# Will I happily retire to Venice, Florence, or Perugia?



## zaphod

Hi. I'm finally retiring within the next year and am trying to figure out where I will most happily live. I am single, have frequently visited Italy on vacations over the years, and have loved the experience. However, I understand there's a world of difference between visiting and making a life there. I read a bit of Italian (really transferring my ability to speak/read Spanish) but speak almost none. (I'm willing to learn.) I will have a modest retirement income and a tiny bit of savings. I need to live near art museums and around an interesting culture. I'm educated, open to new experiences, friendly, but a bit diffident about meeting new people. 
My questions include: Are you happy where you live in Italy? Do you buy or do you rent your lodgings? What were your greatest difficulties? Best tips for adjusting and living? Would you do it again? 
Thanks


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## accbgb

You do not say whether you have Italian/EU citizenship.

Without it, you will require an Elective Residency visa, the minimum requirements for which are in the neighborhood of €30,000 - €35,000 annual passive income (social security, pensions, interest income, etc) and/or a very significant investment portfolio.

Have you got this aspect covered?


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## zaphod

accbgb said:


> You do not say whether you have Italian/EU citizenship.
> 
> Without it, you will require an Elective Residency visa, the minimum requirements for which are in the neighborhood of €30,000 - €35,000 annual passive income (social security, pensions, interest income, etc) and/or a very significant investment portfolio.
> 
> Have you got this aspect covered?


Sorry, I should have said: I am American, so do not have Italian or EU citizenship. Yes, it's a bit close, but I think I will be able to meet the financial requirements.
Thanks for the focused feedback.


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## BBCWatcher

zaphod said:


> Yes, it's a bit close, but I think I will be able to meet the financial requirements.


Try not to make it close if your goal is to retire in Italy. Work longer, save more, spend less, etc. The figures described are minimums, and Italian consulates have the discretion to require more.


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## richardbkk

You need to open up an Italian bank when you get there. You should convert most of your savings to EUR, so that fluctuations won't affect your day to day shopping. You also need to transfer your pension overseas into EUR as well if you have a private or company pension with a reputable company like QROPS Specialists.


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## rsetzer99

You might benefit from taking your automatic 3 month visa stay and spend one month in three different places. This will give you an idea of how you feel about day to day life in each. I would also, even after deciding upon a specific place, initially rent. Again, this would give you the cushion necessary to completely learn about buying a property. In addition, that year spent renting will allow you to sufficiently acclimate yourself to living in your new country.

If you are retired, US Social Security will deposit your monthly benefits directly into an Italian bank. You will need sufficient access to cash as Italy has not turned into a credit card culture. Not that its not common to pay with CC, but its not like the US where you can pretty much never use cash.


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## NickZ

I agree with much of this. I'd add go off season. If you're single with no Italian support system I'd suggest December. It can be the worst month. Weather is iffy. Most Italians are either with friends and family or flying away from them -) January the weather is worse but you'll have more people out and about.

If you can manage and enjoy the worst month of the year the rest will be easy.

Other then that. No reason to buy. I was in Perugia three weeks ago. Glancing at the ads in realtors windows small studios started at about €250 a month including condo fees. Okay tiny studios. But even family sized apartments weren't much over €400. Renting won't tie up your capital and it'll let you change your mind.

Your other choices can be much more expensive. You'd be better looking at the provincial towns outside either city


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## NickZ

And I disagree with much of this. Converting everything in one lump will by definition give you the worst possible rate. Better to leg into things. Converting in stages. If you've got a monthly pension coming in I'd only convert an emergency fund to cover unexpected issues.

Also budget for a much worse exchange rate then currently. The thing will swing around. Plan for the worst hope for the best


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## accbgb

NickZ said:


> And I disagree with much of this. Converting everything in one lump will by definition give you the worst possible rate. Better to leg into things. Converting in stages. If you've got a monthly pension coming in I'd only convert an emergency fund to cover unexpected issues.
> 
> Also budget for a much worse exchange rate then currently. The thing will swing around. Plan for the worst hope for the best


This one is kind of a tough call...

I don't expect the euro will ever go significantly lower against the dollar than it is currently: €1 = $1.09, but it could easily return to where it was a few years ago, about $1.47 in 2007.

So, converting the bulk of one's dollars to euros may not be a terribly bad idea and potentially very profitable (if the euro rises again) if one decided to return to the US and convert it all back to dollars.

Still, pretty risky. I might consider hedging my bets by thinking there is a xx% chance the euro will rise again in the future and a yy% chance it will fall; let's say 75% chance of rise and 25% chance of fall. So, maybe convert 75% of dollar assets into euros in the hope that you will come out maximally ahead regardless of which direction things actually move.

The best you can do is to make an educated guess and then hope for the best.


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## accbgb

Correction: the high euro vs. dollar was closer to $1.58 in the first half of 2008


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## NickZ

The life time low for the € is IIRC $0.80ish. The average over the years is 1.18ish.

But that's not the point. Any time you make one large single purchase you tend to get it wrong. Better to do it in stages. Each stage will be wrong but hopefully the average will be okay.

The other thing the OP could do in "normal" times would be to take any excess income and stick it into €uro bonds or other income generating investments. But yields are so low now this likely doesn't make sense.


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## BBCWatcher

The euro's all-time low against the U.S. dollar was $0.8225 in October, 2000. However, if you extrapolate the basket of currencies that formed the euro back even farther, the all-time post-Marshall Plan low was about $0.70.

Of course the euro could further weaken.

Euro currency options of various kinds are readily available from brokers in the United States, easily and inexpensively traded. That'd be one effective approach to mitigate currency risks.


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## zaphod

BBCWatcher said:


> Try not to make it close if your goal is to retire in Italy. Work longer, save more, spend less, etc. The figures described are minimums, and Italian consulates have the discretion to require more.


Yes: good advice.


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## zaphod

rsetzer99 said:


> You might benefit from taking your automatic 3 month visa stay and spend one month in three different places...


I had thought of doing something like this, but hadn't been quite so focused. I might spend a month in Florence, Perugia, and Venice



NickZ said:


> ...If you can manage and enjoy the worst month of the year the rest will be easy.
> 
> Other then that. No reason to buy. I was in Perugia three weeks ago. Glancing at the ads in realtors windows small studios started at about €250 a month including condo fees. Okay tiny studios. But even family sized apartments weren't much over €400. Renting won't tie up your capital and it'll let you change your mind.


Great advice about going during the worst month of the year.

Also, I had wondered about buying real estate. I am on my own, so I'd be very happy with a one-bedroom flat. preferably as close to the center of town as possible. In my fantasy, I roll out of bed each morning and head for, I dno't know, Piazza San Marco, say, for a cup of coffee before another day of touring.... Can I afford to live in or near city centers? Should I buy or rent? I intuit that the smart move might be to rent at first and keep an eye out for something I might like to buy.



NickZ said:


> And I disagree with much of this. Converting everything in one lump will by definition give you the worst possible rate. Better to leg into things. Converting in stages. If you've got a monthly pension coming in I'd only convert an emergency fund to cover unexpected issues.
> 
> Also budget for a much worse exchange rate then currently. The thing will swing around. Plan for the worst hope for the best


Also sounds like good advice. Any books or articles anyone can recommend on the subject of how to distribute my retirement funds while living abroad?


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## zaphod

So, first, thank you for all the terrific responses, especially re: exchange rates, saving requirements, and so on. 
I think I know most of what I would love about living in Italy. But what did you find - perhaps surprisingly - difficult either about transitioning to expat-hood or about just living there?


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## philat98

accbgb said:


> This one is kind of a tough call...
> 
> I don't expect the euro will ever go significantly lower against the dollar than it is currently: €1 = $1.09, but it could easily return to where it was a few years ago, about $1.47 in 2007.
> 
> So, converting the bulk of one's dollars to euros may not be a terribly bad idea and potentially very profitable (if the euro rises again) if one decided to return to the US and convert it all back to dollars.
> 
> Still, pretty risky. I might consider hedging my bets by thinking there is a xx% chance the euro will rise again in the future and a yy% chance it will fall; let's say 75% chance of rise and 25% chance of fall. So, maybe convert 75% of dollar assets into euros in the hope that you will come out maximally ahead regardless of which direction things actually move.
> 
> The best you can do is to make an educated guess and then hope for the best.


I like your idea because you reduce your Italian tax IVAFE by holding euros instead of dollars.

The thing that worries me is that Italy might place some restrictions on the movement of currency. In times gone by Italy had strong currency control.

Another scenario could be some sort of crisis like they had in Greece. Italy might go back to the lira with a corresponding devaluation.


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## BBCWatcher

philat98 said:


> I like your idea because you reduce your Italian tax IVAFE by holding euros instead of dollars.


No, the currency you hold has nothing whatsoever to do with IVAFE. Where you hold assets does.


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## aleixel

accbgb said:


> Correction: the high euro vs. dollar was closer to $1.58 in the first half of 2008


It is a good period now to transfer USD in EUR (1 EUR = 1.12 USD) :juggle:


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