1. Fail to take a conservative investment approach
When the market is up, people with a moderate-risk portfolio often voice disappointment that they’re only getting a 7% or 8% rate of return. Maybe they have a friend who tells them he earned 18% last year, or somebody at the neighborhood barbecue bragged about getting 14%. Averages are just thataverages. You could have a best year with a 45% rate of return and be thrilled. But if that same portfolio, because of how it’s built, has a 35% loss in its worst year, it could be devastating. Especially if that worst year is early in your retirement.

Consult your financial advisor to develop a plan that protects your capital while ensuring that the portfolio keeps pace with the effects of inflation.
2. Ignoring taxes
Expat Retirees often underestimate how the lack of a tax-efficient plan can affect what they pay. Most have had a pretty straightforward tax return, with income coming directly from an employer.

Expats need to recognize that new tax strategies are needed in retirement, including poorly planned withdrawals, capital gains tax harvesting and tax efficient investment income are all considerations that can aid a financial plan. US Expats have reporting issues to consider with both the IRS and the US Treasury Department including FBAR, PFICS and Form 8938 Statement of Specified Foreign Asset Reporting are all considerations
Canadian expats have their own tax issues including foreign withholding taxes that without careful planning can erode your capital. Work with your qualified financial and tax advisor that is familiar with cross border tax to develop a strategy that is right for you.
3. You Spend the Way You Used To Spend
4. Not planning for long-term care or increased health costs.

According to a survey the national median cost of a semi-private room in a nursing home in 2016 was $6,844 per month. In 2036, it is expected to increase to $12,361. Your financial adviser can explain options that could help you prepare now – and the sooner you decide what you want, the less it’s likely to cost.
A 2021 survey by Nationwide Retirement Institute found a little more than half of retirees are very or somewhat concerned about not having enough money to cover unplanned medical expenses in retirement, two-thirds are concerned about health-care costs becoming too burdensome, and 50% are only somewhat, or not at all, confident in their plan to pay for health-care costs beyond what Medicare covers.
These results aren’t unexpected, given health-care cost trends.
Consider this: The average couple will need $295,000 in today’s dollars for medical expenses in retirement, excluding long-term care.
What’s more, it’s estimated that 70% of people over 65 will require extended care at some point in their lives. And 1-in-5 people over 65 will need long-term care for more than five years. Because of statistics like these, recognizing the potential need for long-term care is another important issue to consider in terms of asset erosion.
One option for retirees is a long-term-care insurance policy to help pay for the costs associated with long term care services. It may also provide more options for your care and relieve loved ones from full-time caregiver responsibilities. It is important that a financial plan covers both expected and unexpected healthcare costs accordingly.
5. Not having a clear Expats Estate Plan
To develop an effective estate plan, expatriates must carefully consider the unique circumstances of living in another country. Here are a few tips:
Prepare and Appoint a Power of Attorney-who can
- Pay your bills, such as your homeowner’s insurance or registration for your vehicle
- Handle bank transactions
- Sell larger assets like your home or car
- Deal with creditors
- Apply for loans
- Complete tax returns and pay taxes and Manage investments


Make Health Care Directives
The laws that regulate health care differ in every country, so to make sure you get the medical care you want, make health care directives in your home state and in your new country. In your health care directive, you can name an agent to make medical decisions on your behalf and you can also describe the kind of medical care that you want (or don’t want) if you can’t speak for yourself. You can usually get health care directives in a local medical facility, but if you can’t find one, contact a local attorney to draft these documents for you.
Wherever you can, name your agent as your emergency contact and put that person’s contact information in places where it would be found in an emergency: in your purse or wallet, on an emergency contact card, in your day planner, in your cellphone, and in other documents you carry with you or in your vehicle. If you have a primary health care provider, give that doctor the name and contact information for your emergency contact and a copy of your health care directive.

Prepay Burial and Funeral Expenses

Create a Will Fit for an Expat
Estate planning is often more complicated for expats who may own property in more than one country.
The kind of will you need may depend on where your property is located. If you own property only in the United States, you can use a will designed for use in the United States. If you own property only in your new country, you need a will that is valid in that country. However, if you own property in more than one country, you might consider more sophisticated options like an international will or multiple wills. In that case, you will likely need the assistance of one or more attorneys.
International Will
An international will is designed to be used in multiple countries. Only countries and legal jurisdictions that signed the Washington Convention consider international wills legally valid.
These include:
- Bosnia-Herzegovina
- Canada
- France
- Iran
- Laos
- Italy
- Libya
- Portugal
- Russian Federation
- United Kingdom
- United States (however, for the will to be valid, the specific state where it is probated must have signed the Washington Convention)
Some estate planning lawyers in the United States are familiar with these wills, so you might be able to have a local attorney prepare this type of will without having to learn about the laws of your new country or dealing with language barriers.
Multi-Jurisdiction WillA multi-jurisdiction will covers property in several different jurisdictions. This type of will must be carefully drafted so that the wording doesn’t cause problems in either country, so get help from an attorney who has experience drafting these kinds of wills for your countries. Sometimes an attorney in one country may work together with an attorney in another country to make sure the will properly addresses the laws and property in both countries.
Primary Will + Situs Will
A situs will works together with your primary will. Your primary will is based on the laws of the country where you live and it covers the property that you own there. Your situs will covers the property you own in other countries or jurisdictions. This can be a useful strategy in case the country where some of your property is located doesn’t recognize your primary will. Additionally, some countries will only allow someone to be named an executor if they are a resident of that country, so you can name a local executor for your situs will if the executor of your primary will lives somewhere else. A situs will must comply with the requirements of that specific jurisdiction, so it’s important to have an attorney familiar with the laws of that country draft the will.

Get Advice on Tax Issues
You may have strong feelings about where you would like to have your funeral and where you want to be buried. You may decide that your new country is your new home, or you might decide to return stateside.
Consider making these arrangements during your lifetime, rather than delegating the task to someone who might be in another country. You can either make arrangements directly with the service providers or purchase an insurance policy for this specific purpose. Share this information with the executor of your will, who will likely carry out your final wishes after death.


Consider a Trust
Putting your property in a living trust may help minimize estate planning complications because property that passes through a trust does not have to go through probate. The probate process is often complicated, time-consuming, and expensive – even for people who don’t have property in multiple countries.
You can also use a living trust to provide clear instructions on what should happen to your property after you die or become incapacitated while you’re living abroad. Further, using a trust may also help you avoid some of the drawbacks of confronting the laws in your current country. For example, some countries have forced heirship laws that require you to split your estate by percentages between certain family members. If you trust owns your property (instead of you), you may be able to escape these laws.
Trust laws vary by country, and every trust document will be based on the laws of a specific country. So for property you own in the United States, use a trust based on the laws of the state where that property is located. Talk to an attorney in your new country to create a valid trust there, or get help from an experienced international attorney to make an international trust that addresses property in more than one foreign jurisdiction.
By: Warren Ferguson