Why many retirees are moving abroad – and where they live

Retirees are going overseas in record numbers.

While the exact number of Americans living outside the U.S. on vacation is difficult to pin down, about 700,000 receive Social Security benefits abroad, an increase of more than 20 percent in 12 years, according to the Social Security Administration.

“The rising cost of retirement in the US is encouraging people to look beyond our borders,” Jennifer Stevens, editor-in-chief of International Living’s 2026 Annual Global Retirement Index, told Yahoo Finance. “In better-value areas in other countries, your dollars can really stretch. Health care, in particular, is important.”

When Jeff and Joch Woodruff decided to move to the north of Portugal in retirement, it was not a quick move. Their decision was influenced by fond memories of past country trips, conversations with friends and family who had spent time in the region, and long-distance sightseeing tours.

Six years ago, the couple sold their four-bedroom house near Sacramento, Calif., and spent six months living in a small studio apartment in the Bonfim district of Porto.

“Everything clicked,” Joch said. They bought three condos from the Atlantic Ocean and lived there. “We adopted cats, made rich friendships, and built a community.”

That is the reason. The fun part is there.

Portugal is one of the European countries that invite people from abroad, according to the latest retirement report from Live and Invest Overseas, which analyzed factors such as the cost of living, health care, entertainment, security, infrastructure, foreign communities, taxes, and residency regulations.

The top 12 places in the world to retire this year, according to the data:

• Blowjob, Panama

• Algarve, Portugal

• Puerto Vallarta, Mexico

• Gascony, France

• Crete, Greece

• Tarragona, Spain

• Santa Familia, Cayo District, Belize

• Hua Hin, Thailand

• Kotor, Montenegro

• Las Terrenas, Dominican Republic

• Sardinia, Italy

• Mendoza, Argentina

As for where retirees are already settled, according to the latest data from the Social Security Administration, the top countries for retirees receiving benefits are Canada, Mexico, the UK, Germany, Poland, Italy, Greece, Portugal, and Spain.

It’s not just retirees who are leaving. Pull back to the big picture, and the expat picture is exploding. Americans are moving abroad in record numbers. For the first time since 1935, immigrants outnumbered new arrivals in the US, according to the Brookings Institution.

Read more: Ask a real estate agent: We’re moving into retirement. Should we buy a house or rent first?

If you’re thinking about retiring abroad, the US State Department has resources to help you think things through. See the Retirement Abroad resource at Travel.State.gov.

Here are some additional steps to consider.

In addition to Retire and Invest Overseas’ annual rankings, which feature cities, towns, or regions rather than entire countries, International Living’s Global Retirement Index examines the world’s best places to retire. That list has 24 countries, including Greece, France, Italy, Costa Rica, Spain, and Portugal.

The index chose Greece as the top destination in 2026, jumping ahead of long-time European favorites Portugal and Spain.

“Greece rose to that position this year on the strength of its visa options, including the Golden Visa which is available from 250,000 euros, a 7% tax on foreign pension funds, and its life expectancy,” Stevens said. “You can live well on $2,500 to $3,200 a month. You can pay $1,200 a year for private health insurance.”

And of course, “there is the sun, the sand, the amazing beauty of the place,” he added.

Read more: How to take a mini retirement

Think about what you really want your days to look like, Stevens advised. “What – and be honest with yourself – are you really looking for? Make a list of what is important to you – what is non-negotiable – and, again, what falls into the category of “would be good,” he said.

How far are you willing to move from your friends and family? Do you love fancy restaurants and the opera, or are you looking for a unique town where you can wear flip-flops all year round?

Before settling down, spend a few months there to see if it’s a good fit. Make friends with foreigners, and learn what brought them there and what their cost of living is.

If you want to continue working in another fashion to earn money as a security, understand the rules of the workplace. Find out if the country allows foreigners to hold the type of job you want and if a work permit is required. Also, gauge the competition for the job you’re looking for.

You don’t have to choose a place to live based on the job market. With some skills, you can turn what you have done during your career into a consulting or project-based business online.

While Joch is retired and collecting Social Security, Jeff, 57, continues to incorporate some remote customer service and accounting work into his schedule. “It’s not necessarily about a lot of money, but about the fun and challenge it gives,” he said.

If you are going to earn even a small salary, consult someone who knows about international tax issues. Both the US and your new country of residence can tax your income. Your foreign bank accounts may require you to file a disclosure form with the US Treasury Department.

As a US citizen or resident alien, you are taxed by the US on your worldwide income. This means that you must file an annual tax return with the IRS. However, you may be eligible for the foreign earned income deduction. For tax year 2026, the maximum exclusion is $132,900 per person.

Have a question about retirement? Your own money? Something related to work? Click here to download Kerry Hannon’s article.

Different European countries offer incentives for people to invest and live there. “That could be in the form of tax breaks and carrots to entice you to renovate the old property… You have a bunch of options,” Stevens said. “But keep in mind, they all come with caveats.”

Some of the best countries for financial incentives are Italy, Spain, Greece, Ireland, and Portugal, according to researchers at International Living.

In Ireland, the national government offers grants of up to 70,000 euros to rehabilitate vacant or dilapidated homes. You should either renovate it to serve as your main residence or make it available for rent.

Portugal offers the D7 Visa, a residence permit designed for non-European Union citizens with stable income, not in the form of a pension, rent, or dividends. It requires a minimum income of $1,086 per month, proof of residency such as a rental contract or a bond, and a clean criminal record. It leads to permanent residency or birth after five years.

Many near-retirees dreaming of traveling abroad worry that homesickness will set in.

“I admit we were afraid we would miss seeing family all the time,” said Joch. “But friends and family have been visiting every year since we left, so there’s never been a problem. Plus, Portugal is the perfect place to explore all of Europe and northern Africa.”

He added, “Almost every day we turn to each other and say, ‘A vida é boa. Life is good.’

Kerry Hannon is a Senior Columnist at Yahoo Finance. He is a career and retirement strategist and the author of 14 books, including “Retirement Bites: A Gen X Guide to Securing Your Financial Future,“”In Control at 50+: How to Succeed in the New World of Work,” and “Never Too Rich.” Follow him Bluesky and X.

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