Retiring abroad can offer numerous advantages, one of which is saving money. Whether it’s the cost of living, healthcare, or taxes, retiring abroad may be an excellent solution for seniors looking to stretch their retirement savings. In this article, we’ll take a closer look at why retiring abroad can save you money.
Lower Cost of Living
One of the most significant benefits of retiring abroad is the lower cost of living. Many countries in the world offer a more affordable lifestyle when compared to the United States. For example, South America and Southeast Asia offer a much lower cost of living than many cities in the United States. Retirees can live comfortably on a modest income, which can include housing, food, and other necessities, leaving more income for entertainment and travel.
Access to Affordable Healthcare
Healthcare costs are one of the biggest expenses for retirees, and the cost of health insurance and medical care in the United States keeps increasing. However, retiring abroad can be an excellent solution for seniors looking for lower healthcare costs. Many countries, including Mexico, Thailand, and Costa Rica, offer affordable healthcare options. The cost of healthcare in these countries can be as much as 60-70% less expensive than in the United States.
Taxes are one of the biggest expenses for Americans, especially retirees. In the United States, retirees can expect to pay federal, state, and local taxes. However, retiring abroad can be an excellent way to reduce your tax bill. Some countries offer tax incentives to retirees, where you can reduce or eliminate your tax liability. Additionally, if you’re living abroad for at least 330 days of the year, you may qualify for the Foreign Earned Income Exclusion, which allows you to exclude $107,600 (as of 2020) of your foreign earned income from federal taxes.
One final advantage of retiring abroad is the exchange rate. If you retire to a country with a lower cost of living and favorable exchange rate, then you can live like a king on your retirement savings. Countries like Mexico and Costa Rica, where the U.S. dollar is widely accepted, offer you more buying power for your money, making your retirement dollars go further.
Retiring abroad offers numerous benefits, including cost savings. When considering retiring abroad, it’s essential to consider the cost of living, healthcare, taxes, and the exchange rates. By taking advantage of these cost savings opportunities, you can stretch your retirement savings and enjoy a comfortable lifestyle in your twilight years.