Retirement Abroad

An estimated 700,000 American retirees currently collect Social Security benefits while living abroad, and that number grows each year as rising U.S. costs push more people to consider international options. International Living's 2026 Annual Global Retirement Index — now in its 35th year — ranked Greece as the world's top retirement destination for the first time, followed by Panama, Costa Rica, Portugal, Mexico, and Italy. These countries consistently score high across healthcare quality, cost of living, climate, and visa accessibility for retirees. The financial case is compelling: a couple can live comfortably in Panama for $2,500–$3,000 per month or in Portugal for €2,416 per month, compared to roughly €3,621 for an equivalent lifestyle in the United States. Healthcare costs are dramatically lower — Portugal spends just 20% of what the U.S. does per capita on healthcare and ranks No. 1 globally for expat healthcare quality. Many countries offer dedicated retirement visa programs with income thresholds as low as $1,000 per month, making the move accessible even for those with modest pensions. However, retiring abroad requires careful planning around Social Security collection, Medicare limitations, tax obligations, and currency risk. U.S. citizens can receive Social Security payments in most countries worldwide, but Medicare generally does not cover healthcare outside the United States. Americans abroad must still file U.S. tax returns and may face double taxation on retirement withdrawals without proper use of tax treaties and foreign tax credits. AARP recommends extended visits before committing, hiring immigration attorneys, and avoiding immediate real estate purchases.

Key Points

• 1Greece topped International Living's 2026 Global Retirement Index for the first time in the ranking's 35-year history, with its Golden Visa program requiring a minimum real estate investment of €250,000 (approximately $290,000) for a residence permit.
• 2Panama's Pensionado visa grants immediate permanent residency with proof of just $1,000/month pension income ($750/month if you purchase property worth $100,000+), plus retiree discounts of 20–50% on prescriptions, hotels, and airline tickets.
• 3Medicare Parts A and B do not cover healthcare outside the United States. Experts recommend maintaining at least Part A (typically free) as a fallback while purchasing local or international health insurance, which is almost always less expensive than U.S. coverage.
• 4U.S. citizens can receive Social Security payments in most countries without restriction. The Social Security Fairness Act, signed January 5, 2025, repealed the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), delivering relief to millions of retirees with government pensions.
• 5401(k) and IRA withdrawals are taxed by the U.S. regardless of where you live, and the Foreign Earned Income Exclusion does not apply to retirement distributions. Tax treaties with 60+ countries can reduce or eliminate double taxation, and the Foreign Tax Credit provides dollar-for-dollar credits for taxes paid to host countries.
• 6Costa Rica's territorial tax system does not tax foreign income, meaning Social Security, pensions, and retirement account withdrawals are tax-free at the local level. Its Pensionado visa requires just $1,000/month in pension income.
• 7Currency fluctuation is a significant risk factor: when the dollar falls, it functions as inflation for American retirees whose Social Security and withdrawal income buys less in local currency. AARP advises accounting for this unpredictability in long-term budgeting.