Living abroad in retirement has romantic appeal, as well as practicality.
A growing number of American retirees have already moved to foreign countries and many more are thinking about doing so. A lower cost of living, a slower pace, new adventures and, more recently, a calmer political atmosphere are part of the appeal.
My recent column highlighting this trend prompted hundreds of you to share your views and raise key questions.
The following is an edited Q&A on the two pillars of retirement finances for anyone considering moving abroad: healthcare and social security.
Healthcare is very important to us. Countries with universal healthcare reduce the risk of you going bankrupt due to a serious illness. Even private insurance in many countries is cheaper and better in terms of risks.
Healthcare in the US carries serious potential retirement risk. Retirees’ out-of-pocket medical expenses take many people by surprise.
A 65-year-old man with traditional Medicare who is enrolled in a Medigap plan with average premiums will need to have saved $212,000 to have a 90% chance of having enough to cover average prescription drug premiums and expenses, and a 65-year-old woman will need to have saved $252,000, according to a new report from the Employee Benefits Research Institute (EBRI).
There are many factors that will determine how that figure will be calculated for you: your sex, your health, where you live, and how many years you will live.
While it is generally true that healthcare costs are lower in other countries, it is not an easy task to prepare for healthcare in a new country.
Do your footwork. To get the lay of the land before you start betting, reach out to other retirees and friends you know who live in the town or city you’re considering. Ask what they do with health insurance, doctors, hospitals and pharmacies and get their advice.
Expats can typically take advantage of low-cost universal coverage offered by local government-funded health systems or sign up for private insurance options.
Many relocation experts I spoke to advise taking out a private policy from a national or international insurance company, at least initially. Here’s why: Many countries require you to have health coverage as a condition of obtaining a visa, and it can take time to become eligible for the public health service.
Some insurers that offer international plans include Cigna Global, GeoBlue (Blue Cross Blue Shield Global Solutions), Allianz Care, and International Medical Group (IMG).
Resources for your research. The World Health Organization provides country-by-country data on factors such as the ratio of doctors to the population. And Joint Commission International (JCI), a global nonprofit healthcare organization, provides an accredited list of medical centers in countries around the world. International Living’s 2026 Annual Global Retirement Index also provides detailed health care information in several popular regions.
Be prepared for language problems. While many medical professionals working outside the US speak English, especially if they practice in a popular expat city, you want to make sure nothing is lost in translation. International health insurers should be able to direct you toward English-speaking providers or check with the U.S. embassy in the country for suggestions.
A translation app on your phone can also be helpful.
Do those who move to a foreign country to retire still pay Medicare premiums? If they move “permanently” out of the country, would they still have to pay the premium, assuming they never return here?
Although many retirees travel abroad for many years, it is not unusual to return to the U.S. to be closer to family, especially if they require special medical care as they age.
“This is a difficult decision for people living abroad in retirement,” Kim Lankford, author of the new book “Medicare 101,” told me.
“Medicare rarely covers care outside the U.S., so if you sign up, you’ll pay Part B premiums for coverage you can’t benefit from while abroad. Most people don’t pay premiums for Part A, so there are fewer downsides to enrolling in it,” he said.
But if you don’t register, you won’t be covered if you travel back to the U.S. and need medical care.
Here’s another tricky point: You can only sign up for Part B at certain times, and you may have to pay a Part B late enrollment penalty if you eventually return to the U.S. and want to sign up for Medicare, he said.
This penalty is 10% of the standard Part B premium for each 12-month period that you could have had Part B but didn’t, which for most people would be from their initial enrollment period at age 65.
Medicare Advantage plans generally require you to reside in the US and will cancel you if you move abroad permanently. For more help, see the Medicare brochure..
Is your SSA check deposited in a US bank or a bank you have moved to?
If you are a U.S. citizen, you can usually receive Social Security payments by direct deposit into a local U.S. or foreign bank.
If you choose the local bank in the country where you live now, you will need to confirm that that country has an international direct deposit agreement with the US. Here is the list of countries and territories that allow direct deposit payments.
You must notify the Social Security Administration when you move abroad. You will receive a questionnaire every one to two years to confirm your address and status, which you must return to avoid suspension.
For help with your application or the benefits you currently receive, contact the Social Security Administration’s Office of International Revenue Operations.
Do you have any questions about retirement? Personal finances? Anything career related? Click here to send Kerry Hannon a note.
Do I still pay taxes on Social Security benefits if I live in another country?
Yes. If you are a US citizen, you are subject to US income tax laws no matter where you live. This means that your income, including up to 85% of the Social Security benefits you receive, may be subject to federal income tax.
Keep in mind that if you live abroad and earn income even from a part-time job, your Social Security income limits remain the same as if you were working in the U.S. Generally, if you are between age 62 and your full retirement age, earn more than $24,480 (the limit adjusts annually), and collect Social Security, the administration will withhold $1 for every $2 above that limit.
Retained profits are not lost. Social Security recalculates monthly benefits when you reach full retirement age and returns any withheld benefits to you.
There’s another thing to consider: If you receive Social Security benefits and are under full retirement age, the SSA will withhold your benefits for each month you work more than 45 hours outside the United States and are not subject to U.S. Social Security taxes. See How Working Affects Your SSA Benefits.
Kerry Hannon is a senior columnist for Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including “Retirement Bites: A Generation X Guide to Securing Your Financial Future,” “In control at 50+: how to succeed in the new world of work,” and “You’re never too old to get rich.” Follow her on blue sky and unknown.
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