Retirement Abroad Tip Sheet

U.S. Department of State - Bureau of Consular Affairs

Publish Date: February  15,  2012


Check Visa and Residency Requirements: Immigration and residency laws differ greatly from country to country. Determine if you need a visa to enter and reside in the country where you want to retire by reviewing the Department of State's Country Specific Information. If dual citizenship is an option for you, review our information on dual nationality before taking this step.

Know the Local Laws: Seek professional legal advice before settling abroad. Determine whether your trust, will and powers of attorney may be legally enforceable in your country of destination. In addition to your lawyer in the United States, the U.S. embassy or consulate can provide you with a list of local English-speaking lawyers willing to assist U.S. citizens. Especially in local real estate matters, it is important to understand any contracts you are asked to sign. Review the local traffic laws and licensing requirements if you intend to drive. Some countries have a changeable political environment with more opaque legal systems. Be sure to find out what civil liberties and political rights you will have as a foreign resident.

Prepare Your Finances: Determine your retirement budget, and allow for exchange rate fluctuations and inflation. You may want to meet with a financial adviser before you go and consider such things as opening a local bank account.

Pay Your Taxes: Leaving the country does not exempt U.S. citizens from their U.S. tax obligations. While some retirees may not owe any U.S. income tax while they are living abroad, you must still file a return annually with the IRS. This is the case even if you move all of your assets to a foreign country; you may still be taxed on income regardless of where it is earned.

Retirees abroad must also fulfill any tax obligations of their foreign country of residence. The United States has tax treaties with a number of countries that address double taxation, but these treaties generally don't exempt residents from the obligation to file a return. Retirees who acquire any assets abroad should also consider the need to modify estate plans, since those assets may be subject to local estate tax rules. Insurance is another factor to consider with assets acquired overseas. Most U.S. umbrella liability policies don't cover international assets. For more information, please review the IRS's tax information for residents and U.S. citizens living abroad.

Understand your Social Security Benefits: If you are thinking about retiring abroad, find out if you can receive your Social Security or other federal agency benefits outside the United States. Social Security Administration's Office of International Operations (OIO) provides such information, and consular officers at the nearest U.S. embassy or consulate can also assist you.