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Retiring Abroad: Does Your Wanderlust Make Financial Sense?

It’s Better When You’re Older, Wiser, and Richer

A lot of people contemplate retiring abroad. In college, did you dream of spending a year in Europe? Maybe you hoped to master art and architecture in Italy or study engineering in China. You were ready to do it all while you were young, but you didn’t have the time – or the money.

Maybe now, after years of hard work, joy, and tears, you’ll get your reward. Retirement, your future is a blank canvas. Retiring abroad? It might actually work. Maybe for you retiring overseas is a financially sound decision.

Retiring Abroad: An Economical Vacation That Never Ends?

There’s no shortage of information about expatriate retirement. You can’t choose your retirement haven based only on climate or cuisine. The US Department of State Travel.State.Gov website identifies crucial considerations and presents a task list for planning your international golden years. Here’s a summary of their recommendations.

  • Check visa and residency requirements.
  • Know the local laws.
  • Prepare your finances.
  • Research medical care and costs.
  • Understand your social security benefits.
  • Pay your taxes.
  • Research accessibility and accommodations.
  • Vote from overseas.
  • Beware of scams.
  • Prepare for emergencies.
  • Stay connected.

Now, list and prioritize your personal retirement needs. Do you need easy access to medical care at manageable costs? Is the cost of living important and will your US dollars exchange well? Will you regret leaving family and friends behind?

With your checklist in hand, you know whether retiring abroad is right for you. Where do Americans retire? Let the explorations begin.

Panama: Newcomers Are VIPs

You can choose between a mountain chateau or a beachfront cottage in Panama. In 2022, Panama International Living called Panama the best place in the world to retire. Some advantages include Panama’s proximity to the US, modern infrastructure, and affinity for foreigners.

The Panama Pensionado Program is considered one of the best retirement programs in the world and is open to expatriates. The program allows foreigners to apply for legal residency if they have a guaranteed monthly income for the rest of their lives. Program benefits include an import tax exemption for household goods, discounts on utility bills, airline tickets, and other transportation. They have other significant discounts for medical services and cultural activities.

But there are downsides. Michael Long of Panama for Beginners explains that air conditioning is rare because electricity is expensive. It’s not much of a concern in the mountains, but other places get pretty steamy. He also notes that while English is widely spoken, you might find Spanish lessons beneficial.

A Sunny Retirement in Mexico

In 2022, International Living ranked Mexico as the third-best place to retire. US dollars go far in Mexico — couples can live well for around $2000 a month. Mexico offers high-quality healthcare for about half the cost of health insurance in the US. Mexico’s climate is temperate to the north and tropical in the south. Retirees can choose which is most amenable. Margaritas and mariachis are ubiquitous in both regions.

The Mexican government’s INAPAM (Instituto Nacional para las Personas Adultas Mayores) offers seniors a discount card. Mexperience says this card, “enables them to enjoy worthwhile discounts on a whole range of goods and services including food, medicines, transport, clothing, as well as recreation and leisure activities.”

The geographical proximity of Mexico to the US, a multitude of tourist attractions, and a resort-like climate encourage visits from American grandkids, family, and friends.

Yes, there are downsides to living in Mexico. Drug-related crime has caused an uptick in violence. Americans can be targeted. Consider US Department of State travel advisories before you decide Mexico is your retirement choice.

Asian Adventure: Retiring Abroad in Vietnam

If a low cost of living is your priority, Vietnam may be your destination. Live and Invest Overseas declared Hoi An a “true cost of living juggernaut.” A retired couple can live comfortably for as little as $800 a month.

Blogger Shannon O’Donnell of “a little adrift” notes that the country has a low incidence of violent crime, an interesting cultural atmosphere, and excellent cuisine. The Vietnam War was a tragedy, but some Americans who served there have retired there. Many Vietnamese have relatives in the US and that fosters amicable relations between retirees and Vietnamese citizens.

Often, retirees everywhere want to continue working, and there are well-paid teaching jobs available in Vietnam. The World TEFL Institute (Teaching English as a Foreign Language) recognizes Vietnam as an excellent option for qualified teachers. Long-term visas are not granted without a work permit, which may be difficult to obtain.

What about medical care? Ho Chi Minh City, formerly Saigon, has the best medical care. Hanoi is second. It is tougher to find good healthcare beyond major cities.

Retirement with a European Flair: Spain

You’ll be surprised at how many Spaniards are fluent in English. The language has been required in grammar schools since the 1970s. Retiring abroad in Spain, you will live among castles, fascinating culture, and rich history. The cost of living is compatible with many retirement budgets. In Mediterranean coastal towns, a couple can live for about $2,600 a month.

Expat Info Desk says the Spanish healthcare system is “a well-developed national health system…available to all, even those from abroad.” However, those who come from abroad experience long waiting periods for some treatments.

Spain’s residence visa for retirees is straightforward but requires a couple to have a permanent annual income of about $38,000.

Sites like Expedia advertise round-trip tickets from around $250, so family and friends might well decide to visit you.

Retiring Abroad: Choose Your Adventure

If none of these destinations suit your dreams, find a world map and design your personal second life. Retirees are younger and more mobile than ever. If you spend a few minutes on Google, you’ll come away with dozens of possibilities. Before you go, you’ll find these resources helpful:

  • Your financial advisor may have some solid input.
  • At Numbeo you can evaluate the cost of living in your city of choice.
  • Use Expatistan to compare the costs of living between cities and to calculate the income needed to live comfortably.
  • Global Peace Index identifies safety concerns in a country.
  • You’ll start the residency process at the chosen country’s consulate in the US.

Retirement marks the end of a fruitful career, but your most rewarding journey is in sight. You’re nest-egg may last longer and have more buying power outside the US. Thousands of American ex-patriates wouldn’t trade their new lives. They have made friends, expanded their knowledge of the world, and probably reduced their stress levels. This could be the life you’ve been looking for, but you won’t know until you start exploring.


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[Editors’ NoteThis is an updated version of an article originally published on December 22, 2017. It has been updated by Daniel Pelland]

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About Cristina Nolan

Cristina Nolan, Director of Webinar Services at Financial Poise, earned her law degree in 1997. Cristina has worked in online education since 2004 and has significant experience in the design, development, and execution of online curricula at the college and graduate school level. She is also an experienced legal editor. Courses she has taught include…

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