Retiring overseas self-funded: super, tax residency and the pension

The order of decisions for you

Being self-funded gives you more say over where you go and for how long. It also leaves the tax and super questions with you, and they’re best settled before you go. We explain the rules here; what to do with your super or investments is for a licensed financial adviser.

1. Decide what kind of time away you mean. It could be part of the year, a trial year, two bases or a move for good. The ATO’s residency tests look at the whole picture, so how long you’re away and what you keep here both count.
2. Get tax residency advice before you leave. Whether you stay an Australian resident for tax decides how your Australian income is taxed, and what happens if you sell your home. Our guide to tax residency when you retire overseas explains the ATO’s tests, and our guide to foreign resident tax rates has the numbers.
3. Ask how your super works from overseas. Your fund and a licensed financial adviser can explain what applies to you.
4. Check the house against the tax rules. If you sell while you’re a foreign resident, you generally lose the main residence exemption. If you rent the home out, the rent is income. Our guide to keeping, renting or selling the family home sets out both, and a registered tax agent can explain what applies to you.
5. Price health cover at your age. Medicare never pays for treatment overseas. Smartraveller says your age and health affect what a policy costs and the type you need, and that international health insurance can be costly. CHOICE found travel insurance premiums climb steeply from about 60.
6. Check the visa’s money test. Long-stay visas usually ask about income or savings, so have your figures ready in the currency they want.
7. Shortlist places with a clear income-based visa. These suit self-funded retirees:
   • The Algarve: Portugal’s immigration agency sets the money test at the Portuguese minimum wage, €920 a month in 2026 (about A$1,540 at the RBA’s 12-month average rate), plus 50% for a second adult.
   • Malaysia: MM2H’s Silver tier needs a US$150,000 deposit (about A$217,000) and gives a 5-year pass.
   • Spain: the Spanish consulate in Sydney says the non-lucrative visa needs means of 400% of Spain’s IPREM indicator. With the IPREM at €7,200 a year in 2026, that’s €28,800 a year for the main applicant (about A$48,350 at the RBA’s 12-month average rate).

A worked example

An example, not a real person.

Paul and Jenny are 66 and 64, retired and self-funded, and they own their home in Hobart. They want two bases: up to 90 days in the Algarve and two months in Penang each year, with the rest of the year at home.

	Months	A month for a couple (our estimate)	Cost
Algarve (up to 90 days)	3	about A$4,570	about A$13,710
Penang	2	about A$2,540	about A$5,080
Total away	5		about A$18,790
For comparison: ASFA “comfortable” in Australia for the same 5 months	5	about A$6,580	about A$32,900

How we worked out our estimate: Numbeo’s living costs for one person (without rent), plus a one-bedroom city-centre rent, plus 30% for eating out, local trips and extras. For a couple we multiply living costs by 1.8. We converted at the Reserve Bank of Australia’s average exchange rate for the 12 months to September 2026 (A$1 = 0.5957 euros, for example). Health insurance isn’t included. We use Numbeo’s Faro and Penang pages, both last updated 15 October 2026. ASFA’s figure is A$78,998 a year for homeowners aged 65 to 84 (June quarter 2026). Neither figure includes flights, or the cost of the Hobart house while they’re away.

What they noted for their professionals:

• Residency. They keep their home, come back every year and live here for seven months of it. They want a registered tax agent to confirm what that means for them.
• Super. Jenny is over 60 and retired, so she has reached her preservation age. How they draw on super is for their licensed financial adviser.
• Visas. Up to 90 days in the Algarve fits Schengen’s 90 days in any 180, and Penang gives 90 days on arrival.
• Later. Paul is close to 67. If their assets fall, a part pension could come into it, and they’d claim from Australia.

What to ask a professional

• Registered tax agent: “With our plan, would we stay Australian residents for tax?” “How would our income be taxed if we became foreign residents?” “What would happen to capital gains on our home if we sold while overseas?”
• Licensed financial adviser: “Does living overseas for part or all of the year change how we can use our super?” “Could we qualify for a part Age Pension later?”
• Insurance broker: “Which insurers cover two bases in different countries, and what happens at renewal after 70?”
• The country’s embassy or a licensed visa agent there: “What income or savings do we need to show, and in which currency?”

Book a free planning session on Zoom. Once we know your situation, we can tell you which of these people to start with.