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How To Retire Abroad To Spain With Financial Peace Of Mind

Retire Abroad To Spain

Anyone recently retired or approaching retirement is entering a new and exciting phase in life. While some worry retirement will be boring, many embrace the freedom it offers.  Spain certainly offers a beneficial lifestyle for retirees. But long-term financial security is crucial to help you enjoy your retirement years.  Retire abroad to Spain with financial peace of mind.

Written exclusively for Expat Network by Jason Swan of Holborn Assets

To achieve long term financial security in retirement, it is worth taking a good look at your finances and the way you hold your assets. Your situation is likely to be totally different in retirement from your working days in your country of origin so be prepared to make considerable adjustments. Here we cover off some of the major aspects you should consider.

Savings and Investments

You may have built up a successful portfolio of savings and investments over your working life, but your circumstances and objectives are likely to have been different then. With a regular salary coming in you could potentially afford to take more risk when considering investments and focus more on growing your portfolio.

Many retirees, however, are looking for income; whether it is receiving regular payments or taking ad hoc withdrawals. This means it is vitally important to protect the capital that generates your income, and this means focusing more on risk management within your portfolio.

You should aim to earn enough capital growth to keep pace with inflation over time to help maintain your spending power throughout retirement. We are now in a period of relatively high inflation compared to the last 15 years or so, and this is meaning the basic costs of living are rising.  It’s a fine balance, and the starting point is to obtain an objective assessment of how much risk you can afford to take to meet your objectives.

A good understanding of your aims, circumstances, needs and time horizon are key to ensuring your portfolio is suitable for you and regular reviews with a trusted adviser are strongly recommended. As always, a well-diversified portfolio of investments is crucial when managing risk.


All that free time in retirement costs money. You can help maximize your income through strategic tax planning.

Tax mitigation opportunities can be limited when paying tax on a salary, for example. But how you hold savings and investments can make a significant difference to your income in retirement.

You should note that tax planning in your country of origin, for example such as the UK, is unlikely to be effective in Spain. ISA’s and UK bank interest, for example, become fully taxable for Spanish residents. Once a resident in Spain, you gain access to investment opportunities that might provide much better tax efficiency alongside other advantages.

Locally compliant arrangements can combine your investment, tax, and estate planning  requirements together and can allow different investments to be held tax efficiently and simply – allowing you the peace of mind to enjoy your retirement.

Pension Plans

This is the time you get to benefit from those years of pension contributions. Instead of paying money each month, you can begin to withdraw funds and enjoy retirement.

There is no one-size-fits-all solution. Once you are a resident of Spain it may become less beneficial to leave existing pensions where they are.

For example, UK pension income is paid in sterling, so if your key spending is in euros, this immediately results in exchange rate risk. Non-EU pensions also remain subject to regulations in the country in which they are held, and holding them could result in unintended tax consequences.

Many residents of Spain/Portugal/France choose to transfer UK pensions to a Qualifying Regulated Overseas Pension Scheme (QROPS). Others reinvest funds into more tax-efficient arrangements for Spain.

As well as reducing taxation, other benefits are available. They may include a greater range of investment choices and more flexibility to choose how it is invested and in what currency to take income.

To protect your long-term financial security, make sure you research your pension options and fully understand the various implications. Professional, regulated advice is critical.

Estate Planning

None of us like to think about our departure from this world, but there is no denying that reaching retirement age does bring the inevitable closer to home.

The key message here is not to risk leaving it too late to construct an effective Estate Plan.

Many people wish to decide who they want to leave assets to, including the amounts and any timings. For example many individuals would like to leave a capital sum to Grandchildren – however they may prefer to limit access to Grandchildren who have yet to reach an age where they may be more financially responsible – such as 25, or even older. This is impossible to achieve without a sound estate plan in place. Wills and trusts can be some of the the most effective ways to achieve your objectives in the most tax-efficient way, taking both the Portuguese/Spanish/French and the rules of your country of origin into account.

Look for arrangements that provide tax-efficiency for you today as well as your heirs in future.

An integrated financial planning approach produces better results than just focusing on one element at a time. For example, the way you hold your investments and pensions can affect how much tax you and your heirs pay. Also it can affect how and when legacies are distributed.


While some try a DIY approach, cross-border tax, wealth management, pensions and estate planning is complex. It can be difficult to objectively assess your own situation.

For ultimate peace of mind, talk to a specialist adviser who will take time to understand your unique circumstances, needs and goals.  This is to help you secure a prosperous retirement in Spain.

The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this report constitutes a solicitation, recommendation, endorsement, or offer by HOLBORN or any third-party service provider to buy or sell any securities or other financial instruments in this or in in any other jurisdiction.

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