Thinking About Retiring Abroad

Michael Hoeflinger

Michael Hoeflinger, CFP® Wealth Manager

Retiring and moving abroad has been become very popular over the last 20 years but it can have its own set of unique problems. Our guide will help navigate some of the unexpected or not commonly thought about pitfalls.

In the U.S. alone, there are 10,000 baby boomers retiring every day, a trend expected to continue for the next 15 years. This means that about 3.6 million Americans are retiring each year. And more Americans are retiring outside of the U.S. every year, as evidenced by almost 375,000 retirees receiving their Social Security checks overseas in 2013 (the latest data published by the Social Security Administration).

The dollar has appreciated against most foreign currencies. Thanks to this exchange rate, purchasing property overseas has become relatively reasonable and certainly much less expensive than the purchase of similar property here in the U.S. The cost of living in most overseas locations is a good deal less, which means you can maintain a better lifestyle and your savings will last longer.

In addition, although the cost and quality of health care varies substantially from country to country, there are many overseas locations that offer health care services similar to what is provided in the U.S. and usually at a great deal less.

As you research overseas locations you should select some destinations and check to see how they compare to your needs and expectations. Considerations should be:

Lifestyle/cost of living. Is the beach important, what about restaurants, shopping, skiing, the arts, etc.? Do you want to live near the mountains or near the beach or even both? What lifestyle will your budget provide?

Climate. Many overseas retirement destinations are hot and humid, while some can be chilly and others have a rainy season lasting several months. How does climate affect your decision?

Health care. Do you have medical problems or a medical condition that requires special medical attention or require that you live near a hospital? What kind of health care is available in the country you select, what are the costs and is this available locally?

Time to travel/ease of travel. If you plan to return often to the U.S. to visit friends and family, or if you want them to visit you; if you have health issues and need to return to take care of them this is an important consideration.

Safety. If you don’t feel safe, you may not feel comfortable in certain overseas locations.

Politics/government/local laws/stability. How comfortable are you living in a country with anti-American leanings, or where you must be careful with your interactions with the police or local politicians?

Natural disasters. Some places have hurricanes, volcanoes, earthquakes, flooding, etc. and their infrastructure is not set up to handle them.

The arts. How important is access to museums, opera, symphony, ballet, theater?

Sports. Do you wish to play golf, tennis, ski, run, bike, hike, scuba dive, or climb mountains? Do you wish to be able to attend professional or amateur sporting events? Is it important to view sporting events on TV?

Shopping. Is shopping important to you? What about shopping for food, clothes or staples?

Language. Are you comfortable in a country where English is not the native language and perhaps is not spoken or understood by many of the locals?

As you do your research on retiring, relocating abroad check out:

Beware of Scams

Land scams are prevalent in many countries where Americans plan their retirement. Check any projected purchase carefully with regard to the legitimacy of the seller as well as the laws governing ownership by non-local as well as foreign nationals.  As an example in Mexico’s Baja peninsula a few years ago, many U.S. retirees learned that deeds on their beachfront property were not valid, as they did not meet certain provisions of a national-security statute that permits only citizens to own land on.


The “International Living” Top 10 List

ECUADOR  Ecuador is the best country in the world to retire to. The country gets top scores in the Buying and Renting and Climate categories and scores high across-the-board in all other categories. Expats are drawn by the low cost of living, perfect climate, the beautiful and diverse landscapes and the favorable retiree benefits.

PANAMA When it comes to the Benefits and Discounts for Retirees, Panama has always ranked at the top with a perfect score of 100. No other country does more for retirees. Panama has been a long-time expat haven mostly for its famed Pensionado visa discount program available to anyone with a pension of over $1,000 a month. The Pensionado visa gives retirees 50% off their entertainment expenses, 25% off airfare, restaurants, electricity and phone bills and 20% off medical services. It’s pretty easy to get back to the U.S. from Panama, and it is possibly the friendliest country toward North Americans. It also has the fastest Internet and best roads in Central America.

MEXICO  Due to its proximity to the U.S., the comforts of home are never far away in Mexico. Established expat havens in communities such as Puerto Vallarta and San Miguel de Allende ease the integration process, while excellent property can still be found for far less than you’d pay in the States.

MALAYSIA Every year, more and more expats are waking up to the amazing opportunities Malaysia has to offer. The country has one of the most robust economies in Asia and this is reflected in the consistently high standard of living available to locals and expats alike. It’s just one of many factors that led it to being ranked the highest Asian nation in this year’s International Living index.

COSTA RICA  Costa Rica scores high points across the board, especially in the Integration and Entertainment and Amenities categories. Costa Rica is a hugely popular retirement haven for the climate, neighborly atmosphere, low cost of living, excellent health care, stable democracy and countless ways to have fun.

MALTA AND SPAIN (tied) Tiny Malta enjoys plentiful sunshine year-round, on top of world-class health care (consistently ranked among the Top Five in the world by the World Health Organization) and tasty Mediterranean cuisine. The European island also has one of the lowest crime rates to be found anywhere. For those seeking sun and affordable living in Europe, Spain remains by far the best option available, evidenced by its standing as one of the highest-ranked European nations.. Although not as cheap as in most of Latin America, property in Spain is often of a high standard and far better value than in many other European countries. Likewise, Spain’s cost of living is lower than what you find in much of Europe.

COLOMBIA For North American retirees heading south, Colombia is becoming an increasingly popular choice. Given all that this diverse country has to offer, it’s not difficult to see why.  Colombia has an incredibly low cost of living. A couple can live comfortably on just over $1,200-a-month here.

PORTUGAL Portugal’s mild climate, its low cost of living and its largely First-World infrastructure make it an increasingly popular European option. English is widely understood, especially in the large cities and — combined with the warm Portuguese hospitality — makes it easy to settle in and feel at home, whether you prefer sophisticated urban environments like Lisbon or one of Portugal’s many beach communities.

THAILAND As Asia’s appeal to North American expats continues to grow, Thailand has become a popular destination. The country combines the best of authentic Asian cuisine and culture with enough North American influences to help you feel at home. Thriving expat communities already exist in the larger cities, such as Bangkok and Chiang Mai, and resort areas, such as Phuket and Hua Hin.

Some Countries that Were Not Ranked 

Why are so many countries not included? Places like Australia, Israel, Japan, Germany, much of the Caribbean and all of Scandinavia. The primary reason is a higher cost of living for some of those places and the weather.  Most retirees are looking to never drag heavy coats around with them.

Sites that will help you with your research
There are too many websites that only tout the advantages of moving overseas, without listing the negatives.  To get both sides check out this Best Places in the World to Retire as it lists over 4,500 answers to questions provided by experts.  Visit to determine the best places for you to consider. Here you can read information either written by “real life” retirees or based on interviews with them.

Retire in Asia provides information on the best cities in Asia that you should consider as well as visa requirements, etc. Visit

Insurance.  Retirees living abroad may or may not have access to local health care unless they have health insurance. Check carefully to make sure you have coverage and access to adequate healthcare. You may have to port healthcare insurance with you. Visit for information. Another resource for researching insurance and medical plans is Travel Insurance Review. Visit to reach this site.


Tax implication:
 provides you with the tax implications (click the international taxpayers section).

Money calculator helps you calculate how far your money will go in 300+ countries

Filing U.S. Taxes Can be a Problem

Unfortunately there are some confusing rules and a great deal of paperwork involved. Expatriates must file tax returns in the U.S. if they remain U.S. citizens. Preparing a return is complicated as, for example, in addition to filing a tax return expatriates must also file two separate forms reporting their foreign savings, stock holdings, life insurance, retirement plans, annuities and other financial information. All amounts must be converted from local currencies into U.S. dollars.  Most retirees living overseas need professional help in preparing their taxes as the fines for even unintentional are substantial.

What You Need to Know to Open a U.S. Brokerage Account from Overseas

Many Americans who retire abroad discover that it’s difficult to maintain or open a U.S. brokerage account from overseas. Some brokerage companies you may have worked with for years say that since you’ve left the U.S. they can no longer trade mutual funds for you, give you advice, or provide services for other issues.

Despite what the brokerage firm may say, there are no laws against you keeping your assets in the U.S. while you live somewhere else. In most cases, you can continue to handle your American stocks, bonds, mutual funds, and bank deposits when you live overseas; however you need to know what forms you’ll have to sign, what are the address requirements, and what investments you can and cannot hold.

It is advisable to discuss with your attorney and CPA which options may be a better choice for your unique situation.

Feel free to contact Michael Hoeflinger, CFP®  with any questions by phone 305.448.8882 ext. 241 or email:

[i]”The World’s Best places to Retire.” International Living. N.p., 2016. Web.

[ii]”Best Retirement Cities in Asia.” Retire in Asia, 1 Mar. 2013. Web.

[iii]”International health Insurance/ International Medical Group.” N.p., n.d. Web. <>.

[vi]”The World’s most affordable places to retire.” Ilyce Glink, 27 June 2013. Web.

[v]”International tax treaties.” N.p., n.d. Web. <>.

[vi]”International Cost of Living Calculator.” N.p., n.d. Web. <>.