Thursday, September 22, 2011

Retirement to Australia: Not for Everyone


As the baby boomers start to consider retirement, they are looking to destinations at home and abroad.  No longer are they content to stay in the same state where they lived working and raising children.  With more disposable income than generations before, many soon-to-be retirees are seeking a warm climate and a lower cost-of-living, mixed with a little adventure.  For many, Australia fits the bill, with its excellent bargains, top-notch health care and breathtaking scenery. 

It may seem far away, but with the internet today, a computer and a modem connects you to the rest of the world.  All of Australia's major cities are within an hour or two by plane. The infrastructure is sound, and the government is stable.  There are plenty of bank and loan services in Australia so you will never be lost in that department.  There is shopping, cable TV and plentiful recreation. You'll also find an abundance of space, lots of social clubs to join if you choose and “livability" not found in other places. The Australian people are warm and generous, and a nice perk is that they adore North Americans!  The Gold Coast in particular, located on the southeast coast of Queensland, attracts thousands of retirees as it offers warm temperatures and plenty to do and see.

Clean, fresh, green, not crowded and reminiscent of a time when things cost less, the pace of life was slower, and people seemed friendlier to one another. And for American English speakers it will much easier to learn speaking Australian English than any other foreign language!

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Climate

Australia is roughly the size of the continental United States and has a variety of climates, but it has no snow!  It is a coastal country, thanks to the dryness of much of its interior, with most of its population living within 20km of the coast between southern Queensland and Adelaide.  This vast continent boasts a sunny climate and its people have a healthy love of the outdoors.

In South Australia, Adelaide enjoys a Mediterranean climate with warm summers and cool winters.  In Mebourne, located in the state of Victoria, the climate is cool but without snow.  Temperatures range from 40 degrees to 55 degrees in the winter and from 70 degrees to 90 degrees in the summer.  In Sydney, located on the southeast end of the continent, the weather is humid but with a temperate climate.

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Cost of Living

In general, the cost-of-living in Australia is half of what it is in the U.S.  The American dollar today buys twice as much as it does in the States, and there are terrific opportunities for buying real estate and investing in the Australian stock market.  And even from Australia, trading on the New York Stock Exchange is made possible by the internet.

Housing to fit all budgets can be found here.  As with most countries, housing in the major cities is generally expensive (Sydney is the priciest city for real estate), but once you are outside the large urban areas, accommodations can be had at reasonable prices.  The cities which frequently appear as offering a low cost of living comparative to the quality of life on offer are Adelaide, Brisbane and Melbourne.

Most new homes are made of brick and built to the same standards as U.S. homes.  Currently, mortgage rates are about 5%.  And if you sell your home here, you will not pay any capital gains tax!

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Healthcare

Life expectancy in Australia is high and the health and social care facilities on offer are of a very good quality. However, retirees should always bear in mind the fact that they will not be entitled to any government or medical benefits during their retirement in Australia and will need to secure their own fully-comprehensive insurance policy from an Australian company.

Infrastructure

Australia has a highly developed and sophisticated infrastructure and the standard of communications, transportation and public services on offer here is on par to that available in other developed nations.

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Investor Retirement Visas to Australia

While the Cost of Living in Australia is reasonable for the retirees, getting there might not be so affordable for some baby boomers, who dreams about relocating to Australia for retirement.

The Investor Retirement Visa Program enables people over 55 years of age who are able to support themselves financially to spend some retirement years in Australia. The Investor Retirement visa provides you with the opportunity to work part-time and enjoy a relaxed and rewarding lifestyle in Australia.

To be eligible for an Investor Retirement visa, you must be over 55 years of age, be sponsored by an Australian State or Territory and have no dependent family members (other than your spouse). You must have sufficient assets to enable you to be financially self-sufficient in Australia, without relying on the public healthcare system or social security benefits. In fact, you must agree to take out comprehensive health insurance with an Australian company to cover any medical costs.

Who is eligible?

The Investor Retirement visa gives temporary residence in Australia. It requires sponsorship from a State or Territory government in Australia, in addition to an investment to be made in that sponsoring State or Territory government Treasury bond.
  • The primary applicant must be at least 55 years of age and there must be no other dependants except a spouse;
  • There must be sufficient assets to ensure self support in Australia;
  • Maintenance of private health insurance as acceptable to the Minister for the duration of their visa;
  • Limited work rights of no more than 20 hours a week; and
  • Initial and further stay period of 4 years.

Financial requirements

To ensure that people who apply for an Investor Retirement visa are fully self-supporting, the financial requirements are:
  • for the initial and all subsequent visa applications, payment of a second visa application charge of $8,700 per person per visa application to offset the possible cost of some applicants accessing aged care/nursing home services at a future time (not refundable, regardless of whether care is utilized during the life of the visa);
  • for the initial and all subsequent visa applications main applicant to be sponsored by a State/Territory Government with sponsorship being maintained for the entire period of the applicant's stay in Australia;
  • for the initial and all subsequent visa applications, main applicant to make a minimum designated investment (DI) (depending on whether they nominate a regional/low growth area or a non-regional/non-low growth area)in a State or Territory Treasury bond of:
    1. A$750,000 for the initial visa, if the main applicant has indicated to the State or Territory Government sponsor that they are going to live in a non-regional or non-low growth area; or
    2. A$500,000 for the initial visa, if the main applicant has indicated to the State or Territory Government sponsor that they are going to live in a regional or low growth area; or
    3. A$500,000 for a second or further visa, if the main applicant has indicated to the State or Territory Government sponsor that they are going to live in a non-regional or non-low growth area; or
    4. A$250,000 for a second or further visa, if the main applicant has indicated to the State or Territory Government sponsor that they are going to live in a regional or low growth area;

In addition to the DI, and for grant of the initial visa only, main applicant to provide evidence of assets that can be used to establish a lifestyle in Australia, with those assets allowed to be combined with those of the spouse, of a minimum of:
  • A$750,000 if the main applicant has indicated to the State or Territory Government sponsor that they are going to live in a non-regional or non-low growth area; or
  • A$500,000 if the main applicant has indicated to the State or Territory Government sponsor that they are going to live in a regional or low growth area;

For the initial and all subsequent visa applications:
The main applicant to provide evidence of an annual income stream, with that income stream allowed to be combined with income stream of their spouse, of a minimum of;
  • $65,000 if the main applicant has indicated to the State or Territory Government sponsor that they will live in a non-regional or non-low growth area; or
  • $50,000 if the main applicant has indicated to the State or Territory Government sponsor that they will live in a regional or low growth area.

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