Mario Martinez | Moment |
For seniors looking to reduce their expenses while improving their quality of life, the idea of settling abroad could be attractive, financial experts say.
So far, nearly a third of retirees have moved either domestically or internationally after leaving the workforce, according to a new CNBC poll of more than 6,600 American adults conducted in early August.
According to the survey, the main reasons for retirees to move included lower living costs, a more comfortable lifestyle or better weather.
While many older Americans have chosen to move to a less expensive city or state, others are choosing to spend their retirement abroad.
More than 450,000 retirees were receiving Social Security benefits outside the United States in December 2023, according to the latest data from the Social Security Administration. In December 2003, fewer than 250,000 retirees were receiving benefits outside the United States.
“Every year, it’s getting more,” says certified financial planner Leo Chubinishvili of Access Wealth in East Hanover, New Jersey. “And I think that’s going to continue to grow.”
Despite a cooling of inflation, higher costs continue to drive significant changes in retirement plans, according to a 2024 survey by Prudential Financial.
Meanwhile, about 45 percent of U.S. households are expected to retire by age 65 and not have enough money in retirement, according to a Morningstar model that analyzed spending, investments, life expectancy and other factors.
But some retirees can supplement their savings by moving to a place where housing, health care and other expenses are lower, Chubinishvili says.
Many people moving want “cultural exchange”
Some retirees are also motivated to move abroad because of “cultural exchange,” says CFP Jane Mepham, founder of Austin, Texas-based Elgon Financial Advisors, where she specializes in international planning.
“There’s a sense of adventure,” she said. “People really want to travel.”
However, retiring abroad requires advance planning. For example, you need to be familiar with visa and residency requirements, local laws, international taxes and other logistical aspects.
You also need to find out if you can be included in your new country’s health care system or if you need to get private insurance. Medicare won’t cover you abroad, Mepham said.
Think about your “life priorities”
“For many people, (living abroad) can be a way to save money depending on how they want to live their lives,” says CFP Jude Boudreaux, a partner and senior financial planner at the Planning Center in New Orleans who serves several expat clients.
But other factors, such as proximity to aging parents or grandchildren, can also greatly influence the decision, says Boudreaux, who is also a member of CNBC’s Financial Advisor Council.
Of the retirees who moved at this time, about 36 percent wanted to be closer to family, according to the CNBC survey, only slightly less than the 37 percent who wanted a lower cost of living.
But your retirement, including the decision to live abroad, could change later depending on your circumstances, he said.
“Everyone makes decisions based on their life priorities,” Boudreaux said. “Being clear about that helps people make good decisions.”
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