Since the election I’ve seen sooo many people commenting on social media that they want to leave the United States. Of course, moving abroad is something many people desire to do regardless of the political climate, including those about to retire.
So, I decided to ask ChatGPT for the 8 best places to live outside of the United States. Here’s the list “she” created for me.
For those considering a move abroad, the world offers a variety of destinations with unique cultures, beautiful landscapes, and affordable living options. Whether you’re looking for better quality of life, lower cost of living, adventure, or an escape from the U.S. for political reasons, here are eight of the best places to live outside the U.S., each offering its own set of benefits (according to ChatGPT). If nothing else, this is a great list to take an extended vacation to. My new destination bucket list. Let’s go and Get Her Done. This list includes: Lisbon, Portugal; Mexico City, Mexico; Barcelona, Spain; Chiang Mai, Thailand; Medellín, Colombia; Auckland, New Zealand; Valletta, Malta; and Bali, Indonesia.
I’ve also included some tips on How to Retire Outside of the U.S. and Take Advantage of Retirement Benefits and Strategies as a U.S. Citizen.
Let’s take a look at the list and the reasons to consider the location:
- Lisbon, Portugal
Lisbon is a charming European city that has become increasingly popular with expats in recent years. The mild climate, rich culture, and affordable living make it an attractive destination for those seeking a slower pace of life without sacrificing modern amenities. Lisbon is also known for its vibrant culinary scene, historic neighborhoods, and a welcoming expat community.
Why Lisbon?
- Low cost of living compared to other Western European capitals.
- Mild climate year-round.
- Rich history and culture, with a laid-back Mediterranean vibe.
- Tax incentives for foreign retirees and entrepreneurs.
- Mexico City, Mexico
Mexico City offers a unique blend of rich culture, excellent food, and a vibrant arts scene, all while being more affordable than many U.S. cities. It’s a hub of economic and cultural activity, and its neighborhoods offer something for everyone—whether you’re seeking the hustle of a metropolitan area or the calm of a quieter suburb.
Why Mexico City?
- Affordable healthcare, both public and private options.
- Rich culture and history, with museums, galleries, and historic sites.
- Close proximity to the U.S., making travel easier.
- Low cost of living, especially compared to many U.S. cities.
- Barcelona, Spain
Barcelona is a top destination for many looking to relocate to Europe. The city’s combination of Mediterranean beaches, architecture (think Antoni Gaudí), and a rich cultural scene is hard to beat. While the cost of living is higher than some other cities on this list, it offers a unique blend of lifestyle and opportunity for those willing to embrace a new culture. I can attest to the appeal of Barcelona. My daughter spent a semester there this year and didn’t want to come home.
Why Barcelona?
- Vibrant social scene with a mix of beach, culture, and nightlife.
- High quality of life, with excellent healthcare and public transportation.
- Mild climate, with plenty of sunshine year-round.
- EU residency options for retirees or long-term residents.
- Chiang Mai, Thailand
For those looking to live in an affordable and exotic location, Chiang Mai is a great choice. Located in northern Thailand, Chiang Mai offers a slower pace of life, surrounded by beautiful mountains and temples. The cost of living is exceptionally low, and the city is known for its welcoming expat community and excellent street food.
Why Chiang Mai?
- Extremely low cost of living, including housing and food.
- High quality healthcare with many medical tourism options.
- Large expat community and a laid-back lifestyle.
- Rich culture and natural beauty, with access to outdoor adventures.
- Medellín, Colombia
Medellín has undergone a transformation over the past few decades and is now known for its pleasant climate, friendly locals, and vibrant culture. The cost of living is low, making it an attractive destination for retirees, digital nomads, and anyone looking for an affordable yet cosmopolitan lifestyle. It’s also renowned for its public transportation system and affordable healthcare.
Why Medellín?
- Affordable living, with inexpensive housing and healthcare.
- Year-round spring-like climate, earning it the nickname “City of Eternal Spring.”
- Strong public transportation system, making commuting easy.
- Growing expat community and an international airport.
- Auckland, New Zealand
Auckland is New Zealand’s largest city and offers a high quality of life with access to stunning nature and outdoor activities. The city offers modern amenities while maintaining a relaxed pace of life. New Zealand has a well-regarded healthcare system, and the country’s welcoming attitude towards immigrants makes it an attractive destination.
Why Auckland?
- Natural beauty, with beaches, forests, and mountains nearby.
- High quality of life, with a low crime rate and excellent healthcare.
- Strong economy, with opportunities for work, especially in technology and innovation.
- Welcoming immigration policies for skilled workers and retirees.
- Valletta, Malta
If you’re looking for a mix of culture, history, and Mediterranean charm, Valletta, the capital city of Malta, could be the perfect fit. Malta offers stunning coastal views, a rich historical heritage, and a friendly expat community. English is one of the official languages, making it easier for U.S. citizens to adapt.
Why Valletta?
- English-speaking country, making it easier to integrate.
- Low taxes for foreign retirees and business owners.
- Rich cultural heritage and stunning historic architecture.
- Beautiful Mediterranean climate with warm summers and mild winters.
- Bali, Indonesia
Bali is often considered a paradise for those seeking an affordable and tranquil lifestyle in a tropical environment. Its natural beauty, culture, and lower cost of living make it a haven for digital nomads, retirees, and anyone looking to escape the hustle and bustle of city life. With its welcoming locals, stunning beaches, and yoga retreats, Bali provides a unique blend of relaxation and adventure.
Why Bali?
- Incredibly low cost of living, especially for housing and food.
- Access to stunning beaches, mountains, and spiritual retreats.
- Growing expat community with a focus on wellness and creativity.
- Affordable healthcare and easy access to medical tourism.
Where Should You Go?
The ideal destination for relocation depends on your individual preferences, lifestyle goals, and budget. Whether you’re seeking a low cost of living, cultural experiences, or outdoor adventure, these eight locations offer unique opportunities for a fulfilling life abroad. From the historical charm of Lisbon to the tropical paradise of Bali, there’s something for everyone looking to start a new chapter in their life outside of the U.S
How to Retire Outside of the U.S. and Take Advantage of Retirement Benefits and Strategies as a U.S. Citizen
Retiring abroad can be an appealing option for many U.S. citizens, offering opportunities for a lower cost of living, an improved lifestyle, and access to new cultures. However, making sure that your retirement benefits and financial strategies are intact while living outside the U.S. requires some careful planning. This article will explore how you can retire outside the U.S. while still taking full advantage of the retirement benefits available to U.S. citizens.
- Understand Your Social Security Benefits Abroad
One of the key retirement benefits available to U.S. citizens is Social Security. The good news is that U.S. citizens can receive their Social Security benefits while living abroad. However, there are a few things to keep in mind:
How to Continue Receiving Social Security:
- Eligibility: If you’ve worked and contributed to Social Security for a sufficient number of years, you’re eligible to receive benefits no matter where you live.
- Payment Methods: Social Security payments can be made via direct deposit to your U.S. bank account, which you can access from overseas, or to an international bank account in certain countries.
- Country-Specific Rules: Some countries have agreements with the U.S. that make it easier to collect Social Security. Check if your country of choice has a Social Security Totalization Agreement with the U.S. This agreement ensures that you won’t lose benefits if you worked abroad for part of your career.
Considerations for U.S. Social Security Recipients Abroad:
- Taxes: While your Social Security benefits are generally exempt from U.S. state income taxes, they may be subject to taxes in your country of residence. Be sure to consult with a tax advisor familiar with international tax laws to understand how your benefits might be taxed.
- Cost of Living Adjustments (COLA): Social Security benefits are adjusted for inflation, but these adjustments may vary depending on your country of residence. Some countries may have different rates or adjustments.
- Keep Your Medicare Coverage
While Medicare benefits are an essential part of retirement planning for many U.S. citizens, they don’t typically extend outside the U.S. and its territories. However, there are some ways to ensure that you have health coverage while living abroad:
Medicare Outside the U.S.:
- Limited Coverage: In general, Medicare only provides coverage for emergency medical services abroad. If you are planning to retire outside of the U.S., it’s wise to consider additional health insurance.
- Medicare Advantage Plans: Some Medicare Advantage plans may offer international coverage or emergency medical coverage outside the U.S. Make sure to research plans that specifically cater to expats.
Private Health Insurance:
- International Health Insurance: Consider purchasing international health insurance that will cover you in your new country of residence. Many countries also have affordable local health insurance options that provide coverage similar to what you would get in the U.S.
- Medicare Part B: If you plan to return to the U.S. occasionally or move back after several years, keep in mind that you can keep your Medicare Part B coverage by continuing to pay your premiums. You may face penalties if you choose to delay your Part B enrollment for more than 8 months.
- Minimize Tax Liabilities with the Foreign Earned Income Exclusion (FEIE)
When retiring abroad, it’s essential to understand the U.S. tax implications. As a U.S. citizen, you’re required to file a U.S. tax return every year, no matter where you live. However, there are provisions that can help minimize your tax burden:
Foreign Earned Income Exclusion:
- FEIE allows you to exclude up to $120,000 (as of 2024) of foreign-earned income from U.S. taxation, provided you meet certain requirements.
- This exclusion applies to income from work, which is particularly useful if you are working remotely or earning income while living abroad.
Foreign Tax Credit:
- If you’re paying taxes in your country of residence, you may be able to use the Foreign Tax Credit (FTC) to offset your U.S. tax liability. This credit helps prevent double taxation by allowing you to deduct the taxes you pay to a foreign government from your U.S. tax bill.
Considerations:
- U.S. Taxes on Worldwide Income: Even though the FEIE helps exclude foreign-earned income, you are still required to report all income, including interest, dividends, and retirement income, such as Social Security benefits and withdrawals from U.S. retirement accounts like IRAs and 401(k)s.
- Tax Treaties: The U.S. has tax treaties with many countries to help reduce the risk of double taxation. You should review whether the country you are moving to has a tax treaty with the U.S. to understand how it will affect your retirement income.
- Manage Your U.S. Retirement Accounts (IRAs, 401(k)s) Abroad
U.S. retirement accounts, such as IRAs and 401(k)s, offer substantial tax advantages. While you can still manage these accounts while living abroad, there are some important factors to consider:
Withdrawing Funds:
- Age 59½ Rule: You can begin withdrawing funds from your retirement accounts without penalty at age 59½. However, you will still be subject to U.S. income taxes on these withdrawals.
- Required Minimum Distributions (RMDs): If you are over 73 (age increases with birth year), you will need to take Required Minimum Distributions from traditional IRAs or 401(k)s. Keep in mind that you may be taxed both by the U.S. and your new country of residence, depending on their tax rules.
IRA and 401(k) Contributions:
- While you can continue contributing to U.S. retirement accounts while living abroad, contributions to U.S.-based retirement plans may be complicated if you’re not earning U.S.-based income. Be aware of the tax rules in both countries, as some countries may limit contributions to U.S. retirement plans.
- Plan for Currency and Banking Needs
Retiring abroad may mean dealing with different currencies and banking systems. To ensure you manage your finances efficiently, consider the following strategies:
- Currency Exchange: You’ll likely need to exchange U.S. dollars for the local currency. Use a reliable and low-fee service to avoid high exchange costs.
- U.S. Bank Accounts: Many U.S. banks allow you to maintain an account while living abroad, and you can access your funds through international ATMs or online banking. Some banks also offer accounts specifically designed for expats.
- Local Bank Accounts: It may be worth opening a local bank account to avoid excessive fees when withdrawing money. Research the banking options in your destination country.
- Consider Estate Planning and Inheritance Laws
If you plan on leaving assets behind in your home country or in your new country of residence, it’s important to consider how both U.S. and local inheritance laws may impact your estate. Many countries have different rules regarding estate taxes, inheritance, and wills. Work with an attorney to create an estate plan that accounts for the specifics of your international living situation.
Conclusion
Retiring outside the U.S. offers exciting opportunities, but it requires careful planning to make the most of your U.S. retirement benefits. By understanding how Social Security, Medicare, taxes, and retirement accounts work abroad, you can ensure that your transition is smooth and that you continue to enjoy the benefits you’ve earned. Consulting with a financial advisor familiar with expat retirement planning is a smart step to ensure you’re making the best decisions for your financial future while living abroad.
As for me, I have no plans to leave the U.S. I’m not political at all and I’ve lived 59 years under all different presidents so I’m going to take my chances with this not so new new one and hope for the best. If you need help putting together your plan to move or retire outside the U.S., reach out. We have people who can help you prepare, plan and Get Her Done: lynnt@herretirement.com
