Many retirees are finding life too expensive in the United States and making the bold decision to retire abroad. Expats often find their dollars stretching further with lower tax rates, housing prices, health care costs, and transportation and food expenses. If it’s something you’re considering, check out our list of preliminary steps assembled from reliable sources like the U.S. Department of State, International Living, Fortune, and Kiplinger.
A Growing Trend
Retiring overseas is a growing trend that will accelerate in the coming years. About 40% of Gen Xers have nothing saved for retirement. Meanwhile, debt-burdened Millennials are finding it impossible to purchase a home—a key to wealth accumulation for most middle-class people. The rise of remote work has produced a wave of “digital nomads” earning their living online while traveling without maintaining a permanent home anywhere.
Americans are adventurous when it comes to international travel. Pew Research Center reports that as of 2024, 76% of Americans have visited at least one foreign country and most of those who have not say they would like to if they had the chance. So here are some of the steps you can take if you’re ready to take the plunge and move outside the U.S. in your retirement.
1. Decide on Your Non-Negotiables
It’s your retirement and you have to be the one to decide what that will look like. If you’re one of the few who has been able to put together a sizeable nest egg to live your dreams in retirement, then more power to you. But if you’re among the much larger number who will need to live on a tight budget in retirement, then you’ll have to set some priorities and make tough choices. For example:
- How close do you need to live to your children and grandchildren?
- How often would you want to return to the States for a visit?
- What sort of housing and transportation could you live with, reasonably comfortably?
- What is your preferred climate?
- Do you have medical conditions that require advanced care? Are you comfortable receiving that care abroad?
- Are you willing to learn a foreign language, or do you require living in an English-speaking country?
2. Consider Your Options
Most Americans who retire abroad do so in Mexico or Canada. It makes sense, as they border the United States and are convenient for quick trips home to visit loved ones, shop, or just refresh yourself being in a familiar place again. Plus, many Americans have relatives in one of these countries.
Well-developed countries like the United Kingdom, France, Germany, Australia, and Israel are also highly popular retirement destinations for Americans. They all over a high quality of life and excellent medical care, but the cost of living can be quite high there. Locations in Central and South America, such as Costa Rica or Uruguay, can be more affordable and still offer a comfortable retirement lifestyle. The cost of living in Mexico, for example, is about half of that in the United States.
3. Downsize Your Life
Whether you’re retiring in the U.S. or overseas, your life could no doubt stand some downsizing. Here’s your chance to sort through closets, attics, and storage units and say goodbye to things you haven’t used in years. There’s no way you’ll want to take all that stuff with you, and why waste your money paying for a storage unit? Just get rid of it.
You’ll also want to downsize your budget. Get rid of memberships, apps, charitable donations, and other things that may be unsustainable in your new life. Also, let go of social commitments or volunteer work that has run its course. Start reorienting your time toward the people and activities you truly care about, and redeploying your resources to prepare for your move.
4. Begin Language and Cultural Learning
In much of the world, you’ll be able to get by with English, but that comes at the cost of always feeling like a cultural outsider, not really understanding a lot of what is happening around you, and not making close relational connections to local people.
Retiring in a developed English-speaking country like Canada, the UK, Australia, or New Zealand may be more expensive than living in the States. Retiring in a nearby Spanish-speaking country like Mexico may be more affordable and allow you to visit family in the U.S. more often. Whether the language in your country 0f choice is English or not, you’ll still need to learn innumerable details about the culture that are unseen and unspoken, but important.
The best way to acquire language and/or cultural proficiency is to be immersed as much as possible in it. So if you know where you’re going, start listening to music and watching entertainment and media produced there. Explore restaurants and discover ethnic foods you enjoy. Use free language apps like Duolingo and others to start learning the language. And remember, you won’t do it all at once. The key is to take small steps daily and you’ll be surprised how much you’ll learn in just a few months!
5. Learn the Local Laws
You’ll need to investigate what kind of visa you can get to retire in another country. In some cases, you’ll be required to complete a process to become a citizen. In Japan, for example, this will take about 10 years and require that you meet minimum income standards. In some countries, your visa may require you to leave and reenter the country periodically by traveling to a neighboring country or back to the U.S.
Other areas to consider are the process for purchasing property versus renting and buying and registering a car, learning traffic rules and getting a driver’s license, if you plan to drive. If you want to work part-time, as an English tutor, for example, you’ll need to find out what the employment rules are and what taxes you’ll be subject to. If you’re bringing a pet, find out what the import requirements for an animal are.
6. Make Financial Arrangements
In well-developed countries and in the major cities of those that are still developing, you’ll be able to use your credit cards, ATMs, and set up bank accounts without too much difficulty. However, you’ll want to look into the various fees that may be associated with each option and find the most cost-effective way to access your funds.
Investigate as well whether you will be liable for taxes in the United States and/or in your host country, and how to draw Social Security while living there. Note that the United States will not pay social Security to citizens who are living in certain countries, such as Cuba and many of the countries of the former Soviet Union.
7. Make Healthcare Arrangements
It is a myth that high-quality healthcare is not available in other countries. Healthcare in most developed countries is advanced and reliable, and even many developing countries have state-of-the-art clinics and hospitals in major cities that cater to large expatriate communities as well as local people who are able to afford their services. Costs are so much lower in many places than the United States that many American citizens become “medical tourists” to have operations or other expensive treatments in places like Thailand, India, or Turkey rather than pay ten times more in their own country.
Nevertheless, if you have particular health conditions that require regular monitoring and treatment, you’ll want to find a place to live where the kind of care you need is available, and that you would be comfortable receiving care there. Flying back to the U.S. for every checkup will likely not be practical for most people. You’ll need to research whether your health insurance will cover you there and how to access those funds. In some cases, you may need to pay for care out-of-pocket and be reimbursed by insurance later.
8. Find Realistic Housing and Transportation
If you’ve done a thorough job of downsizing before you move, you’ll likely be able to move into a smaller and more affordable space. You might not be able to find something exactly equivalent to an American dwelling, though. Central heating and air conditioning may not be typical in places like Portugal with a warm climate that can get still get sticky during the day and chilly at night. Rooms might be smaller or configured in ways you find inconvenient. If you don’t bring your furniture from home, what is available locally might not suit your taste.
Similarly, with transportation, owning and operating a vehicle as many of us do in the States can be more of a headache than it’s worth. All the problems you’ve ever had with traffic police, road ragers, and mechanics your entire life will be 10 times more stressful in a foreign country. Mass transit tends to be more popular and better developed in other countries than in the United States, so consider giving that a try for a while before committing to vehicle ownership.
9. Create Security Without Fear
People living abroad can make two opposite mistakes when it comes to personal safety: naively assuming nothing bad can happen to them or hiding away in a paranoid way fearing every person is about to rob them. So investigate ahead of time what the crime rate is like in the place you’re considering relocating to—especially crime directed toward foreigners. Then confer with expatriates and people from that country online to understand what security precautions are reasonable.
Something to be aware of is that Americans in general tend to be loud and boisterous. When we walk down the street in another country, people know we are coming. You can keep yourself safer by maintaining a lower profile: dressing modestly, talking quietly, and not flashing money and expensive possessions in public.
10. Connect with Your New Culture
Once you get settled in your new country, your attitude will make all the difference in whether you enjoy living there or hate it. Your first few weeks and months may feel like a vacation. Everything is new and exciting and you’re constantly discovering things that are better about your new country than what you left behind. As culture shock sets in, though, you may become weary of a new language (or accent) and culturally unfamiliar things. Things that are inconvenient or unfamiliar might start to loom larger and irritate you. You could grow critical of the local people and start to retreat into your own cultural bubble: consuming American media, hanging out with other people from your country, and counting the days until you can go back “home.”
Instead, make the choice to interact with local people, learn a little more of the language and local customs every day, start changing your diet to the foods you like in your new country, and resist the urge to isolate and pacify yourself with American things. If you do, you’ll come to find that you’re not missing home . . . you are home!
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