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Brett Dvoretz

April 9, 2015

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Retiring Overseas? Transfer your Pension with an FX Firm to Save Money

Retiring abroad and living in some beautiful tropical paradise or a Mediterranean villa can be the ideal way to spend your golden years. Often the cost of living will be lower and your dollar will go further, ensuring you have the money to comfortably see you through your retirement. Before you take that long-awaited leap though, make sure you spend a bit of time getting your financials in order.

You’ll need to take into account your tax position and filing, moving your pension, transferring your daily spending money and more. Today we’ll focus on moving your pension.

 

The Best Way to Transfer Your Pension Overseas

Because of all the time involved in researching the best way to transfer pensions overseas, many people put it off until the last minute. Living on a fixed income during retirement though makes proper budgeting and a good money management policy doubly important and that includes ensuring your getting the best deal on transferring your money.

Using a bank for your pension disbursement is probably your worst option. The old school way of thinking was to contact your home bank or use their online service to initiate an international transfer, but the average person will lose around 8% of their money handling it this way. If your pension is $2,000 a month, the banks will be getting about $160 of that every time you make a transfer. That means you’ll be losing $1,920 a year to bank fees and poor exchange rates. That’s nearly a month’s pension!

A better method is to set up a regular international money transfer using a firm like World First or Xoom. The process is just as easy and secure as your bank, but the fees are much lower. Both of these companies offer free transfers and competitive exchange rates putting your total lose during transfer somewhere between 2% and 3% which is on par with the best market currency exchanges. By the end of the year, you would wind up with an extra $1,500+ in your pocket instead of the banks. That could be a month’s rent or your airfare flight back home to visit family and friends. We’ve also written easy to use guides explaining how to send money with Xoom and how to send money with World First.

 

Set Up Regular Transfers to Send Your Pension Overseas  

Making everything even more convenient is the regular money transfer options that World First and Xoom offer. Instead of wasting your time every month arranging a new transfer with your bank, you just set up an account with one of the previously mentioned services and elect for regular transfer schedule. This way, the money will be automatically debited from your home bank or pension account, converted into a foreign currency, and deposited into your foreign bank account on the date of your choice.

Using an international money transfer firm also gives you more flexibility in specifying the transfer amount and locking in favorable rates. You can choose to specify the transfer amount in USD so you know how much will be debited from your account every month, but you the amount you receive will fluctuate based on the current exchange rates. If you are more concerned with receiving a fixed amount, you can specify the amount to be transferred in the foreign currency of your choice which means the amount debited from your pension account will fluctuate.

To ensure you are always getting a good exchange rate on your transfers, you can set up forward contracts to lock in a fixed rate. Most of the international money transfer firms allow you to lock the rate for up to two years.

 

Sending Your Pension with an International Money Transfer Firm Quick Benefit Guide

  • Saves between 5% and 6% over bank rates
  • Time saving regular payment plans
  • No fees and competitive exchange rates
  • Ability to lock in favorable rates for up to 2 years
  • Added flexibility in specifying transfer amounts base on currency choice

 

 

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