether payment is in cash or by check. Acquiring an offshore bank account is not difficult, expensive or illegal. Indeed it may be easier to preserve existing offshore arrangements than to open a local account.