How To Manage Retirement Savings When Living Abroad

Editor’s note: "How To Manage Retirement Savings When Living Abroad" is part of an ongoing series on retiring abroad. To see all the articles in the series, jump to the end.

Halfway through the 2020s, Americans are shattering the rules traditionally governing retirement. Whether it’s retiring at age 55 or starting a career second act after leaving the corporate world behind, today’s Baby Boomers and Gen-Xers are placing their own unique stamp on retirement in a way their parents or grandparents never dreamed.

That’s surely the case for the growing number of U.S. retirees opting to retire abroad in their golden years.

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According to the U.S. Social Security Administration, 760,000 Americans currently draw a Social Security check while living abroad. That’s up from 500,000 in 2016, the SSA reported.

Calling beautiful bourses like Portugal or Panama home is a tempting proposition for wanderlust-minded American retirees. Yet many won’t get very far if they fail to prepare for the myriad personal financial challenges that come with retiring abroad.

“It’s not easy,” said Joe Cronin, president of International Citizens Insurance and world traveler who’s spent long stretches of time in Moscow, Tokyo, Mexico City, Sydney, London, Athens and Argentina. “The largest retirement challenges stem from fluctuating exchange rates, understanding foreign tax systems, and managing accounts across multiple countries.”

These complexities can quickly erode retirement funds or create compliance headaches if not planned for properly, Cronin said. “Currency conversion losses and double taxation are particularly tricky without professional guidance.”

Why is retirement planning so vexing overseas, and what can U.S. retirees do to take command of their cash management situation? Here’s a look at some of the most significant financial management issues tied to retiring in a foreign country, along with some expert tips to mitigate any trouble.

Getting clean access to your cash

Obtaining disbursements from retirement plans based in the U.S. while staying overseas usually involves additional bank charges, transaction delays, and currency exchange management, Cronin said.

But the process is made easier with a few basic steps.

“Retirees can open U.S. bank accounts that partner with international banks for reduced rates or simply set up offshore accounts in their resident country that are accessible online,” Cronin said. “Working with a tax advisor familiar with cross-border regulations ensures compliance while maximizing disbursed funds.”

Watch out for access restrictions, too, as some U.S. retirement accounts may have limitations when accessed abroad.

“Check with your financial institution to ensure seamless withdrawals,” said Federica Grazi, founder at Mitos Relocation Solutions, a London, U.K.-based living abroad relocation services firm. “Additionally, align withdrawals with major expenses (e.g., annual property taxes) rather than taking regular monthly amounts, which might result in unnecessary FX costs.”

Streamline your tax issues

Another significant cash management challenge involves cross-border taxes and fees tied to income disbursements in non-U.S. countries.

"U.S.-based disbursements might automatically withhold taxes, and U.S. retirees living abroad must prepare for that scenario. “Work with a financial planner to optimize the timing and amounts of your withdrawals to avoid overpayment,” Grazi said.

Past that, foreign taxes may be treated significantly differently than in the states, and Uncle Sam plays a big role in that scenario.

“On the tax side, normally if you are present in another country for at least 183 days (or just over half the year), you are a tax resident there and will need to comply with local tax laws,” said Crystal Stranger, senior tax director and CEO of OpticTax.com in Boulder, Col. “However, most countries only tax you on the income you earn in the country, so normally if you are retiring, your income is from passive sources and often will be considered foreign-sourced income and not taxable.”

U.S. retirees living abroad may also earn a foreign tax credit in the country of residence for taxes paid to the U.S. “That can also sometimes offset the tax burden in your country of retirement,” Stranger said.

Yet few countries tax their residents on worldwide income like the U.S. does.

“Consequently, it normally isn't that tough in practice, at least from what I have seen over my many years of working with U.S. expats and digital nomads with U.S. businesses,” Stranger added.

In contrast, if you’re a U.S. citizen retiring abroad, you’ll be taxed by the U.S. government on your worldwide income.

“Many retirees forget this when they move abroad and only find a local tax expert to help them in their country of residence,” Stranger said. “Keep in mind you’ll need to pay U.S. federal income tax, and depending on what state you last lived in, you may also still have state income taxes to pay.”

Currency exchange (FX) fluctuations

For Americans, retiring to a foreign country often means you’re dealing with multiple currencies, such as the U.S. dollar and the in-country currency (i.e., the euro if you’re retiring in most European countries or the real (BRL) if you’re retiring in Brazil, for example).

Juggling two currencies is no easy task for U.S. retirees unfamiliar with financial issues overseas.

For example, the USD/EUR exchange rate shifted from 0.9 in August 2024 to 0.97 in 2025.

“For retirees converting USD income into euros in Mediterranean countries, this could mean swings of approximately $3,500 per year on a $50,000 annual income,” Grazi said. “These fluctuations can significantly impact budgeting and long-term financial security.”

To streamline the local currency process, retirees can leverage multi-currency accounts that allow easy transfers between USD and the local currency.

“Avoid traditional banks’ high exchange rates by using online services like Wise or Revolut for transfers and conversions,” Cronin said. “Locking in exchange rates through forward contracts can also mitigate risk from currency fluctuations.”

Cost of living changes

While some countries may seem inexpensive initially, local inflation or loss in competitiveness could erode purchasing power over time.

“For example, property rent in Portugal increased by 49% between 2017 and 2022, and rent hikes have since then come under regulation,” Grazi said. “It’s essential to prepare by tracking economic trends in the new country.”

Unexpected legal costs

Legal fees for property purchases, visas, or inheritance laws can also be unpredictable. “Planning ahead and building a contingency fund for such expenses is a wise move," Grazi added.

Watch for healthcare expenses too

Retirees leaning on Medicare as their foundational healthcare piece need to know the rules of the road overseas.

“At a minimum, I recommend retirees living full time overseas maintain their Medicare plan Part A coverage,” said Stewart Koesten, chairman at Aspyre Wealth Partners, a financial planning firm in Boynton Beach, Fla. “Medicare doesn’t typically provide coverage for retirees living abroad. However, returning to the U.S. for critical care is an option if you maintain Medicare A coverage.”

Additionally, some countries have robust health insurance programs at reasonable costs.

“There are also several companies that offer medical coverage to Americans living abroad full time,” Koesten said. “Investigate these options in lieu of Part B Medicare. It’s also a good idea to seek advice from a health care insurance specialist as this is a critical area of concern during retirement years.”

If your retirement plan involves traveling back and forth between the U.S. and foreign countries, several Medigap plans can be used in addition to Medicare Part A and Part B.

“That includes foreign travel emergency coverage,” said Louise Norris, a health policy analyst at Medicareresources.org. “The benefit is capped at $50,000 over the person's lifetime, and the emergency care has to start within 60 days of the beginning of the trip.”

More On Where To Retire Abroad

• Where to Retire: Living in Portugal as a US Retiree
• Where to Retire: Living in the Dominican Republic
• Where to Retire: Living in Panama Offers Stability and Charm
• Retire in Thailand Where 'The White Lotus' Was Filmed
• Where to Retire 2025: Puerto Rico