Living abroad in retirement could feed your adventurous spirit without draining your savings.

3 minute read

Have you dreamed of moving to a foreign country after you retire? Or, maybe you’re ready to embrace the “expat” life by setting up residence in a new destination where many other Americans have also flocked, countries such as Mexico, Taiwan or Vietnam.

Living overseas may be an ideal situation for you, allowing your retirement savings to last longer while your life experience expands to embrace a new culture. Before you sell your house and pack your bags, however, make sure you know the pros and cons of living abroad in retirement.

1. Pro: Lower cost of living

If you’re planning to move to Paris or London after retiring, you’ll pay a pretty penny to live in those world-class cities. However, there are many places you can live abroad that are inexpensive, which can make retirement savings or social security go much further than if you live in the U.S.

In many countries in Central America, you can live well on a mere $2,000 a month, according to International Living, a resource for living abroad in retirement. In many Asian countries, the cost of living can be even lower. And many inexpensive towns are near pristine beaches, so you can enjoy coastal living for a fraction of what you’d pay to live near a beach in the U.S.

“Prices for rent, real estate taxes, healthcare, food, utility bills, and more can be a fraction of what you’re paying right now,” says International Living. “With these low costs, you could even retire sooner than you planned.”

Find out: 8 Questions to Ask Before Relocating for Retirement

2. Con: Leaving friends and family

When you move thousands of miles to another country, you’ll leave friends and family behind. If you’re an extrovert who makes friends easily and speaks the native language, you can probably make new friends quickly. However, if you’re not outgoing and committed to meeting new people, you could get lonely in a foreign country.

The good news is that it’s easy to stay in touch with people you care about, even when you live in another country. You can visit via Zoom or Skype, and your phone plan even may allow international calls.

Find out: 6 Pros and Cons of Having a Roommate in Retirement

3. Pro: Make new friends from other cultures

Nothing broadens your mind and life experience like meeting new people from other countries. Not only can your new friends introduce you to new foods, music, art and entertainment, they can also show you around your new city or town while helping you to navigate the culture like a local.

Find out: 6 Ways Downsizing Can Stretch Your Retirement Income

4. Pro: Low-cost health care

Health insurance and medical costs are high in the U.S., but that’s not the case in many foreign countries. If you’re an expat who becomes an official resident, you may have access to “extremely low-cost but good medical services” provided that country’s government health care system, according to International Living.

Even if you’re not an official resident, there are many low-cost private insurance options for living in other countries. In most cases, Medicare won’t typically cover you when you live outside the U.S. However, you can still enroll in Medicare and maintain U.S. coverage in case you ever want to move back.

Find out: 5 Big Expenses to Prepare for in Retirement

5. Con: Culture shock

If you’ve never traveled or lived abroad, you may have difficulty adapting to a new culture, new laws and possibly a new language. You’ll also have new bureaucracies to tangle with when getting a driver’s license or opening a bank account, tasks that can be more difficult and have more restrictions than in the U.S.

For example, if you’ve lived in a quiet cul-de-sac in Nebraska for 30 years, you may be put off by the noise of barking dogs, loud parties and fireworks that you might find in many Latin American cities and countries. You’ll need to get used to the new culture’s ideas on how much personal space people need, too.

If you’re adventurous and enjoy trying new foods, products and experiences, your culture shock should be short-lived. On the other hand, if you like things just the way you’re used to in America, retiring in the U.S. is probably a better idea than living abroad.

Find out: 7 Reasons to Work Part-Time in Retirement

6. Pro or con: Learning a new language

If English isn’t the native language where you want to live, you don’t have to become fluent in the language spoken right away, but learning enough through an online or college course to be conversational is a good place to start.

“Language barriers can be tough and frustrating,” according to Stephanie Kempker, founder of the Joy and Journey blog and an expat who’s lived in Thailand, Brazil and Mexico. “Depending on the number of second language English speakers in the city, doing anything will be hard, and maybe even impossible, without a friend, translator or the help of Google Translate.”

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About the Author

Deb Hipp

Deb Hipp

Deb Hipp is a full-time freelance writer based in Kansas City, Mo. Deb went from being unable to get approved for a credit card or loan 20 years ago to having excellent credit today and becoming a homeowner. Deb learned her lessons about money the hard way. Now she wants to share them to help you pay down debt, fix your credit and quit being broke all the time. Deb's personal finance and credit articles have been published at Credit Karma and The Huffington Post.

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