Retiring Outside of the USA on a "budget"
- Amanda Abraham
- Jul 11, 2024
- 12 min read
Updated: Mar 15
Retiring outside the USA on a low budget can offer significant financial and lifestyle benefits. Lower living costs in countries like Costa Rica, Mexico, and Ecuador allow Social Security income to go further, covering housing, food, and healthcare more affordable. Many countries offer high-quality healthcare at reduced costs and have favorable tax policies for retirees, minimizing the taxation on Social Security benefits. Accessible retirement visas with low-income requirements simplify the process of establishing residency.
However, retirees should consider legal differences, language barriers, political stability, and safety. Social networks and expatriate communities can provide support, making the transition smoother. Retiring abroad can enhance the quality of life but requires thorough planning and adaptation to new legal and cultural environments.
Here are the top 9 countries to retire to if you are trying to live off the average Social Security for Americans, listed from 9 to the best:
Italy (9)
Cost of Living: $1,750/month
Tax Implications: Italy taxes worldwide income, but retirees have tax exemptions.
Pension and Social Security: Social Security can cover the basic cost of living, but additional income might be taxed.
Visa and Residency: Elective Residence Visa, valid for 1 year, renewable every two years.
Property Ownership: Foreigners can own property without restrictions.
Legal Rights: Similar legal rights to those of the U.S., but bureaucracy can be slow.
Healthcare Costs: Public healthcare is free or low-cost; private insurance is around $1,000/year.
Quality of Healthcare: Excellent, ranked high in Europe.
Pre-existing Conditions: Covered under the National Health Service.
Language: Italian (majority), limited English in non-tourist areas.
Climate: Mediterranean, 50-85°F (10-29°C).
Social Networks: Growing expatriate community.
Family and Friends: Direct flights to the U.S.
Political Stability: Stable but bureaucratic.
Local Transportation: Extensive public transport.
Reason: Italy is a good place to retire with a lower income due to its affordable cost of living, especially in southern regions and rural areas. The country offers high-quality, low-cost healthcare, and its rich cultural heritage and beautiful landscapes add to the appeal. The temperate Mediterranean climate is another draw for retirees. However, retirees should consider the language barrier, as Italian is predominantly spoken outside tourist areas, and the slow bureaucracy can complicate legal and administrative matters. Planning and adapting to these challenges can ensure a smoother retirement experience in Italy.
Panama (8)
Cost of Living: $1,724/month
Tax Implications: No taxes on foreign-earned income.
Pension and Social Security: Social Security sufficient; Pensionado Visa with minimum $1,000/month income.
Visa and Residency: Pensionado Visa, renewable indefinitely.
Property Ownership: Foreigners can own property.
Legal Rights: Legal system similar to the U.S.; Spanish required.
Healthcare Costs: Affordable; public insurance ~$100/month.
Quality of Healthcare: Very good in urban areas.
Pre-existing Conditions: Covered under private insurance.
Language: Spanish; English is spoken in urban areas.
Climate: Tropical, 75-90°F (24-32°C).
Social Networks: Large expatriate community.
Family and Friends: Direct flights to the U.S.
Political Stability: Stable.
Local Transportation: Good public transport.
Reason: Panama is a great place to retire on a lower income due to its affordable cost of living, favorable tax laws, and the accessible Pensionado Visa program, which requires only $1,000 per month. The country offers good quality, affordable healthcare, especially in urban areas, and boasts a warm climate, vibrant culture, and a large expatriate community. However, Spanish is the primary language, though English is common in expat areas. Additionally, rural areas may lack the modern amenities and healthcare services found in Panama City. Preparing for these differences can ensure a smoother retirement transition.
Mexico (7)
Cost of Living: $1,600/month
Tax Implications: No taxes on foreign-earned income.
Pension and Social Security: Social Security covers the living costs of a temporary or permanent resident visa.
Visa and Residency: Temporary or Permanent Resident Visa.
Property Ownership: Restrictions near coasts/borders.
Legal Rights: Similar legal rights; Spanish recommended.
Healthcare Costs: Affordable, high-quality in cities.
Quality of Healthcare: Very good.
Pre-existing Conditions: Covered under private insurance.
Language: Spanish; English spoken in tourist areas.
Climate: Varies; tropical to temperate, 50-90°F (10-32°C).
Social Networks: Large expatriate community.
Family and Friends: Easy travel to the U.S.
Political Stability: Varies; some regions have higher crime rates.
Local Transportation: Good public transport in cities.
Reason: Mexico is a good place to retire on a lower income due to its low cost of living, which allows Social Security income to comfortably cover housing, food, and healthcare expenses. The country offers various visa options, such as the Temporary or Permanent Resident Visa, which are accessible with modest income requirements. However, retirees should consider Spanish as the primary language, although English is widely spoken in tourist and expatriate areas. Safety can vary significantly by region, so it's essential to research and choose a safe area.
Ecuador (6)
Cost of Living: $1,500/month
Tax Implications: No taxes on foreign-earned income.
Pension and Social Security: Social Security sufficient; Pensioner’s Visa with $800/month income.
Visa and Residency: Pensioner’s Visa is renewable.
Property Ownership: Foreigners can own property.
Legal Rights: Legal system similar to the U.S.; Spanish needed.
Healthcare Costs: Affordable; public insurance ~$70/month.
Quality of Healthcare: Good.
Pre-existing Conditions: Covered under private insurance.
Language: Spanish; limited English.
Climate: Varies; coastal to highland, 60-80°F (15-27°C).
Social Networks: Growing expatriate community.
Family and Friends: Direct flights to the U.S.
Political Stability: Stable.
Local Transportation: Good public transport.
Reason: Ecuador is a great place to retire on a lower income due to its low cost of living, which allows Social Security income to comfortably cover daily expenses. The country offers a Pensioner’s Visa, which requires only $800 per month, making it accessible for many retirees. The growing expatriate community provides social support and helps with integration. However, retirees should consider that Spanish is the primary language, and learning it may be necessary for daily interactions. Additionally, while healthcare is generally good, services in rural areas may be less advanced than in urban centers. Understanding these factors can help ensure a smoother transition to retirement in Ecuador.
Portugal (5)
Cost of Living: $1,750/month
Tax Implications: Non-Habitual Resident tax regime can be beneficial.
Pension and Social Security: Social Security covers living costs; D7 Visa.
Visa and Residency: D7 Visa, renewable every 2 years.
Property Ownership: Foreigners can own property.
Legal Rights: Similar to the U.S.; Portuguese necessary.
Healthcare Costs: Public healthcare is low-cost; private insurance ~$1,000/year.
Quality of Healthcare: Excellent.
Pre-existing Conditions: Covered under the public system.
Language: Portuguese; English is widely spoken in tourist areas.
Climate: Mediterranean, 50-85°F (10-29°C).
Social Networks: Large expatriate community.
Family and Friends: Easy travel to the U.S.
Political Stability: Very stable.
Local Transportation: Excellent public transport.
Reason: Portugal is an excellent place to retire on a lower income due to its affordable cost of living, particularly outside major cities. The D7 Visa is accessible for retirees with modest incomes and provides residency with the possibility of renewal. Portugal also offers high-quality, affordable healthcare, and the Non-Habitual Resident tax regime can provide significant tax benefits. However, retirees should consider that Portuguese is the primary language, though English is widely spoken in tourist areas. The increasing popularity among expats has increased property prices in some regions, and navigating bureaucratic processes can be challenging.
Colombia (4)
Cost of Living: $1,500/month
Tax Implications: Taxes on worldwide income after 183 days.
Pension and Social Security: Social Security covers living costs, as does the Pensionado Visa.
Visa and Residency: Pensionado Visa, renewable.
Property Ownership: Foreigners can own property.
Legal Rights: Similar to the U.S.; Spanish necessary.
Healthcare Costs: Affordable; private insurance ~$500/year.
Quality of Healthcare: High-quality.
Pre-existing Conditions: Covered under private insurance.
Language: Spanish; limited English.
Climate: Temperate to tropical, 60-85°F (15-29°C).
Social Networks: Growing expatriate community.
Family and Friends: Direct flights to the U.S.
Political Stability: Improving.
Local Transportation: Good public transport.
Reason: Colombia is a great place to retire on a lower income due to its low cost of living, allowing Social Security benefits to cover daily expenses comfortably. The country offers the Pensionado Visa for retirees with a minimum monthly income of $717, making residency accessible. Colombia boasts high-quality, affordable healthcare, particularly in major cities, and a pleasant climate that varies from temperate in the highlands to tropical on the coast. However, retirees should consider that Spanish is the primary language, and learning it may be necessary for smoother daily interactions. While safety has improved significantly, it still varies by region, so choosing a secure area is essential. (Global Citizen Solutions) (Retirable) (Investopedia).
Spain (3)
Cost of Living: $1,750/month
Tax Implications: Taxes on worldwide income, United States and Spain have a tax treaty that helps prevent double taxation of income
Pension and Social Security: Social Security covers living costs; Non-Lucrative Visa.
Visa and Residency: Non-Lucrative Visa, renewable annually.
Property Ownership: Foreigners can own property.
Legal Rights: Similar to the U.S.; Spanish necessary.
Healthcare Costs: Public healthcare is low-cost; private insurance ~$1,000/year.
Quality of Healthcare: Excellent.
Pre-existing Conditions: Covered under the public system.
Language: Spanish; English is spoken in expatriate areas.
Climate: Mediterranean, 50-85°F (10-29°C).
Social Networks: Large expatriate community.
Family and Friends: Direct flights to the U.S.
Political Stability: Stable.
Local Transportation: Excellent public transport.
Reason: Spain is a great place to retire on a lower income due to its moderate cost of living, particularly in smaller towns and rural areas. The Non-Lucrative Visa allows retirees to live in Spain with proof of sufficient income, making residency accessible. Spain offers high-quality, affordable health care and a public system covering most medical needs. However, retirees should consider that Spanish is the primary language, and learning it can facilitate daily interactions. Additionally, while the cost of living is moderate, popular areas can have higher property prices. Navigating Spain’s bureaucratic processes can also be challenging for newcomers.(Global Citizen Solutions) (Retirable) (Investopedia).
Malaysia (2)
Cost of Living: $1,500/month
Tax Implications: No taxes on foreign-earned income.
Pension and Social Security: Social Security sufficient; MM2H Visa.
Visa and Residency: Malaysia My Second Home (MM2H) Visa, renewable every 10 years.
Property Ownership: Foreigners can own property.
Legal Rights: Similar to the U.S., English is widely spoken.
Healthcare Costs: Affordable; private insurance ~$500/year.
Quality of Healthcare: Very good.
Pre-existing Conditions: Covered under private insurance.
Language: Malay; English is widely spoken.
Climate: Tropical, 75-90°F (24-32°C).
Social Networks: Large expatriate community.
Family and Friends: Direct flights to the U.S.
Political Stability: Stable.
Local Transportation: Good public transport.
Reason: Malaysia is an excellent place to retire on a lower income due to its low living cost, allowing retirees to live comfortably on Social Security benefits. The Malaysia My Second Home (MM2H) Visa offers long-term residency with a straightforward application process and is valid for ten years. Malaysia provides high-quality, affordable healthcare, with many private hospitals offering world-class medical services at a fraction of the cost in the U.S. However, retirees should consider that while English is widely spoken, particularly in urban areas, learning some Malay can be helpful for deeper integration. Additionally, while healthcare is generally excellent, access to specialized medical care may be limited in rural areas.(Global Citizen Solutions) (Retirable) (Investopedia).
Costa Rica (1)
Cost of Living: $1,500/month
Tax Implications: No taxes on foreign-earned income.
Pension and Social Security: Social Security sufficient; Pensionado Visa with $1,000/month income.
Visa and Residency: Pensionado Visa, renewable indefinitely.
Property Ownership: Foreigners can own property.
Legal Rights### 9. Italy
Cost of Living: $1,750/month
Tax Implications: Italy taxes worldwide income, but there are exemptions for pension income under certain treaties.
Pension and Social Security: Social Security covers basic living costs; additional income may be taxed.
Visa and Residency: Elective Residence Visa, valid for 1 year, renewable every two years.
Property Ownership: Foreigners can own property without restrictions.
Legal Rights: Similar to the U.S., but bureaucratic processes can be slow.
Healthcare Costs: Public healthcare is low-cost; private insurance ~$1,000/year.
Quality of Healthcare: Excellent.
Pre-existing Conditions: Covered under the National Health Service.
Language: Italian; limited English outside tourist areas.
Climate: Mediterranean, 50-85°F (10-29°C).
Social Networks: Growing expatriate community.
Family and Friends: Direct flights to the U.S.
Political Stability: Stable, but bureaucracy can be cumbersome.
Local Transportation: Extensive public transport.
Reason: Costa Rica is an ideal place to retire on a lower income due to its moderate cost of living, allowing Social Security benefits to cover essential expenses. The Pensionado Visa program is accessible, requiring proof of just $1,000 monthly income, making residency straightforward. Costa Rica offers high-quality, affordable healthcare, with universal coverage available to residents. The country's tropical climate, natural beauty, and welcoming expatriate communities make it a pleasant and supportive environment for retirees. However, retirees should consider that while English is widely spoken in expatriate areas, learning some Spanish can benefit daily interactions. Additionally, the high humidity in some regions might require adjustments, and while healthcare is excellent, access to specialized care may be limited in rural areas. Understanding these factors can help ensure a smooth transition to retirement in Costa Rica (InvestingChannel) (Global Citizen Solutions) (Retirable).
Here's a table summarizing the key aspects of retiring in Costa Rica, Malaysia, Spain, Colombia, Portugal, Ecuador, Mexico, Panama, and Italy:
Country | Cost of Living (monthly) | Is Social Security taxed | Length of Time Visa Valid | Property Ownership | Average Healthcare Costs (USD yearly) | Primary Language (% of speakers) | Secondary Language (% of speakers) | Local Transportation |
Costa Rica | $2,000 - $3,000 | No | Indefinitely (renewable) | Yes | $1,000 - $1,500 | Spanish (99%) | English (widely spoken in expat areas) | Good public transportation |
Malaysia | $1,500 - $2,000 | No | 10 years (renewable) | Yes | $500 - $1,000 | Malay (70%) | English (widely spoken) | Good public transportation |
Spain | $2,000 - $2,500 | No, Treaty | 1 year (renewable) | Yes | $1,000 - $2,000 | Spanish (74%) | Catalan (17%), English (widely spoken in expat areas) | Excellent public transportation |
Colombia | $1,500 - $2,000 | Yes, after 183 days | 1-3 years (renewable) | Yes | $500 - $1,000 | Spanish (99%) | English (limited) | Good public transportation |
Portugal | $2,000 - $2,500 | No, under Non-Habitual Resident regime | 1 year (renewable) | Yes | $1,000 - $1,500 | Portuguese (96%) | English (32%) | Excellent public transportation |
Ecuador | $1,500 - $2,000 | No | 2 years (renewable) | Yes | $500 - $1,000 | Spanish (93%) | English (7%) | Good public transportation |
Mexico | $1,600 - $2,000 | No | 1 year (renewable) | Yes, with restrictions near coasts/borders | $500 - $1,500 | Spanish (92%) | English (widely spoken in expat areas) | Good public transportation |
Panama | $1,724 - $2,000 | No | Indefinitely (renewable) | Yes | $1,000 - $1,500 | Spanish (93%) | English (14%) | Good public transportation |
Italy | $2,000 - $2,500 | No | 1 year (renewable) | Yes | $1,000 - $2,000 | Italian (93%) | English (34%) | Excellent public transportation |
Notes:
Cost of Living: Estimates can vary based on lifestyle and location within the country.
Tax Implications: Taxation rules can change; consulting with a tax professional is recommended.
Visa Validity: Renewal processes and requirements vary by country.
Property Ownership: Generally favorable for foreigners, with some regional restrictions.
Healthcare Costs: Public healthcare can significantly reduce costs; private insurance prices vary.
Languages: Language proficiency is crucial for integration; English is commonly spoken in expatriate communities.
Local Transportation: Public transportation quality varies by city and region within each country.
These factors appeal to Costa Rica, Malaysia, and Portugal due to their affordable living costs, favorable tax treatments, and strong expatriate communities. Considering local language and healthcare quality is essential for a smooth transition.
Explore retirement destinations with ease. DnA Escapes can help you plan exploratory trips to find your ideal retirement spot. Learn more at www.dnaescapes.com.
Financial Advice Disclaimer
The information provided on this website is for general informational purposes only and should not be construed as professional financial advice. While we strive to ensure that the information provided is accurate and up-to-date, we make no guarantees regarding the accuracy, completeness, or reliability of any information on this website.
Important Points to Note:
No Financial Advice: The content on this website does not constitute financial, investment, tax, legal, or other professional advice. You should not rely on any information presented on this website to make financial or investment decisions. Always consult with a qualified financial advisor or other professional before making any financial decisions.
No Liability: We are not liable for any losses or damages incurred from using the information provided on this website. Your use of any information or materials on this website is entirely at your own risk, for which we shall not be liable.
Third-Party Links: This website may contain links to other websites or resources. We are not responsible for the content or availability of these external sites, nor do we endorse or guarantee the information, recommendations, products, or services offered on third-party websites.
Changes to Content: We reserve the right to modify, update, or remove content on this website at any time without prior notice. It is your responsibility to ensure that you access the most current information on this website.
Personal Responsibility: You acknowledge that any reliance on the information provided on this website is solely at your own risk. You are encouraged to conduct research and seek professional advice tailored to your situation.
By using this website, you agree to the terms of this disclaimer. If you do not agree with any part of this disclaimer, please refrain from using our website.
For personalized financial advice, please consult with a qualified financial professional.
Trademark Information
DnA Escapes™ is the trade name and unregistered common-law trademark of DnA Escapes, LLC, a registered Limited Liability Company. The use of this name, logo, or any associated branding without written permission is strictly prohibited and may result in legal action.
All other trademarks, service marks, and trade names mentioned on this website are the property of their respective owners. These include, but are not limited to, references to Digital Nomad Visa, Barbados Welcome Stamp, and other programs, services, or companies. The use of these trademarks is for informational purposes only and does not imply any affiliation with, endorsement by, or sponsorship of these third-party entities.
For inquiries, contact admin@dnaescapes.com or info@livingontheline.com.
Comments