More American retirees are boosting the value of their nest egg by living abroad, where health care, real estate, and cost of living can be cheaper. Chris Taylor of Reuters discusses this trend in terms of arbitrage:
“You can exploit price differences by earning money in some countries and spending it in others. You can, for example, make money in the United States by collecting Social Security, pension or annuity payments. You can pick up fatter dividends by investing in mutual funds that buy foreign stocks, and boost interest earnings by investing in foreign bond funds. Then you could crank up the purchasing power of all those income sources by living abroad for at least part of the year.”
To read more, including a comment by Olivia S. Mitchell from Wharton’s Pension Research Council, please click here.