As the largest economy in Europe, with a central location, affordable health care, low crime rates and a vibrant U.S. ex-pat community, more and more Americans are choosing to retire in Germany. Before you pack up your bags, rent a place and begin life as a retiree in the German economy, here are some tips to make sure the reality of retirement is as relaxed as your vision of retirement.
Living in Germany Legally
All foreigners from outside the European Union who wish to stay in Germany for longer than 90 days will need a visa. If you are already working in Germany, you can start the process of obtaining a residency permit before you retire. If not, you should begin the application as soon as possible after you arrive. There are several possibilities depending on if you are married to a German or EU citizen; have a German or EU child; if you are looking to continue working; opening a business or if you just want to retire. Contact the U.S. Embassy for all of the requirements.
Once you are settled, you will need to report to the local registry office within seven to 14 days (depending on the region). When moving between cities within Germany, you must register your new address on arrival in the new city. When leaving Germany, you must de-register – not doing this means various contracts, etc. are enforceable, as you are technically still living in Germany. This applies not just to foreign nationals, but also to local German citizens. In Germany, this is called Abmeldung.
One requirement for obtaining residency in Germany is to provide proof of income. American citizens who are eligible to receive social security benefits can receive those payments while living overseas in accordance with Social Security Act laws. While retirement pay is usually enough, you’ll also want to be sure you have enough to enjoy the benefits of your new life abroad. Germany is not inexpensive, but the cost of living is reasonable. With food costs in the low to mid-range and accommodation, transportation, and leisure falling in the mid to high-range, it is important to determine your budget beforehand and allow for changes in the exchange rate over time.
Retirees transferring from the United States Army Europe system into the German economy cannot have a lien on any vehicle they intend to transfer out with them. Any vehicle loans must be paid off before the transfer can be completed.
It is recommended that you keep an American bank account, as it will allow you to maintain your financial activities and get you better savings and exchange rates. Service Credit Union offers refunds on ATM surcharges from other financial institutions and Visa International Service Assessment (ISA) fees on debit and credit cards (up to $20 monthly) as well as online International Bill Pay services both online and in-branch, EMV Debit and Credit Cards and the Europe V PAY card. You may also want to set up a German bank account for Euro-related financial matters and convenience. Do your research and shop around, you’ll want a bank that meets your needs, including offering services in English if necessary.
Keep in mind, Service Credit Union is prohibited from opening new membership accounts for retirees already living in Europe. If you want to use a Service Credit Union account when you retire in Germany, you will need to open it in a branch before you retire or open it online with a VALID address in the U.S.
Moving abroad does not exempt U.S. citizens from their U.S. tax obligations. While some retirees may not owe any income tax, Americans living overseas are still required to file an annual return with the IRS. Additionally, personal property and income earned while living in Germany may be considered taxable under the German tax system, even if the U.S. government already taxes it. There are more than 30 different types of taxes in Germany including a Value Added Sales Tax (VAT). Retirees and their beneficiaries may also be eligible to access AAFES Exchanges and Commissaries to purchase tax-free items as long as they have a valid German Customs certificate. In most cases, the best course of action is to keep good documentation and hire a tax consultant, or Steuerberater, to guide you through the complexities of the two tax systems and their interaction with one another.
Another requirement to achieving residency in Germany is proof of healthcare. Whether or not you qualify for German state insurance depends on a variety of factors and military medical care is often time-limited. Medicare does not provide coverage for hospital or medical costs outside the United States. Therefore, most ex-pat retirees find Tricare or private insurance plans to be the best option.
Germany has a reputation for having one of the best healthcare systems in the world. Most doctors speak some English, but if you want someone who is fluent, you should check with the U.S. embassy or consulate. Dental care is extremely expensive in Germany and it is typical for retirees to coordinate their dental visits with their visits to see friends and family in the U.S.
Adapting to German Life
Once you have determined that Germany is your ideal retirement destination, it’s time to get to work! Review the traffic laws and licensing requirements and make sure you have an informed plan when it comes to renewing your U.S. documents and voting in U.S. elections. Determine whether your trusts and will need updating to be legally enforceable in your new location. Most importantly, understand any contracts you sign.
Learn some German. Most major cities and tourist destinations have a large English as a second language population, but learning the language will make meeting people easier and reduce the stress of starting out in a new country.
Genießen (Enjoy)! Germany offers a quality of life that is ranked one of the best in the world and choosing to retire there is the first step on a grand adventure.