Thinking About Retiring Abroad? Here's What You Need to Know About Cross-Border Retirement Planning
👉 Want to learn how to retire without the worry of running out of money in retirement? Click here to watch this video
Why This Matters — And Why You Should Listen to Me
As a financial advisor, I’ve had countless conversations with retirees and soon-to-be retirees who are exploring a bold question: What if I didn’t just retire… but retired abroad?
Whether it's Puerto Rico, Portugal, Costa Rica, Thailand, or even Australia, retiring internationally is more than just a lifestyle decision—it's a complex financial and tax planning journey. And while I’ve seen many retirees thrive in these dream destinations, I’ve also seen how poor planning can turn a dream into a costly mistake.
Why Retirees Are Moving Abroad
1. Lower Cost of Living
Countries like Mexico, Costa Rica, and Thailand offer comfortable lifestyles for a fraction of U.S. costs. Healthcare, housing, and even dining out can be dramatically cheaper.
2. Better Climate and Lifestyle
Tropical beaches, European walkability, slower pace of life—what's not to love?
3. Tax Incentives
Places like Puerto Rico and Portugal offer favorable tax environments, especially for U.S. citizens who understand how to structure their finances properly.
4. Adventure and Culture
Retiring abroad isn't just about saving money—it's about living more fully. New languages, foods, and experiences often top the list of "why we moved."
But Cross-Border Planning Is No Walk on the Beach
Before you book a one-way flight, you need to understand how U.S. tax law and local laws interact. Here's what to watch for:
1. U.S. Citizens Are Taxed on Worldwide Income
Even if you retire to Bali or Barcelona, you must still file a U.S. tax return. The IRS doesn’t care where you live.
You may qualify for Foreign Earned Income Exclusion (FEIE) or the Foreign Tax Credit, but retirement income isn’t always included.
Social Security is usually taxable in the U.S., even if you live abroad.
2. Currency Exchange Risk
Your U.S. dollars may go further today… but exchange rates fluctuate. A 10% shift could alter your budget significantly.
3. Health Insurance Access and Coverage
Medicare does not follow you abroad (with rare exceptions).
You may need local insurance, international private coverage, or a hybrid.
4. Estate and Inheritance Laws
Some countries don’t recognize U.S.-style beneficiary designations.
Cross-border estate planning can involve double taxation or forced heirship rules.
5. Immigration and Residency
Each country has its own process, and not all welcome retirees equally.
Financial thresholds, background checks, and health coverage may be required.
Why Puerto Rico Deserves Its Own Blog (Coming Soon)
Puerto Rico is unique. It’s part of the U.S., so no passport required, and you can still get Social Security and keep your Medicare. But it also has its own tax system, with powerful incentives for high-income retirees and business owners.
We’ll explore this in-depth next.
Next Up: Deep Dives by Destination
In the coming weeks, I’ll be publishing location-specific cross-border retirement guides:
Puerto Rico: U.S. territory, Act 60 tax benefits, Medicare implications
Costa Rica: Residency requirements, low cost of living, property ownership
Portugal: NHR tax regime, EU residency, estate planning risks
Thailand: Retirement visa options, expat healthcare
Spain or Italy: Cultural lifestyle + tax complexity
Australia: Tax residency, investment reporting, global estate taxation
Each blog will explore:
Taxes (U.S. and foreign)
Healthcare and insurance
Residency and visa options
Investment accounts
Currency and banking
Legal/estate considerations
Final Thoughts
Retiring abroad can absolutely be done right—and done beautifully. But it takes planning, patience, and professional guidance. I’ve helped clients retire internationally in a way that protects their assets, optimizes their taxes, and supports their dream lifestyle.
If you’re even thinking about retiring overseas, now is the time to build a plan.
👉 Want to learn how to retire without the worry of running out of money in retirement? Click here to watch this video
FAQs
Do I still pay U.S. taxes if I retire abroad?
Yes. U.S. citizens must report global income and may owe taxes unless offset by credits or treaties.
Can I keep my U.S. investments and retirement accounts?
Yes, but you may face extra reporting and tax rules, especially if you become a tax resident elsewhere.
What happens to Medicare if I live abroad?
Medicare generally doesn’t cover you overseas. You’ll need local or private international insurance.
Disclaimer: Case studies are hypothetical and do not relate to an actual client of Lock Wealth Management. Clients or potential clients should not interpret any part of the content as a guarantee of achieving similar results or satisfaction if they engage Lock Wealth Management for investment advisory services.