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By Ryan Pedro
- In Travel
If you wish to stretch your retirement funds further, relocating abroad may be the solution. Living in a foreign country offers the opportunity to see more of the world and can provide lower living expenses.
But which countries are the best for retirees? Each year, International Living’s Annual Global Retirement Index highlights the best countries for retirees, and the top 10 list for 2021 includes five Spanish-speaking Central and South American nations. If you are contemplating a retirement abroad, it may make sense to add Spanish to your to-do list.
The top 10 nations with the highest average cumulative score across all categories are:
1. Costa Rica.
If you value a healthy, active lifestyle, Costa Rica is an excellent option. It received high marks in the categories of healthcare, development, and governance, and there is no shortage of attractions. Even on the smallest retirement budget, Costa Rica is highly affordable due to its low cost of living. The cost of living in Costa Rica ranked 84th out of 25 countries surveyed, with housing costing 74th. You can find inexpensive homes with property tax rates that are a fraction of what they are in the United States.
2. Panama
Between its majestic mountains and lively beaches, Panama offers retirees the best of both worlds. Locals have a reputation for being hospitable and friendly, and the cost of living is exceptionally low. Almost everything is cheaper than in the United States, including groceries, restaurants, and rent.
Expats who obtain a retirement visa enjoy a variety of advantages, including steep discounts on entertainment, airfare, and local transportation. To qualify for the pensioner visa, you must have a pension that provides at least $1,000 per month. As a retired resident, however, you will save 25% on utility bills, airline tickets, and restaurant meals, as well as 20% on prescriptions and 50% on movie tickets.
3. Mexico
Combining modern amenities with a rustic atmosphere, Mexico is ideal for retirees who favor a warm climate and proximity to the United States. Entertainment and amenities, as well as the ease of establishing residency, received the highest marks on International Living’s list. A temporary resident visa valid for up to four years can be obtained by retirees who meet minimum monthly income or asset requirements or who own property in Mexico. If you want to stay indefinitely, you can apply for a permanent resident visa, which has stricter requirements for your income and assets.
Keep in mind that the U.S. State Department has marked five Mexican states as “do not travel,” eleven as “reconsider,” and fourteen as “extreme caution,” so be careful about where in Mexico you decide to move.
4. Colombia
Whether you prefer the beach, the mountains, or even exploring the rainforest, Colombia has something for you. There are many nonstop flights from Florida to any major city in Colombia, which is a unique blend of colonial and modern culture. Visas for retirees are easy to get if they can show proof that they have enough money for retirement, but they must be renewed every three years.
The low-cost, high-quality healthcare system in Colombia, ranked 22nd by the World Health Organization, outranks the United States and Canada, both of which are ranked 30th. Health insurance premiums in Colombia are roughly 70% less expensive than in the United States, according to expats.Overall, the cost of living got a high score of 89, which means that you can get more out of your retirement money.
5. Portugal
Portugal is one of three European countries included in the top ten. Expats are drawn to this coastal European location because of its low cost of living and abundance of amenities, in addition to its beautiful scenery. It is easier for Americans to communicate with the local community because English is taught in schools. There are hundreds of islands to visit, and the inexpensive prices and vast selection of restaurants make it a culinary paradise. Portugal got the best scores for housing, climate, cost of living, and health care.
The top ten list of the best places to retire is made up of five Spanish-speaking countries in Central and South America, a few beautiful European countries, and exotic places like Vietnam and Malaysia.
The countries completing the top 10
The remaining countries in the top ten offer a combination of low prices, excellent amenities, and pleasant weather. They are Ecuador, Malaysia, France, Malta, and Vietnam, in descending order.
Popular Places to Retire
In addition to the list compiled by International Living, there are a number of other resources that advise retirees on where to go if they decide to relocate abroad. However, based on where they cash their Social Security checks, where are retirees actually settling? The answers may very well surprise you. Here are the five most popular countries for Social Security recipients who want to retire abroad, in order of how popular they are:
• Canada
• Japan
• Mexico
• Germany
• United Kingdom Royal
We have previously discussed Mexico’s benefits. Housing and other fundamental aspects of the cost of living in smaller towns and the countryside are frequently less expensive than in the United States, especially when you consider that many of these countries offer universal healthcare.
Familiarity also helps to explain the popularity of some nations. A large number of U.S. military personnel are stationed in a number of these countries, which could result in a desire to “stay on” after their active service has ended.
Planning Your Retirement Abroad
1. Confirm Visa and Residency Requirements
Immigration and residency laws vary between nations. You can examine the country-specific information provided by the U.S. Department of State to determine if you require a visa to enter and reside in the country where you wish to relocate. The website also has other useful information, like how long a passport is good for, what vaccinations are recommended or required, and whether or not you can bring certain currencies in or out.
2. Safety in Research and Political Stability
The Bureau of Consular Affairs of the U.S. State Department provides up-to-date information on the safety and stability of various countries for international travelers. Occasionally, there will be travel warnings and alerts for specific locations, and the United States may, on rare occasions, prohibit its citizens from traveling to or within certain countries. The information is regularly updated as required.
Certain countries may impose travel restrictions on foreign nationals. Remember that you are subject to the laws of the foreign country you are visiting.
3. Establish Foreign Ownership Regulations
Many countries have rules and regulations governing who can own property and how it can be used; some countries outright prohibit foreign ownership. Before deciding to move to a country, thoroughly investigate its restrictions and ensure that they are compatible with your finances and plans. The best source of information is a local real estate agent. Through the International Consortium of Real Estate Associations, you can locate such agents (ICREA).
Even if a country does not restrict who can purchase real estate, it may regulate the sale of property by non-citizens.
Additionally, make sure that your property rights are safeguarded. When purchasing a home in the United States, purchasers typically receive a clear title. In other countries, the rules may be less clear. Hire a qualified real estate agent and a lawyer in the area to make sure you understand the property you’re buying and that all the paperwork is done according to local rules.
4. Visit before moving and rent before buying
Living in a country differs greatly from visiting it. Try to stay in the neighborhoods and areas you’re considering to experience life as a native. and visit during multiple seasons. Try to visit once during the least pleasant weather season of your prospective home, such as dry desert winds, monsoon rains, or dreary, sunless winter days. Once you are living there, you will not always be able to escape. Check to see if there is a local American or international club or association you can join to learn more about living in the country or region.
Once you’ve relocated, begin the transition by renting a home to ensure that the area is conducive to your retirement goals. If it works out, house-hunting may commence.
5. Consider a cash-only purchase.
Finding a U.S.-based bank or other lenders willing to finance a mortgage for an overseas property is extremely challenging. Some foreign banks will lend money to people from other countries, but they may ask for a big down payment.
Try to find a property that you can afford to purchase with cash. You’ll have greater negotiating leverage, a simpler transaction, and, in many cases, you’ll likely obtain a better deal.
6. Arrange Your Real Estate (and Taxes)
You may be retiring overseas, but your assets need not follow. Stocks, bonds, annuities, IRAs, and similar investments can remain in the United States, where the economy and political climate are well known.
Unless you renounce your U.S. citizenship, you will be subject to the same income tax regulations as if you were living in your home country. You will still be required to file a tax return with the IRS and report any withdrawals from your retirement accounts.
Consult with a tax attorney or tax advisor prior to relocating, and plan to maintain contact while abroad to ensure compliance with domestic and international tax laws. Consult with your accountant or lawyer to determine if and how your assets will be taxed if you decide to move them abroad.
You can open a local bank account to accept regular transfers from your U.S. account and pay bills in order to cover day-to-day expenses.
Online banking and brokerage accounts make it easier than ever to manage money while traveling abroad, but transfers to certain countries are restricted. If your Social Security check is mailed internationally, you should be aware that delivery times vary, so it may not always arrive when expected. There’s always the option of direct deposit, which can get rid of fees for changing money or cashing checks.
Visa, MasterCard, and American Express are widely accepted around the world and offer an alternative method for covering daily living expenses and purchases. Contact your credit card company about the possibility of auto-payment.
7. Make Healthcare Arrangements
Many U.S. health insurance policies do not cover international residents. And despite the fact that Social Security will follow you wherever you go, Medicare coverage is extremely limited outside the United States.
Depending on where you choose to retire, you may discover that healthcare is so inexpensive that you do not need insurance. Ensure that foreign residents have access to the same care and costs as citizens if, for instance, the country offers subsidized care to its citizens. If not, determine your coverage as a visitor and proceed accordingly. There may be American or international companies that sell health insurance to Americans living abroad, depending on where you plan to reside.
In some countries, healthcare may be inexpensive, but not up to your standards. If so, your plan may include adding a certain amount to your annual budget for health-related travel and care, either back to the United States or to a larger city abroad than where you live now.
If you are currently being treated by a physician at home, ask him or her to recommend a colleague in your new location. Having this link can make it much easier to deal with medical conditions you already have and make sure you get the right care.
8. Obtain a valid international driver’s license.
Your new country may not recognize your U.S. driver’s license, depending on where you go. International Driver’s Permits (IDPs) issued by the American Automobile Association or the American Automobile Touring Alliance are valid in many countries. Most of the time, these permits, which must be accompanied by a valid driver’s license, expire after one year.
If you intend to drive abroad, you must obtain a local license as soon as possible.