Retirees Are Leaving the U.S. in Droves (And Going To These 9 Countries Instead)

Whether you're feeling like you're totally on track for retirement or you're in catch-up mode, the allure of a place where every dollar goes further can't be overstated. That's why a growing number of retirees from the United States are exploring options abroad rather than limiting themselves to classic destinations like Florida or Arizona.

From the rising health care costs in the U.S. to housing prices hitting all-time highs, retirees are feeling the squeeze here at home. With the ability to take their Social Security elsewhere and stretch their retirement savings further in countries with a lower cost of living, they're looking to countries like Canada, Mexico, Costa Rica, and Portugal for a second chapter that's as exciting as it is affordable.

Here's what you need to know if you're considering relocating abroad for retirement.

Canada

If you don't mind the cold, or if you're particularly outdoorsy, retiring in Canada sounds like a dream. For a single person in Canada, the average monthly living costs are just $1,026.80. You could cash in on that affordable way of life with a visa that, depending on the nuances of the type you apply for, could allow you to stay anywhere from six months out of the year to up to two years straight. But not that you'll need to go beyond the visa program and gain residency if you want to access their universal health care system.

Mexico

Whether it's the beaches of Cabo or the mountains of Oaxaca, the laid-back lifestyle in Mexico is just as appealing as the affordability, though the 56.3% difference in cost of living between the U.S. and Mexico is definitely the biggest draw for many retirees. You could get a permanent resident visa here and, with a few caveats, you should be able to buy property (it may be more complicated to buy along the desirable coastal areas). And, if you go through the process of legally establishing residency, you'll even be eligible for Mexico's health care system.

United Kingdom

The cost of living in the United Kingdom isn't significantly lower than the United States, only 5.8%, but every penny counts when you're on a fixed income. Plus, the ease of retiring to an English-speaking destination is worth the premium for some retirees. You could stay in the country for up to six months on a tourist visa, though establishing residency may require some connection, whether that's through family or work. Once residency is established, retirees are eligible for the national health care system in the U.K.

Germany

Retiring to a small German town sounds like something out of a movie, and that's before you even consider the cost of living that is 13.5% lower than in the United States. You could try out the lifestyle for up to 90 days without worrying about how to get a visa but following that initial trial period, you'll need to look into establishing residency. You'll need to look into getting health insurance given Germany's high health care costs and keep in mind that dental procedures are not covered by insurance.

Greece

Sun-soaked afternoons eating Mediterranean food by the sea are what draw many retirees to Greece, not only for vacation, but for a more permanent retirement destination. The cost of living here is 35.9% lower than in the United States, and establishing residency is possible through a few different pathways, including for those who are still working or are generating income in the United States. Private health care is affordable compared to the United States, with costs often less than $300 a month.

Spain

Given that the cost of living in the United States is 42.3% higher than in Spain, there are going to be more than a few retirees eager to fill their days with tapas and sangria. If you have enough retirement savings to qualify for a non-lucrative visa, that's the easiest way to gain residency in Spain, and this could be renewed for up to five years before you establish permanent residency. You could apply for Spain's health care system, Sistema Nacional de Salud (SNS), but you must have private insurance available before that kicks in.

Portugal

The sunny beaches, incredible seafood, and cobblestone streets are reason enough to visit Portugal but as soon as retirees find out that the cost of living is 32.4% lower than in the United States, they start wondering what life might look like there. There are various options, including the D7 Visa and the Golden Visa, depending on what your intentions look like in retirement but generally, Portugal is friendly towards ex-pats. Plus, their health care system is accessible to everyone.

Costa Rica

The awe-inspiring tropical landscape of Costa Rica, paired with a cost of living that's 26.2% lower than the United States, is a draw for many retirees. There is a strong community of American ex-pats there, and you could go on a retirement visa or fixed-income program, among other options. No matter how you choose to live in Costa Rica, their national health care system is available to all residents.

Panama

The cost of living in the United States is a whopping 58.8% higher than in Panama, yet you're close enough to quickly get back to the States whenever you'd like. If you're on a fixed income, you could get a visa through their Pensionado program, which requires a verifiable pension. You may want to look into private health care, in addition to the public health care available to residents, but costs are typically lower than in the U.S.

Bottom line

There are a few caveats to consider as you explore options to retire abroad, and neglecting these could be one of the biggest financial mistakes you make in retirement. Medicare, which many retirees rely on for health care, does not cover any care you receive abroad, so you may need to plan for trips home or paying out of pocket for essential services. 

Additionally, retiring in another country does not preclude you from filing taxes in the U.S., so you would still need to account for the financial and admin implications that come with tax season. While retiring overseas sounds like a romantic, carefree decision, there are major logistical steps that need to be considered first.

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