"Living in some of the popular coastal areas can be expensive, property as well as living expenses, go inland and it’s a different story. We live in Llucmajor where the majority are Mallorquins. A coffee is still only 1.50! Go where the locals go and you can’t go wrong!" - Alexandra Thom-Heinrich in a Facebook Comment on this article
Ahhh, retirement! The culmination of all those years of hard work, long commutes, and dodging office politics. The light at the end of the tunnel. The reward. And you’ve FINALLY made it! But now what?
If the thought of living out your golden years in the same old town faced with dreary winters and even drearier neighbours makes you want to crawl under a rock, you’re not alone. 70,000 retirees from the UK currently live in Spain (compared to 62 - yes, that number is correct! - retirees from Spain living in the UK)... and you could become one of them.
You may be thinking that it’s a lovely dream and that it’s great for some people, but sadly, you hadn’t planned as well as you should have and now you don’t think you can afford to make a move.
If that fear is holding you back, it most likely needn’t be, and Affordable Mallorca is here to tell you why. So, are you ready? Read on and we will show you how to make retirement to Mallorca your new and improved reality!
If It’s Good Enough for the Royal Family… #
Not that Mallorca needs a hard sell, but we’re going to give you one anyway.
The island has been ranked in the Top 10 islands to retire to by several different publications for years. In 2019, Mallorca ranked #6 best island to retire to by Money Wise and #7 by Insider Monkey. In 2018, International Living ranked the island #2. Trip Advisor ranks it #2 in Europe and #6 in the world as far back as 2016. The list could go on (almost) forever if we included all the publications whose readers have awarded Mallorca the honour of having “the best” of something, such as the best beach or the best lifestyle.
There are shed loads of reasons why people rank the island so highly, many obvious, many maybe not so much. Of course, there is the weather. Three hundred days of sunshine is a big draw, as are cool but not too cold winters, and an abundance of hot summer days to while away at the island’s spectacular beaches or hiking in the stunning and impressive mountains. The variety of landscapes means there is something for everyone’s tastes.
The food here is amazing. The perfect triumvirate of fresh, economical, and tasty are a draw to the foodie in us all. But what would eating well be without friends to share it with? Mallorca’s large and vibrant expat community means meeting people with common backgrounds is easy and is a great way to have an entrée into the ways of the island, so eventually, you become part of not just the expat community, but also the community-at-large.
The island is safe. Crime is pretty much limited to petty theft and personal matters. Crimes of opportunity do occur, such as pickpocketing, but a little vigilance and common sense is all you need to avoid falling victim to those.
The health care system is ranked eighth best in the world according to The Healthcare Access and Quality Index and Bloomberg dubbed Spain the world’s healthiest country in 2019. Mallorca is a place suited to an active lifestyle, and many people choose to cycle, hike, swim and walk year-round.
Finally, island has been given the royal seal of approval. The Spanish Royal family have an official residence in Palma and spend most summers and holidays here. They can often be seen ambling around Palma or taking part in local sailing competitions (King Felipe is an enthusiastic sailor). Charming, no?
How to Make it Work #
Now that we’ve gotten you primed, let’s take a look at how to make it happen.
Even with the recent tanking of the pound, it is still relatively good value to live on Mallorca. The average retired couple in the UK has a weekly income of €631(575GBP/$700) according to statistics from the UK Department for Work and Pensions, i.e. 2524€ per month. According to research, the average monthly cost of living on Mallorca can be as low as €2250 (2050GBP/$2500) all in.
Mind, this doesn’t leave a lot left over for savings or travel, but when you live in a place as diverse and interesting as Mallorca, the option to explore in your own back yard is always there. Plus, people love to come here, so good luck getting lonely. There would be no shortage of guests, and no worry that the kids will find excuses not to visit!
If you have a house in your home country that you’d like to sell, then that sets you up even better. The proceeds can be rolled into a home here, and if you avoid Mallorca's pricey southwest, there are deals to be had in virtually every part of the island, particularly in the centre and east. This would also mean more money in your pocket, as the lion’s share of the estimated €2250 would normally go toward rent.
In the event that you are fortunate and have a pension, savings plan, retirement account or a primary residence valued at over €1 million, remember that Spain reintroduced the wealth tax (Patrimonio) in 2011 during the last financial crisis.
Spanish Wealth Tax is payable by both residents and non-residents (if they own property in Spain), although the rules are different. Residents pay wealth tax on their worldwide assets but have quite generous tax-free allowances, whereas non-residents are only liable on net assets within Spain but miss out on some of the allowances.
Our suggestion is that you consult with a reputable tax lawyer in Spain who can guide you through the process of determining how best to plan for your retirement here.
Now that you’ve got the facts, what’s stopping you? Sunny days and warm people await…right here on Mallorca!
“Retirement is not the end of the road. It is the beginning of the open highway” - Unknown
#mallorcapropertyforsale #costoflivingmallorca #rentinginmallorca #retiringinspain #livinginspainprosandcons
By Stephanie Horsman
30 August, 2019