As many as 3 million baby boomers in the U.S. plan to retire abroad, according to trade publication the Travel Market Report. With relocation, however, come other complications, such as navigating currency markets.
Hidden foreign-exchange fees are the No. 1 culprit in dwindling your hard-earned retirement savings in another country. Exposure to the volatile currency markets on a daily basis can add up quickly in the form of unwanted fees.
The first such fee is what's known as a transfer fee, which can cost $15 to $100 per transfer of money to the foreign location of your choice. If there are regular transfers on a monthly basis, those fees will rapidly add up.
But the biggest expense factor is the exchange rate itself, said Michael Ward, CEO of currency exchange service USForex.
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According to Ward, currency specialists offer additional tools to structure and protect nest eggs against currency exposure. "We see significant savings we can pass on to retirees, compared to the financial institutions many are dealing with," he said.
Once retirees have checked transfer fees and exchange rates off their fix-it lists, they can start thinking about immersing themselves not only in their new surroundings and the local culture but also the financial markets in their new country as well.
The dream to retire abroad can become reality—if done right.