I love to travel. And on each trip, I take, I always think about what it would be like to live in that location.
You see, I grew up in several states and attended five different elementary schools, so moving has never been a big deal to me. Consequently, relocating is frequently on my mind.
For instance, I just returned from an eight-day trip around the southern edge of Lake Superior—all the way from Duluth to the Canadian border—3,100 miles in total. And I loved it! I enjoyed all the cute small towns (and shops!), sampling local fare like the pasties in Houghton, Michigan, taking in numerous lighthouses and waterfalls, and meeting some very friendly people in the Upper Peninsula.
So, naturally, I thought about what it might be like to live there. That is, until I overheard a store owner comparing their winters with another customer from upstate New York. The owner mentioned that it was a fairly mild winter last year—they only received 131 inches of snow!
Well, I have to tell you, I didn’t need to think about relocating to the UP anymore (especially when I don’t even like the 5” to 10” of snow we get in our yearly Tennessee winters)!
Last year, while on a river cruise through France, Germany, and Switzerland, I was seeing myself in each of those locales—but especially in Paris. I’ve had the opportunity to visit there several times, and I absolutely love it! The language, the sites, the beautiful buildings, the fashion, and of course, the food!
I have a friend who lived there for a while, and she adored it. I know several other people who have lived overseas, in places like London, Japan, and Belgium, and they, too, have mostly good things to say about residing abroad.
The subject came to mind again, recently, when an acquaintance called to ask me for some financial advice, specifically about moving abroad—to Panama.
I have visited Panama but didn’t really know a lot about relocating there. So, that inquiry prompted me to research the ins and outs of an American moving abroad. I found out some interesting—and sometimes surprising—facts that I didn’t know and that I thought might be helpful to those of you who may be considering such a move.
Why Do Americans Want to Move Abroad?
That was the first question I asked my acquaintance. Her reply: 1) Her husband had spent some time there in the military and loved it, and 2) they are ready to retire, and they felt their money would go further in Panama than in the U.S.
Those were essentially the same answers I received when another friend mentioned that he would love to move to Costa Rica. He and his wife visited there and loved it! And while they have an extensive retirement portfolio, he still likes the idea of their dollars affording them a more luxurious lifestyle in Costa Rica. The biggest stumbling block is that his wife says no; she has a sister and other relatives that she doesn’t want to leave.
My research, however, showed that there were many additional reasons why U.S. citizens may want to live overseas, including:
Realization of a dream, maybe living in a country that is very close to others (such as in Europe) that you can use as a jumping-off place to see more of the world, or perhaps you’ve dreamed of skiing the Alps, climbing all the 14’er (14,000 ft.) mountains in the world, or living on an affordable beach.
Better climate, due to health issues or just because you want a colder/warmer environment.
New experiences, being close to worldwide points of interest or living a different lifestyle that you’ve only imagined.
Lower cost of living, freeing up funds from necessities to spending money on more fun adventures.
Affordable healthcare, available in more countries than you may think.
Retiree incentives, offered by several countries outside the U.S.
I was surprised to find that the U.S. government, apparently, doesn’t specifically track people emigrating from the U.S. But I was able to access a few studies, and the number of Americans living overseas ranges from 5.5 million (from AARO) to 9 million (as estimated by the State Department). And according to Forbes, there are 701,000 U.S. Social Security recipients living abroad, a number that has risen 20% over the past ten years. Furthermore, 17% of those 55 and older said “they’d like to move abroad and they’re the ones who are most able to do so, since many countries welcome those with enough money to live, without taking a local job.”
Their most popular destination appears to be Europe, with U.S.-to-Europe immigration rising by 28% in 2022 alone. France, Spain, Germany, the Netherlands, and Italy top the list, but as you’ll see when you read further, smaller countries such as Portugal are becoming attractive to U.S. retirees also.
I found many lists of the best places to retire overseas, from sources such as Forbes, International Living, Liveandinvestoverseas.com, Kiplinger, and U.S. News & World Report. I reviewed and parsed those lists into destinations that seem to be the most likely to attract U.S. retirees. These recommendations are mostly based on costs, amenities, health care, climate risk, language, crime, and whether they welcome U.S. retirees.
The 10 Best Places to Retire Abroad (In No Particular Order)
Let’s begin with Europe:
Portugal
I’m seeing Portugal on many lists of the best places to retire abroad. When you consider the features below, you’ll understand why:
Cost of living: Much lower than the U.S. average; Numbeo reports that consumer prices, including rent, are 74% higher in the U.S. than in Portugal.
Health care: Good and affordable; Portugal is ranked #12 according to the World Health Organization.
Taxes: A tax treaty between the U.S. and Portugal avoids double taxation.
Immigration: Relatively easy, especially if you are a retiree with income of $14,000 or more (per couple), or plan to invest $550,000 (can be in property). Applicants usually apply for a renewable D7 Residence Visa or the fast-track Portuguese Golden Visa.
Language: Portuguese, but there is a large English-speaking population.
Climate: Mild winters with little rain. Temperatures average about 75 °F (24 °C) in summer and 50 °F (10 °C) in winter.
Crime rate: Low. According to the Global Peace Index, Portugal continually ranks as the seventh safest country in the world. By the way, the U.S. ranks 132nd.
Politics: Stable.
Other items of interest: There is nonstop plane service to the U.S. About 7,000 Americans live there. And it’s estimated that you can retire comfortably to this country with income of about $3,000 per month. Additionally, Portugal is known for great food, abundant sunshine, attractive beaches, and excellent golfing opportunities.
Spain
History, culture, and food are all good reasons for relocating to Spain. But there are plenty of other reasons, including:
Cost of living: The cost of living in Spain is on average 46% to 123% lower than in the U.S.
Health care: Excellent and cheap. According to the WHO report, Spain’s health care system is ranked 7th overall, and it also has one of the highest rates of life expectancy. If you’re living and working legally in Spain, you’ll have access to state-funded Spanish healthcare. Private healthcare is also available.
Taxes: Spain doesn’t tax pensions of retired expat government workers, and a tax treaty between the U.S. and Spain eliminates many double taxation issues.
Immigration: Relatively easy. U.S. retirees can apply for a Non-Lucrative Residence, as long as you can show annual income of about $39,000 a year for a couple. After five years of residency, expatriates automatically are given permanent resident status and gain access to Spain’s public health care system. Expats can also apply for the Golden Visa program which fast-tracks residency for non-EU retirees who invest in Spanish real estate.
Language: Spanish primarily, so you would need to learn the language.
Climate: One of Europe’s sunniest regions, Spain has three main climate zones with the south and east coasts: Mediterranean, the vast central inland areas (a continental climate), and the north and northwest regions (oceanic). The summers are mild and the winters are cold in the north and vice-versa in the south.
Crime rate: Low, ranked 23rd in the Global Peace Index.
Politics: Stable
Other items of interest: Spain is known for its music, cuisine, viticulture, art, architecture and design, and festivals. The country is geographically diverse, with mountains (the second most mountainous country in Europe, after Switzerland), plateaus, rivers, beaches, and islands.
There are nonstop flights back to the U.S. And retirees can get by nicely with a monthly budget of $2,000 to $3,000.
Greece
Who hasn’t seen the movie Mama Mia and drooled at the scenery in Greece? But the environment isn’t the only attraction:
Cost of living: It’s 54% less expensive to live in Greece than in the U.S. The average cost of living for a single person in Greece is $1,146/month, compared to $2,433/month in the U.S. For a family, the average in Greece is $2,794/month vs $5,667/month to live in the U.S.
Health care: Reasonable and required for expats. Your proof of health care must be submitted with your visa application. Some expats may be eligible for the national health insurance organization, based on government care, but you must get a national insurance number, or AMKA, to participate. And most expats go with private health insurance. As you might expect, the hospitals in the metropolitan areas are rated higher than those in more rural areas.
Taxes: Taxes are high, but there is a long-standing tax treaty with the U.S. against double taxation.
Immigration: Most expat retirees apply for a renewable Financially Independent Person Visa, which requires a minimum annual income for a couple of $26,000.
Language: At least some knowledge of the Greek language is expected.
Climate: Greece has a Mediterranean climate with hot, dry summers and mild, rainy winters.
Crime rate: Low, ranked 57th.
Politics: The country has achieved democratic stability, after a decade of economic recession and uncertainty, but politics is very competitive.
Other items of interest: The flights to the U.S. are long (about 9 ½ hours from Athens to New York). Additionally, the country is known for healthy cuisine, a rich cultural heritage, 2,000 sunny isles, mountains covering 80% of the landscape, and amazing archaeological ruins. Housing prices are estimated to be 75% lower than in the U.S.
Now, let’s move on to Central and South America:
Mexico
Mexico is home to thousands of expats, due to its closeness to the U.S. and its low cost of living. Plus, these other attributes:
Cost of living: The cost of living in Mexico is 45.7% lower than in the U.S. Most folks can live well on an income of $600 to $2,000 a month. You can buy a new condo for around $200,000, even in major tourist venues—lower if you get away from the hotspots.
Health care: Adequate and affordable. The Instituto Mexicano de Seguro Social (IMSS) provides health care services for both Mexican citizens and expats legally residing in the country. People enrolled in the IMSS program receive full coverage, including prescriptions. Additionally, you can always come back to the U.S. for treatment and use your Medicare plan.
Taxes: Mexican income taxes are comparable to the U.S., and a tax treaty between the U.S. and Mexico prevents double taxation.
Immigration: Relatively easy. You can apply for a Mexican Permanent Resident Visa and then a Mexican Permanent Resident Card.
Language: English is spoken, but not widely in smaller towns and rural areas, so a knowledge of Spanish would be helpful.
Climate: Warm, subject to some of the same hurricanes we get in the U.S.
Crime rate: Serious crime rate is higher, but stats say that foreigners are not usually the victims. Theft is rampant, especially around the U.S.-Mexico border.
Politics: Stable
Other items of interest: Close proximity to the U.S.; fantastic natural beauty with geography that includes deserts, rolling hills, volcanoes, national parks, beach towns, and metropolis cities; ability to live a luxurious lifestyle at low cost; thriving wine industry and multiple expat communities.
Costa Rica
This country is on the top of many of the lists I found. Here’s why:
Cost of living: Consumer prices in the U.S. are 56.2% higher than in Costa Rica when rent is excluded, and 62.5% higher when rent is included.
Health care: Good and inexpensive in larger cities, and you may be able to take advantage of the public health system. There are two health care systems in Costa Rica. The public one, La Caja, is available to legal residents without copays, pre-existing exclusions, or age disqualifications. However, once you are a resident, you must pay 13 -15% of your reported monthly income into the Caja Costarricense de Seguro Social healthcare system.
Taxes: There is no tax treaty between the U.S. and Costa Rica, but Costa Rica does not tax the foreign income of retirees.
Immigration: Easy. A two-year renewable retirement visa requires $12,000 in annual income. The country offers incentives to help expats invest, sample life, or acquire residency, via its new Digital Nomad Visa (which allows foreign remote workers to live in the country for a whole year), and a recent extension of its tourist visas from 90 to 180 days.
Language: Spanish, although English is widely spoken.
Climate: Spring-like weather in some areas; humidity in others, dry and wet seasons.
Crime rate: Low; ranked 39th.
Politics: Stable.
Other items of interest: Beautiful topography—beaches on two oceans, a jungle, lush waterfalls, nonstop flights to the U.S., a country committed to the environment (operates 98% on renewable energy), 25% of Costa Rica’s land is protected as national parks and wildlife refuges, and the country is often ranked as one of the “happiest countries.”
Panama
After seeing all that Panama has to offer, I can see why my acquaintance is interested in relocating there:
Cost of living: Nearly half of the U.S. average, like “Florida on the cheap.”
Health care: High quality and affordable. Basic, public health care is available, but most expats go for the private system, which is highly rated.
Taxes: Panama has no tax treaty with the U.S., but it does not tax the foreign source income of retirees.
Immigration: Very easy. The Panama Retirement Visa is easy to come by, although it often requires use of a local lawyer. The Pensionado Visa requires a monthly pension of at least $1,000. Or you can apply for the Friendly Nations Visa by buying a home for $200,000 (or just put that amount in a local account). If you are from the U.S. or Canada, you can stay up to six months without a visa. And you can also work remotely for up to 18 months on the new temporary telework visa.
Language: Spanish, but some English is spoken.
Climate: Sunny and warm, a tropical climate, with little hurricane exposure.
Crime rate: Low, ranked 64th.
Politics: Stable; a democracy.
Other items of interest: Easy to get back to the U.S., plenty of expats, number one in Latin America for its environmental performance and sustainability (one of only a few carbon-neutral countries on the planet), fast internet, the wealthiest country in Latin America, diverse geography (beaches, mountains, and jungles), and the fastest-growing economy in the region for several years.
Belize
Belize is an English-speaking country in Central America, known for its excellent fishing and diving among its coral reefs. But as you will read below, there is much more:
Cost of living: Considerably less than the U.S. average. The U.S. is 58.4% more expensive than Belize. A monthly income of $2,000 is usually sufficient to live in Belize.
Health care: Basic. Expats often return to the U.S. for treatment. Fortunately, Houston is just a two-hour plane ride away.
Taxes: There is a tax exemption on income from outside the country.
Immigration: Very easy. Belize’s Qualified Retirement Program offers permanent residency when you have $24,000 in yearly income. It’s available to anyone over the age of 45 and includes incentives such as tax-free importation of household goods, automobiles, boats, or even airplanes.
Language: English is the official language, the only country in Central America where this is so.
Climate: Tropical, with some threat of hurricanes.
Crime rate: An issue, especially in the cities; similar to Mexico.
Politics: Stable.
Other items of interest: Several islands offer attractive places for retirees; many opportunities for outdoor activities; a lush tropical climate with plenty of outdoor activities.
Colombia
Columbia combines the old and new worlds pretty well and with its warm climate and quick access to the U.S., it is becoming a favorite retiree destination:
Cost of living: Colombia is 53.1% cheaper than the United States. You can live comfortably in affluent neighborhoods for as little as $1,000 per month in Manizales, Bogota, and Pereira, and $1,500 to $2,000 in Medellin and Cartagena.
Health care: According to the World Health Organization, Colombia’s health care system is comparable to those of the U.S. and Canada. In fact, eight of the top 35 hospitals in Latin America are in Medellín. And there are top-rated facilities in many other Colombian cities.
Taxes: Pensions and Social Security payments are subject to Colombian tax, which generally is higher than U.S. rates. There is no tax treaty with the U.S. to prevent double taxation, but the U.S. foreign tax credit can offer significant relief.
Immigration: It’s fairly easy to obtain a renewable three-year retirement visa if you can prove $10,000 in sustainable yearly income. The country’s digital nomad visa incentivizes remote workers who want to live in the country before deciding if they want to be there permanently. You can establish residency in a couple of hours, without an attorney.
Language: Spanish, but some English is spoken.
Climate: Tropical with no discernible seasons.
Crime rate: Although most of the cartel business has been eradicated from the country, Colombia still has the third-highest homicide rate in South America.
Politics: Stable.
Other items of interest: Excellent expat communities; mountains and islands with stunning beaches; Amazon rainforest and nature preserves; rich culture of Colombia’s Indigenous, European, and African ancestry; colonial architecture; ease of traveling to Central and South America, and a short plane ride to the U.S.
And on to Asia:
Thailand
Although I’ve never been to Thailand, I have several friends who travel there yearly. They say the climate is great, the citizens are welcoming, and it has all these other characteristics to recommend it:
Cost of living: Less than half of the U.S. average. A comfortable lifestyle in Thailand can cost around $1,000 to $1,600 per month.
Health care: Excellent and cheap, attracting patients from around the world, mostly through private providers. The country is a top global medical tourism destination.
Taxes: A tax treaty between the U.S. and Thailand prevents double taxation and also exempts Social Security and pension payments from the U.S. from Thai taxation.
Immigration: The Non-Immigrant O-X Retirement Visa is easy to get. You just need about $24,000 in yearly income per couple and another $25,000 in a Thai bank.
Language: Thai, but English is widely spoken.
Climate: Tropical, with risk of tsunamis.
Crime rate: Low, ranked 60th.
Politics: Stable.
Other items of interest: It’s a long plane ride back to the U.S. (24 hours or more), but there are five major expat communities in the country. Thailand has diverse ecosystems, including the hilly forested areas of the northern frontier, the fertile rice fields of the central plains, the broad plateau of the northeast, and the rugged coasts along the narrow southern peninsula.
Malaysia
According to the U.S. Citizens Retirement Trends Study, Malaysia was ranked as the most affordable country in the world, based on cost of living and tax optimization. But the country’s mix of cultures and favorable climate, combined with the following attributes make it a growing attraction for U.S. retirees:
Cost of living: The cost of living in Malaysia is 51.56% lower than it is in the U.S. And the average monthly cost in retirement for a single person is $1,500; $2,500 for a couple. You will pay one-third to one-fifth of your U.S. housing, transportation, food, and entertainment expenses in Malaysia. And you can rent a three-bedroom apartment on the beach in Penang for as little as $900 per month.
Health care: Universal care via a vast network of private hospitals is available, and most of them are fluently English-speaking.
Taxes: You will be taxed only on income earned in Malaysia (a 30% rate). There is no tax on U.S. pension or Social Security benefits.
Immigration: The best program for emigrating to Malaysia as a retiree is the Malaysia My Second Home (MM2H) program, which allows foreign seniors to emigrate to Malaysia with a long-term visa (up to 10 years) to live as residents of the country. But to qualify for the program, you will need to meet various financial and medical criteria, including: Being over 50 years old; proof of minimum liquid assets of RM1,500,000 ($334,600); proof of minimum offshore monthly income of RM40,000 ($8,922); evidence of a deposit account with a Malaysian bank which contains a minimum of RM1,000,000 ($223,065); and if you are already retired, you will need to show proof of receiving a government pension such as Social Security of RM10,000 ($2,230.65) per month.
Language: Malay, although English is widely spoken.
Climate: Tropical, high humidity, lots of rainfall.
Crime rate: Low, ranked 37th.
Politics: The World Bank rated Malaysia’s Political Stability and Absence of Violence/Terrorism at 51.89 % in 2022. In contrast, the U.S. was rated 44.8%.
Other items of interest: Like in Thailand, the plane ride back to the U.S. from Malaysia is very long, about 19 hours. But the low cost of living, combined with several expat communities, a diverse food cuisine (think street food) influenced by Malay, Chinese, Indian, and indigenous cuisines and European elements, and easy access to many Asian countries are making Malaysia one of the go-to countries for American retirees.
Pros and Cons of Retiring Overseas
So, you have an idea of some of the best countries in which you may want to retire. But now, it’s time to get real and examine some of the pros and cons of living abroad.
Pros
- You can usually stretch your money further.
- Health care is available and affordable in many countries.
- Amazing history, culture, and interesting food.
- Local transportation may be easier as many of the large cities have great public transportation.
- Traveling between countries may be faster and easier (like in Europe).
Cons
- The new culture may take some getting used to—different restaurant hours, time zones, dinner times, and courtesy norms.
- Learning a new language may not be simple, especially if your new country uses a different alphabet or symbols, such as Greece, Malaysia, or Thailand.
- Difficulty in dealing with financial institutions and the IRS. You may still be taxed by the IRS, which loves to tax worldwide income. Laws such as the Foreign Account Tax Compliance Act (FATCA) require foreign financial institutions to report on the assets held by their American customers. My recommendation: discuss this possible liability with your tax lawyer and accountant before you move abroad.
- A loss of amenities that you may be used to in the U.S., such as living in a smaller home, a kitchen without an oven, and no air conditioning or central heating. And local infrastructure may be very different from home—including the quality of roads, speed limits, and utilities.
Questions to Ask Before Making the Big Decision
In addition to the factors I outlined for each country, there are some additional questions you’ll need to consider about living abroad:
Find out about housing, including property taxes, the ease of buying and owning property as a foreigner, rental costs and renters’ rights.
The possibility of receiving retirement benefits.
Quality of available financial services.
Inquire if your family’s heritage (ex., grandparents who came from the country in question) may give you some leverage in applying for a Visa.
Student visas may be a path to living in a foreign country.
Consult a financial/tax advisor before making any decisions.
What vaccinations may you need?
If you need to continue working, it’s not easy to get a job in a foreign country unless you have a work visa and are sponsored by an international employer, but it’s not impossible (see below).
Can you bring your car with you? (Not recommended.)
How much are moving costs? (Not cheap!)
A couple more things you need to know, Medicare will not cover your medical expenses in a foreign country while you are living overseas, but you can still receive your Social Security benefits.
Finding a Job Abroad
Although, as I mentioned above, it’s not easy to find a job in a foreign country, and it can take a long time to gain employment, it is possible. Here are some tips to help you get started:
- Decide what kind of job you would like. And if you can’t find something full-time, consider applying for part-time work, or even volunteering. One of the more popular jobs that may be less difficult to find is teaching English.
- Find a job you’re interested in by paying attention to foreign media, social media, networking, job fairs, online job boards, and company career pages.
- Apply for a visa or work permit. Sometimes companies you are interested in may be willing to help you through this process. Check with the foreign embassy for requirements.
- Localize your resume. There may be different resume standards than what you are accustomed to.
- Be well-versed in local culture, economics, and etiquette.
How to Find an Expat Community
If you do move overseas, you will find settling into your new home a bit easier if you become acquainted with an expat community of folks who have also moved away from their home countries.
You can find many such communities on social media, especially LinkedIn, InterNations and Expat.com. Additionally, Reddit has an expat subreddit with over 147,000 members.
Often, the community will be officially organized, sponsor gatherings, and offer online forums as a way to stay in touch with other expats.
According to sevenseasworldwide.com, common topics include “countries that allow dual citizenship, house hunting, cultural differences, money, schooling and travel.”
Investment Ideas Abroad
Even if you aren’t planning to move overseas (at least not yet), but you want to become familiar with a particular section of the world, you might consider investing in an ETF that covers the countries or regions in which you are interested.
I’ve searched through a couple dozen ETFs and found two that may be of interest to you.
GX FTSE Southeast Asia ETF (ASEA). The underlying index tracks the equity performance of the 40 largest and most liquid companies in the five Association of Southeast Asian Nations.
Stoxx Europe 50 SPDR (SPEU). The index is a free-float market capitalization-weighted index designed to provide a broad representation of publicly traded Western European companies.
I tried to find an ETF that covered companies in Central and South America. But I was unable to find one that was rated a Buy or Strong Buy at this time.
Therefore, I reviewed several multinationals that do a lot of business in the region and feel they are attractive at these levels.
The companies are Amazon (AMZN), Walmart (WMT), Unilever, Proctor & Gamble (PG), and McDonald’s (MCD). Certainly, there are many more multinationals that do business in the lower Americas, but these are a start!
I hope you find this information on moving abroad helpful.
Bottom line, before you consider such a big move to a foreign country, please visit the country—hopefully, for an extended period of time—so that you can experience the culture, the ease of traveling from one place to another, learn some of the language, and in general, try out the place.
And if you do decide to make such a move, I would love to hear from you!
