Retiring abroad is a practical way to stretch your savings, enjoy better weather, and embrace a slower pace of life. But a big life change like that can generate a lot of additional questions around important issues such as finances, healthcare, legal paperwork, and cultural adjustments.
If you’re planning a retirement overseas, it’s normal to feel both excited and overwhelmed. This Remitly guide is here to help. We’ve broken down the key steps and tips to help you feel more prepared so you can plan your retirement abroad with confidence.
Why retiring abroad is gaining popularity
More and more retirees are choosing to spend their golden years overseas. Common reasons retirees consider moving abroad include the opportunity to gain a higher quality of life at lower cost, access to more affordable healthcare, and potential tax advantages. In fact, recent research shows that more than one in three Americans are open to relocating abroad to cut expenses and stretch their retirement savings.
Plus, when the world is your oyster, you can choose your ideal climate, experience new cultures and lifestyles, and enjoy the activities or trips you’ve always dreamed of. If you long for warmer weather, Mexico offers excellent food and affordable living without having to be too far from the US. If you’re a nature lover, Costa Rica’s jungles and wildlife will inspire you while economic stability and a diverse expat culture make it an easy place to live.
For those ready to venture to another continent, Portugal has the perfect mix of great weather, affordable healthcare, a friendly visa system, and easy access to all of Europe. Thailand, on the other hand, combines warm tropical weather with great beaches and exotic cultural experiences.
How to choose your dream destination
The best place to retire abroad depends on your lifestyle, budget, and priorities. Ask yourself:
- Climate: Do you prefer year-round sunshine or four mild seasons?
- Cost of living: How far will your retirement savings stretch?
- Cultural fit: Do you enjoy the language, customs, and pace of life?
- Healthcare: Is quality, accessible care available?
- Safety and stability: Is the country politically and economically secure?
Investigate retirement visa and residency options
Many countries recognize the value retirees bring and offer visa programs tailored to their needs. For example, Spain offers a non-lucrative visa aimed at retirees with passive incomes (i.e. pension, Social Security, rental income) of at least €2,400 EUR (about $2,700 USD) per month. You’ll also need to take out private health insurance. The visa is valid for one year and is renewable. Portugal has a similar option, the Passive Income (D7) Visa, with a much lower income requirement at just €870 EUR per month.
Another popular option is the Malaysia My Second Home (MM2H) long-term residency visa, which offers 10- to 20-year renewable residency with a minimum $120,000 USD deposit in the country and the purchase of property.
Additionally, Panama’s Pensionado Program welcomes retirees with a lifetime pension of at least $1,000 USD per month. The program includes discounts on healthcare, entertainment, and utilities.
Take a scouting trip
Before making a permanent move, visit your top choice. Spend a few weeks living like a local—use public transit, shop at local markets, talk to expats, and try out the healthcare system. It’s a good way to see if the destination truly aligns with your retirement goals.
Financial planning for retirement abroad
Living abroad often adds new layers of complexity to your financial responsibilities, so sound financial planning is essential.
Set a realistic budget
Create a monthly budget based on your destination’s cost of living. Even in affordable countries, expenses like healthcare and travel can add up. Make sure to include:
- Housing (rent or mortgage, property taxes, HOA fees)
- Utilities (electricity, water, gas, internet, mobile phone)
- Health insurance and medical costs
- Food and dining
- Transportation (public transit, car, or taxi)
- Travel back home
- Entertainment and hobbies
Managing currency and international banking
You’ll likely earn retirement income in US dollars, but spend in your new country’s local currency. Look for a US bank or credit union with international-friendly perks, like free international ATM withdrawals or no foreign transaction fees.
Additionally, you’ll probably want to open a local bank account for everyday expenses without worrying about conversion fees. Use a trusted money transfer service to send funds securely from your US account to your overseas account. Monitor exchange rates and consider multi-currency accounts to manage fluctuations.
Tax considerations
As a US citizen, you must file federal taxes every year, even if you live in another country. Many countries have tax treaties with the US to avoid double taxation, but check local tax rules to find out whether you need to file taxes in your new country of residence as well. If you become a tax resident in your new home, this could trigger additional local tax obligations.
Another thing to remember is that if you have more than $10,000 in foreign bank accounts, you will need to file a Foreign Bank Account Report (FBAR) informing the US government about your overseas finances. An international tax advisor who understands both the US and local laws can help you stay compliant with all the requirements and avoid unexpected issues.
Establishing residency and legal considerations
Your legal status abroad is crucial. Without the proper paperwork, you might not be able to stay long-term or access services like healthcare.
Required documents typically include:
- Valid passport, typically with 6-12 months of validity beyond your intended stay
- Proof of steady income or savings (from pensions, Social Security, annuities, or investments)
- Clean criminal background check (usually from the FBI for US citizens)
- Medical clearance or health certificate
- Proof of accommodation (such as a lease or home purchase)
- Health insurance (private or local, depending on the country’s requirements)
- Passport-sized photos and completed application forms
Many countries require you to get documents apostilled (a type of international document certification), notarized, and sometimes translated by a certified translator. Because paperwork processing can take weeks or even months, it’s a good idea to start the process well in advance.
Retirement visas vs. permanent residency
Most retirees start with a retirement or long-stay temporary visa (usually valid 1-5 years), which can often be renewed if you still meet the requirements. In many countries, you may be eligible to apply for permanent residency or even citizenship, depending on the country.Compared to your retirement visa, permanent residency allows you the right to live in the country indefinitely, fewer renewal requirements, and, in some cases, more favorable access to healthcare and public benefits.
Gaining citizenship often comes with additional criteria, such as passing a language test, demonstrating cultural integration, or renouncing previous citizenship.
Property ownership and real estate laws
If your retirement dream includes buying a home abroad, it’s helpful to research foreign property ownership laws early on.
- In some countries, like Mexico, you can own property, but you may face restrictions when buying near coastlines or borders.
- In Thailand, foreign land ownership is restricted, though you can purchase condominiums or lease property long-term.
- Portugal, Spain, and Costa Rica allow foreigners to purchase property with few restrictions, making them popular among retirees.
- In countries like Malaysia or Colombia, you can own real estate, but there may be minimum investment thresholds or ownership rules based on visa status.
It’s a good idea to consult a local real estate attorney to guide you through the legal and financial aspects of buying property abroad.
Healthcare abroad and staying healthy
Healthcare systems vary drastically around the world. Knowing what to expect and planning ahead can save you time, money, and stress.
Private vs. public healthcare
Healthcare systems abroad generally fall into two categories: public and private. Some countries, like Spain and Costa Rica, have high-quality public healthcare systems that are affordable for legal residents. However, wait times can be long, and you may not qualify if you aren’t a citizen or permanent resident.
Wherever you move, you can opt for private healthcare to receive faster service, English-speaking staff, and access to a wider network of specialists. Countries like Thailand, Mexico, and Malaysia have modern private hospitals at a fraction of US costs.
International health insurance
Another option is to look for expat-friendly US health insurance providers that offer global coverage, including emergency evacuation, routine care, and access to quality providers. These plans can be more expensive than taking out private insurance in your new country of residence, but they offer more flexibility if you plan to spend time in multiple places.
Popular options include:
- Cigna Global: offers customizable coverage for expats in over 200 countries
- Allianz: known for its broad international networks and multilingual support
- GeoBlue: ideal for US citizens living abroad and backed by Blue Cross Blue Shield
- IMG Global: offers budget-friendly, long-term expat health plans
Managing chronic conditions
If you live with a chronic condition or take regular medications, prepare in advance by confirming the availability of your medications in your new country or finding approved local alternatives. Pack a 3-6 month supply of medications when you first move, in case of delays in finding local providers.
It’s also a good idea to locate and contact specialist doctors in advance, especially if you require regular appointments or treatments. Carry digital and physical copies of your medical history, vaccination records, and current treatment plans—translated, if necessary.
Making the move seamless
Once your plans are in place, it’s time to start preparing for the move and getting settled into your new life abroad.
Moving checklist
Our international moving checklist can help you stay organized as you prepare for your move. Here are a few tasks to prioritize:
- Finalize your housing arrangements
- Set up international or local bank accounts
- Research healthcare providers and local insurance options
- Use international moving companies that help with customs
Managing emotions and staying connected
Relocating abroad is a big emotional shift. It’s normal to feel a mix of excitement and anxiety. To ease the transition after arriving, schedule regular video calls with your family and friends, plan visits home for holidays, and create routines that make your new environment feel familiar.
Learn the language (even just a little)
You don’t need to be fluent, but knowing the basics can help you make friends, navigate healthcare, and better immerse yourself in a new culture. Apps like Duolingo or Babbel can help, or you could enroll in in-person classes, which can also help you connect with fellow expats.
Join expat and local communities
Getting involved is key to avoiding isolation. Consider joining Facebook expat groups, attending language exchanges, volunteering, or becoming a regular at a local cafe. Finding your balance between local life and expat support will help you thrive.
Mistakes to avoid
Even with the best planning, mistakes happen. Here are common ones to watch for:
- Underestimating the cost of living
- Neglecting healthcare research
- Not understanding visa limitations
- Skipping legal or tax advice
- Expecting it to feel like home immediately
Take your time to research and plan your move in stages.
Take the first step toward retiring overseas
Retiring abroad is more attainable than ever, and with the right preparation, it can be the most rewarding chapter of your life. By researching wisely, preparing financially, and staying flexible, you can create a retirement life that’s rewarding and full of possibility.
Ready to take the next step? Start by exploring visa options, connecting with other retirees abroad, or browsing more relocation tips on Remitly’s Beyond Borders Blog. Your next chapter awaits. Take the first step with confidence.
FAQ
How much do I need to retire abroad?
It depends on your destination and lifestyle. In countries like Thailand or Mexico, $1,500-$2,500 USD per month can go far. In certain parts of Europe, you might need more. Make a personalized budget and take into account the current exchange rate.
Do I still pay taxes to my home country when I retire abroad?
If you’re a US citizen, yes. You’ll need to file US taxes regardless of where you live. Tax treaties may prevent double taxation, and it’s a good idea to consult a tax advisor.
Can I access my pension or Social Security while living abroad?
Yes, the US government allows direct deposit of benefits to international bank accounts.
What’s the best way to deal with culture shock?
Stay in touch with loved ones, create new routines, and give yourself time. Joining expat communities and engaging locally can ease the transition. A positive attitude and adaptability are key.