AARP Smart Guide to Retiring Abroad

10. Don’t go it alone

“I would recommend to always work with a professional who specializes in expats, whether you have a high level of wealth or a low level of wealth,” says Grazi. Talking to a relocation consultant or overseas immigration attorney can yield expert insights on navigating complex visa rules and other hurdles, “even if it’s just for an hour,” she says.

Don’t just conduct a Google search; seek out personal and professional recommendations. Ask for referrals from expats you meet in online networks or on your scouting trips. Your U.S. attorney or financial adviser might not know the nuances of other countries’ laws and tax regulations, but they may have colleagues or contacts who do.

“It’s just like the way doctors refer their patients to medical experts,” says Frank Fas, who is a lawyer. “There’s a really short list of attorneys who do this, because we all did that [international law] elective in law school. So asking around for referrals is usually the best way.” 

AARO’s “Ask an Expat” tool can help you find on-the-ground visa experts, too, and it’s available to members and nonmembers alike.

FIGURING OUT FINANCES

11. Know the tax rules

Unless you’re planning to renounce your U.S. citizenship, moving abroad doesn’t eliminate your financial obligations to Uncle Sam. You still need to file a U.S. tax return (and possibly a state return, too, if you maintain a U.S. residence). There may be additional filing requirements for expats who earn income or hold financial assets abroad,  and you risk steep penalties for failing to report them, Speer says.

That’s on top of any tax obligations you have in the country you move to. If you’re there more than half the year, you typically are considered a tax resident.

Most countries favored by expats have tax treaties with the U.S. that prevent dual taxation — being taxed in both places on the same income — but there are still many complications. Tax years, filing deadlines and treatment of some types of income (such as capital gains) may differ widely from those in the U.S. Find an accountant or a tax attorney who specializes in relocations, or one based in your destination country, to help you navigate this minefield.

12. Sort out Social Security

If you haven’t already, create an online My Social Security account to manage your benefits remotely. You can use it to apply for benefits if you didn’t do so before moving, and to register a change of address or bank account information if you did.

The SSA can make direct deposits to banks in most countries. Remember, though, that the payment will be transmitted in dollars. The amount you receive may be subject to currency fluctuations and international transaction fees. The same is true if you keep benefits flowing to a U.S. bank (which you can do if you maintain a U.S. address) and withdraw them abroad.

If you have your benefits loaded onto a Direct Express debit card, you may want to consider switching to bank deposits. Direct Express works wherever Mastercard debit cards are accepted, but there’s a 3 percent currency-conversion charge for overseas use, plus hefty fees for foreign ATMs.

One more thing to know about getting Social Security abroad: The SSA will send you a questionnaire every year or two, typically in May or June, to ensure you are still eligible for benefits. Your payments can be stopped if you don’t respond.

13. Limit your fees

These days, U.S. debit and credit cards are good almost anywhere in the world — but using them anywhere in the world can be expensive. Most charge fees for overseas transactions, ranging from 1 to 3 percent.

If your current cards charge for international use, get one that doesn’t. Shop around — most major banks’ card offerings will include some with no foreign fees. Look for one with no annual fee and make sure the credit limit is sufficient for your daily spending. This should be your go-to card in your new place.

You can save on cash withdrawals overseas by opening a U.S. checking account that doesn’t charge international ATM fees, such as Capital One 360 or HSBC Premier. If you will be making regular payments to or receiving them from someone in the States, consider money-transfer services like Wise, XE or Remitly, which generally charge lower fees than banks for international transactions. 

14. Safeguard inheritances

Estate planning can be complicated no matter where you live, but residing abroad adds new wrinkles. For example, some foreign jurisdictions tax inheritances left by resident expats when they die, even if they’re in a trust — many countries do not recognize U.S. trusts for probate or inheritance purposes.

You may need to revise your estate plans, including living wills and instructions for end-of-life care, to conform not only to U.S. law but also to the laws where you live. Some older expats create a second will, called a situs will, to govern the disposition of property they hold outside the United States. Relocation specialists recommend working with attorneys in both the U.S. and your adopted country to make sure your estate is handled in accordance with your wishes.

15. Prepare for surprises

Retirement requires financial planning; retirement abroad means accounting for the unexpected, such as unpredictable currency fluctuations. When the dollar falls, it’s effectively a form of inflation for Americans abroad, whose dollar-based income from Social Security or account withdrawals suddenly doesn’t go as far. “People struggle,” Speer says.

Build a cushion into your budget to accommodate factors such as currency swings or unplanned trips stateside. Unanticipated travel obligations for, say, a health emergency or a relative’s death can mean pricey last-minute bookings.

You may even want to consider evacuation insurance. In a medical emergency, it can cover the cost of transport to the nearest suitable facility for your condition and, if needed, repatriation to the U.S. for ongoing treatment once you’re stable. It can be especially valuable for adventurous expats who choose to live in remote or rural areas with limited medical infrastructure, says Joe Cronin, president of International Citizens Insurance, a global insurance brokerage.

MAKING THE MOVE

16. Downsize

Americans of retirement age tend to have accumulated lots of stuff. Do you really want to drag it with you to a new country? And with homes in the U.S. typically being much larger than those abroad, would you even have room? “It’s a new start, so it’s good to just take what you need and build up from that,” Grazi says.

Here are some practical steps to downsize for an international move:

• Divide your possessions into categories, from those you can’t remember why you bought to everything you can’t live without.
• Hold a moving sale to get rid of valuable items you can do without, or list them on Facebook Marketplace or eBay.
• Put meaningful possessions you don’t want to sell in storage, or gift them to friends and family.
• Digitize physical photos so you can easily bring those memories with you.
• Donate books to your local library.

Don’t wait until the week before you move; start doing this early in your process to avoid a scramble and to get used to living with less.

17. Get ready to ship

Even after jettisoning all those possessions, getting what’s left to another country — “international removal,” in moving-industry parlance — is a lot more complicated than hiring some local kids to load a rented truck. It involves freight forwarders, destination agents, customs brokers, duties and a lot of paperwork. The less you bring, the easier it will all be.

An experienced international moving company can handle many of these steps on your behalf. Check with your new expat friends for recommendations. Get references and written quotes before hiring a firm.

For customs purposes, you’ll need an inventory of everything you’re shipping, with the value of each item; a bill of lading (a key legal document in global shipping that serves as a receipt for your goods); an export declaration (a record of what’s being shipped); and insurance. Ask your mover about additional rules or records that may be required by your destination country.

18. Get health insurance

Most countries require you to have medical coverage in place as a condition to move there. Medicare won’t pay for care abroad, except in very limited situations, nor will standard U.S. health plans, so you’ll need to arrange an international alternative.

Some insurers operating in the U.S., including Allianz, Cigna and IMG, offer international plans that comply with visa regulations. You can deal with them directly or use a broker — your costs will be the same either way, and a broker can help you save time because they’ve already researched premiums and provisions and can answer coverage questions, such as whether and to what extent plans cover pre-existing conditions.

International plans offer a vast range of coverage, from basic to comprehensive. Cronin says he often sees clients opt for the cheapest coverage and regret it later. “That keeps your costs down until you actually need the benefits,” he says. “Then you find out that the deductible’s too high and the coverage isn’t enough.”

Private health insurance is also widely available in other countries, including plans tailored to meet visa requirements that can be purchased before you move or shortly after (using limited-term travel medical insurance as a stopgap).

These local plans can be more affordable than international insurance but may have waiting periods for eligibility and offer access to fewer doctors and hospitals. U.S.-based brokers don’t work with them, but a relocation consultant can help you weigh options and find reputable providers. Check that customer service is available after hours and in a language you speak

In most countries, you can qualify for the national public health system after a set period of legal residency. Some, including Mexico, let you buy into the national system sooner. Accessing the public system can be more cost-effective than other options, although it may come with more limited coverage.

19. Check on meds

Another health matter to sort out before you move: Make sure any medications you’re taking to manage chronic conditions are available in your new country.

Ask insurance providers and brokers about drug coverage where you are going. You can also search online for a country’s formulary (the list of medications covered by insurance). The World Health Organization has a repository with more than 150 countries’ essential medicines lists; you could also check the website of your target country’s public health system or government health ministry.  Be sure to search by the medication’s generic name, as brand names may differ in other countries.

Bring the maximum allowable supply of your medications with you when you move so you have a stockpile while you arrange care in your new home. You’ll likely need to get new prescriptions from local doctors to maintain your meds.

20. Rent first

However much you’ve fallen in love with a region, town or neighborhood, relocation specialists recommend against buying property, at least right away.

“It’s easier to back out from a rental than it is from a purchase,” Frank Fas says. He likens buying before renting to “marrying someone you’ve never met. Some arranged marriages go very well. But given the choice, I’d rather not.”

Buying before you really get to know the place can backfire. Jen Barnett, cofounder of relocation consulting company Expatsi, recounts the stories of a client who bought a condo over what turned out to be a noisy cantina in Puerto Vallarta and a couple who closed on a house in Costa Rica during a dry period and were miserable when the rainy season arrived.

“It’s really hard to know where you want to live unless you try it,” Speer says. “Buy when you know you’re in for the long haul. It’s a little bit like falling in love with a person. You know when it happens.”

SETTLING IN

21. Find doctors

Regions with large expat communities are likely to have a fair number of English-speaking (and often U.S.-trained) medical professionals in a range of specialties. Ask your insurer about multilingual providers in your area. Some international insurance companies offer 24/7 customer service to help policyholders quickly find care.  (Cronin says he once called his insurer when he needed an English-speaking doctor in Madrid and was quickly referred to one a few blocks away.)

U.S. embassies and consulates can also help you find local providers, and your new expat acquaintances will have suggestions based on their own experience. Before leaving the U.S., collect and organize all relevant medical records, including your prescriptions, so your new doctors know your history and can treat you accordingly.

22. Arrange banking

While you can make ATM withdrawals from your U.S. bank account and buy things with your U.S. credit cards, you will almost certainly need a bank account where you live, Speer says. That’s often required to pay utilities and other routine bills from local providers. In some countries (Costa Rica, Malaysia and Thailand, for example), you must open a bank account to get certain kinds of residency visas.

Still, this step can be more complicated than you might think. According to AARO, some foreign banks won’t open accounts for Americans because they do not want to deal with IRS reporting requirements. “We’ve had people contact us in a tizzy because they couldn’t get a bank account,” Speer says.

Ensure that the banks you’re considering can handle multiple currencies and are backed by a deposit insurance authority such as the FDIC in the U.S. Ask your U.S. financial institution whether it has a “correspondent bank” near where you’ll be living — that can make it easier, and cheaper, to transfer money — or use an international bank such as HSBC or Citibank that has branches abroad and accounts that let customers transfer money internationally, fee-free.

23. Learn the language

Sure, in places popular with expats, it’s usually easy to get by in English, but making an effort to communicate in the local lingo can go a long way. “It’s a psychological thing,” says Divers. “It shows that you’re trying. And it helps you start to feel at home.”

Begin before your move, with a language-learning app like Duolingo, Babbel, Memrise or Rosetta Stone. Consider continuing with language classes, which are readily available in most countries (some U.S. embassies post lists on their websites). Watch local TV and read local newspapers to bone up. The mobile app Tandem can connect you with a native speaker to swap language instruction.

You might not become fluent, but attaining even a basic grasp of the language can make a big difference, both in conducting daily business and getting comfortable in your new surroundings. Bonus: Studies show that learning a new language can stimulate brain health.

24. Get tools to stay connected

Your U.S. mobile phone will likely work abroad, but international roaming and data rates can add up quickly. Get an international mobile phone plan or, better yet, sign up with a local carrier. In many countries, Speer says, phone plans are cheaper than in the U.S. and often include free international calling.

Private messaging apps like Signal and WhatsApp can be a lifeline to loved ones back home. All you need is a valid mobile number and an internet connection to call or text other users, anywhere in the world, for free. Consider purchasing paid versions of programs like Zoom and Teams so you can video chat with the kids and grandkids without time limits.

25. Make friends

Keeping to yourself doesn’t just defeat the purpose of having an adventure in a new country; social isolation can be bad for your health, increasing the risk of heart disease, stroke, dementia and depression, according to a 2024 feature in The Journal of the American Medical Association.

Still, isolation “is a huge danger” for Americans abroad, Speer says. Fitting into a new place is always challenging, and language barriers and different social customs can make it considerably harder. “You have to watch people and listen,” Speer says. “You have to assimilate.”

Language class is a good place to make friends among fellow new arrivals. So are those social media platforms you’ve tapped into for advice. If you have friends or colleagues in the States with connections where you are moving, ask for introductions. There are also societies and clubs for resident Americans in many places abroad (the Federation of American Women’s Clubs Overseas, for example, lists 59 groups in 29 countries). Some embassy and consulate websites also list upcoming events for U.S. citizens abroad.

26. Go native, as much as you can

But you didn’t move to another country to just hang out with other expats, right? “People sometimes fall into that trap,” says Speer. “They meet only other Americans at the beginning, and then those are their only friends.”

There are plenty of ways to meet natives, leveraging your own inclinations and interests: Volunteer, attend a house of worship, take continuing-education classes (many universities abroad offer some in English), or use Meetup.com or local listings to find hobby groups. (Speer, for instance, is the only American in a Parisian tap-dancing class.) Or brush off the long-ago custom of just introducing yourself to the neighbors.

“Do something that scares you,” Frank Fas says. “I try to do something that scares me every day — trying a new food or going somewhere I’ve never been. Meeting other people is scary, but it's rewarding. After all, you wanted a change.”