July 2, 2026
Here’s a fact most people don’t learn until they’re already deep into planning a move: the United States taxes its citizens no matter where they live. Only one other country in the world does this — Eritrea. Every other country taxes based on residency, not passport. That single fact shapes almost everything else about retiring abroad, and it’s a good place to start.
Interest in leaving the U.S. is real and growing. In a February 2025 Harris Poll survey of over 6,300 Americans, 35% of Gen Xers and 26% of Baby Boomers said they’d considered relocating out of the country. Lower cost of living was the top motivator, cited by roughly half of respondents; better or more affordable healthcare came in at 38%.
I work with clients thinking through exactly this decision. Here’s the framework I actually walk people through, starting with the part most guides bury near the bottom.
The Tax Reality: Complicated Everywhere, Different Every Time
Because U.S. tax obligations follow you wherever you go, you’ll typically file in both the U.S. and your new country of residence. Tax treaties usually prevent you from being taxed twice on the same income, but “usually” is doing a lot of work in that sentence.
What actually gets taxed, and at what rate, varies enormously by country. A few examples worth knowing:
- Costa Rica, Panama, and Uruguay typically exempt foreign pensions from local tax entirely.
- Greece offers qualifying retirees a flat 7% tax rate on foreign-sourced pension income for up to 15 years, provided you haven’t been a Greek tax resident in 5 of the past 6 years and your home country has a qualifying tax treaty with Greece. (Source: PwC Tax Summaries)
- Other countries tax retirement income at standard progressive rates that can run well above U.S. brackets.
This is not a do-it-yourself area. The right approach depends on your specific accounts, income sources, and destination. Talk to your advisor and a cross-border tax professional before you commit to a country, not after.
Getting Legal Residency
Many countries have dropped the old lump-sum investment requirements for retiree visas and now simply want proof of a minimum guaranteed monthly income — often satisfied by Social Security alone. Two concrete examples:
- Panama’s Pensionado visa requires a lifetime pension of at least $1,000/month ($750/month if you buy qualifying property worth $100,000+). It grants permanent residency immediately on approval and comes with legally mandated retiree discounts on healthcare, transportation, and entertainment.
- Portugal kept its income requirements relatively accessible even after tightening some of its more generous visa and tax programs in recent years.
Processing usually takes three to four months once you apply; give yourself six months of buffer. And don’t choose a country because the paperwork is easy — that’s a filter, not a reason.
What It Actually Costs to Live There
Living costs abroad tend to run lower than an equivalent U.S. lifestyle, even with today’s exchange rates, but how much lower depends heavily on the country and the specific city or region. Central and Latin America are generally cheaper than Western Europe. Within any country, the capital is rarely the budget option.
Published “typical retiree budgets” from cost-of-living sites are a decent starting reference, but your real number comes down to your own habits — house or apartment, cooking or eating out, taxis or public transit. Build your own estimate from prices you’ve verified yourself, ideally during an extended visit rather than a one-week trip.
Healthcare: Line It Up Before You Need It
Nearly four in ten Americans considering a move abroad cite healthcare affordability as a top reason, and the underlying cost data generally supports that. Quality and access still vary by country and region, the same way they do domestically. A few things to plan for:
- There’s usually a waiting period. Most public healthcare systems make newcomers wait anywhere from a few months to two years before they qualify. You’ll need private international coverage in the meantime.
- Keep Medicare active. It won’t cover you abroad, but you’ll want it for visits back to the U.S., and letting it lapse triggers a permanent premium penalty if you re-enroll later.
- Some retirees carry catastrophic-only coverage and pay out of pocket for routine care, since routine care is often inexpensive in many countries. Whether that structure makes sense depends on your health and your destination — a conversation for an insurance specialist and your advisor, not a general rule.
Logistics: Mail, Banking, and Estate Planning
A few practical items that are easy to overlook until they become urgent:
- A U.S. mailing address. You need one to maintain Medicare eligibility. A family member’s address or a virtual mailbox service both work.
- Social Security logistics. Benefits can continue to a U.S. account or be sent overseas, but you’re required to notify Social Security of the move and respond to periodic status confirmations. As of December 2024, the Social Security Administration was paying benefits to more than 711,000 people living abroad, worth roughly $8.4 billion a year — this is a well-worn path, not a fringe scenario.
- Bank accounts in both places. Keeping accounts in the U.S. and your new country generally simplifies daily life and reduces currency conversion costs.
- Estate planning. This is the piece people overlook most. Many countries, including most of Europe and parts of Latin America and the Caribbean, follow “forced heirship” rules that dictate who inherits what, regardless of your will. Jointly held assets don’t always pass automatically to a surviving spouse either — they can sit in probate for a long time. Review this with an estate planning attorney before you move.
The Human Side
The financial and legal pieces are solvable with enough planning. The social piece is harder to plan for, and it’s the one that catches people off guard.
A 2025 study published in Psychology and Aging compared nearly 5,000 Dutch retirees living abroad to roughly 1,300 who stayed in the Netherlands. Retirement migrants reported higher social loneliness than those who stayed home, even though the movers were generally healthier and wealthier. The researchers found the effect was concentrated among people who lost touch with friends and family back home — those who maintained those ties, and built new ones locally, fared better.
Two things help in practice. First, treat a scouting trip as a trial run, not a vacation: rent an apartment instead of a hotel, cook instead of eating out every night, and see the place in its least flattering season, not its best one. A location that feels perfect during one good week can feel very different once the novelty wears off. Second, before you fall in love with any specific country, get clear on what you’re actually optimizing for — proximity to family, a certain climate, English-speaking doctors, whatever it is. Decide your priorities first, then let research narrow the list. The places people say they want to retire aren’t usually the places that are actually cheapest, have the best healthcare, or are easiest to move to.
Bottom Line
The people who make this work treat it like a research project, not an impulse decision: understand the tax exposure, secure the right visa, build a real cost estimate, line up healthcare, get the estate plan sorted, and have a plan for staying connected to the people who matter. And remember the decision isn’t permanent — if it’s not working, you can come home.
None of this replaces personalized advice. Taxes, healthcare, estate planning, and Social Security timing all play out differently depending on your finances and your destination.
Next Steps
Curious about the details for a specific country? Our expat guides cover visa requirements, tax treatment, healthcare, and cost of living, with new destinations being added regularly.
If you’re weighing a move abroad and want to see how it fits your financial picture, don’t wait until it’s a live decision — the best planning happens years out. Schedule a call and we’ll walk through it together.