I'm often asked about the “best” countries for people looking to retire abroad. There's no easy answer to that question, since countries have different qualities, and individuals have different needs from the places they live. But when it comes to retirement visas, I'm quite happy to make my recommendations.
What makes a good retirement visa? Here are my criteria:
Affordability: Some people don't need to worry about having enough income to meet the requirement to qualify for a visa, but most folks would probably prefer to retire in a place where it’s well within their means.
Cost of living: The lower, the better.
Time-in-country requirements: Most European countries that offer retirement visas require that you stay there at least six months of the year, which triggers tax residency. However, other countries don't have such requirements, which is ideal for retirees who want a home base abroad but want to keep traveling extensively.
Taxation: Some countries tax your foreign retirement income fully. But others either give you a tax break on things like Social Security payments or, even better, don't tax foreign income at all.
Healthcare: Access to quality, low-cost healthcare is a big factor for any retiree.
Other benefits: Some countries give you nothing more than permission to live there. But others give you all sorts of extra benefits, like discounts, duty-free importation of personal goods, and so on.
Based on this, here are my top five choices for North American retirees:
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Panama
Panama's pensionado visa is available for as little as $1,000 a month in guaranteed income. The country doesn't tax foreign income, so you don't need to worry about that. On average, the cost of living in Panama City is nearly 50% lower than in a coastal American city. The healthcare is excellent and low cost. You only need to visit the country once a year to keep the visa active. And under the pensionado program, you get boatloads of exclusive discounts on all sorts of things, as well as the right to import vehicles and other household goods duty-free. It's in the same time zone as the US, and it's easy to go back and forth to visit family.
Costa Rica
Like its neighbor Panama, Costa Rica offers a pensionado visa for $1,000 a month in guaranteed income. The conditions and benefits are almost identical to those of Panama; the major difference is that you must spend at least four months out of the year there to keep the visa.
Italy
The elective residence visa is perfect for retirees. In common with all European destinations, however, the required monthly income is higher, at €3,200 ($3,367) for a couple. If you're willing to move to a town of fewer than 20,000 residents in southern regions, you can qualify for a 7% flat tax on all foreign income for up to nine years. Healthcare is excellent and low cost, although waiting times can be an issue. The overall cost of living outside the big cities is 60% less than coastal US locations. You must spend most of your time in Italy, which makes you liable for income tax. You can import most personal goods duty-free, except for electronic equipment and new items.
Greece
A couple can retire here with a minimum income of €4,200 ($4,419) per month. The country offers a flat tax rate of 7% on all foreign income for 15 years. You must live in Greece for at least six months out of the year to keep the visa. Greece ranks highly on World Health Organization tables for efficiency and cost-effectiveness in its healthcare system. The overall cost of living is about 55% lower than in US coastal cities.
Portugal
Portugal is a popular destination but comes last on my list for tax reasons. The top marginal income tax rate is 48%, which most US or Canadian retirees would trigger. On the other hand, a couple can get a D7 visa for around €1,300 ($1,368) a month in guaranteed income. Thanks to a treaty with the US, Social Security isn't taxed in Portugal. Healthcare is excellent, and the overall cost of living is about 40% less than in a coastal US city.
What about the process of getting the visas? Panama, Costa Rica, and Greece all seemed to have quite good immigration bureaucracies, and processing times are typically a matter of weeks or a few months. Italy and Portugal, on the other hand, are often backlogged, and wait times can be extensive.
Finally, remember that in Italy, Greece, and Portugal, you will get a tax credit for anything you've already paid to the IRS, so it's likely that you'll be able to live there free of local income tax.
If you're interested in pursuing a visa to any of these countries, or want to consider your options further, contact me at Global Citizen, and we'll set up a time for a consultation!
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