Retiring abroad could lower your cost of living, experts say

Seniors looking to reduce expenses while also boosting their quality of life may find the idea of settling abroad appealing, financial experts say.

To that point, nearly one-third of retirees have relocated either domestically or outside the country after leaving the workforce, according to a new CNBC survey, which polled more than 6,600 U.S. adults in early August.

Some of the top reasons for retiree moves were a lower cost of living, a more comfortable lifestyle or better weather, the survey found.   

While many older Americans have opted for a less expensive city or state, others are choosing to spend their golden years abroad. 

More than 450,000 retirees were receiving Social Security benefits outside the U.S., as of December 2023, according to the latest Social Security Administration data. That’s up from less than 250,000 retirees in December 2003.   

“Each year, there are more and more,” said certified financial planner Leo Chubinishvili with Access Wealth in East Hanover, New Jersey. “And I think that will continue to grow.” 

Despite cooling inflation, higher costs are still prompting significant changes to retirement plans, a 2024 survey from Prudential Financial found.

Meanwhile, roughly 45% of U.S. households are predicted to fall short of money in retirement by leaving the workforce at age 65, according to a Morningstar model that analyzed spending, investing, life expectancy and other factors. 

But some retirees can stretch their nest egg by living somewhere with a lower cost of housing, health care and other expenses, depending on their needs, Chubinishvili said.

Some retirees are also motivated to move abroad for the “cultural exchange,” said CFP Jane Mepham, founder of Austin, Texas-based Elgon Financial Advisors, where she specializes in international planning.  

“There’s a sense of adventure,” she said. “People really want to travel.”

However, retiring overseas does require advanced planning. For example, you’ll need to understand visa and residency requirements, local laws, international taxes and other logistics.

Plus, you’ll need to research whether you can get into your new country’s health system or whether you’ll need to purchase private insurance. Medicare won’t cover you abroad, Mepham said.

“For many people, [living abroad] could be a money-saving option, depending on how they want to live their lives,” said CFP Jude Boudreaux, partner and senior financial planner with The Planning Center in New Orleans, who works with several expat clients.

But other factors, like proximity to aging parents or grandchildren, can weigh heavily on the decision, said Boudreaux, who is also a member of CNBC’s Financial Advisor Council.

To that point, of retirees who moved, some 36% wanted to be closer to family, only slightly lower than the 37% seeking a lower cost of living, according to the CNBC survey.

But your retirement, including a choice to live abroad, could change later, depending on your circumstances, he said.

“Everybody makes decisions based on their life priorities,” Boudreaux said. “Being clear about that helps people make good choices.”

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