Thinking About Retiring Abroad? Here's Some Financial Tips.

November 20, 2025

Have you ever imagined spending your retirement years in a sunny villa in Portugal—or perhaps sipping coffee from a mountain-view terrace in Panama? For many Americans, that dream isn’t just possible; with the right planning, it can even be more affordable than staying stateside.

That was the experience of Edd and Cynthia Staton, who traded life in the U.S. for Cuenca, Ecuador, back in 2010. After the 2008 financial crisis derailed their plans, they reinvented retirement on their own terms—building a fulfilling life at a fraction of the cost. Today, they write books and lead an online program called Retirement Reimagined, helping others follow a similar path.

Edd calls their approach the “retirement trifecta”: lower expenses, higher quality of life, and enough savings to bank part of their Social Security income each month. “We live very comfortably,” he says of their walkable city, vibrant restaurant scene, and spacious apartment. “If we’d stayed in the U.S., we’d be scraping by instead of thriving.”

Of course, not every international move will save you money—some popular destinations can rival U.S. costs—but with proper planning, retiring abroad can be both an adventure and a smart financial move. Here’s how to prepare before you pack your bags.

1. Budget for the Big Transition

Even if you’ve traveled extensively, living abroad is different from visiting. Before committing to a move, plan several extended trial stays to get a feel for your potential new home. That means budgeting for flights, lodging, and daily living costs during those “test runs.”

Once you decide to move, expect additional one-time expenses:

●     Travel and shipping costs for your belongings

●     Visa applications and legal assistance

●     Housing deposits or down payments

●     Utilities, furnishings, and internet setup

●     Pet relocation and veterinary expenses if you’re bringing animals

If you’re buying property, understand exactly what kind of ownership you’re getting. Real estate laws vary widely—some countries grant full ownership, while others only allow long-term leases. Work with trusted local legal and translation professionals, and always add at least 10% to your projected budget for unexpected costs.

2. Make Sure You Can Access Your Money

Before you move, talk to your U.S. financial institutions about how your accounts will function once you’re overseas. Ask about:

●     Potential restrictions on deposits or withdrawals

●     Currency conversion and wire transfer fees

●     Whether international transfers can be done online or require in-person authorization

Thomas and Nancy Sutton, who retired to Lisbon after first testing out life in South America, learned this firsthand when they discovered that some U.S. banks required in-person wire transfers. “That was a surprise we weren’t expecting,” says Thomas.

Opening a local bank account, if permitted, can make life much easier—reducing exchange-rate fees and simplifying bill payments. You can still receive Social Security payments while living abroad, either deposited into a U.S. account or directly into a local one (depending on the country). Just be sure to compare the costs and convenience of each option.

3. Plan Ahead for Health Care

U.S. health insurance and Medicare generally don’t cover medical care outside the country, so you’ll need to budget for coverage. Options include:

●     Private or international “expat” health insurance

●     Paying for care out of pocket

●     Enrolling in the host country’s public system (if available to residents)

Many retirees choose expat insurance, which typically includes both routine care and emergency services such as medical evacuation.

Consider keeping your Medicare enrollment active, even while abroad. This helps you avoid re-enrollment penalties and ensures coverage if you return to the U.S. someday—whether permanently or for medical treatment. “We’ve seen people swear they’d never come back,” Edd says, “until a health issue changed their plans.”

Before you move, research the availability and cost of any prescription medications you rely on. Some drugs may not be available—or may be restricted—even with a valid U.S. prescription.

4. Understand the Tax Implications

Moving abroad doesn’t mean cutting ties with the IRS. As a U.S. citizen, you’ll still need to file a federal tax return each year if your income exceeds IRS thresholds. Withdrawals from retirement accounts are still taxable and may be subject to early withdrawal penalties.

Many countries also tax residents on their worldwide income or assess a separate wealth tax. Rules vary, so it’s crucial to work with a cross-border tax specialist before you move.

Timing also matters: selling your primary U.S. home before becoming a tax resident abroad could help you qualify for U.S. capital gains exclusions that your new country might not honor. Planning ahead can save you from double taxation and other costly surprises.

5. Keep an Emergency Fund

Life abroad comes with its own set of surprises—some pleasant, others not so much. Whether it’s a sudden trip home, a medical expense, or a major repair, having 3–6 months of essential expenses in easily accessible savings can make all the difference.

A healthy cash cushion also helps you manage currency fluctuations or market volatility without dipping into long-term investments at the wrong time.

6. Know the Rules for Residency and Citizenship

Every country has its own requirements for long-term stays. Some offer residency permits that can lead to citizenship after several years. Others have “citizenship by investment” programs that require an economic contribution.

Understand how becoming a resident—or a citizen—could affect your taxes and legal obligations before applying. In some cases, residency can trigger taxation on worldwide income, even if your assets remain in the U.S.

Final Thoughts

Retiring abroad can be a wonderful opportunity to lower costs, explore new cultures, and create a lifestyle that fits your values and budget. But like any major financial decision, it requires careful planning—especially when it comes to taxes, health care, and cash management.

With the right preparation and guidance, your dream destination can become the backdrop for a fulfilling, sustainable retirement.

Sources:

https://www.fidelity.com/learning-center/personal-finance/how-to-retire-overseas

Disclosure:

This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.

This material is provided as a courtesy and for educational purposes only.

These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.