Many people dream about a retirement in which they spend part of their time living in the United States and part of their time somewhere else. Maybe you see yourself on a beach in Costa Rica or buying olive oil from your local producer in Tuscany.

A more exotic lifestyle comes at a price, though, and includes a whole host of potential administrative and tax headaches. Below are the most common considerations when deciding whether to spend part of your retirement abroad.

Should I own or rent homes in both places?

We always recommend that you rent first in your new locale to try it out. It’s good to give a new place some time before putting down roots. Plus, property ownership, while a desirable option for many people, comes with a myriad of financial and administrative challenges, not least of which is exposing yourself to taxation in a second jurisdiction. And this taxation may not be like the taxation in your home country.

Will I have to pay taxes in both places?

It’s entirely possible you’ll pay tax twice, depending on your situation. The good news is that most countries have tax treaties with each other to avoid or mitigate double taxation—so it doesn’t happen often. American taxpayers cannot escape the IRS regardless of where they reside, and property owners must always pay taxes in the jurisdiction where the property is located. Taxes are often an afterthought when deciding to spend part of the year abroad, and many clients come to us because they got tripped up over some details on international taxation and need more clarity on what to do to avoid tax issues and create a more efficient financial life. Learning a new tax system is hard, so we advise that you be as informed as possible and plan ahead!

How does health care coverage and health insurance work while living in more than one country?

Health care is a big concern for most retirees. While accessible, high-quality health care is available in many parts of the world, public or private insurance from your place of residence normally only covers you in emergencies abroad. If you envision a life of wintering in Bali and summering on the Puget Sound, then you will need public or private insurance for each location. You can often qualify for public insurance through your primary residence (and Medicare Part A as a U.S. citizen living abroad), but you may need to supplement it with private insurance. If your dream is to be a nomad with no fixed residence, health insurance and costs need to be researched carefully. Health coverage in the United States is complicated and expensive and is generally not included in other international medical insurance plans.

Am I eligible for other government retirement benefits?

Speaking of public insurance, after a long time feathering your nest to create this cross-border retirement, you should still take advantage of all the government-funded benefits that you have paid into all your working years. Fortunately, your main retirement benefits can be linked from working in different countries, and you can have your benefits paid into accounts abroad. The challenge is that it is very complicated if you do have a cross-border work history and/or are changing your residence to live primarily abroad. It can be difficult to get a straight answer, or a correct one, as these situations are complicated and unusual. It pays to do your research well in advance, checking the information not twice but three times, and to seek guidance from an expert in cross-border issues.

How will different currencies impact my situation?

Currency exchange rate fluctuations are notoriously difficult to predict. Unless you have the wherewithal to invest in currency hedges, the main advice is to either try to create an income stream aligned with your expenses in that currency—through side work or rental income—or to always keep at least six months’ worth of expenses in the appropriate currency so that you are less vulnerable to currency swings. Or do both.

What if I or my partner passes away suddenly while living abroad?

Estate planning, like real estate, abides by the cardinal rule of location, location, location. Estate laws usually follow the concept of domicile (principal home for legal purposes)—both for persons and for property—and you or it may be considered domiciled without your knowledge. Estate laws between countries can differ tremendously, and there is no such thing as a true international will. It is complicated, and you will likely need specialized help if you have assets to pass on. This is an area that most people overlook, to their detriment. Unforeseen consequences can negatively impact your loved ones. Forewarned is forearmed!

Are you planning for a jet-set retirement? Or are you already spending part of the year abroad? If so, Cerity Partners can help you navigate the complex world of living in more than one place, so that you’re able to preserve your wealth and enjoy the finer things in your golden years.

Please read important disclosures here.