Retiring Abroad? Don’t Make These 9 Mistakes!
According to a recent article by CNN, more and more older adults are choosing to retire in other countries. Some want to escape the tense political climate in America, while others have decided that their dollars might stretch a lot further on a different continent.
“So far, it’s cheaper than America,” says Mike Jansen, an ex-military serviceman who chose to retire in the Philippines. “As long as the exchange rate does not dive.” Jeff Natale, the author of An Expat’s Guide to Living in Playa del Carmen, also shared a few thoughts about the cost of healthcare with The Signal: “I have found health care to be reasonably priced as a resident. Of course, there are two tiers of pricing— one for non-residents and one for residents. I do not have health insurance here as prices for care are much less than in my home state.”
While Jansen and Natale are only two examples, more than 760,000 retirees outside the United States receive Social Security Administration (SSA) benefits, according to a report. Perhaps you, too, are eyeing Europe or Latin America as ideal retirement destinations. We imagine that you might also feel a little overwhelmed. After all, packing your bags and moving to a place you’ve only experienced as a tourist is more than a little gutsy! And while you’ll have to slash through your fair share of red tape, retiring abroad doesn’t have to be a stressful nightmare…especially if you don’t make mistakes! Here are just a few you should avoid.
Mistake #1: Not doing enough research.
You wouldn’t travel to a city you’ve never visited without researching the local hot spots, culture, and points of interest, right? Then don’t make the same mistake when you retire abroad! Research the country you feel might be your perfect retirement paradise. Travel.State.Gov has compiled a list of things you need to research, which you can check out HERE.
Your research shouldn’t be limited only to taxes and legal issues. You should also look into the local culture, language, and even the weather! For example, does your chosen destination experience hurricanes? What about typhoons or tsunamis? Are the winters mild? Look into every consideration, both big and small. No amount of research is too much!
Mistake #2: Underestimating the cost of living.
As we stated in our introduction, a lot of Americans are choosing to retire abroad because it’s cheaper. And while the cost of living abroad is often less expensive, there are a few things you need to consider. First, according to Huffington Post, it’s not expensive to live in another country…but it is to move there. For example, it can cost over $3,000 to ship the contents of a three-bedroom home. Meanwhile, getting a visa is also costly, coming in around $3,000. And don’t forget about other expenses, like housing, insurance, furniture, and airfare!
While some countries use the U.S. dollar, not every country does. The exchange rate between currencies might let you live comfortably right now, but it could change drastically in five years (per U.S. News & World Report). Figure out what you need to open a bank account in your retirement destination of choice. Make sure you understand the requirements to open an account!
Mistake #3: Not looking into healthcare options.
Did you know that the United States has the most expensive healthcare in the world? Fortunately, healthcare overseas is often less expensive! Unfortunately, many retirees don’t understand how healthcare works in other countries before they move. Medicare doesn’t cover healthcare costs abroad. That doesn’t mean that you’re out of luck! For example, Cigna Global and Aetna International offer healthcare coverage for expats. Some countries might also have universal healthcare, but that doesn’t mean that it’s available to expats.
And also, remember to factor healthcare costs into your retirement budget! According to the Visa Guide, expat health insurance costs run from anywhere between $170 to $1,000 per month. Including your spouse (or dependents) in your plan will also raise the cost of your monthly premium even more! Make sure you understand exactly what coverage you’re getting before you sign on any dotted lines.
Mistake #4: Overlooking language and cultural barriers.
Did you know that only 20 percent of Americans can speak two or more languages? If you’re part of the 80 percent that only speaks one language, stop for a minute. Think about moving to a country where you might walk into a restaurant and not find anyone who speaks the same language as you. Imagine going to the grocery store and struggling to read labels on necessities. Consider how frustrating it would feel to exchange smiles with your new neighbors instead of pleasantries. Sadly, that might be your reality when you first move to your new retirement destination. It might be your reality for even longer if you don’t make a serious effort to learn the local language!
Beyond language, you should also take the time to truly immerse yourself in your new culture! For example, every country has different social etiquette and customs. Try to learn them! Don’t just be in your new culture; do whatever it takes to become part of it!
Mistake #5: Not considering tax implications.
Did you know that your tax responsibilities won’t stay in the States when you move? According to the Internal Revenue Service (IRS), the rules for filing income, estate, and gift tax returns are the same whether you’re in the United States or abroad. The good news? Many Americans who live abroad are entitled to special tax benefits! Some states might also require you to file a state income tax return when you live abroad.
Some countries may have tax treaties, which can help you avoid double taxation (per TurboTax). Before you pack your bags and jet off to a sun-drenched locale far, far away from the United States, talk to a seasoned tax expert. Sit down and talk to them until you understand everything about your new country’s tax system. Okay, not everything. After all, that’s what the tax expert is for! But make sure you understand enough that you won’t feel completely lost and over your head come tax season.
Mistake #6: Overlooking legal and immigration issues.
Every country has different laws on immigration. First, you’ll need to get a retirement visa, which requires proof of monthly income, health insurance, and a clean background check (according to Wise.com). But retirement visas are only good for 12 months, at which point you’ll need to renew them if you still meet the requirements. Per Investopedia, some countries allow residents to apply for permanent residency after they’ve lived there for a certain number of years.
Before you sell your house, research immigration laws in the country of your choice. An easy way to do this? Check out immigration and retirement visas on the website for the Embassy or Consulate of your chosen country! Also, reach out to an English-speaking lawyer local to your retirement destination. They can walk you through all the legal implications and even help you fill out all the necessary paperwork!
Mistake #7: Not having a plan to build a social support system.
Sadly, over 24% of adults aged 65 and older are socially isolated. When you move overseas, you’re taking yourself away from everything familiar: places, people, and even your loved ones! Worse still, you might struggle to make friends with a language barrier. Don’t fall into the trap of moving overseas and feeling like a fish out of water. Check the internet for expat groups before you even step foot on an airplane. Figure out where you can meet new friends and find your people. No matter the culture, humans are built for connection, so you can always find ways to meet new friends and build a new social circle!
Mistake #8: Ignoring personal safety and security.
No place is paradise. Whether you’re walking around your neighborhood in the United States or strolling on a beach in the Cayman Islands, you could become a victim of a random act of violence. Worse still, expats can be vulnerable to certain scams or even financial fraud. While you shouldn’t walk around thinking the worst of everyone, be cautious. If you plan to buy a house or rent an apartment in a new country, visit it in person first. Don’t blindly wire money to anyone without checking (even triple-checking) that they’re exactly who they say they are!
Also, take the time to research crime rates in your would-be retirement destination. Is it generally regarded as safe? What kind of punishments do criminals receive? Are they strict with offenders, or do they let them go with a slap on the wrist? You don’t want to spend your retirement in fear that you might be a victim of a senseless crime or scam!
Mistake #9: Rushing the decision-making process.
Rushing into a move is never a smart idea, whether you just bought a new house across town or signed the lease on an apartment in Costa Rica. Slow down and take a deep breath. If you haven’t already, refer to our previous tips and start doing a little legwork. Take the time to start learning the language in your new home on apps like Babbel or Duolingo. Get ready for your new adventure, financially, mentally, and physically. Now is the time to slow down and enjoy your retirement to the fullest, even if you plan to do so overseas!
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Originally published June 16, 2025
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