Approximately over 760,000 US retirees receive their Social Security abroad. This number has been increasing over the last several years, which is not a coincidence but a result of long-term economic and political uncertainties. For many, retirement means living the happiest years of their life. This concept changes significantly for Americans, as they only see the high cost of living, heavy tax burdens, and low quality of healthcare. This pushes many Americans to find the best countries to retire in from the US.
American retirees look for many tax-free retirement countries where they do not have to pay tax on their pension before their relocation. Considering this challenging process, we have gathered the top 15 tax-free retirement countries for American expats in this article.
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Why are Americans Choosing to Retire Abroad?
Over the last few years, there has been a trend worth watching: Americans are moving abroad. At Get Golden Visa, we have been following this trend since 2022 and searching for the reasons behind this relocation as the residency or citizenship by investment inquiries from the US increase. In 2022 and 2024, we examined in general why US citizens were leaving the country and seeking a “secure place to live abroad”.
In 2025, we have seen an increase in the number of tomorrow’s American retirees, a 76% rise in 2024 compared to 2023. To comprehensively understand the reasons behind this peak, we take a closer look at The Great American Retirement Exodus 2025, which reveals both data and real stories.
You can download our latest report by clicking below.
Do Americans Have to Pay US Taxes If I Retire Overseas?
Moving abroad does not exempt them from US tax obligations. Even if you are living overseas full-time and earning income from foreign sources (like a pension or investments), the IRS still expects you to report that income.
However, there are some exemptions that you can use to avoid double taxation:
- Foreign Earned Income Exclusion (FEIE): It allows qualifying expats to exclude a certain amount of foreign earned income from US taxation (over $130,000 as of 2025).
- Foreign Tax Credit (FTC): It lets you offset US taxes by the amount of foreign taxes you have already paid.
- Tax Treaties: Some countries have tax treaties with the USA that may help reduce or eliminate double taxation on certain types of income.
Essential Filing Requirements for Retirees Abroad
Key forms you may need to file include:
- Form 1040: Your standard US income tax return.
- FBAR (FinCEN Form 114): You only have to file this if foreign bank accounts exceed $10,000 at any time.
- Form 8938: You need to report foreign financial assets if they exceed certain thresholds.
- Form 1116: You need to claim the FTC to avoid double taxation.
Top 10 Tax-Friendly Countries to Retire
If you are looking for a tax-friendly country to retire in from the USA, here are the top 10 countries for you to relocate to.
1. Costa Rica: Nature, Wellness, and Tax-Free Pensions
- Quality of Life: 130.2 (High)
- Cost of Living: $1,500-$2,000 per month
- Retirement Visa: Pensionado Visa
- US Expats: 18,354
If you would like to embrace a “pura vida” lifestyle, which means pure life, Costa Rica is here to welcome you with its potential tax benefits. Along with its natural beauty through rainforests and biodiversity, the country does not tax foreign income, meaning that you do not have to pay any tax for your retirement income or savings.
Thanks to its proximity to the US, it is one of the top destinations for American retirees seeking to relocate. For instance, flying from San Jose to Miami takes about 3 hours, which is ideal for family visits and quick returns.
You can also access Costa Rica’s healthcare benefits through both public and private options. However, you must obtain residency or citizenship status to access the public healthcare system, as you must register with Caja. Otherwise, you can opt for private healthcare through private health insurance. To obtain residency, you can qualify for a Pensionado Visa, valid for 2 years and requiring proof of at least $1,000 in passive income per month.
2. Panama: Best for Low-Cost Living with Big Benefits
- Quality of Life: 125.6 (High)
- Cost of Living: $1,500 - $3,000 per month
- Retirement Visa: Pensionado Visa
- US Expats: 25,732
Panama is one of the most popular retirement destinations for US citizens. It is a dream country for many because it blends a high quality of life with a low cost of living. Locals are generally friendly, and you can expect to encounter many English-speaking people, which can make your adaptation process easier. Additionally, you can experience the beauty of nature through its beaches, mountains, and tropical climate.
Panama does not tax foreign income. However, this is not the main reason most retirees prefer to relocate. Its retirement visa, also known as Pensionado Visa, is a permanent residency program that requires only proof of a $1,000 pension per month. Plus, you can include your spouse or minor child with an additional $250.
The program’s benefits also include discounts on many everyday items. These include 10% off medications, 25% off utility bills, 15% off doctor visits, 30% off public transportation, and 50% off entertainment such as movies and concerts. Therefore, if you have a limited budget or prefer an affordable retirement, Panama may be the best option for you. On the other hand, it also offers the Panama Golden Visa program, allowing foreign investors to obtain direct permanent residency through investment, with a minimum real estate investment of $300,000.
3. Belize: Best for English-Speaking Caribbean Life
- Quality of Life: 64.6 (Moderate)
- Cost of Living: $1,200-$1,500 per month
- Retirement Visa: Qualified Retirement Program (QRP)
- US Expats: 5,146
As one of the best places to retire in the Caribbean, Belize offers a low cost of living, natural beauty, tropical climate, and tax exemptions. By spending around $1,200 to $1,500, you can easily cover your basic living expenses, making it one of the cheapest places in the Caribbean.
English is the official language, so you can easily communicate with locals and integrate into local life. However, healthcare quality is low, particularly for comprehensive or advanced medical treatment. Although there are private clinics, they offer limited services compared with public healthcare.
Although there is no retirement visa option, you can pursue the Qualified Retirement Program (QRP). To qualify, you must be at least 40 years old and demonstrate passive income of $2,000 per month. Under this program, you can get tax exemptions on foreign-sourced income, import duty waivers for household goods, a vehicle, possibly a boat, etc. Therefore, if you are looking for a place to retire without foreign income tax or language barriers, you can consider Belize.
4. Mexico: Close to Home, Rich in Culture
- Quality of Life: 127.4 (High)
- Cost of Living: $1,800 - $3,000 per month
- Retirement Visa: Temporary Resident Visa or a Permanent Resident Visa
- US Expats: 823,502
If you are looking for a place where you can integrate easily, Mexico stands out as the most popular destination for Americans, equaling 28.15% of the total population. According to SSA’s data in 2023, around 34,000 retirees receive their benefits in Mexico. However, these statistics are more than numbers; there are strong ties between these two countries. Most of the US citizens have Mexican origins, attracting them towards Mexico.
Additionally, the cost of living here is around $1,800 to $3,000 per month, depending on your expectations for life. Plus, you do not pay tax on your US pension income or Social Security here. You can easily integrate into life here in the expat-populated areas like Mexico City, San Miguel de Allende, and Puerto Vallarta. When it comes to healthcare, you can benefit from public and private options.
Normally, US citizens can stay in Mexico for 90 days without the issuance of any visa. However, if your stay will exceed this time, you need to apply for a Temporary Resident Visa or a Permanent Resident Visa. For a temporary visa, you need to show a monthly income of about $4,400 for the last six months or $73,235 for the last 12 months. For a permanent visa, you need a monthly income of $7,300 and over $293,000 in savings. On the other hand, you can apply for dual citizenship in Mexico if you are eligible.
5. Nicaragua: Best for Budget-Friendly Retirement
- Quality of Life: 96.04 (Moderate)
- Cost of Living: lower than $1,000 per month
- Retirement Visa: Pensionado Visa
- US Expats: 3,918
Looking for a place to retire on a budget? Then, Nicaragua is the place you should choose, as it is the cheapest country to retire in 2026. By spending less than $1,000, you can enjoy your retirement life to the best. Plus, you will pay zero income tax on your foreign pension income. You can also take advantage of public and private healthcare for its low cost, but prefer to go abroad for advanced treatments.
However, the low cost of living does not always compensate for the quality of life. In Nicaragua, the underdeveloped infrastructure might disappoint you. Apart from this, people are mostly living in poverty, which may not be the picture you want to see.
When it comes to retirement visa options, it has the Pensionado Visa, in which you can get residency through a monthly income of at least $600.
6. Greece: Best for Flat Tax Living in the EU
- Quality of Life: 140.4 (Very High)
- Cost of Living: $1,000-$3,000 per month
- Retirement Visa: FIP Visa or Greece Golden Visa
- US Expats: 24,748
As one of the countries with retirement visas, Greece welcomes US retirees with its laid-back island lifestyle, along with additional benefits. Although the cost of living is expensive compared to Central America, the quality of life is significantly higher. You can experience the best healthcare quality with both private and public options.
In urban areas, you can come across English-speaking people. Plus, the expat community here is larger, making you experience less cultural shock. Also, the latest SSA data states that around 13,251 receive their benefits here. However, these numbers are not a coincidence; the tax system in Greece is also appealing to many. There is a 7% flat tax on all foreign pension income for 15 years for retirees. If you are a high-net-worth individual, you can also benefit from a €100.000 annual flat tax on your foreign earnings.
To reside in Greece, you can either choose to make a minimum investment of €250,000 in the Greek Golden Visa by purchasing a property, or the Greece Retirement Visa via a monthly income of €3,500. In Greece Golden Visa option, you can get a 5-year residency, with an opportunity to renew as long as you keep your property. On the other hand, Greece Retirement Visa, also known as FIP Visa, allows you to get only a 3-year residence with a renewal option.
7. Portugal: Europe’s Gateway for Strategic Retirement
- Quality of Life: 169.1 (Very High)
- Cost of Living: $1,500-$2,000 per month
- Retirement Visa: D7 Visa or Portugal Golden Visa
- US Expats: 8,977
Americans retiring abroad mostly prefer Portugal for its accessibility, low cost of living, balanced with a high quality of life, and its warm climate. According to latest SSA’s data, it is among the top 5 destinations Americans choose to retire in Europe.
The country used to have a favorable tax regime for expats called NHR. Through this option, people used to get tax benefits for 10 years. It enabled them to be exempt from worldwide income tax and to pay a flat 20% tax rate on income earned in Portugal for 10 consecutive years.
Although it is not currently eligible to apply, you can still benefit from the New NHR 2.0 (IFICI) program. However, this new program is restricted to highly qualified professionals. You can also be exempt from paying taxes on your worldwide income thanks to the double taxation agreement between the US and Portugal. Additionally, Portugal does not impose wealth, gift, or inheritance taxes.
Among the countries with retirement visas, Portugal offers expats the D7 Visa, which allows you to obtain residency by showing an income of €920 per month and a clean criminal record. This visa type will allow you to get a 1-year residency in Portugal with a renewal option. If you are looking for a strategic move, in other words, if you do not wish to relocate yet, you can opt for the Portugal Golden Visa as it requires a minimum residency of only 7 days per year. Through this program, you can obtain a 5-year residency and the opportunity to qualify for permanent residency or Portuguese citizenship by preserving your capital through investment in funds.
8. Malta: A Tax-Efficient Island in the Mediterranean
- Quality of Life: 136.1 (Very High)
- Cost of Living: €1,500 to €2,000 per month
- Retirement Visa: Malta Retirement Programme or MPRP
- US Expats: 6,313
Malta is one of the EU countries in which you can benefit from tax efficiency, as it offers one of the highest flat tax rates on foreign income. You can benefit from a 15% flat tax rate on your foreign income, including your social security, pensions, or savings. If you are a resident but not domiciled in Malta, you do not have to pay taxes on your foreign income. However, if your stay exceeds 183 days, you are considered a tax resident. The tax rates are 15%-35%.
Expats can benefit from special tax regimes like the Global Residence Programme or the Malta Retirement Programme, which offer a flat 15% tax rate on foreign income (with a minimum tax of €15,000 per year).
To qualify for Malta Golden Visa,you need to choose one of the following paths:
- Property rental with a minimum annual rent of €14,000 in Malta or Gozo (totaling a minimum investment of €169,000 for 5 years with the additional fees)
- Property purchase with a minimum of €375,000 in Malta or Gozo (totaling a minimum investment of €474,000 with additional fees)
In terms of healthcare, you can benefit from both public and private healthcare. Plus, the country is the most LGBTQ friendly country to retire. The laws are quite progressive, offering many rights and social acceptance.
9. Cyprus: Best for Long-Term Tax Exemption (Non-Dom)
- Quality of Life: 160.4 (Very High)
- Cost of Living: €1,800–€2,000 per month
- Retirement Visa: Category F residence permit, Cyprus Golden Visa
- US Expats: 3,355
If you wish to spend your retirement years having fun and enjoying life to the fullest, Cyprus can give you what you are looking for. It is one of the English-speaking countries, although it is not the official language. You can easily communicate with locals and benefit from English-speaking medical personnel.
One of the biggest advantages is Cyprus’s Non-Domicile (Non-Dom) tax regime. It allows you to avoid tax on most foreign income for 17 years. For your pension income, it offers a flat 5% tax rate on annual pensions over €3,420, with the first €3,420 taxed at 0%. Alternatively, you can elect to be taxed at the normal income tax rates if that’s more favorable.
As a foreign retiree, you can apply for a Category F residence permit, known as “Pink Slip”, by showing a minimum income of €24,000 per year. You can also choose to get residency through the Cyprus Golden Visa program through a minimum investment of at least €300,000.
10. Italy: Best for Affordable Charm in Southern Europe
- Quality of Life: 154.4 (Very High)
- Cost of Living: €1,400 to €2,700 per month
- Retirement Visa: Italian Elective Visa
- US Expats: 50,957
La Dolce Vita is the essence of Italian living, meaning the sweetness of doing nothing. This concept is quite close to retirement life in Italy: you will live life at a slower pace, but enjoy it to the best. Besides, the United States and Italy have a bilateral tax treaty that prevents double taxation. Therefore, your pension will be taxable in the US, not in Italy. This is a significant tax advantage for American retirees compared to other foreign nationals.
There is also a 7% flat tax regime for new residents in Southern Italy. You can transfer your tax residence to certain municipalities in the Southern regions, such as Sicily and Abruzzo, and benefit from a 7% flat tax rate on all foreign source income. Nevertheless, you should also know that Italy taxes Social Security benefits; still, you can benefit from the flat tax rate if you qualify. If you are a high-net-worth individual, you can prefer a flat tax regime too. As of 2026, Italy’s flat tax for new residents is €300,000 annually.
Furthermore, the Italian public healthcare system is one of the most efficient and affordable in the world. You can register with the national health system for €2,000 per year or take out private health insurance valid in Italy. Plus, there is an Italian Elective Visa for retirees with a minimum income requirement of €31.000 per year.
You can also go for the Italy Golden Visa program by making a minimum investment of €250,000 in a startup if you plan to relocate in the future, as it does not impose any residency requirements. Once you are granted it, you will receive a 2-year residency that can be extended 3 times.
Tax-Friendly Countries to Retire: Comparison Table
Retirement abroad can be challenging, especially if you do not know where to start. Below, you can see a clear table that will help you in the process of deciding which country to relocate.
| Country | Tax Rate on Foreign Income | Duration | Requirements for Retirement Visa | Min. Investment |
|---|---|---|---|---|
| Greece | 7% flat | 15 years | €3,500/month income | €250,000 property |
| Malta | 15% flat | Indefinite | €275,000 property or rent | €169,000 rental |
| Cyprus | 0%* | Indefinite | €24,000 per year | €300,000 property |
| Italy | 7% flat | 9 years | €31,000/year income | €250,000 startup investment |
| Panama | 0% | Indefinite | $1,000/month pension | None |
| Costa Rica | 0% | Renewable | $1,000/month pension | None |
| Belize | 0% | Indefinite | $2,000/month income (Age 40+) | None (QRP) |
| Mexico | 0% | Renewable | $4,400/month (Temp Visa) | None |
| Nicaragua | 0% | Indefinite | $600/month pension | None |
| Portugal | Variable (NHR ended) | N/A (replaced) | €820/month income | €500,000 Fund Investment |
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FAQs on Tax-Free Retirement Countries
Where are American retirees flocking to?
They are moving to places with lower living costs. In the US, many choose states like Florida, North Carolina, and Arizona for tax benefits and cheaper living. Others are moving abroad to countries like Spain, Portugal, Mexico, Costa Rica, and Panama, where healthcare and daily expenses are more affordable.
Where can I retire on $4,000 a month?
You can comfortably retire on $4,000 a month by picking a budget-friendly US city like Albuquerque, Cincinnati, or Waco. You can also move overseas to places like Thailand, Spain, or Taiwan.
Do I pay tax on pensions if I live abroad from the USA?
If you’re a US citizen or resident, you have to pay US taxes on all your income, including your pension or retirement savings, no matter where you live. This is because the US taxes based on citizenship. You might also have to pay taxes on your pension in the country where you live. But there are ways to avoid paying taxes twice through specific tax incentives.
Where can I retire on $2,000 a month?
You can retire on $2,000 a month in places like Portugal, Mexico, Thailand, and Panama, where living expenses are affordable.
Can I still collect Social Security if I move to Costa Rica?
Yes, you can. The US Social Security will keep paying you even if you live in Costa Rica. In fact, you can withdraw cash from local ATMs there. Alternatively, once you open a bank account in Costa Rica, you can transfer your benefits from your US account to your local one.
