Top 13 Tax-Free Retirement Countries for Americans Abroad
Retiring abroad has become a popular choice for many Americans seeking to enjoy their golden years in a new setting. The allure of warmer climates, rich cultural experiences, and scenic locales like pristine beaches and culinary delights is strong. However, deciding on the best country to retire to involves careful consideration of various factors, including cost of living, healthcare quality, safety, and ease of integration. And, if you’re like thousands of our clients, you’re also looking for a country where your tax burden is limited or countries where pensions are not taxed.
In this guide, we have compiled a list of top countries that offer an ideal combination of these elements, catering specifically to the needs and preferences of American retirees who are interested in international living. From affordability and healthcare infrastructure to cultural richness and expatriate communities, each country on our list has been evaluated to ensure it offers a high quality of life and a welcoming environment for those looking to make the most of their retirement years.
Discover our expert picks for the best places to retire, where you can fully embrace a rewarding and comfortable retirement experience in a new permanent residence.
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1. Panama
Panama tops most lists of the best countries to retire in, and there are good reasons for that. To start with, Panama’s tropical weather and lush mountain vistas make it a perfect spot to enjoy your retirement years. Beyond this, a low cost of living means that Americans can stretch their retirement income quite a bit farther than they could in the states.
Panama also offers one of the most comprehensive retiree programs for expats in the world: the pensionado visa. Retirees who qualify for this visa can claim a wide variety of special benefits while living in Panama. This includes significant reductions and exemptions for:
- Utility bills
- Airline tickets
- Public transportation
- Loans
- Personal home mortgages
- Doctor’s bills
- Hospital services (if no insurance applies)
- Dental exams
- Eye exams
- Medications
- Hotel stays
- Import taxes
To qualify for the pensionado visa program, a retiree must have a lifetime income from Social Security, a pension fund, or some other source above a certain threshold. General retirement accounts, such as 401(k)s or IRA, generally do not qualify as lifetime income as you are required to provide documentation from your financial institution stating that your retirement income is guaranteed for life. Annuity contracts generally do help you secure a Pensionado visa.
Eligibility for the pensionado visa program in Panama includes a requirement for a lifetime pension of at least $1,000 per month. If the individual owns a property valued over $100,000 in Panama, the monthly pension requirement can be lowered to $750.
2. Costa Rica
Panama’s next-door neighbor, Costa Rica, is another popular expat community for Americans retiring abroad. This should come as no surprise, as even a brief taste of Costa Rica’s sun-soaked climate will leave many retirees longing for more. The friendly locals, easygoing lifestyle, and affordable living costs certainly don’t hurt, either.
Costa Rica’s health care system is also widely regarded as the best in Latin America. And because roughly a quarter of the country’s landmass is made up of national parks and wildlife refuges, Costa Rica is especially suited to those who love the great outdoors.
3. Portugal
For Americans who are interested in retiring in Europe, Portugal offers a host of benefits. This temperate Iberian country is renowned for the safety its residents enjoy. According to the 2023 index, Portugal is ranked as the seventh most peaceful country in the world. The World Population Review also ranks Portugal as the 7th safest country in the world with one of the lowest crime rates.
Portugal is also a remarkably affordable option for American retirees, offering one of the lowest costs of living in all of Europe. This includes lower-than-average prices for food, lodging, and most other day-to-day expenses. On top of this, Portugal boasts a truly comprehensive healthcare system.
For anyone interested in making Portugal their home, the Non-Habitual Residence Tax (NHR) system and D7 visa programs are both excellent options for obtaining long-term residency.
In October 2023, Portugal’s Golden Visa program saw some sweeping changes that are important for potential investors to understand. Previously, a simple real estate investment with a regular property tax payment in Portugal could set you on the path to obtaining a Golden Visa. However, this once-popular avenue has been officially closed off by the Portuguese Government.
The significance of this change cannot be overstated. If you were considering buying property in Portugal as a way to get your foot in the door, you’ll need to look at other options. The government has completely removed all real estate investment options from the program, affecting those who planned to establish part-time residences in Portugal.
Additionally, new amendments to the program include increased investment thresholds and limitations on where investments can be located. While the exact details are yet to be revealed, it’s clear that the program is undergoing a transformative phase.
4. Ecuador
Lying along the equator, Ecuador has become a tropical paradise to the thousands of US expats who call it home. Ecuador features diverse landscapes, including 1,200 miles of stunning coastline and the world’s highest active volcano. Add in the Galápagos Islands, and it’s no wonder that Ecuador is considered one of the best countries to retire in.
There are several ways to become a resident of Ecuador. One of the most common routes for retirees is with Ecuador’s retirement visa. Regardless of the method used, Ecuadorian residents aged 65 or older receive a number of benefits, including major discounts for transportation and entertainment options.
In addition to this, seniors are also eligible for a refund of Ecuador’s 12% value-added tax.
5. Greece
The Mediterranean nation of Greece is steeped in history, culture, and plenty of sunshine. Whether you prefer the peace of the country or the hum of urban life, Greece has you covered, offering both beautiful stretches of countryside and bustling cities like Athens and Thessaloniki.
No matter what part of Greece appeals to you, the low cost of living will help you get the most out of your retirement income. While Greece is slightly more expensive than Portugal, it’s still more affordable than much of Europe.
Moving to Greece is often easiest through the Golden Visa program. This requires investing at least 250,000 Euros in Greek property—a much lower threshold than is required by most countries’ Golden Visa programs.
Greece has also launched a program to attract foreign retirees by offering them a flat tax rate of 7% for 10 years. This program does not require a minimum investment in Greek property, though you would still need to purchase or rent a home in Greece. However, this is only offered to pensioners from countries with a double taxation treaty with Greece.
6. Belize
Belize features many of the same benefits as its other Central American neighbors: endless beaches, striking scenery, and lots of sun. Plus, Belize’s Qualified Retired Persons (QRP) program is easily one of the best retirement programs in the world.
Under the QRP system, retirees receive a full exemption from taxes on any income from outside of Belize—whether passive or earned. The QRP also provides duty exemptions on certain items, including personal vehicles.
7. Nicaragua
Like Belize, Nicaragua offers numerous tax benefits for US expats through the Law of Resident Pensioners and Retirees. This, combined with a remarkably low cost of living, has attracted many American retirees.
Nicaragua provides a warm climate, stunning landscapes, and a rich cultural heritage. The low cost of housing, utilities, healthcare, and dining allows retirees to live comfortably on a modest budget. Tax incentives include exemptions on import taxes for household goods, vehicle purchases, and no taxes on foreign income.
The country offers diverse recreational activities, from exploring colonial Granada and vibrant markets in Masaya to enjoying the beaches along the Pacific and Caribbean coasts. Outdoor enthusiasts can explore volcanoes, lakes, and nature reserves.
8. The Philippines
The Philippines is an archipelago of 7,000 tropical islands with a population of more than 200,000 US expats, making it a popular place for expats in Asia. So what draws so many Americans to these islands? As with most other entries on this list, the chief reasons tend to be the warm weather and reasonable living costs.
The Philippines’ Special Resident Retiree’s Visa also offers a range of benefits for expats hoping to retire overseas. This visa entitles you to an exemption of certain:
- Customs duties
- Import taxes
- Travel taxes
- Pensions and annuities
…and more.
9. Malta
Malta is a small island nation floating in the Mediterranean Sea just south of Sicily. As an island, Malta promises breathtaking coastlines and delicious seafood-based cuisine. Best of all, most of the population of Malta can speak English, making communication easy for Americans living abroad.
Malta’s Golden Visa is also generally the cheapest option of any European country—even lower than Greece’s threshold. Most expats will only need to invest about $32,000 USD to acquire a visa. Then, Malta’s affordable living costs will help your remaining finances go even further.
If you’ve been dreaming of retiring to an island paradise, Malta may be calling your name.
10. Mexico
Mexico is an increasingly popular destination for American retirees due to its close proximity to the United States, warm climate, and rich cultural heritage. Mexico offers a low cost of living, making it possible for retirees to enjoy a comfortable lifestyle without breaking the bank.
Mexico’s Retired Temporary Resident Visa allows retirees to live in Mexico for up to four years, with the possibility of renewal. This visa requires proof of a steady income, which is relatively easy for most American retirees to meet. Furthermore, Mexico has a territorial tax system, meaning foreign-sourced income is not taxed, making it an attractive option for those with pensions or other income from abroad.
The excellent healthcare system in Mexico is another major draw. The country offers both public and private healthcare options, and many of its hospitals and clinics are of high quality, often at a fraction of the cost of similar services in the United States.
11. Malaysia
Malaysia is a fantastic option for American retirees seeking a tropical paradise with a lower cost of living and high-quality healthcare. Malaysia operates on a territorial tax system, meaning foreign-sourced income is not taxed, which is a significant benefit for retirees living on pensions or other income from abroad.
The Malaysia My Second Home (MM2H) program is designed specifically for retirees and long-term visitors. This program offers a 10-year, renewable visa and allows participants to bring in personal belongings tax-free. To qualify, applicants must meet certain financial requirements, including a minimum monthly income or substantial liquid assets.
Malaysia boasts a high standard of living, with modern infrastructure, world-class healthcare facilities, and a rich cultural heritage. English is widely spoken, making it easier for American retirees to integrate into the local community and enjoy their retirement in a vibrant and diverse environment.
12. France
France, with its world-class healthcare system and picturesque landscapes, is an appealing retirement destination for US citizens. From the charming countryside of Provence to the vibrant streets of Paris, France offers a high quality of life and diverse living experiences.
France has a favorable tax system for retirees, too. While it does tax foreign income, the income tax treaties between the US and France can help avoid double taxation. Additionally, France has a special pensioners’ residence permit for retirees, which allows them to reside in the country if they can demonstrate sufficient income to support themselves.
The French healthcare system is considered one of the best in the world, providing high-quality care at a relatively low cost. Retirees can benefit from this system, which includes access to both public and private healthcare services.
France’s cost of living can vary significantly depending on the region. While Paris and the French Riviera are known for their higher living costs, many other regions offer more affordable cost of living options without compromising on quality of life. The country’s excellent public transportation system and extensive network of high-speed trains make it easy to explore and enjoy everything France has to offer.
13. Australia
Australia, known for its gorgeous landscapes, vibrant cities, and friendly locals, is an attractive destination for American retirees. With its high standard of living and excellent healthcare system, Australia offers a comfortable and rewarding retirement experience.
Australia operates on a territorial tax system, meaning that foreign-sourced income is not taxed, making it an appealing option for retirees with pensions or other income from abroad. The country also has a reciprocal healthcare agreement with the United States, allowing American retirees to access certain healthcare services.
To retire in Australia, American retirees can apply for a retirement visa (subclass 410) if they meet specific requirements, including demonstrating sufficient financial resources to support themselves without relying on Australian social services. This visa allows retirees to live in Australia for an extended period, with the possibility of renewal.
A critical point for retirees with a foreign pension classified as a “foreign super fund” is the timing of the pension transfer. Foreign superannuation lump sums are tax-free if transferred within six months of becoming an Australian resident. These sums are considered non-assessable non-exempt income.
Australia offers a diverse range of living environments, from the bustling urban life in cities like Sydney and Melbourne to the tranquil natural beauty of the countryside and coastal regions. Retirees can enjoy Australia’s excellent infrastructure, outdoor lifestyle, and a strong sense of community, making it an ideal place to spend their golden years.
Retiring Abroad Doesn’t Have To Be Complicated
We hope this list of the best countries to retire abroad has helped you better understand your options. If you have any more questions, we have answers.
Contact us, and one of our customer champions will gladly help. If you need very specific advice on your specific tax situation, you can also click below to get a consultation with one of our expat tax experts.
