U.S. retirees also continue to be eligible for Social Security benefits, and many have their checks directly deposited in foreign banks. Among the Caribbean and Central American countries, the Dominican Republic and Costa Rica have the most beneficiaries, and in South America, Colombia and Argentina have the most, according to the Social Security Administration.

Latin American countries also offer perks. In Ecuador, for instance, you can import household goods duty-free, and Panama allows you to import an unlimited amount of used goods and a car duty-free. Mexico and many other nations offer retirees discounts on everything from airfares to utilities. Mexico also provides discounts to expatriates on medicine and medical care as well as job training and placement services through its Instituto Nacional de las Personas Adultas Mayores.

U.S. expatriates in all countries must file yearly tax returns, but the IRS allows retirees living overseas to exempt the first $92,900 in earned income from U.S. taxes. And while some countries, including Mexico, require retirees to file tax returns, others such as Nicaragua and Panama don’t tax out-of-country income.

Many retirees still wonder if, despite the perks, Latin American countries are safe. Peddicord says that, overall, they are. But check the U.S. State Department travel advisories before making your decision.

Next: World Bank study analyzes aging in Latin America. >>