Should You Retire Abroad?

mature couple relaxing
Ruslan Guzov /

Should you retire abroad? It’s an age-old idea that is a polarizing one in the United States. While some would never leave their homeland behind, others have fantasies of living in luxury on the cheap overseas. Whichever camp you fall into, it’s important to note that there are pros and cons of both living abroad and remaining in the United States after retirement.

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Here are things you should consider if you’re thinking about retiring abroad, along with a list of important things you need to know about the differences between retiring in the United States and going abroad.

Pro: Potentially Cheaper Cost of Living

Many countries around the world have a much lower cost of living than the United States, and many of them are quite desirable. From France, Austria and Germany to Thailand, Singapore and the Philippines, there are plenty of desirable countries you can live in while spending much less than you would in the United States.

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Con: Potentially More Expensive Cost of Living

While there are plenty of low-cost countries that you can retire in, some of the most popular destinations in the world actually cost more than living in the United States. Ireland, the United Kingdom, Australia, New Zealand, Canada and Japan are just a few of the countries around the world that could prove more costly in retirement.

Pro: Exposure to Different Culture

Some seniors find themselves falling into a rut after retiring in the United States. Living abroad is a great way to keep sharp by learning and participating in a new culture, tasting new foods and seeing extraordinary sights. You may also find some new friends as you will most likely be doing more than simply staying in your home.  

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Con: May Not Be Comfortable in a New Culture

As exciting as adapting to a new culture can be, it’s not for everyone. If you’ve lived your whole life in America and are very comfortable there, you might not want to endure the extra stress and preparation it takes to adjust to a new culture. 

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Pro: Lower Healthcare Costs

Healthcare costs in America are nothing like those in many other countries. You can often get a procedure done overseas for less than half of what it may cost in America, or even lower. In the United States, according to Fidelity, a 65-year-old couple should expect to spend at least $300,000 in medical costs over the remainder of their lifetimes.

Con: Quality of Healthcare May Be Lower

Although overseas healthcare may be much more inexpensive, some countries won’t have the latest high-tech machines available if you need serious care. Although most countries can provide basic care at a level equalling or exceeding that in America, more advanced procedures, like open-heart surgery, may not be handled at the same level.

Pro: Retiree Benefits

Many countries attempt to lure overseas retirees with special perks and benefits packages. If you qualify for Panama’s Pensionado Program, for example, you’re granted a host of discounts and benefits, from 25% off utility bills and airfare to a 20% discount on doctor bills, an import tax exemption on household goods, and 50% off movie tickets, cultural and sporting events.

Con: No ADA

One major advantage that America has over many other countries is the Americans With Disabilities Act. This law requires everything from disabled parking spaces to ramps, elevators and other facilities designed to make it easier for disabled and the elderly to access buildings, stores and events. Many other countries do not have such access requirements, making it much harder to get around.

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Pro: Can Still Maintain Accounts and Receive Social Security From the US

Just because you retire overseas doesn’t mean you can’t still manage your finances in America. You can maintain your investment accounts, savings accounts and even your Social Security payments even if you live overseas. This can make life overseas seem much less “foreign” and more like you still maintain close ties with America.

Con: May Still Owe Taxes in the US

The United States is the only country in the world that taxes its residents on their worldwide income. Whether you draw Social Security and pension checks from the U.S. or earn wages working a part-time gig in Portugal, the U.S. will send you a tax bill. 

Pro: Can Live Out the Rest of Your Days in a Vacation Destination

During your working career, you likely have to live close to your job or your kids’ schools. But once you retire, you won’t have either of these obligations and can choose to live on a beach, in the mountains or at any type of destination that you choose. As the cost of living is often lower in other countries, what may be too expensive of a dream destination in America might be completely feasible abroad.

Con: Vacationing in a Resort Area Is Different Than Living There Full Time

The harsh truth is that living full time in a resort or vacation destination is not always the same as spending a few days there while on vacation. The things you love while on vacation might wear on you over time if you’re a resident. Places full of solitude might seem lonely over time, while cities with an active nightlife might be constantly noisy and full of people. Although many can manage, for some the dream is much more exciting than the reality.

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About the Author

After earning a B.A. in English with a Specialization in Business from UCLA, John Csiszar worked in the financial services industry as a registered representative for 18 years. Along the way, Csiszar earned both Certified Financial Planner and Registered Investment Adviser designations, in addition to being licensed as a life agent, while working for both a major Wall Street wirehouse and for his own investment advisory firm. During his time as an advisor, Csiszar managed over $100 million in client assets while providing individualized investment plans for hundreds of clients.
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