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What should the affluent consider before relocating?

By David Norton - May 18, 2022

One of the many challenges our affluent clients face is living in multiple places. 

The practicalities of living and the ease or time taken to do simple things, can become complex. 

And complexity usually equals cost...  

Snowbirding is a term used (mainly in the US) to describe those who migrate to warmer climes for half the year.  

For my clients, the reverse might be true, as temperatures in the Middle East can become unbearable during the summer months.  

Then there are those who simply travel extensively for work and live in multiple places.  

With this, comes relationships with multiple banks, credit cards, insurance providers... to name but a few.  

Whether you are a snowbird, travelling for work, or looking at your retirement location options, you are likely to be experiencing frustration at the complexity involved. 

This week, I want to focus on retirement – because, particularly at this life stage, complexity is something you wish to avoid.  

Because whether you are contemplating a retirement country for better weather, lower taxes or other reasons, you should be sure to put your decision to the test before uprooting.  

Careful research that looks at relocation from all angles is needed to ensure that your move will be successful... 

And to avoid unpleasant surprises on the other end. 

When it comes to the affluent, however, it’s not as simple as Googling.  

Little of the online discussion and advice on the topic is targeted at high-net-worth individuals and couples, whose concerns and anxieties generally span into subjects like private banking, insurance, visas and tax strategy.  

You will be better served by professional planners.  

Those who ensure your capital is aligned with your goals and objectives. 

So here are 9 points to consider before choosing your retirement location: 

1. Taxes 

While many people think of the income-tax benefits of moving to a jurisdiction with lower or no income tax, you should consider the entire tax picture.

Does the new jurisdiction assess an estate or inheritance tax? Is there a Double Taxation Agreement (DTA) in place? What is required to break residency with the jurisdiction you’re leaving?

Also, in certain environments, you do not require complex investment solutions to protect and invest your wealth. You will need to consider an integration of your investment strategy with your tax strategy. 

Please note that our Financial Planners are not tax advisers, however AES has a working knowledge of taxation in relation to your invested wealth, depending on your retirement location. AES also have the necessary network, where further tax planning is required.

2. Housing costs 

How expensive are homes? How do property taxes compare? Will homeowners’ insurance be more expensive? Can you even obtain insurance? (Think areas prone to extreme weather or natural disasters). How will the cost and time required for upkeep of multiple residences impact your lifestyle

3. Health care 

Will you have access to quality doctors and medical centres? Are there sufficient numbers of trained professionals, particularly as you age? How do long-term care costs compare, and what facilities are available?

4. Financial services and banking 

Will you have access to regulated financial services? In some countries, this is still developing.

We continue to see many firms offer commission-led, underperforming portfolios, held within outdated structures, in many popular retirement locations. Ask yourself if your current adviser is best positioned to help you once you relocate. World-leading banking institutions can also prove substandard in some locations.  

5. Visas 

Different visa requirements will apply depending on where you choose to spend your non-working days. Retirement visas are one option, but for those looking to retire in the UAE, for example, property investment visas and golden visas are also available.

6. Availability of services for part-year residents 

If you won’t be living there full time, is there a network of services for part-year residents (e.g. landscaping, boat maintenance and storage, home maintenance)?

7. Ease of travel 

Will you be near an airport? Can you quickly and easily access private planes? Will you be able to easily travel to family, corporate or charitable board meetings?

8. Climate 

Do you really know what the climate is like, and in all seasons? Will you retire there full time or for only part of the year?

9. Amenities 

Will you have access to fine dining, luxury retailers and auto dealers, premier clubs (golf, tennis), theatre, etc.? 

Your financial planner should be able to assist you with answer to some of the above.  

Drawing your other advisers such as lawyers and doctors into the process, will also be well worth the extra effort if it ultimately makes your move go smoothly.Pursuing a better investment experience