4 Reasons People Who Retired Outside of the US To Save Money Move Back
Written by
Daria Uhlig
Edited by
Jenna Klaverweiden
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Many frugal retirees see living abroad as a way to experience a different place and culture on a smaller budget than they could live on in America. A move across the border to Mexico, for example, can reduce living expenses by 40% to 50%, according to Mariana Lange, founder of Mexico Relocation Guide.
But when the experience fails to live up to these retirees’ expectations, some move back to the U.S. to live out their golden years on home soil.
Keep reading to find out what drives expat retirees to return home.
Living Abroad Isn’t as Cheap as They Thought
Housing might be cheaper abroad, but retirees who don’t consider the bigger picture often come to regret it.
“The perception of low cost of living is not as realistic as experienced once they get settled into the lifestyle they were accustomed to living before relocating,” said Andrew Jernigan, CEO at Insured Nomads.
Many also fail to account for fluctuating exchange rates, which, for retirees on fixed budgets, “could be the difference between running out of money each month or not,” according to Lange. As recently as 2023, she said, less favorable exchange rates were especially problematic for expats, with the exchange rate for pesos hovering around 16 or 17 pesos per $1 in U.S. dollars
The first year can be especially tough.
“Most people spend more than they normally would the first year because they have to supply their new rental or home,” Lange said. “Or they might splurge on exploring the country — which can add up.”
Healthcare Fails To Meet Expectations
For retirees accustomed to the American healthcare system, getting adequate and affordable care abroad can be challenging.
“At some point during retirement, more serious healthcare issues often arise, during which expats require more advanced medical treatments unavailable to them in their host country, better accessibility for wheelchairs or a need for extra care from loved ones, [which] can make living abroad more expensive and unsustainable,” said Stewart Koesten, chairman at Aspyre Wealth Partners, which specializes in working with U.S. citizens living abroad.
Even if the quality and level of care are acceptable, the costs might not be. In most cases, Medicare doesn’t cover care you receive outside of the U.S. That means you’ll need room in your budget for an international health insurance plan, Jernigan said.
They Miss Their Family and Friends
The expat life can be lonely for some retirees.
When asked what typically triggered his returning clients’ sense that they’d make a mistake, Jernigan said it was the realization that time had vanished and they’d still not established a community in their new home. “No friends or social group to help with the years ahead,” he said.
Koesten explained that changing goals also play a role. “The simple desire to live closer to family or our place of origin will drive expats to close the distance gap and return to the U.S.,” he said.
They Experience Culture Shock
Culture shock drives many of Lange’s clients to return to the U.S. within a year of moving to Mexico.
“Everything is different. The way banking is done is different. The speed at which things move is slower,” she said.
Jernigan agreed.
“Culture shock is one of the biggest invisible threats to the expat retirement plan,” he said. “It brings out the worst in you. But if you can make it through to the second year, you can probably make it indefinitely.”
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