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The 3 Things You Need to Know When Retiring Abroad

Retirement is one of the most exciting aspects of a person’s life. After a lifetime of hard work, it is finally time to quit the 9-to-5 and dedicate yourself to the things you find most worthwhile. There are many logistics, however, to think about before entering retirement. This is doubly true for anyone who plans to retire abroad in a foreign country.

The 3 most important aspects of retirement that potential expatriates need to know before retiring abroad are:


Healthcare is a very big deal for retirees, and naturally so. When health problems inevitably arise, you will want to know that you: A) Have access to quality health services, and B) Can afford these services without going broke or passing on massive debt to your loved ones.

Luckily, there are many options for retirees who spend their Golden Years in foreign countries. Some of these options are even better than in their original home country (I’m looking at you, United States).

Now for the uncomfortable news. One major fact that U.S. citizens who plan to retire abroad need to know is that Medicare coverage does not apply outside of the United States. This is crucially important to understand. (Take note, however, that you can still draw Social Security while retiring abroad, which I’ll talk about later.)

Since Medicare is off the table, another healthcare option needs to fill the void. Many nations around the world have national healthcare systems, and if you retire in a foreign country, and thus become a full-time resident of that country, you will most likely be able to sign up for a healthcare plan through that government’s national healthcare network. The main benefit of this route is that it’s usually incredibly affordable. Also, since you’re working with the national healthcare system, doctors and hospitals will have no problem accepting and working with your insurer.

Private healthcare is another option. You can choose a private plan in your new country of residence, or you can choose an international healthcare plan, possibly based out of your home country. If you plan to travel a lot, the international healthcare plan is likely the best option. These are often a bit pricier but are well worth it if your lifestyle necessitates this. If you plan to stay in one country, a private plan through a local insurer is probably the best option.

There is one final need-to-know fact about healthcare for those who plan to retire abroad. One of the main benefits of retiring overseas is the incredible affordability of health services. This is especially true for U.S. citizens who will find that health services, such as hip replacement surgery, can be as much as 75% cheaper in a foreign country. This statistic is based on a cost comparison of hip replacement surgery in a typical U.S. hospital, compared to hip replacement surgery in a hospital in San Jose, Costa Rica, where many of the doctors received their medical degrees from American or European universities.


If you plan to retire abroad for the long-term, you will need to know the process of gaining residency there.

Gaining permanent residency in a foreign country is as diverse a process as there are nations in the world. Some countries, such as Switzerland, make it exceptionally difficult for foreigners to gain full time residency. Others, such as Panama, literally go out of their way to court foreigners into retiring within their borders.

The Panamanian Friendly Nations Visa, for example, offers an array of discounts to full-time expat retirees in Panama. Nicaragua is another country that has an easy retiree/residency program. It is growing in popularity among expat retirees and also boasts one of the cheapest costs of living in the Americas. It is also one of the safest countries in the Americas.

Gaining residency is certainly something a potential expat needs to know about to retire abroad. Luckily, there are many affordable and easily accessible options available.

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Finances / Taxes
Let’s get the elephant in the room taken care of right away for American retirees: Yes, you can draw Social Security benefits if you retire abroad. So don’t worry. You’ve been paying into this system your whole working life; you’ll get your money back out of it, even if you retire in another country.

But before you get too excited, consider that Social Security might be on its last legs. The program is estimated to become insolvent by the mid 2030s. So while you can draw from Social Security as long as it’s around, consider that it might not be a guarantee that it will be around forever.

This brings up another major need-to-know point about retiring abroad: cost of living. Many retirees choose to retire abroad because of the lower cost of living associated with other countries. Take, for example, retiring in Nicaragua.

It’s possible to retire comfortably in Nicaragua on a budget of just $1,200 per month. On Social Security checks alone, as long as they keep coming in, you can live a comfortable life in the exotic, safe country of Nicaragua – complete with local, organic food and extremely cheap domestic help services. For example, a maid, cook, or gardener will generally cost as little as $150-200 per month each. Think about that; no more chores EVER, and at a cost well within the average expat’s price range. That truly epitomizes higher quality of life for a lower cost of living.

This is precisely why so many Americans and other Westerners are choosing to retire abroad – the prospect of a higher quality of life with a lower cost of living. If you’re looking to stretch your budget in retirement, you need to know that retiring abroad can help you achieve this goal.


Final Thoughts
Retirement is the start of a new chapter in one’s life. It means getting to pursue all the things you may have had to put off in the past, due to work or family responsibilities.

Choosing to retire abroad is a great option for those looking to explore the world. It’s also a great option for those looking to stretch their retirement budgets, as the cost of living is cheaper in many, many countries around the world compared to such developed nations as the United States.

Make sure to remember these 3 need-to-know aspects of retiring abroad: healthcare, residency, and finances. If you do this, you’ll be set up for the retirement you’ve always dreamed of.

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