Emigrate as a pensioner

Enjoying a well-deserved retirement abroad

Many people fulfill long-awaited wishes in retirement and increasingly choose to spend their time abroad rather than in Germany. But this decision should be carefully considered. The number of German pension recipients spending their retirement abroad is rising steadily, and not without reason.

Although a switch to the so-called basic pension is currently taking place, the traditional pension is not enough for many people in Germany to enjoy their well-earned retirement. Increasingly higher living costs have an impact on the financial situation in old age. In addition, rising costs for medications, caregivers, and high rents and utility costs burden retirees and can make them want to leave the country. Many retirees yearn for a carefree lifestyle and this desire is understandable considering they have worked for decades.

One of the reasons why emigration as a pensioner is a topic for many is the political climate which can cause existential fears. Further fears are evoked by the vexed but currently present heating issue. The fear of having to freeze in winter in your own home was unthinkable for a German and is currently but really an issue and scares.

Another reason for the current trend to migrate out in retirement is the need to spend the twilight years in a different place. Meanwhile, one in five of the 60+ age group is inclined to spend the new phase of their lives abroad after they stop working. There are many reasons to leave home for at least part of the year and spend time in the place of your choice. A common reason is to spend the winter in a country with more pleasant climatic conditions, as many ailments of old age are particularly noticeable in the wet and cold weather of autumn and winter. On the Canary Islands or in Southeast Asia, the climate is more pleasant because of the consistently warm conditions. Retirees look forward to a year-round vacation feeling and a climate that can also positively impact health.

More life for the money

The financial side also plays an important role in the decision to retire abroad. Retirees want to enjoy their post-employment life and achieve the best possible quality of life with their pension. Retirement abroad is therefore often a question of money. In other countries, lower rents and ancillary costs, cheaper medicines, lower expenses for nursing staff and comparatively luxurious care in retirement homes sometimes beckon.

Against the background of the threat of old-age poverty in Germany, such savings are particularly attractive. The cost of living is significantly lower in some European and non-European countries, while the standard of living is correspondingly higher. After decades of gainful employment, this is an understandable motive for retirement.

Social contacts are important for retirees

If you have not yet established social contacts at your destination, you will have to build them first, which does not guarantee success. Participate as much as possible in events, go out to eat and show the population of your new home that you are not a tourist but stay longer. This makes it easier to make contacts and, as a rule, people outside Germany are much more open-minded and much friendlier. Try it, you will be surprised.

It is especially important for retirees to emigrate as a couple and consider what will happen if one of the partners dies. If making social contacts in the new home is difficult, this can lead to loneliness and isolation for single retirees.

Insurance cover - also important for you when emigrating as a pensioner

For pensioners who live in countries of the European Union and receive a pension from Germany, the insurance coverage remains in place. The same applies to countries with which Germany has concluded a social security agreement, such as Turkey or Tunisia.

However, if you emigrate to countries with which Germany does not have a social security agreement, such as Thailand or the USA and Canada, you will have to take care of your own health insurance abroad, as the protection of your German statutory health insurance expires here. This can be difficult, as many expatriate health insurance policies set maximum age limits, exclude chronic pre-existing conditions or only cover a maximum of five years.

It is therefore advisable to look for a solution that will provide you with permanent insurance coverage from the very beginning. There are insurance policies that cover chronic pre-existing conditions and offer unlimited protection worldwide, including the USA and Canada. However, if you do not want to rule out the possibility of returning to Germany in the future, we recommend that you switch your statutory health insurance to Anwartschaft as a precautionary measure to ensure that you can be readmitted.

However, it is important to note that even in other EU countries, insurance coverage is not always complete. In Spain, for example, German pensioners have to pay for dental visits themselves, while members of German health insurance in France have to pay a share of between ten and 30 percent of treatment costs.

We would like to point out here that in Germany the benefits, whether for dental or general medical treatment, have also declined sharply. Germany definitely can’t score any more points here.

The topic of taxes also affects you when emigrating as a pensioner

The topic of taxes can be confusing at first glance for retirees living abroad. The conditions and places where income taxes are payable depend on various factors. For retirees who live outside Germany for less than half the year, they remain fully taxable and can thus continue to take advantage of tax benefits such as the basic tax-free allowance and deductions.

Emigrants who live abroad for more than 183 days per year and reside within the EU can also retain tax benefits if more than 90 percent of their income comes from Germany. Rental income from real estate in Germany can also be included here. An application for “unlimited tax liability” must be filed annually to retain these benefits.

Whether pensioners have to pay taxes in Germany depends on their new place of residence and whether there is a double taxation agreement between it and Germany. The rules may vary from country to country, and an overview of the individual regulations can be found on the pages of the Federal Ministry of Finance.

Some states have discovered foreign retirees as a source of revenue and offer flat taxes to attract retirees from the West. When deciding to move abroad, all costs should be carefully calculated. It is also important to seek individual advice, as tax benefits may not last forever and the impact on retirement should be considered.

Here on our emigration portal we will go into the subject of taxes as precisely and as simply as possible for each country where we present you as a retiree domicile. Taxes are already complicated in working life and that doesn’t change as a retiree.

Legal for pensioners

The legal conditions for German seniors who wish to emigrate abroad as pensioners depend primarily on whether they wish to remain within or outside the borders of the European Union (EU). As a national of an EU member state, they have the fundamental right to live in another EU state. However, they must meet certain requirements, such as having comprehensive health insurance in the destination country and a sufficiently high income to be able to support themselves without financial assistance.

If the planned stay is longer-term, there are three different scenarios regarding residence rights and obligations:

  1. Permanent residence: If the stay is extended legally and without interruptions to a period of five years, those wishing to emigrate can acquire the right to stay in the country indefinitely. However, there are some exceptions that do not qualify as a break, such as temporary absences of less than six months per year. However, if the residence is transferred from the new country for more than two consecutive years, the right to permanent residence there expires.
  2. Temporary stay: If the stay is planned to be shorter than five years, those wishing to emigrate must follow the respective national regulations in order to extend the stay.
  3. Cross-border stay: If the stay changes between different EU countries, there are special regulations that must be observed.

In order to obtain a certificate of permanent residence, those wishing to emigrate must usually provide proof that they have been living legally in the country in question for five years. This may require various supporting documents such as a valid registration certificate, proof of residence and sufficient income. The authorities are obliged under EU law to issue a permanent residence card without charging higher fees than for the issuance of an identity card. The validity period of the card varies depending on the country, but no further formalities are required to renew it.

Do not rush, step by step

If you are a retiree considering emigrating abroad, there are some basic factors you should consider in advance. These factors include finances, culture shock, country specifics, time frame, retirement and insurance, and caregiving. It is advisable to contact German counseling centers in case of doubt.

It is important that your pension is sufficient for the cost of living in the destination country. Therefore, make a list of your monthly income and expenses in advance. Outside the EU, country-specific peculiarities in legal matters, reception conditions and medical care must be taken into account.

The time frame is another relevant factor that can be decisive for tax obligations. The pension will be transferred anywhere in principle, but possibly with restrictions. It is important to clarify all questions around the topic of insurance in order to ensure sufficient protection for all eventualities. The topic of nursing care and nursing care insurance in particular is becoming increasingly important in advanced age.

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