Retiring In Austria: A Guide To Knowing The Basics

Austria is a popular retirement destination due to its high quality of life, low crime rate, excellent social security system, and strong economy. The country offers pristine lakes, majestic mountains, and an extensive network of bicycle paths and ski slopes. For retirees, there are several benefits, including affordable costs of living, accessible healthcare, and a good standard of living. However, before relocating, it is essential to research the pension system, health insurance, tax policies, and housing options. This paragraph introduces the topic of retiring in Austria, highlighting the country's advantages as a retirement destination and outlining the key considerations for prospective retirees.

Visa requirements

Austria does not have a specific retirement visa, but there are other options available for those who want to retire in the country. For example, retired citizens from a third country can obtain a residence title "settlement permit except gainful employment", which is a type of residence permit issued to financially independent individuals.

To be eligible for a settlement permit, you must meet the general and special requirements. Firstly, there must be an available place within the quota, as there is a limited number of settlement permits issued annually. Secondly, you must have a regular monthly income (foreign pension, income from assets, savings deposits, company shares, etc.) equivalent to the amount of the standard rates of the General Social Insurance Act (ASVG). Thirdly, you must have sufficient means of subsistence, i.e., a fixed and regular income to support yourself without claiming public social benefits. Lastly, you must have health insurance coverage that provides benefits in Austria and covers all risks.

Austria offers two health insurance options for expats: public and private health insurance. Public health insurance is compulsory for all residents, including foreigners, and covers the self-employed, pensioners, and unemployed. Patients might be required to pay for some treatments, but part of the costs will be reimbursed by the health insurance fund. Retired expats can also choose to register for private health insurance or opt for an international healthcare plan.

Cost of living

Austria is a highly-developed industrialised country with a strong, well-developed market economy and one of the highest standards of living in the world. It offers a high quality of life, a low crime rate, an excellent social security system, and an excellent healthcare system.

The cost of living in Austria is considered affordable and 28% cheaper than in the United States. A single person can expect to spend a monthly amount of around $900 for their necessities, excluding rent. The estimated monthly costs for a family of four are around $3,020. The minimum monthly income requirement for an individual retiree to live in Austria is $2,070.

Austria offers two types of pensions: contributory and non-contributory. For a pension in Austria, the minimum contribution is set at 15 years. Employers subtract 10.25% of the gross income as the employee's contribution and add 12.55% as the employer's contribution for contributory pensions. The government contributes to certain citizens for non-contributory pensions.

Austria offers two health insurance options for expats: public and private health insurance. Public health insurance is compulsory for all residents, including foreigners, and covers everyone who is working, physically disabled, studying, or retired. Patients might be required to pay for some treatments, but part of the costs will be reimbursed by the health insurance fund. Private health insurance is also available, and retired expats can choose between private and public insurance.

Housing options

Austria is a popular retirement destination due to its high quality of life, safety, excellent healthcare system, and resilient economy.

When it comes to housing options for retirees in Austria, there are a few things to consider. Firstly, it's important to research the cost of living and compare it to your budget. While Austria offers a high quality of life, it can be an expensive country to live in. The average single person can expect to spend around $900 per month on necessities, excluding rent.

• Rental Apartments: Due to rising interest rates and inflation, many families in cities like Vienna are opting for rental apartments instead of purchasing properties. This could be a good option for retirees, especially if you're looking for flexibility or are not ready to buy.
• Purchasing Property: If you're looking for a more permanent solution and have the financial means, purchasing a property in Austria can be a good investment. However, it's important to carefully research the market conditions and seek professional guidance, as the country is currently facing a challenging period in the real estate market.
• Retirement Communities: Consider exploring retirement communities or senior living facilities in Austria. These communities often offer a range of amenities and services tailored to retirees, such as healthcare services, social activities, and transportation options.
• Rural or Suburban Areas: If you're looking for a more tranquil and affordable lifestyle, consider exploring rural or suburban areas outside of major cities. Places like Graz offer beautiful landscapes, a rich culture, and an affordable cost of living.
• Dual-Country Retirement: If you're not ready to commit to a single country, consider splitting your time between Austria and another country. This can help stretch your retirement savings and give you the benefits of multiple locations.

Remember, before making any decisions, it's essential to do thorough research on the specific requirements, costs, and availability of housing options in Austria. Additionally, seek professional advice regarding visa requirements, retirement permits, and any applicable taxes.

Healthcare and insurance

Austria is known for its high-quality healthcare, which is accessible to all residents. The country offers two health insurance options for expats: public health insurance and private health insurance. Public health insurance is compulsory for all residents, including foreigners, and covers everyone who is working, physically disabled, studying, or retired. Even if you are retired, you must have health insurance coverage to obtain a settlement permit. Patients with public health insurance might be required to pay for some treatments, but part of the costs will be reimbursed by the health insurance fund. Private health insurance is also available, and retired expats can register with an Austrian company or cooperate with international healthcare providers. In Austria, dependent children are entitled to the same health benefits as their parents and can be included in the insurance for free.

Austria has a pay-as-you-go tax system, meaning your pension fund is not subject to tax on investment income earned on your or your employer's contributions. Instead, taxes are defined by how much you earn in a year. There is currently no inheritance tax in Austria, but there may be a transfer tax of 2-3.5% if you transfer property, depending on the relationship between you and your successor. Additionally, Austrian pensions are subject to Austrian income tax. However, due to the double taxation treaty between Austria and the United States, pensions are exempt from US federal income tax.

Austria offers two types of pensions: contributory and non-contributory. For a contributory pension, employers subtract 10.25% of an employee's gross income as their contribution and add 12.55% as the employer's contribution. For a non-contributory pension, the government contributes to certain citizens. To qualify for a pension, you must have contributed a minimum of 15 years of your income. The retirement age to receive a pension in Austria is 65 for men and 60 for women, with plans to gradually increase the standard retirement age for women over the next decade. However, early retirement is possible for those who have accrued many contributory years, although this results in a financial penalty. Conversely, those who work beyond the standard retirement age receive a bonus.

Austria has social security agreements with several countries, including the United States, Canada, Serbia, and Bosnia. These agreements are often linked to employment within Austria. Additionally, individuals who left Austria on political, religious, or racial grounds between March 4, 1933, and May 9, 1945, may be eligible for a nursing care allowance if they receive retirement benefits. To receive an Austrian state pension, you need at least 180 covered months, and there is an international agreement in place between Austria and the United States to facilitate retirement benefits for those who would otherwise be ineligible in either country.

Pensions and taxes

Austria offers two types of pensions: contributory and non-contributory. In the former, the employer subtracts 10.25% of the employee's gross income as their contribution and adds 12.55% as the employer's contribution. For the latter, the government contributes to certain citizens. To qualify for a pension, an individual must contribute a minimum of 15 years of their income. The retirement age in Austria is 65 years for men and 60 years for women, with plans to standardise this over the next decade. However, there is an option for early retirement, which will result in a financial penalty.

For UK citizens, the Qualifying Recognised Overseas Pension Scheme (QROPS) allows you to transfer your pension rights and choose how and where to invest your pension fund. For non-EU citizens, there is no such policy, but certain countries have social security agreements with Austria, so it is worth checking if your home country is one of them.

Austria runs a pay-as-you-go tax system, meaning your pension fund is not subject to tax on investment income earned on your or your employer's contributions. This is because taxes are defined by how much you earn in a year. Austria currently offers no inheritance tax for residents, but in the case of a property transfer, there can be a transfer tax of 2-3.5% depending on the relationship between you and your successor.

Austria does not have a specific retirement visa, but there are other options available. For example, the "settlement permit without gainful employment" allows financially independent individuals to stay in the country for a year. To be eligible, you must have a regular monthly income (foreign pension, income from assets, savings deposits, etc.) equivalent to the amount of the standard rates of the General Social Insurance Act (ASVG). You must also have sufficient means of subsistence, health insurance coverage, and meet the general requirements for granting a residence permit.

Frequently asked questions