Retire Overseas

Back From Ecuador

Would you have guessed? We have already booked our ticket back to Ecuador in June. The air travel is quite expensive, but so long as you stay in Ecuador for a reasonable period, the lower costs-of-living quickly compensate for the high travel costs ‘ stay for 60-90 days and it is about break-even. But any successful opportunities sourced soon make the trip very viable.

It has been quite a shock to get used to the higher costs here in Australia fuel, food, clothes, accommodation, entertainment. I think we became very accustomed to living on the other side of the world, in comfort with relatively very few dollars being expended. It really is true that a couple can live easily on less than $20,000 year ‘ and that includes rent. The requirement to get a “retirement residency” is that a person has to prove that they get at least US$800 per month as a pension or from superannuation (US$900 per couple). The Australian single pension is about US$1,050 so that easily qualifies (US$1,780 per couple). That benchmark provides an idea as to what the Ecuador government thinks is required to live adequately.

And the best thing is that we will be able to conduct a business without too much pressure, and we won’t have manufacturing issues to deal with. Ecuadorian lifestyles also seem to be much lower pressure than in Australia.

And if you know friends or family who are struggling with coping with lack of cash in their retirement, encourage them to look at other options by living overseas. We now know that it is not always necessary to stay on the treadmill of making more money to afford a high cost of living. Another option is to live in a low cost environment and reduce the pressure on the income requirement. The savings from lower living costs will more than cover a couple of trips back to Australia each year, so living overseas does not mean that retirees have to do without contact with family. And these days with Skype internet communications, they can talk to family every day for as long as they want – for FREE. With video (web cam) you can also visually see loved ones while you speak to each other.

An example of how many people struggle to make ends meet in retirement was illustrated in an article in our West Australian issue of “The Sunday Times” last week. It was pointing out how difficult it is for pensioners to live on AU$546.80 per fortnight (AU$14,000 per year).

“Thousands of impoverished pensioners are rationing their food, going without simple pleasures and doing it tougher than ever before”.

This situation would not be the same in Ecuador if the same person lived in that country with the same pension. Quality accommodation can be achieved with just US$250 – $300 per month. For a couple, the numbers are even better. That leaves a lot for food, transport and entertainment. Medical and dental is also much cheaper than Australia and insurance can be purchased for less than $100 per month (for over 65 year olds).

No wonder Ecuador is listed as one of the best countries in the world to retire (see. www.internationalliving.com/)

Hasta Luega

Expatriates – Your Money is at Risk

HOW EXPATRIATES’ ARE EXPLOITED BY THE OFFSHORE FINANCIAL SERVICES INDUSTRY

Copyright © 2008 Hugh Stevenson

Every year around the world, greedy financial advisors and international insurance companies persuade expatriates to invest an estimated $5,000,000.00 or more in offshore avings/retirement schemes that are little better than a swindle

Imagine an advertisement couched in the following terms:

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Advertisement

COLOSSAL INTERNATIONAL INSURANCE LTD Expatriates – How to Save For Retirement

For regular savings toward retirement our Offshore Pension Plan is the perfect vehicle. Here are the great features:

1. You contribute, say, $1,000 per month over the next 25 years.

2. If we achieve, say 10% p.a. growth your fund at maturity should, in theory, be worth about $1,065,308

3. But our charges will have swallowed up around 47% of the $300,000 you contributed. That means about $140,000 of the growth is lost to you.

4. If you stop payments, for any reason whatsoever and at any time during the first 23 months you get not a penny back; we shall keep all the $23,000 you had paid in.*

5. Then after month 23 if you stop payments at any time for any reason whatsoever we shall hit you with a substantial penalty. For instance, had you paid for, say, 7 years and then cashed in, the amount you would get back is uncertain but is unlikely to exceed the $84,000 you had paid in over the seven years.

6. You can reduce your monthly contribution at any time. However, If you do so we s hall continue taking our charges as if you were still paying at the original level. That means if you reduce the $1,000 per month to $200 per month we will keep levying the charges that would apply to a contribution of $1,000 per month.

7. You can increase your contribution at any time but if you do we shall apply to the increase a fresh ‘initial period’ – i.e. the period during which you would get little or nothing back if you stopped payments.  That means another 23 months zero return and many years of not much.

8. You could stop payments at any time and leave the fund invested with us but we will still, month by month, take out the charges to a total of around $140,000 (see 3 above).

9. There are offshore savings vehicles that give access to all the same investment areas but with much lower charges and no hidden penalties but we prefer not to tell you about these.

(Throughout this article the $ sign stands for any major currency. e.g. EUR, GBP, YEN, AUD, CAD).

The above “advertising” copy is very different from the hype in the slick advertisements the companies publish but it accurately sums up the typical features of International “Contractual Regular Savings and Retirement Plans” offered by some major offshore insurance companies.

If they were advertised as above, would anyone ever buy them? Surely not. Consider some of the details:
1. Forty Seven percent of payments gone in charges!

2. All of your money confiscated if you stop contributing before you have made 2 years payments!

3. Crippling ongoing charges applied even of you reduce or stop payments.

4. If you increase payments a new set of charges and a new zero return period is applied.

And yet every year, thousands of expatriates are talked into joining such schemes.

Accurate figures are not available but reasonable estimates suggest that over $500 million is directed to such plans annually.

Who has the effrontery to market such nonsensical investments?

1. International Life Insurance Companies

These companies are mostly the offshoots of British ‘household name’ insurance Companies, and

2. Offshore Independent Financial Advisors

An Offshore Independent Financial Advisor is anyone who chooses to call himself an Offshore Independent Financial Advisor (IFA). Anyone? What about training? What about experience? What about background?

In most countries there is no legislation to prevent anyone setting up as an Independent Financial Advisor (IFA). Offshore insurance companies make cursory, far from thorough, checks on background before giving agencies but they cannot check qualifications because none are specified.

For an experienced, sometimes unscrupulous, salesperson it is easy to “spin” the negative features into looking like advantages. He/she is usually a skilled communicator, subtle in gaining the trust of his ‘prospects’.

Why do so many IFAs take advantage of the expatriate’s vulnerability in a new and unfamiliar personal financial situation?

The answer, of course, is money. The salesperson is paid a percentage of the client’s first year premiums equal to 3 times the years of the contract. On top of that there is normally a 40% over-ride.

Actual figures depend on the amount being invested and the contract term but where an expatriate is saving $1,000 per month:

If the plan is for 25 years the salesperson’s commission with over-ride = $12,600

If the plan is for 5 years the salesperson’s commission with over-ride   = $ 5,040

For no extra work, simply by extending the savings term from 10 years to 25 years the Salesperson/IFA/Consultant receives an immediate extra payment of $7,560. No wonder the consultant often pushes hard for the longer term often using falsehoods to achieve it.

With very few exceptions the financial consultant is self-employed. He/she receives no salary. In practice, the IFA works not for the insurance company, not for his brokerage but as a self-employed consultant retained to look after the client’s best interests.
Unbelievable as it may seem, the IFA does not have to wait for premiums to be paid in order to receive his commission. The insurance company calculates the commission that would arise gradually month by month from regular premiums over the term of the plan, then pays it all, the entire amount in USD, GBP, EUR, or YEN to the IFA just as soon as the client’s very first monthly payment is made.

The average period for which payments are actually continued on these plans is a little over 7 years. When the expatriate stops payments the penalties will probably come as shock. Almost certainly he/she will be sorry he ever heard of the deal.

A complaint to the insurance company will get nowhere. ‘”Sorry”‘, they will say “you bought the plan through your Financial Advisor who works for you not for us. Take it up with that Advisor”.

Complaining to the IFA will also be futile. Even if he/she can be found, no laws have been broken and civil action in a foreign country is likely to be hugely expensive and pointless.

It is easy to say the victim should have read all the small print in the policy rules but deciphering all the meaning of that small print is often difficult. Easy too to say that he was foolish to contract for 10, 20, 25 years or other long term only to find he had to stop payments within 24 months and lost all or almost all of his contributions.

But the expatriate life is full of uncertainty. Right now thousands of expatriates are being forced to leave Dubai because of the global financial downturn. How many will also face job changes? How many will have now to find housing costs and school fees which often had been covered by their employers. How many will unexpectedly have to stop hefty contributions to contractual savings plans?

There are, of course, offshore insurance companies that, to their credit, refuse to market these types of high products. Likewise, there are Offshore Financial Advisers who possess the skill, knowledge and integrity to offer service of genuine benefit to their clients.

One might suppose that expatriates would be better advised to deal with advisers based where there is regulation of the financial services industry. But home based advisers are not subject to regulation on business conducted overseas. In addition, many home based advisers will lack sufficient breadth of experience and training to deal with the requirements

of an international clientele.

To sum up, all too often expatriates are financially exploited by being enticed into saving thru offshore contractual policies that are little better than a swindle, presented to them by ill trained but persuasive and unprincipled sales ‘consultants’ masquerading as professional practitioners.

How many expatriates might be at risk is uncertain but with an estimated 6 million Americans living and working overseas and other countries’ nationals probably amounting to a similar number, the total must be substantial.

Could anything be done about this abuse? Almost certainly it could. If the insurance companies simply abandoned contractual savings plans or at least did away with ‘indemnity commission’ the shady offshore advisors would almost certainly disappear because they would be deprived of the mechanism that gives instant high income for little effort. Perhaps they could then go back to used cars or double glazing.

Single Boomers Expatriates; Click Here:

Pure Adventure 

There has been a lot written and said about the baby boomer generation. Most of it about social security, health care issues and the like. One thing that has not been heard about much is single baby boomers. There is a segment of boomers that for one reason or the other has found themselves single at this later stage of their life.

People react to the age of 40 and above in different ways. Some long for the good ole days and would prefer to be back in their 30′s. Other people embrace the maturity and wisdom of their lives and are happier than ever.

Now there is a web site just for the single boomer that wants more and has the ability to go out and take a big bite out of life. A significant amount of single boomers find themselves at a crossroads where they could retire at an early age and/or start a new life abroad.

Retired really just means they stopped working and have the means to do so. They then have to decide what do next. This situation makes some singles very uncomfortable. For many, making big life decisions is much better if there are two heads involved.

A lot of single boomers have taken the step to live, invest or travel abroad. There are major migrations to Mexico, Panama, Costa Rica and South America, Europe, and Asia. Mainly they go for better weather, low cost of living or for just pure adventure. Some want to escape the rat race and reinvent themselves with a whole new set of friends.

Celia has created an exciting, new and different website called RetiringSingles.com.
Celia was over 40, single and was not happy with what she saw on the internet for people in her particular situation so she decided to do something about it.

Drawing on her experiences of travel and expat life RetiringSingles.com was born.

RetiringSingles.com is targeted specifically for the single retired person living or wanting to live abroad. It’s not as a dating site perse but is a different kind of website for retired or soon to be retired adventurous single boomers to converge and share thoughts and ideas about living, traveling and investing overseas.

A major convenience is that you don’t have to sort through thousands of profiles to find someone with similar age, interests and aspirations like yourself. A lot of single boomers are looking for romance and a partner and that is fine but RetiringSingles.com offers more. It’s a non pretentious, relaxed atmosphere to meet people of similar circumstances.

The great thing about RetiringSingles.com is that you can sign up, post your profile and get going for FREE. You can upload articles, announce events, place classifieds, submit videos and upload photos. In your personal profile you have plenty of room to post lots of photos and tell other members a bit about yourself.

Qrops Vs. Sipps ? Which One Would Be Beneficial For You?

When it comes to transferring pension to an overseas country then people often get confused about which scheme to choose and which plan would be beneficial. People often get trapped in the confusion that among QROPS and SIPPS which one would be utmost advantageous, but not anymore! This article will help you to make the decision in the easiest of manner.

Before we get into the discussion of QROPS and SIPPS, let’s clarify three points – do you possess the necessary UK pension rights? If you are not a UK citizen then do you live permanently in an overseas country? If you are a UK citizen, do you intend to take retirement outside the UK or live permanently overseas?

If your answer any of the aforementioned questions as ‘yes’ then you should go for QROPS. Well, let’s discuss more elaborately that why QROPS is much better than SIPPS.

Options of investments: QROPS has a large number of flexibilities for investing fund in different commodities, currencies and markets. On the other hand, SIPP is just limited to those people available under the UK pension rules.

Income Tax: Fund in QROPS is paid in gross, on the other side SIPPS’s benefits paid net of tax.

LTA: QROPS doesn’t provide Lifetime Allowance advantage, but on the other side the SIPPS provides this advantage.

Inheritance tax: Qualifying Recognised Overseas Pension Scheme has no restriction regarding inheritance tax. An annuity dies with the holder. Here one thing must be mentioned that a joint annuity can be bought with a reduced return that expires on the second death.

Fluctuation of currency exchange: QROPS can be invested and paid out in a number of currencies, including US Dollar, Euro and Sterling. This facility will facilitate the overseas members a lot.

Protection from Inflammation: You should keep in mind that as an offshore investment your retirement fund is not at all associated with economic policies and economic inflammation country.

Growth of fund: In this regard, QROPS is beneficial as well. This scheme of UK pension can live in one tax jurisdiction that allows a low tax on find growth while you are in another low income tax.

So, now you must have understood which one would be mostly beneficial for you – QROPS or SIPPS. Before you move on to a particular scheme you should consult with an experienced consultant which will help you to make the right decision in this regard.

Buying Almeria Property For Investment

Investing in Spain, especially Almeria, is an excellent choice for overseas property investors. Thanks to the rapid appreciation in Spanish property prices,the demand for Almeria property in particular among Britons continues to grow at a fast rate. However, before buying Spanish property for investment, one should consider several key factors to determine the best strategy for investing in Spain and use the services of an experienced and reliable Spanish real estate agent for sound property investment advice.

According to an article last year in “The Times”, which quoted a study by “The Economist”, over 600,000 Britons have chosen to make property investments in Spain. However, it is not too hard to see why investing in Spain is so popular with the British.

For one, the returns on investment in Spanish property have been simply spectacular, to put it mildly! With property prices in some of the most popular destinations for overseas property investments rising almost in the 15-20% range annually, many of these investors have been rewarded for their enterprise in investing in Spain with exceptional returns.

Even amidst fears that this kind of appreciation is unsustainable, most overseas property analysts still project at least an average of 5-10% annual growth in Spanish property prices, a higher return than several other investment options.

Another reason that lures Britons to invest in Spain is their ongoing love affair with the country. The year-round sunshine; peaceful, easy-going life; extremely affordable cost of living; sumptuous food and above all, a certain exotic character, have all appealed to investors who want to combine business with pleasure.

The excellent and inexpensive air connections to most destinations in Spain are certainly an important factor: many Britons find it cheaper and faster to travel to Spain than come to London!

Couple that with luxurious Spanish property set in the backdrop of more than 1000 miles of the magnificent Mediterranean coastline at a fraction of the price you would pay in the UK and you can see that investing in property in Spain is a way forward for many British people.

While investing in Spain is certainly lucrative, it would be wise to consider various aspects of buying Spanish property for investment. A thorough in-depth analysis with an experienced Spanish real estate agent and overseas property consultant, who can understand specific investment objectives and requirements, is the key to making a sound investment.

You should seriously evaluate the following aspects before investing in Spain: It is very important to be sure about what you want from your overseas property. For some, it may be the lure of a holiday home; for others, it may be the prospect of having an inexpensive retirement home; and for many others, it may be a purely commercial investment.

“Buying to let” is a big trend – Britons buy property in Spain and rent it out to generate continuous rental income. Understanding your true motives for buying property will be an important factor in determining the most appropriate investment in Spanish property.

Where to buy property in Spain? “Location” is probably the single most important factor in any property investment. However, choosing the ideal location to invest in Spain can be challenging due to the numerous exciting options available – be it in Costa Blanca, Costa Almeria or Costa Calida.

Should you invest in an extremely popular destination that is nearing saturation or should you rather choose a relatively untapped but potential high-growth area?

For example, investing in property in the Costa Almeria may be a better option than investing in the Costa Del Sol, in terms of budget and property prices. Or, if you are buying property for retirement purposes, you may be able to get cheaper options on the outskirts of the popular tourist haunts or commercial centres, whereas if you are buying property to let, you will have to consider investing in a completely different area.

An experienced real estate agent can help you weigh up all these factors and help you choose the best location in which to invest.

Which estate agent? If you get this decision right, your success with investing in Spain is virtually guaranteed. Think of your overseas property consultant or real estate agent as your personal investment portfolio manager with whom you trust your hard-earned money.

What kind of Spanish property do they have in their portfolio? What is their track record and experience in helping people buy Spanish property for investment? What is their reputation both locally in Spain and in the UK? All important factors to consider when looking for a new home in Spain.

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