11 Expenses That Almost Totally Disappear When You Retire Abroad

RETIREMENT - RETIRED LIFE
Moving abroad for your retirement could save you money
Updated April 11, 2024
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Retiring is your chance to build a life where you can travel when you want. But have you ever considered retiring abroad entirely?

You can cut plenty of costs from your monthly budget when you retire in the U.S., like work clothes and eating lunch at your office. In another country, there could be some added expenses, especially in your first year of retirement, but you might also be able to cut some costs. 

The more you research, the more money you can avoid throwing away. If you're thinking about retiring abroad, factor in these cost cuts when you're putting together your budget.

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Commuting costs

sodawhiskey/Adobe businesswoman drinking hot coffee

Working in an office means you've probably had to include commuting costs like gas or public transportation into your budget, which you can likely drop now that you're retired.

You also may want to consider retiring to an international city that isn't too spread out, allowing you to drop the need for a car in favor of more affordable options like walking or public transportation.

Food

Siphosethu Fanti/peopleimages.com/Adobe sharing a toast for celebration

You might be surprised at how your food costs decline if you move abroad instead of retiring in the U.S.

Some towns rely more on local foods instead of transporting food a good distance, which means your grocery shopping may not include transportation costs.

You also may live in an area with a lower cost of living, dropping your expenses for groceries or dining out locally compared to the U.S.

Currency exchange fees

Carlos David/Adobe holding dollar bills

You may be excited to travel to a new place until you take your American dollars to get exchanged for local currency and have to pay addition fees.

But living abroad means you can easily access local currency, especially from a local bank if you open an account in the country you move to. That extra cash can add up any time you use the local currency without a need to exchange it over from U.S. dollars first.

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Taxes

Studio Romantic/Adobe bank account balance notification

Taxes can be an important factor in your decision-making process as some countries may be more tax-friendly than others for retirees. You may want to consider countries that are tax-friendly to retirees when looking into retiring abroad.

Regardless of where you decide to retire, it's also good to remember that you won't be paying payroll taxes anymore so that's one expense you can drop from your budget.

Work clothes

Moon Safari/Adobe businessman working on laptop

It doesn't matter if you retire in the U.S. or abroad because you likely won't need to spend money on work clothes anymore.

However, it may be a good idea to assess your closet before you decide to ditch all the business attire and move abroad.

You may still need certain pieces depending on the local attire, and it's better to shop your closet rather than tossing everything and needing to start over with a new wardrobe.

Mortgage

goodluz/Adobe financial adviser for investment

One reason you might want to move abroad is because your dollar can go further living in a different country with a lower cost of living.

One of those places where you can save money is with housing, so think about selling your home here and using that money for an all-cash purchase of a home abroad. Buying a home with cash can help you avoid paying mortgage fees and interest.

Heating and cooling

LIGHTFIELD STUDIOS/Adobe sitting at table with paperwork

You may be readyto ditch all that snow in a wintery state for a warmer climate abroad when you retire, or perhaps you want something a little cooler than a southern state in summer.

Living somewhere else may not just make you feel better but can help your wallet too by cutting back on utility costs. Factor in utility costs when you're developing an estimated budget for retiring abroad and see how much you may be able to save.

Activity fees

koumaru/Adobe white haired man

You may be spending plenty of cash to enjoy indoor spaces in the winter or summer to get away from the outdoors.

Find a place where you can enjoy nature more with hiking trails or water sports like kayaking. Outdoor activites can be free and in a temperate climate, you'll be more than willing to enjoy them instead of paying to stay inside.

Health care

sebra/Adobe doctor and patient are discussing

Health care costs can be expensive in the U.S., especially if you haven't qualified for medicare yet.

Research some potential destinations. You may be surprised at how low health care costs are compared to the U.S. or if you qualify for low-cost or free healthcare coverage where you live.

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Family expenses

LIGHTFIELD STUDIOS/Adobe man selling his house

Living abroad may give you the chance to downsize, getting rid of extra space you had when your kids still lived at home.

Think about how you'll be empty nesters abroad and where you can save some costs when you're living without your adult children.

However, you also may want to factor in the extra costs you might incur from traveling back to see family when you're not living near them.

Incentives

Alessandro Biascioli/Adobe lifestyle and travel transportation concept

Some places welcome retirees and want you to move there to contribute to the economy. Check out countries that may give you a discount on a retiree visa instead of a typical visa.

You also may be able to save money on goods you bring into the country compared to others who have to pay taxes on their goods. You may also get to keep more money in your bank account by receiving financial breaks on utilities, transportation, or cultural events.

Bottom line

Proxima Studio/Adobe couple paying bills together

Before you retire abroad, you'll also want to investigate the different rules about moving to another country. 

Some countries may be more willing to welcome retirees than others, or you may have to pay additional taxes or fees that could eat into your savings and change your timeline if you want to retire early.

It's also a good idea to create an estimated retirement budget so you know how much it will cost to live somewhere else while you're retired. 

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Author Details

Jenny Cohen Jenny Cohen is a freelance writer who has covered a bit of everything, from finance to sports to her favorite TV shows. Her work has been featured in The Wall Street Journal, USA Today, and FoxSports.com.

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