Here are the top retirement destinations in the U.S. and abroad
Fact checked by Suzanne KvilhaugReviewed by Ebony Howard
Finding the best place to retire isn’t easy. One study named the best affordable place to retire in the U.S.: Akron, Ohio. But if affordability isn’t your main focus, what are your other options in the U.S. and overseas?
You might be able to stretch your retirement dollars—and improve your quality of life—by moving somewhere that better fits your budget and interests. If you’re thinking of making a move, here are eight of the best places in the world to retire: four in the U.S. and four overseas.
Key Takeaways
- Retirement in the U.S. means you’ll be close to friends and family, but it can get expensive and you can get stuck in a routine.
- Retiring abroad offers a lower cost of living and new and exciting experiences, but navigating unfamiliar logistics, culture, and language can be daunting.
- The top four countries to retire abroad for 2024 are Costa Rica, Portugal, Mexico, and Panama.
- The top four states to retire in the U.S. for 2024 are Florida, Colorado, Virginia, and Delaware.
Retiring Abroad vs. in the U.S.
Retiring abroad is an adventure, though just how big an adventure it is depends on the destination. Still, no matter where you go overseas, you will be a long way from home, and you’ll have to get comfortable with the cultural, political, and economic differences, and, perhaps, the language.
And though you’re likely to enjoy lower costs, cheaper healthcare, and a nice change of scenery, remember that living abroad is not like being a tourist. Be sure to test out a destination before making any long-term decisions. Rent for at least six months, immerse yourself in the culture, get to know the locals and the expats, and decide if you’d really be happy living there.
Note
According to the Social Security Administration, the average Social Security retirement benefit is $1,907 per month as of January 2024. That amount may be enough to retire comfortably abroad if you stick to a budget.
On the other hand, you might be happier retiring in the U.S. if you don’t want dramatic changes in your life or if you want to stay close to family, friends, and established networks.
Of course, the cost of living in the U.S. is much higher than in many parts of the world, and you’ll also be subject to rising healthcare costs and high assisted living costs.
If you decide to stay in the U.S., you may want to consider relocating to an area that better suits your retirement goals.
Best Places to Retire Abroad
Though a beautiful place may be nice to visit, it’s not necessarily an ideal place for retirement. When considering overseas destinations, try to look beyond being a tourist to imagine what you would experience as a local. Our top picks come from International Living’s Annual Global Retirement Index, which ranks countries based on seven categories that look at the big picture:
- Visa/benefits
- Climate
- Cost of living
- Development
- Healthcare
- Housing
- Affinity rating
Here are the top four countries to retire abroad in 2024.
Costa Rica
Costa Rica was one of the first countries to offer a benefits package aimed at expat retirees. Here you’ll find sandy beaches, good healthcare, rich biodiversity, a tropical climate, friendly locals (aka “Ticos”), and a healthful diet—plus local coffee and chocolate.
Dubbed “the Switzerland of Central America,” Costa Rica is known for its safety, neutrality (it abolished its army in 1948), and commitment to the environment. Adventurous retirees can enjoy the same activities that attract tourists from around the world: canopy tours, jungle hikes (insider tip: try a night hike for added adventure), volcano hikes, sea kayaking, and white-water rafting.
Portugal
A low cost of living attracts ex-pats from around the world to Portugal’s sunny shores. The country might be a good choice if you look forward to relaxing on the beach, dining on fresh seafood, and drinking wine—especially port wines, the country’s signature spirit.
Portugal’s capital, Lisbon, won the 2020 European Green Capital award. The city restricts car use and prioritizes walking, public transportation, and cycling (there’s an excellent bike-sharing program).
Portugal is one of the most affordable countries in Europe. The food is terrific. The temperate climate never seems to get too hot or too cold.
Mexico
Mexico hosts retirees from around the world, including more than one million Americans and a half-million Canadians. There’s a robust retirement benefits program, and the expat community is very welcoming to newcomers. Retirees will enjoy the country’s pleasant climate, rich culture, abundant natural beauty, affordable healthcare, and low cost of living.
The country’s two million square kilometers offer much for retirees to choose from, from quaint colonial villages to vibrant beach towns.
Still, keep in mind that six Mexican states are on the U.S. State Department’s Do Not Travel To list. (Another 7 are designated as Reconsider Travel To and 17 are designated as Exercise Increased Caution When Traveling To). Be sure to carefully research potential destinations to avoid any high-risk areas.
Panama
Panama’s favorable climate, low cost of living, affordable healthcare, and retirement visa program make it one of the world’s top retirement havens. You can use your Pensionado Visa to score deep discounts, including:
- 50% off entertainment
- 30% to 50% off hotel stays
- 30% off bus, boat, and train fares
- 25% off airfare
- 25% off energy bills
- 15% off hospital bills (unless insurance applies)
The country’s infrastructure is modern and in good repair, and Panama City—the country’s capital—rivals many U.S. and European cities in terms of culture, atmosphere, and conveniences.
Best States to Retire in the U.S.
Our top picks for U.S. retirement locations come from WalletHub’s Best and Worst States to Retire rankings. To find the most retirement-friendly states, WalletHub compared 46 metrics. Here are the top four U.S. states to retire to in 2024.
Florida
The Sunshine State has long been a favorite for retirees, who enjoy Florida’s sunny beaches and warm winters. Florida offers a reasonable cost of living and no inheritance tax, estate tax, or state income tax—which can be a big perk for retirees with taxable income from Social Security, pensions, Individual Retirement Accounts (IRAs), 401(k)s, and the like.
Though Florida is famous for its big destinations—Orlando (home of Disney World and Universal Studios), Miami, and the Florida Keys—plenty of other beaches and inland cities are worth considering. And no matter where you go in Florida, you can expect to find many other retirees, in addition to amenities geared toward older adults.
Colorado
Though Florida’s sunny beaches are a big draw for retirees in that state, Colorado offers up something different. Ideal for active retirees, the Centennial State boasts four national parks, 32 ski resorts, 300 days of sunshine a year, and countless recreational opportunities on the state’s spectacular slopes, trails, rivers, and lakes.
With four distinct seasons, you can participate in different activities throughout the year. Colorado offers several attractive tax perks for retirees, including a large deduction on all retirement income and some of the lowest property taxes in the country.
Virginia
Virginia is the only state on our list that boasts both beaches and mountains, providing retirees with endless opportunities to get outside and enjoy nature. (An insider tip: the Virginia Creeper Trail is a mostly downhill, 35-mile trail that runs along creeks, through gorgeous scenery, and across old railroad trestles—it’s perfect for a day or two of easy biking).
The state is tax-friendly, too: There’s no tax on Social Security benefits, and you can deduct up to $12,000 in pension and retirement income state taxes.
Delaware
Delaware is a tax-friendly state that’s well-suited for retirees. It’s one of four states with no sales tax at the state or local level, and there are no estate or inheritance taxes, either. What’s more, Delaware doesn’t tax Social Security benefits, and you can exclude up to $12,500 of pension and other retirement income. The state also has some of the lowest property tax rates in the country.
Though the tax situation may be Delaware’s biggest draw for retirees, the state features 28 miles of beaches, small-town charm, and big-city attractions. It’s a short drive or train trip to major cities in the Northeast, including New York City, Washington, D.C., and Philadelphia.
If You Move Abroad
When you have a country in mind, it’s a good idea to spend some time visiting as a resident, not as a tourist. Try renting an apartment in an area you might want to live in and talk to some locals. Try to find expats and get their opinions on living there as a foreigner. Moving abroad is a big decision, and you should have as much information as possible before finalizing it.
It’s also important to consult a financial advisor before you move. Your country of choice may have different rules about taxes, and getting that information sorted out beforehand will make your move that much easier. Plus, an advisor can help you set up a budget to follow so you don’t end up spending your nest egg too quickly.
Which States Don’t Tax Social Security and Pensions?
Taxes are a big part of your retirement budget. Fortunately, several states don’t tax retirement distributions, meaning your retirement dollars could last longer. Twelve states don’t tax 401(k), IRA, or pension distributions:
- Alaska
- Florida
- Illinois
- Mississippi
- Nevada
- New Hampshire
- Pennsylvania
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
What Are the Cheapest Places on Earth to Retire?
Colombia, Thailand, Malaysia, Ecuador, and Mexico are ranked as the cheapest places to retire in the world. Akron, Ohio is ranked as the best affordable place to retire in the U.S., factoring in livability.
Where on Earth Is the Quality of Life the Highest?
In a U.S. News ranking of the Best Countries, one of the sub-rankings is Quality of Life, based on nine attributes: affordable, job market, economic stability, family-friendly, income equality, political stability, safety, public education, and public health. The top 10 countries (in order) are:
- Sweden
- Norway
- Canada
- Denmark
- Finland
- Switzerland
- The Netherlands
- Australia
- Germany
- New Zealand
The Bottom Line
Many Americans opt to stay in their existing homes or make in-state moves during retirement. For many retirees, family is a key reason to stay put, especially if grandkids are in the picture.
However, living abroad offers many perks, including a lower cost of living, new experiences, a better climate, and access to affordable healthcare.
If you decide to retire abroad, it’s vital that you do your homework ahead of time, use common sense, and avoid (or use extra caution) in areas with active travel alerts and warnings. (See the U.S. Department of State’s Alerts and Travel Warnings.) Rules and regulations vary by country, including visa and residency requirements. In addition, taxes for those retiring abroad can be quite complicated. You might work with a qualified attorney and/or tax specialist when making plans for retiring abroad.
Another option is moving beyond your comfort zone while remaining stateside. Carefully choosing where you retire in the U.S. allows you to optimize livability, while offering stability and convenience.
Read the original article on Investopedia.