Here at AgingOptions we’re always on the lookout for articles that describe a retirement problem that’s a bit out of the ordinary. For that reason we were intrigued to discover this new article on the Money magazine website that asked a question to which we hadn’t given much thought: what happens to Americans who decide to retire overseas, only to find they want to move back home?

Not Much Advice for Boomerang Retirees

This sounds like a simple question, but as the Money article points out, things can get complicated for retirees who change their minds about living the good life in another country. “While there’s plenty of guidance available for wannabe expats on everything from picking the right destination to ensuring that you don’t mess up your taxes, there’s scant advice available for ‘boomerang’ retirees who decide to move back home after a few years or after a decade or two,” says the article. That’s why, even if moving back to the U.S. seems unlikely, “The best time to prepare for a possible return is before you leave in the first place.”

It’s hard to get an accurate gauge of the number of Americans retiring in other countries. The best estimate, says the Money article, is 680,000 – the number of Social Security checks being mailed to foreign addresses. The article spotlighted one such couple, the Johnsons, from Phoenix who decided to retire to Puerto Vallarta, Mexico, in 2012. The couple rented out their Arizona house, loaded up their two vehicles, and headed south to a rental home in the Mexico sunshine, fully intending to start a new life among the ex-pats. “It was absolutely wonderful,” Mr. Johnson said of their new lifestyle. Nevertheless, after a surprisingly brief sojourn, they had moved back home.

Planning for Retirement was Incomplete

“Less than two and a half years after making their move to Mexico,” says the Money article, “[the Johnsons] were back in the United States, dividing their time between Phoenix and Stockton, California, where Johnson’s mother-in-law, in her 90s, needed their help.” Now, just a few years later, there are new grandkids. “It has changed Johnson’s idea of retirement,” says the article: the couple had “planned for a lot of stuff,” but had not considered the need to be close to an aging parent and the pull of a growing family.

The Money article predicts that a growing group of retirees will be facing the same decision in the coming years, and they need to plan ahead. “The reality is that the kind of lifestyle that is right for you in your 60s or 70s may no longer be what you want or need in your 80s or 90s,” says financial planner David Kuenzi, who specializes in working with expatriate Americans. As Money writes, “He believes that of those who move overseas in retirement, we can expect to see ‘a surprising number’ reconsider as they grapple with health problems or decide that they want to be closer to friends or family in the final decade or so of their life.” But moving back home without some preparation can be costly and disruptive.

Make Plans to Return – Even Before You Move

As Kuenzi advises, “The key message that I hope all of the people who are rushing off to Mexico and other destinations would learn is that life has a lot of surprises in store, and whatever you think today, your plans may change. So part of planning when you leave should involve at least the possibility that you might return.”

Here are a few of the points on which the Money article touches. We hope those considering retiring overseas will consider these and other important points before grabbing their passport.

• Don’t be surprised by Medicare. “Medicare late enrollment penalties are one potential minefield for returnees,” says the Money article.  Fail to sign up for Medicare Part B on time and you’ll face a steep 10 percent premium hike for every year you should have enrolled – a big problem if you move home without having enrolled. For that reason, “Many financial advisors recommend that you sign up and maintain that coverage, just in case.”
• Don’t forget Uncle Sam. Most retirees moving overseas should know that they still have to file an annual return with the IRS, declaring all earned income including Social Security, investments, and any wages you earn in your new home. (Current regulations exclude the first $104,100 of income from U.S. taxes.) Check out any state income taxes you might be liable for as well: depending on how long you’re away, some states may require you to pay back taxes. “California and some other [states] may treat you as if you never left if you come back within two years, and could charge you state income taxes for the years that you were gone,” says the article.
• Don’t sever your ties with the home front. It’s wise, experts say, not to sell your American home right away and to rent instead of buying in your new host country. “It can be much more costly and expensive to sell that house you bought overseas than you expect,” says Money, “with special taxes and fees attached to the transaction. If you rent for the first few years, you avoid a big financial penalty from picking the wrong retirement location.” Another recommendation: keep your “financial home” – your primary bank – here in the U.S. It will provide greater security and stability plus an easier transition if you do decide to return.

Good Advice, Wherever You Retire

Are you planning to retire overseas? If so, you need some good advice and some careful planning before you make the move. Of course, we would also add that it doesn’t matter where you plan to retire: the sooner you get a fully-developed retirement plan in place, the better. That’s why we urge you to investigate the service we call LifePlanning. A LifePlan is a unique and comprehensive type of retirement plan in which all aspects of your retirement living – financial security, legal affairs, housing choices, medical coverage and family communication – fit together like pieces of a puzzle. We invite you to learn just how powerful LifePlanning can be for you and those you love. Invest just a few hours and attend one of our free LifePlanning Seminars, scheduled in locations throughout the area. For dates, times, locations and online registration, click this link, or contact us during the week. Let us be your guide as you chart the course for the retirement future you’ve dreamed of. We’ll see you soon!

(originally reported at https://time.com/money)