Many Americans dream of spending a few, if not most, of their retirement years in places other than where they’ve lived or worked throughout most of their lives. That is especially the case for those who live in the colder states. Escaping the country’s harsh winters to instead spend time in a lush, warm and affordable tropical destination sounds pretty good, doesn’t it?
Luckily, retirees looking for a change of scenery have a wide range of warm, sunny and affordable destination options to choose from. However, when you consider living abroad full-time, or even for half of the year, one of your most immediate concerns will be how far your money will go and how your dream destination fares in terms of things such as climate, overall safety and healthcare.
Here’s a shortlist of 5 sunny, affordable retirement spots for your consideration.
1. Turks and Caicos
With no income taxes or property taxes, Turks and Caicos is the ultimate affordable tropical destination for those who enjoy vacationing in the Carribean Islands. You certainly won’t have to do any convincing to have your (future) grandchildren spend their summers with you. What’s even better is that the Islands of Turks and Caicos have a lower crime rate than many well known Carribean, Central American, and South American destinations. You’ll have peace of mind knowing that you’re spending your retirement in a relatively safe country.
A country that is only growing in popularity, Panama is quickly becoming known as the premier retirement destination in the world. They offer a retiree visa, as well as a fantastic retiree benefits program. If you’re retired in Panama, you’re entitled to:
- 50% off entertainment anywhere in the country (movies, theatres, concerts, sporting events)
- 30% off bus, boat, and train fares
- 25% off airline tickets
- 25% off monthly energy bills
- 15% off hospital bills
Along with all these perks and the warm winter weather, the United States dollar goes far, and healthcare is incredibly affordable.
From breath-taking landscapes to the intoxicating culture, not to mention the delicious food, Portugal has become one of the best countries to retire abroad in. Somehow it still feels like this destination is a hidden gem among the retirement world. Its location on the map as the easternmost country in Europe makes it one of the fastest European locations outside of America to travel to. With a climate that’s been equated to that of Southern California, Portugal is the ultimate spot for retirees to find a welcoming country of friendly people, great weather and a reasonable cost of living.
One of the many fiscal benefits of Portugal is that the country has what they call the non-habitual residence (NHR), which is a dedicated tax program for expats. Originally being introduced in 2009, it provides tax benefits for individuals in their first ten years of living in Portugal. It’s important to note that you are required to be in the country for a minimum of 183 days, in order to be eligible for the tax break on specific types of income, pensions being one of them.
In addition, the 2018 Global Peace Index ranked Portugal as the fourth-most peaceful country in the world. And when it comes to healthcare options, there is national free healthcare available to retirees after they fulfill the 5-year requirement necessary to attain permanent residency.
4. Costa Rica
When you take into consideration Costa Rica’s affordability, spectacular weather and stunning beauty, it’s clear why it remains one of the top retiree destinations for North Americans. From an established public health system, to bargain real estate and a stable government, Costa Rica doesn’t disappoint.
For individuals who take into consideration environmental policies, the country is home to many preserved tropical forests. Costa Ricans pride themselves on their sustainability. If you’re ready to embrace a slower-paced lifestyle, good healthcare, a tropical climate with a sense of adventure, all while stretching your retirement dollars, Costa Rica is waiting for you.
Phrased by many as paradise on a budget, retirees seeking a tropical climate paired with a relaxed lifestyle have often been known to settle down in Malaysia. From exotic jungles to pristine beaches and fast-paced urban centers, this country truly is a colorful mix of culture. George Town, a city in the state of Penang, has been said to be one of the top retirement cities in the world due to its low cost of living and easygoing English-speaking culture.
Malaysia offers expats a 10-year renewable visa, also known as Malaysia My Second Home. To qualify for this visa, you must meet certain income and asset criteria.
So now what?
Thousands of Americans have decided to spend their retirement years abroad for various reasons. While the idea of living abroad during most, or even some of your retirement years, is tempting, taking up residence in a different country can be a very complicated process. Before you resettle, it’s very important that you understand the full impact of moving abroad. Whatever your reason is for wanting to retire in a completely new locale, even for six months of the year, a basic rule to keep in mind is to make careful preparations.
This is where your financial plan can help you. Not only should you pay your dream destination multiple extended visits to gain a realistic view of the lifestyle, but being aware of the financial implications such as taxation rules for Americans who move is crucial. Chances are, just like with your current lifestyle, you will need to make additional sacrifices and compromises, so it’s important not to get hung up on the first option that comes your way.
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