Retiring Abroad: What to Know Before You Go
More Americans are considering retiring abroad. According to a 2024 Monmouth survey, 17% of Americans ages 55 and older want to move out of the country, up from 4% in 1974.
Living abroad can often bring a better quality of life, access to affordable health care and a slower pace. However, moving overseas isn’t something you should do on a whim. Here’s everything you need to know about retiring internationally, including the pros and cons and the best countries to retire to.
Why More Americans Are Retiring Abroad
A little over 700,000 Social Security beneficiaries live in foreign countries, according to December 2023 data from the Social Security Administration. And that number may only go up.
Many retirees move abroad because they can’t live comfortably on a fixed retirement income in the U.S., where many cities are experiencing a cost-of-living crisis. With Social Security payments averaging around $1,900 per month, it often makes more sense for retirees to live in other countries where their money could go further.
“Many of our customers share with us that they are able to reduce their cost of living by 30-50% when moving to Mexico, while also reporting that their overall quality of life has improved,” said Mariana Lange, Founder at Mexico Relocation Guide. “They can now afford some luxuries they couldn’t before, like weekly house cleaning and a full-time gardener.”
It isn’t always just about money, though. Some retirees may move abroad because they’re drawn to warmer weather, a slower pace or better access to health care.
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Pros and Cons of Retiring Abroad
Though there’s a lot to love about retiring in another country, it isn’t for everyone. Here are some pros and cons to consider before booking your one-way ticket.
Pros:
- Lower day-to-day costs in many countries
- Access to quality health care for a fraction of U.S. prices
- New travel opportunities and cultural experiences
- A slower and often less stressful lifestyle
Cons:
- Harder to see family and friends regularly
- Language barriers and cultural differences
- Complicated financial planning (especially with taxes and banking)
- Risk of scams or misinformation when moving abroad
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Top Countries for U.S. Retirees (and Why)
These countries have become popular with Americans retiring abroad because they offer a good balance of affordability, safety, health care access and nice weather.
Portugal
Portugal has a warm climate, coastal towns and a low cost of living. English is spoken in larger cities like Lisbon and Porto, so you won’t have to worry about communication issues. Plus, once you’ve lived in Portugal for five years under a visa like the D7, you can apply for permanent residency, which doesn’t require you to prove investment or income.
Mexico
Mexico is only a few hours by flight from the U.S. So if you don’t want to live too far away from your family, this country is worth considering. The cost of living is much lower than in the U.S., and health care is accessible too. Around 1.6 million U.S. citizens live in Mexico, many of them retirees, according to the U.S. Department of State.
Costa Rica
Costa Rica is another country close to the U.S. that’s known for its biodiverse wildlife, lush rainforests, and stunning beaches. It offers a “pensionado” visa program that allows retirees with a steady income (like Social Security) to qualify for residency.
Spain
Spain consistently ranks as one of the best countries for retirees because it offers a high quality of life, great public transportation, and access to public and private health care. Cities like Valencia and Alicante are especially popular with retirees because of their mild weather and walkable communities.
Thailand
Thailand is known for its affordable street food, beautiful beaches and welcoming locals. It’s also one of the most budget-friendly places to retire.
The most common visa option is the Non-Immigrant O (Retirement) visa, which requires you to be at least 50 years old and meet specific financial requirements, like having a deposit of 800,000 THB ($24,500) or a monthly income of 65,000 THB ($1,900).
What It Costs to Retire Internationally
Here’s a rough snapshot of the monthly cost of living abroad for retirees in the above-mentioned countries:
- Mexico: $1,500 to $3,500
- Portugal: $1,500 to $2,200
- Costa Rica: $2,000 to $3,000
- Spain: $2,000 to $3,000
- Thailand: $1,500 to $2,500
Of course, your actual costs will depend on your lifestyle, housing choices and location within each country.
Health Care Considerations When Living Abroad
One of the biggest factors you’ll need to consider when deciding where to retire is the local health care system. Medicare doesn’t cover treatment outside the U.S.
Some retirees buy local private health insurance, which is usually more affordable than U.S. coverage. Others pay for international insurance plans that provide care across multiple countries. Either way, it’s a good idea to look into local hospital reputations, out-of-pocket costs for prescriptions and how emergency care is handled.
Jason Hull, owner of J & J Cash Home Buyers, said he and his wife relied on travel insurance to cover most of their medical costs after retiring abroad. “But since I’m on the VA health care system and my wife has a network of providers, we come home to see family over the holidays and get regular checkups and major procedures, like colonoscopies, done in the U.S.,” Hull said.
Talk with a financial advisor or insurance expert to figure out what makes the most sense for you.
Legal, Visa and Tax Requirements to Know
Most countries require some form of visa for long-term stays. Many offer retirement-specific visas that ask for proof of income, background checks and medical clearance. Some need to be renewed yearly, while others let you apply for permanent residency after you’ve lived there for some time (like Portugal).
“Depending on the country, the pathway to residency can be very different, so it’s essential that you know what will be required of you in order to be fully legally compliant,” said Ben Michael, attorney at Michael & Associates.
The IRS will still expect you to file a U.S. tax return each year. “Even if you’re not earning income in the States, or you qualify for certain exclusions like the Foreign Earned Income Exclusion or the Foreign Tax Credit, you’re still expected to report your income,” said Carson Mclean, founder and lead wealth advisor at Altruist Wealth Management. “You might also owe taxes in your new country, depending on local laws and any tax treaties in place.”
Talk to a financial advisor or international tax expert if you have any questions.
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Final Tips for Retiring Abroad
If you’re thinking about retiring abroad, give yourself time to research, plan and test the waters. And, if possible, live in that country for a few months before making any final decisions.
Once you’ve settled on a location, Mclean suggests keeping some financial ties to the states, like a domestic bank account and credit card. “It makes it easier to manage Social Security and any U.S.-based bills or subscriptions. It also helps maintain your credit and smooths the process if you return to the States.”
Local expat communities (through Facebook groups, Reddit forums or in-person meetups) can also be helpful if you have questions about housing, health care, safety or culture.
Jamela Adam is a personal finance writer covering topics such as savings, investing, mortgages, student loans and more. Her work has appeared in Forbes Advisor, Chime, U.S. News & World Report, RateGenius and GOBankingRates, among other publications.
