Ready to retire overseas but not sure where to start? In this episode, Kathleen Peddicord—founder and publisher of Live and Invest Overseas—breaks down why retiring abroad is becoming mainstream and gives you a practical framework to choose the right country based on your real priorities.
Jeffrey Snyder, Broadcast Retirement Network
Well, we’re gonna welcome back to the program, Kathleen Peddicord. She is the founder and publisher of Live and Invest Overseas.
And she’s back with a new book, Where to Retire Overseas. Kathy, it’s great to see you. Thanks for joining us this morning.
Kathleen Peddicord, Live and Invest Overseas
Hello, it’s great to be back speaking with you again.
Jeffrey Snyder, Broadcast Retirement Network
It’s a pleasure, the pleasure is all ours. And you have had a fabulous journey. Before we get into the book, let’s talk a little bit about your background.
You, I think you kind of are bi, you live in multiple countries.
Kathleen Peddicord, Live and Invest Overseas
I don’t know what the correct terminology is.
Jeffrey Snyder, Broadcast Retirement Network
Maybe I’m bi-continental, I don’t know. Bi-continental, that’s what you are. That’s what I was thinking.
So tell us, set us up with your journey just real quick, and then we can kind of get into the book. Cause you do some amazing things.
Kathleen Peddicord, Live and Invest Overseas
Well, thank you for that. So I left Baltimore, Maryland, where I grew up.
Jeffrey Snyder, Broadcast Retirement Network
And I grew up there too.
Kathleen Peddicord, Live and Invest Overseas
That’s right. Yeah, exactly. I remember that from when we last spoke.
I left there at the age of 35 and moved to Waterford, Ireland and lived there for seven years, then to Paris and was based there for four years and then moved to Panama and was in Panama full-time for about 12 years. And then for the past several years, been dividing my time between Panama and Paris. So part of the year in Paris, because I just love it.
For me, Paris is the world’s best place to be. If I could be anywhere, that’s where I would likely choose if I had to choose one place. And then Panama, because it makes so much sense for business especially, and we have a lot of investments there.
So it is a very split world, you know, between if I, we talk always about considering the world map in the context of fun and profit. For me, if you’re going to have fun, go to Paris. That’s my kind of, that’s my idea of fun.
If you want to make some money, go to Panama.
Jeffrey Snyder, Broadcast Retirement Network
There you go. I mean that, and by the way, I know you’re from Baltimore as am I. Orioles, I don’t know if you’re still an Oriole fan, they’re just not doing too well.
Kathleen Peddicord, Live and Invest Overseas
So- I am a huge Oriole fan and I’m sorry to hear that.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, they’re just like five games under 500 days underperformed. Anyway, that’s another show. We’ll bring you back.
We can talk about live and invest overseas while being an Oriole fan. That’s part two of this program.
Kathleen Peddicord, Live and Invest Overseas
That sounds very fun.
Jeffrey Snyder, Broadcast Retirement Network
So, it seems like, as we kind of transition into our discussion about the new book, it seems like more and more Americans want to live overseas. I mean, this is not a new trend, but it is a newer trend, Kathy.
Kathleen Peddicord, Live and Invest Overseas
It is not a new idea, but it is finally not a crazy idea, is the way I would put it. It’s kind of becoming mainstream. And there was a poll, a survey taken last year that found that one out of every three Americans was interested in the idea of retiring overseas, but just didn’t know how to make it happen or get started.
One out of every three, that’s ridiculous, right? That’s such a, you know, to me, mind boggling percentage of Americans, more than a third. But I understand it because in the context of everything going on in the world and in the United States right now, inflation, rising costs, healthcare, you know, a lot of concerns for the people for whom this idea is especially appealing and interesting, which is those nearing or in retirement.
Jeffrey Snyder, Broadcast Retirement Network
So when you decided to write the book, I mean, obviously you had this plethora of experience living on multiple continents, multiple areas, building a very successful business. When you look at where to live, I mean, if I was kind of going through this process, look, I love America and you’re right, we face a lot of challenges. I look at the gas pump, it’s at 371 here in Charlotte, not really liking that.
I enjoyed it when it was under three, not sure if we’ll get back to it anytime soon, but where do you kind of, how do you figure out? So if you’re taking Jeff Snyder through the process of where he wants to live overseas, I have a few ideas, but how do you start?
Kathleen Peddicord, Live and Invest Overseas
That is the best question. You start by taking stock of your priorities and objectives. What is most important to you and what do you want your life to look like?
And I suggest going very old school, take out a pad of paper and a pen and make lists. These are the things I want my life to include. These are things I never want to deal with again.
And they can be anything from, I never want to shovel snow again to I absolutely want to be able to wake up steps from the beach every morning. That’s the most important thing to me. And then they can be more mundane kinds of things like I don’t want to live somewhere where I have to own a car.
I want to be able to walk everywhere I need to go every day. Or they can be not as, not really fun, sexy topics, but critically important. Like I want to, I need to be somewhere where healthcare and health insurance are more affordable than where they are for me right now.
Jeffrey Snyder, Broadcast Retirement Network
So I was going to ask you about that. I would think that as we age into retirement and retire can be a different, you know, it used to be age 65, but candidly, Kathy, it’s not that anymore. People are working longer and longer for a lot of reasons.
Inflation is one of them. People maybe enjoy it or they’re transitioning in different roles. But that healthcare cost, it’s really going to go up.
So you probably want to maybe prioritize that one. Yeah, you want to be able to hop around the city or not have a car, but healthcare is going to be important. You want to have access to good doctors or, sorry, go ahead.
Kathleen Peddicord, Live and Invest Overseas
Exactly. I don’t mean to cut you off, but that is such an important point. And I’m hearing every day more and more from readers, attendees at our conferences, et cetera, that this is a driving agenda.
This is increasingly the priority agenda. And to put things in perspective, I spoke with a woman just a couple of weeks ago, an American from North Carolina who retired last year, moved to Tarragona, Spain. And she said that the deal breaker for her, because like everyone, you have doubts, you have concerns, maybe you’re afraid, it’s intimidating, can be overwhelming.
You can feel stuck and get paralyzed and not know how to proceed. So she had considered all the factors, had made a plan, but then what really was the critical determining factor for her that, as she said, allowed her to muster the courage to make the move was when she realized that living in Tarragona, Spain, her cost of health insurance would be less for her annual premium than it was what she was paying monthly in North Carolina. So what she was paying per month in North Carolina was more than she was gonna spend per year living in Spain.
And she said, I realized with that much budget change, so many other things didn’t matter. I was trying to calculate as she put it in the margins of 5% here, a few dollars there. She said, but that was just monumental.
And then it made everything else much easier.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, I think you’re absolutely right. Just kind of from the outside looking in, you prioritize. And once you get your big priorities, everything else kind of falls into place.
Let me ask you about money. Transitioning from here in the US, we use the dollar. Other countries may use the Euro.
They may use another denomination of currency. How does that factor in to the decision-making of where to retire overseas?
Kathleen Peddicord, Live and Invest Overseas
It’s a really important factor for someone, especially on a fixed retirement budget. If you are still earning income, if you have a steady investment income, you have more margin for error. But especially if you’re moving on a very fixed retirement budget, you don’t have margin for error.
You need to do your sums very carefully. And you need to take into account that the currency can move in your favor, which means, yay, you just got a raise that year or that month, or it can move against you. And if your budget is too tight and the currency moves against you, well, then you can have a big problem.
So we recommend a couple of things in that context. One, if you’re going to move to a place where the current local currency isn’t the US dollar, don’t cut it close. Don’t move somewhere where your budget is exactly, you’re going to be spending exactly what you have to spend.
You do need some give in your budget because you need to allow for currency fluctuations. Two, set aside a kind of sinking fund, a fund of money that you can tap into if there’s a period of months or longer where the currency goes against you and you’ve figured a budget of, just to use easy numbers, $2,000 a month, and suddenly it’s 22 or 23 or $2,400 a month because the exchange rate moves that much. You need to have a little fund set aside to tap into.
And then finally, one really big thing you can do, if you’re feeling pretty confident that this is the place you want to be long-term, go ahead and buy a place to live rather than renting because housing cost is the biggest part of any budget. So if you buy right now at whatever the exchange rate is when you make the move, then you’ve taken that housing cost off the table. And without that, to worry about, the rest of your budget can be much more easily managed in the context of currency changes.
Jeffrey Snyder, Broadcast Retirement Network
So Kathy, with the healthcare decided, the currency or how to manage that, how do you, what about banking? I mean, a lot of Americans here bank with larger or regional banks. Do you have to, is it best practice to get a local bank or can you still bank at Bank of America, JP Morgan, Truist, all, you know, do they have branches overseas?
Kathleen Peddicord, Live and Invest Overseas
I’m assuming- So they don’t have branches overseas. So the bank you work with in the US is not going to be the bank you work with wherever you go. But we generally recommend keeping a bank account in the States and then also opening an account where you move.
So you’ll need an account even just to pay local bills. You can, and then also if you’re collecting social security you can arrange to have your social security direct deposited into that bank account where you’re moving to. You could also just continue having your social security direct deposited into your account in the US and access it via cash withdrawals from an ATM.
But the most efficient way is to have a local bank account, have your any monthly income deposited there and then operate, that’s your operating account. But it’s a good, it’s always good to have redundancies and backups. And there’s, if there’s no reason to get rid of your bank account in the US, it’s best just to keep it.
Jeffrey Snyder, Broadcast Retirement Network
Yeah. Yeah, I could see that. And I’m assuming the internet works in pretty much every country.
Kathleen Peddicord, Live and Invest Overseas
In today’s world, banking is so much easier than when I moved overseas. I made my first move almost 30 years ago. This was pre-internet, pre-online banking.
Things were so much harder. So today I’m excited for people looking at this today because there’s so many challenges that someone 10 years ago even faced. This is easier all the time because right, banking online, banking today is mostly all online and you can do that from anywhere in the world.
Jeffrey Snyder, Broadcast Retirement Network
I should have asked you this question like second or first but let me kind of go back. If I decide to retire overseas, do I have to renounce my US citizenship or can I remain a US citizen, number one? And two, what about taxation?
Do I still pay taxes to the United States and to the district that I’m in, the country that I’m in? How does that work?
Kathleen Peddicord, Live and Invest Overseas
Yeah, great questions. First of all, no, you do not lose your US citizenship. You can’t lose your US citizenship by accident.
It just can’t happen. You have to renounce it. It’s a process.
It requires an FBI interview. It’s a whole big thing that isn’t going to happen accidentally. So you don’t have to worry about that.
On the other hand, as long as you remain a US citizen, yes, you do have a tax obligation in the US but it’s not necessarily that you owe money, that you owe taxes. You have a filing obligation and you may or may not owe taxes in the US and it gets, it’s very personal and it can get a little complicated depending on where you earn your money and what kind of money it is, passive or active income. And again, where it comes from.
You will have a tax situation to address wherever you move in the jurisdiction where you decide to move to. And then as an American, you will retain your US tax filing obligation. Who you actually owe tax payments to will depend on a lot of factors.
As a retiree, you definitely should not end up paying more tax. You may pay the tax differently. You may pay some to the country where you’re moving that will then be offset against what you owe to the IRS.
So you need two tax advisors. You need a good tax advisor in the US who has experience working with Americans, living, investing abroad, full or part-time. Someone who understands how to address this to your best benefit.
US taxes allow for a lot of creative thinking. So you need someone who’s gonna be creative. And then you also need someone on the other end of the conversation in the place where you’re moving.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, really good points. I could, I have so many questions so we’ll have to bring you back. But let me finish off with this one.
Estate planning, medical directives, those are all important things here in the States. As you age, you wanna have a will, you wanna have the ability to transfer your inheritance to loved ones, beneficiaries, et cetera. Is that different depending on the jurisdiction that you ultimately reside in, the country you reside in?
Kathleen Peddicord, Live and Invest Overseas
If you have assets in another country, so if you buy a home, for example, or if you own property or any other assets, you’ll want a will in that country too. But you still want your US will and your advanced directives and everything else that you would ordinarily have as an American just living in the States. And then in addition, you’ll want a will in the country where you haven’t, in countries, because if you’re, you may have assets in more than one country outside the United States.
And then you need, again, someone with experience helping Americans manage all of this. So an estate planner who has experience across borders and can help make sure that you don’t have more than you need. We hear often from people, unfortunately, it’s often single older women who are left on their own trying to navigate this.
And they speak to someone who says, oh, you should have a corporation. You need some kind of structure set up. That’s not necessarily the case.
You don’t necessarily need any structures. You may, depending on what you’re doing, but you definitely will want a will to make sure that your house or your property goes to whomever you want it to go to. But you may not need anything beyond that.
And so you, again, you wanna talk to someone with experience at this.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, well, all these details and more folks are in the book, Where to Retire Overseas. I think we just touched on the very tip of it. And of course, I left out probably the most important part is the top 23 countries, but that’s the reason to buy the book.
Kathy Petticoat, it’s great to see you. Thanks for joining us this morning. And we look forward to having you back on the program again, Thank you so much.
Kathleen Peddicord, Live and Invest Overseas
Great to speak with you.
