Cost of Living Comparisons

For US citizens considering international relocation in 2025-2026, the global cost of living landscape presents both significant opportunities and hidden pitfalls. The Numbeo Cost of Living Index, the world's largest crowdsourced cost of living database, uses New York City as its baseline (index score of 100), with the United States ranking 19th globally at a score of 56.3. Countries across Southeast Asia, Latin America, and parts of Eastern Europe consistently score well below 30, meaning everyday expenses can be 50-70% cheaper than in the US. Meanwhile, nations like Switzerland, Iceland, and Denmark regularly exceed the US baseline, with Bermuda holding the highest cost of living worldwide. Purchasing Power Parity (PPP) is the key economic concept expats need to understand. Rather than simply converting currencies at market exchange rates, PPP adjusts for what your money actually buys locally. A $100,000 salary in Austin and a $100,000 salary in London sound equivalent on paper, but the purchasing power differs dramatically due to local price levels for housing, food, transportation, and services. For American expats earning in US dollars or drawing from US retirement accounts, relocating to a country with favorable PPP means their money stretches further for the same or better quality of life. However, the true cost of living abroad extends well beyond rent and groceries. Americans remain subject to US citizenship-based taxation regardless of where they live, with the Foreign Earned Income Exclusion capped at $130,000 for 2025 and $132,900 for 2026. Additional hidden costs include visa application and renewal fees, international health insurance premiums averaging $2,517 per year in 2026, emergency flights home at $1,500-$3,000 on short notice, international money transfer fees averaging nearly 6% of the total amount moved, and shipping household goods at $2,300-$14,300 per container. Financial advisors recommend maintaining six to nine months of expenses as an emergency fund during the first year abroad.

Key Points

• 1Vietnam has been ranked the most affordable country for expats for five consecutive years, with Southeast Asian nations (Thailand, Indonesia, Philippines, Malaysia) dominating the top 10 for personal finances. Monthly living expenses in Thailand average $877 per person and in Indonesia around $583 per person.
• 2Housing costs in popular expat destinations are dramatically lower than in the US, where the national average monthly utility bill alone is $611. In Mexico, housing prices run 50-75% below comparable US cities. In Portugal's interior, two-bedroom furnished homes rent for as low as $450 per month, while Lisbon one-bedroom city-center apartments start under $1,000.
• 3Healthcare represents a major cost advantage abroad. Private health insurance in Portugal starts at around $50 per month per person, while the average annual premium for international expat health insurance is $2,517 in 2026. By comparison, US ACA plan premiums and deductibles have spiked sharply for 2026, with projections that 4.8 million more Americans could become uninsured without extended premium tax credits.
• 4The most expensive expat destinations are Switzerland (cost of living score 9.29 out of 10), Iceland, Denmark, and Luxembourg. Six Swiss cities rank in the global top 10 most expensive places to live. A routine appendectomy costs $15,000 in Switzerland, and a fractured femur treatment often surpasses $35,000.
• 5Hidden costs catch many expats off guard: visa application fees range from hundreds to thousands of dollars and are often non-refundable even if denied, international shipping of household goods costs $2,300-$14,300 per container, money transfer fees average nearly 6% of the total amount, and a new 1% remittance tax on certain outbound transfers from US accounts took effect in January 2026.
• 6Americans living abroad must still file US taxes. The Foreign Earned Income Exclusion allows excluding up to $130,000 in wages for 2025 ($132,900 for 2026), but self-employment tax of 15.3% still applies. FBAR reporting is required when foreign accounts exceed $10,000 at any point during the year, and FATCA Form 8938 kicks in at $200,000 in foreign assets for single filers abroad.
• 7A couple can live comfortably in Portugal for $2,500-$3,000 per month outside major cities, in Thailand for around $2,000 per month covering housing, utilities, food, entertainment, and healthcare, and in Mexico for under $2,000 per month. By contrast, the average US household spends over $6,000 per month, with median rent alone at $1,155 in a mid-range city like Chicago and exceeding $8,300 in New York.