Having made the fateful decision to enjoy retirement in a more hospitable country compared to yours, you must now choose which is most suitable to your tastes and needs. Let's see what are the most important criteria to evaluate and how to use them.
Paraphrasing an old adage, we can say that nothing is more subjective than objective criteria. Someone considers crucial the cuisine and for this reason he would never shift from Sardinia to Trentino and some people are allergic to smog and could never go from rural environment to urban one.
There is no solution that will satisfy everyone, but then for what the "objective criteria" are useful? They serve to avoid that we can casually underestimate a factor that, for most people, is important. We must then add to them the factors that impact on our personal quality of life.
In the following we will assume that the choice of the country is within the European Community. If not, we should consider other factors, such as the time and cost to obtain a visa, short-term or permanent, and possible constraints: for example in some countries is much more difficult, if not impossible, to buy the house for a foreign citizen .
Among the factors that we will deepen there are two economic ones, like the fiscal policy and the cost of living, and three social and environmental ones, namely healthcare, safety and climate.
The first important fact is whether the country of destination has signed a treaty to avoid double taxation with your country. This is to prevent that our pension is taxed twice, by country of origin and that of our residence.
On the Department of Finance website we can find the official list and the individual treaties, which should be read carefully, and among others there are Bulgaria, Poland, Portugal, Romania, Slovenia, Spain (and therefore Canaries).
Under certain conditions, if we live outside of Italy for more than half of the year, we are considered tax resident abroad and we pay taxes only in the country of residence (except regional and municipal surtaxes that must still be paid in Italy). An important exception concerns pensioners in the public sector (the former Inpdap), which in many cases must continue to pay taxes in Italy even if they live abroad.
This clause is particularly interesting if the new country has lower taxes, such as a "flat tax" of 10% such as Bulgaria (6% for some retirees), or if it has specially created a favorable legislation for pensioners, as is the case in Portugal where for ten years they are exempted from taxes.
In addition to income tax, we must check how much the indirect taxes, such as VAT, weights and if there are other taxes, such as on home and car.
The foreign tax residence is in most cases advantageous, but there are some cases particulates to be evaluated carefully.
If we pay taxes abroad, we lose the right to certain non-contributory benefits, such as social benefits that the state provides to the elderly with a very low income and such as the allowances provided for disabled people.
Our heirs may have to undergo a double inheritance tax and, if we own a residential property in Italy, we can not make use of the personal income and IMU tax deduction for the first home. For the consequences on healthcare refer to the specific chapter.
Please note: it is a delicate matter, and given that the Italian tax laws are constantly changing and are not always very easy to understand, you should ALWAYS be informed on the latest provisions in official sites, such as INPS, MEF and Italian Revenue Agency.
Cost of living
Cost of living is a deceptively simple element to be evaluated so it is likely to be taken lightly in one direction or another.
Sometimes we hear that in some exotic country you can live with a euro per day; maybe it's true, if you are glad to eat doubtful food, cooked in the street without any rule of hygiene. Or, on the contrary, we find that a rental home costs twice that in Italy, but perhaps we are comparing the center of Las Palmas in August with a town in Aspromonte in November.
We have to use cautiously national averages, even if they come from authoritative bodies: they serve to take macro-economic decisions but can not be applied uncritically to all the particular situations.
As we learned in elementary school, we have to compare apples with apples and pears with pears, so first we establish the conditions within which to make a comparison and then we do not limit ourselves to the final figure, but we try to understand in detail how it was built and by whom. We identify which are, among food, shelter, clothing, transportation, personal care and entertainment, the goods and services most important to us and we increase their weight in the calculation of the final result. Let's be clear on the accommodation that we want: in a big city or in the countryside? Sea or inland?
Given this, we can use an Internet service dedicated to the comparison of the cost of living. Two services widely used are Expatistan and Numbeo, but you can easily found other.
As an example, we asked to compare Sofia to Milan and we found that Sofia is 51% cheaper than Milan. How reliable is this estimate? As seen in the figure, they were used 14,223 price entered by 1,361 different people and the last update of a price is 4 hours before. Okay, it is quite reliable.
If we ask the esteem of a small village in the province and we find less than 100 prices, or less than 10 people, we would do some additional checking choosing two or three nearby towns and checking that the estimates do not differ too much between them.
Completed this level of analysis, we try to go a step further in-depth.
Expatistan breaks down such 51% in the categories we listed before; for example, it says that housing costs 69% less while the transport cost (only) 28% less. If we think that the cost of accommodation for us will weigh more than the transport sector, then our economy will be higher than 51% (precisely between 51% and 69%); otherwise our economy will be a little less than 51% (between 28% and 51%).
Finally, if we click on the buttons with the "+" on the left of the categories, we have the full details of the charges: an apartment of 85 m2 furnished in a standard area normally costs € 285, 76% less than in Milan, while its consumption of heating, gas, electricity for two people in a month costs € 82, 36% less than in Milan.
Doing some test, we can build a fairly clear and reliable picture. It is worth repeating that this data are only preliminary, and nothing can replace our direct experience.
Among all the selection criteria, health is more delicate because on one hand greatly impacts on quality of life, on the other is hard to quantify.
Let's start with the information of official bodies highly respected in the scientific community, reminding us that we can never get the right answer if the question is wrong from the beginning.
We do not need to know what the state of healthcare is for the mean population, but what interests us is the health standard to which we can access in our situation (for once) of pensioners with more privileged than the average income. We will return to this point.
We start from the Foreign Ministry website Safe travel that has a section devoted to "Health situation". The Foreign Ministry puts Portugal, Spain and Slovenia in the group of countries with generally good health services.
In Poland "the local health facilities are acceptable and good turns out to be the preparation of the medical staff", while in Bulgaria "Health care appears, on the whole, still below than the Italian although registering an adequate medical staff professionalism and nursing". Less good is the situation in Romania, where the Foreign Ministry recommends some specific hospitals and says: "The private structures, used mainly by foreigners, are broadly efficient".
What choices do we have, with particular reference to the second group of countries?
We can choose or, in some cases, be required to maintain the tax residence (ie the payment of taxes) and health coverage in Italy. We can ask our ASL the European Health Insurance Card, which gives the right to health care in any Member State of the European Union under the same conditions of the patients of the country and must be renewed annually. In this way we use the Card for emergencies and in the case of particularly important actions we can go back to Italy. The main drawback is due to the logistical and bureaucratic complication.
A second option takes into account the lower cost of living and the fact that private health care is at a much more advanced level than the public: for example, it is actually developing dental tourism as it is already happening for years in the neighboring Croatia and there are many cases in which we can make use of medical specialists at the price of an Italian ticket.
We can invest a portion of what we save in taxes in private health insurance at a cost not too high, between 70€ and 200€ per month, that allows us to deal with most unfavorable eventualities, as the hospital care and related drugs, surgery, transplants, eye surgery eyes with the laser, rehabilitation and more, in private facilities of a good standard. It is true that in this way, to have a health care at Italian level or higher, we lose the advantage on taxes, but it remains the one linked to the significantly lower cost of life.
Always taking as source the website viaggiaresicuri.it, the security status compared with the Italian one does not raise particular concerns, although no country is immune to risks.
As regards petty crime and criminality, we must follow the same rules of caution that would follow in Italy. Do not flaunt precious jewels, do not leave valuables in your car, do not face long open road in luxury cars and during the night, are ordinary common sense attitudes. There are no statistics or specific surveys for expatriate pensioners, but many interviews to TV and newspapers show a favorable perception of security, particularly in the case of the Canary Islands which are described as extremely safe. The Foreign Ministry noted that these countries share with the rest of Europe the risk of being exposed to international terrorism.
The impressions are useful, but it is important to have a more objective measurement on the amount of crimes divided by country and by type. Let us examine the data collected in 2012 by Eurostat, the European statistical office, and UNODC, the United Nations Office on Drugs and Crime, and processed by the magazine "L'Espresso" in an article of the year 2014: "Europe seen with the eyes of the crime". As always when we are in presence of statistics, let's use very carefully: a greater number of reported crimes may indicate greater delinquency but also greater investigative capacity and repressive police or a greater propensity to complaints by the population.
Given this premise, we see that Italy is in 12th place, with 1,158 crimes per 100,000 inhabitants. More specifically, in 10 years they have increased by 34% theft in dwelling (406 offenses) and +27% violent crimes (248 offenses). This sad list says that Italy is higher than Spain (900 offenses), Portugal (853 offenses) and especially Bulgaria (433), Slovenia (410), Poland (337) and Romania (151).
From the standpoint of physical security, the seismic risk can be assessed starting from the map drawn by SHARE, an international project funded by the European Community.
The map shows that the south-east region of Europe is at greater risk of earthquakes. Not taking into consideration the geographical area of maximum risk between Greece and Turkey, the countries to watch out are Italy, Slovenia and Romania, as correctly pointed out by viaggiaresicuri.it site.
In these same countries it is good to pay attention, especially during the winter, to climate and hydrological factors related to rain, fog and snow.
Many other factors can affect the safety and each country has its own peculiarities, so we suggest to read carefully the points highlighted by the site. Just for example, we find that in Portugal "the guidance, especially in large urban centers, requires a lot of attention because of the strict observance of road signs (also horizontal)".
The climate is a very important factor of acclimatization; it would be more correct to speak of microclimate, because what most interests us is the climate of the city where we will live.
Broadly speaking we can say that there are three groups.
The first group, with Poland and Romania, has a continental climate and colder weather than northern Italy. In Bucharest, the temperature (min / max) goes from (-6°/2°) in January to (16°/29°) in July, with rainfall not too abundant and widely distributed in the year. Slightly milder the coast of the Black Sea in Constanta, where the temperature is 2°-3 ° higher in respect of Bucharest and especially incorporate many less rainfall; the sea temperature allows bathing in July and August.
The second group, including Slovenia and Bulgaria, has a climate comparable with the north of Italy that in some areas becomes more temperate and similar to that of Venice and Rimini. As an example we take Sofia, passing from temperatures (-5°/2°) in January to (14°/26°) in July and August; rainfall is not abundant. More mild and dry the Black Sea coast, called Sunny Beach, with Varna passing from (-1°/6°) in January to (18°/27°) in August; you can bathe in July and August, with a water temperature of 24°.
The third group consists of Portugal and the Canary Islands. Portugal has a climate similar to that of southern Italy but with a higher frequency of rains in the fall and winter. As a whole it is very pleasant: Lisbon passes from (8°/15°) in January to (19°/28°) in August, with rainfall of 710 mm/year in 79 days. The Algarve has a Mediterranean climate, with a nice temperature range (9°/15°) in winter and (20°/28°) in summer, little rain and plenty of sunshine; the ocean water is not hot though (21° in August).
Finally, the Canaries! Mild weather and temperate all year round, never too hot, never too cold: in Las Palmas temperature is between (15°/21°) in winter to (21°/27°) in summer. Ideal for those seeking the eternal spring. Of course, even in this climatic heaven there may be some inconvenience, as when the Saharan winds blow bringing the temperature even up to 40°, but these are quite rare events that do not disturb the attractiveness of the islands.
An interesting website to explore is Climates and travel, from which we took a lot of information of this section.
Great, we considered the 5 factors to choose our ideal destination, analyzing, discerning, judging. We have built our own ranking, taking into account the weight thathas any single factor for us. Did we finish? Can we leave?
Well, no. The 5 factors help us to identify our best candidates among countries and cities, but now we must confirm our choice by digging deeper. The criteria become more dependent on personal taste: if we are very technological we will evaluate the technological infrastructure, the availability of Internet and cable television. If we are interested in the peace of a small farm in the countryside, we will assess the availability of drinking water, reliable electricity, roads sufficiently cured. If we are interested in a healthy life style, we will consider the pollution, the availability of preservative-free food and pure water.
Do not forget the care element: have we a friend or a partner we can rely on for small needs like grocery shopping when we are sick, and for real emergencies, like a broken leg or an appendicitis?
If we are not really pioneers, we were preceded by other Italians who often tend to form real close-knit community. Search for them through Internet, identify key contacts, let's talk about their experience, let's speak of our needs. It 'a great way to learn from afar.
Finally, irreplaceable, we make a field test! If we have a friend on the spot, ask her if you can rent a room for a few months to see if we had considered all items or if we had left out one that for us it is the critical one. Are we able to adapt to the new food, culture and language? If the answer is yes, we are about to start our new life!