If you want to retire in an English-speaking country outside of the United States, you have numerous choices — including Canada, Australia and New Zealand. Canada is just a short hop across the northern U.S. border, which makes it an easy destination to get to, though the weather can get frigid. Australia and New Zealand are much warmer — and also much further away.
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Retiring comfortably in Canada, Australia and New Zealand depends on a few different factors. including your definition of “comfortable.” If comfort means paying the bills and living a minimalist lifestyle, then you can obviously get by on a lot less than if you want a luxurious lifestyle in retirement.
Before making the decision to retire abroad, there are some things you should know to ensure the best experience. Here are four financial rules to be aware of:
Learning the financial rules can give you a better idea of what to expect when you retire abroad, and help determine how much money you’ll need. Below are estimates of how much a comfortable retirement is likely to cost in Canada, Australia and New Zealand. Keep in mind that the actual costs will vary depending on the city you live in. Other sources could provide very different estimates.
According to a 2023 retirement study from BMO Financial Group, the typical Canadian believes they need the equivalent of about US $1.2 million to require comfortably. That’s in line with a separate study from Motley Fool, based on a typical retired household having just shy of $50,000 in annual retirement income for 25 years. You need to factor inflation into the mix, so in some years you will need more than $50,000 and in others you might be able to get by with less.
Assuming you own your home, you would need the U.S. equivalent of about $29,000 a year for an individual or $41,177 a year to retire comfortably in Australian, according to AMP Limited. That adds up to total savings of $725,000 to $1.03 million to cover 25 years in retirement. AMP recommends following this rule of thumb: Assume you will require 67% of your pre-retirement income to maintain the same standard of living.
A report from Opes Partners estimates that you would need the U.S. equivalent of about $37,000 to about $53,000 a year to enjoy a “Choices” lifestyle in New Zealand, which equals total savings of $925,000 to $1.32 million over 25 years. A “choice” lifestyle means you have your own home, no debt, and want to enjoy a “comfortable” time. To enjoy a “well-off” lifestyle you would need at least US$61,000 a year — or total savings of about $1.52 million — which can cover the essentials as well frequent travel and other perks.
All dollar amounts were converted to U.S. dollars on June 18, 2024.
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This article originally appeared on GOBankingRates.com: What a Comfortable Retirement Will Cost You in Canada, Australia and New Zealand
2024-06-18T19:04:46Z dg43tfdfdgfd