For many retirees, retiring in Florida is the ultimate American dream (and not just for US nationals). Palm trees, coastal breezes, a place to just kick back and relax – the Sunshine State appeals to many Brits, and other foreigners alike.
Those people not planning to work, including retirees, must be able to demonstrate substantial means. This can be an obstacle to many people’s dream of retiring to Florida.
Brits retiring in Florida will find that costs vary widely across state, with some things in Orlando, for instance, generally more expensive than Miami, and vice versa. But overall, the cost of living in Florida is generally higher than the US average.
There are several key topics relating to retirement finances that you should bear in mind when you are moving to Florida, for example, ascertaining what impact a move will have on the benefits and pensions that you are entitled to receive in the UK.
When thinking of retiring to Florida, it is imperative that you seek independent advice when it comes to your private pension and UK state pension. Ideally, you’ll do this before you arrive in Florida.
You must inform the Department for Work and Pensions that you are moving overseas and provide them with contact details.
The US currency is the dollar and it is necessary to take the sterling-dollar exchange rate into consideration, and what impact potential major fluctuations between the two currencies may have on your ability to survive in Florida. See section 7: Currency exchange in Florida for more details
As well as a private pension, you could potentially claim a UK state pension while in Florida. However, you should check with the International Pension Centre (IPC) to make sure that you are eligible. You can contact the IPC by email or phone, or fill in the international claim form.
If you have not yet reached your state pension age, you should be sent a claim form four months before you hit the milestone. Contact the IPC if you have not received a letter from them three months before you reach state pension age.
A ‘life certificate’ is a form the Department for Work and Pensions might send you to check you are still eligible for the state pension.
If you get sent a life certificate, you will need to get it signed by a witness – the list of people who can do this is the same list of people who can countersign a passport photo – and send it back, as instructed on the form. Your payments may be suspended if you do not comply.
Your state pension will rise annually, even if you live in Florida, as the United States has a social security agreement with the UK, and the agreement allows for the annual increase of the UK State Pension.
If you lived in a country, such as Australia, that did not have a social security agreement with the UK, you would not be entitled to the annual increases that normally happen. However, if you returned to live in the UK, your state pension would be increased to current levels.
Your state pension can be paid into a bank in Florida or a bank or building society in the UK. But you cannot choose to have it paid in to one country for part of the year, and a different country for the rest of the year.
You can use an account in your name, a joint account, or someone else’s account – if you have their permission and keep to the terms and conditions of the account.
The United Stated does not currently use IBAN numbers, as is the case some other countries. Instead, you will require your SWIFT code (international bank code) to receive payments from the UK to Florida.
You can choose to be paid every four or 13 weeks and will be paid in local currency – the amount of money you get may change slightly due to exchange rates (we’d suggest speaking to a currency expert – see section 7: Currency exchange in Florida for more details).
You may have to pay UK tax on your state pension over a certain amount. This will depend on your taxable income and whether you’re classed as a UK resident or non-UK resident for tax purposes.
Non-UK residents don’t pay UK tax on their state pension but may pay tax in the USA. You don’t have to pay tax in both countries because there is a double taxation agreement between the two nations.
If you are planning to move to Florida, you must really set a budget aside in order to invest in your own health insurance to benefit from Florida’s advanced national health system, as and when required. All treatments in American hospitals and clinics are based on a pay-as-you-go system, which could leave you having to pay thousands of dollars/pounds if you fail to take out insurance. Compare private health plans using US News & World Report’s health insurance ratings for Florida.
You also need to be aware of emergency procedures; who to call in an emergency and which hospitals that will be the most suitable for your needs in the event of an emergency. Florida’s emergency phone number is 911, as is the case across North America. An emergency is any situation that requires immediate assistance from the police, fire department or ambulance.