Retirement Abroad? Three Countries Without Inheritance Tax
These 2025 top-retiree-friendly countries have an added benefit: potential tax savings for you and your heirs.


For many Americans, wanderlust can spark a desire to retire abroad. Could that be you?
Data show that the number of Americans retiring abroad has tripled over the last 30 years, with the U.S. Department of State reporting 7.5 billion dollars in Social Security benefits paid internationally each year.
But what if you want to retire overseas and leave a financial legacy without unduly burdening your heirs?

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Thankfully, some countries offer tax-friendly environments for US retirees, allowing them to maximize their retirement income while preserving assets for heirs.
Interested? Read on.
'Tax friendly' countries for U.S. retirees
Several countries offer no inheritance tax (taxes paid by beneficiaries on an inheritance).
To whittle that list down, we utilized a study by International Living which ranked the top ten best countries to retire in 2025 based on the Annual Global Retirement Index. The index looked at factors like healthcare, cost of living, and home prices.
Kiplinger started at the top of the list, selected the top three countries with no inheritance tax, and ranked those based on potential taxes on retirement income. Here they are.
3. Costa Rica
Costa Rica taxes
This Central American paradise takes third on the list with no inheritance tax. Its booming housing market, easy application for a retiree visa, and longer life expectancy than the U.S. can make your golden years….well, more golden.
However, there are some ways you may have to pay more taxes on your income:
Foreign-earned income: Taxable if you are a resident, in addition to U.S. taxes owed
U.S. retirement benefits: Taxable if you are a resident, in addition to U.S. taxes owed
While retirement and foreign-earned income are often tax-exempt, if you meet the Costa Rica residency requirements, that status could change. Consult with a tax or legal professional for your specific situation.
2. Portugal
Retirement in Portugal
Tourists from the United States recently overtook France as the third largest group of foreign tourists in Portugal. The European destination has one of the lowest crime rates in the world, plus a U.S.-Portugal Tax Treaty which helps its residents avoid double taxation.
So you may not pay more taxes on your income:
Foreign-earned income: Taxable if you are a resident, but may reduce U.S. taxes owed
U.S. retirement benefits: Taxable if you are a resident, but may reduce U.S. taxes owed
Portuguese property inheritances are only tax-exempt for spouses, children, grandchildren, parents, or grandparents. However, you may want to work with an international lawyer to understand Portugal’s rules on compulsory succession (which heirs are required to inherit) as the law can be a bit complicated and you probably don't want any surprises.
1. Panama
Inheritance tax in Panama
The best country to retire for tax reasons is Panama, and it’s no wonder why. In addition to no taxes on inheritances, retirees can get tons of discounts with the retirement visa and experience few hurricanes relative to its warm climate.
And you probably won’t be paying more tax on your income:
Foreign-earned income: Only U.S. taxes owed
U.S. retirement benefits: Only U.S. taxes owed
Like with the rest of the countries on this list, you can’t be covered by Medicare outside the U.S. However, Panama’s private health insurance can be comparatively low compared to some parts of the U.S., with plans as low as $393 per month.
Related: Three Tax Reasons to Retire in Panama
International Tax
International tax laws to consider as a U.S. expat
Keep in mind the above is not an exhaustive list of countries with no inheritance tax, and your heirs’ financial position could be affected by:
- Additional transfer taxes
- Estate taxes (also sometimes referred to as “death taxes”)
- Double taxation (in countries that don’t have a tax treaty)
Also, countries that are “taxable as a resident” may mean you still have to pay taxes if you’re a resident or citizen.
Consult an international legal or tax professional to ensure you know which status is most appropriate for you.
Read More
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Kate is a CPA with experience in audit and technology. As a Tax Writer at Kiplinger, Kate believes that tax and finance news should meet people where they are today, across cultural, educational, and disciplinary backgrounds.
-
Ask the Editor — Tax Questions on "The One Big Beautiful Bill Act"
Ask the Editor In this week's Ask the Editor Q&A, we answer tax questions from readers on the new tax law.
-
The Anti-Prime Day Deals Guide to Everyday Essentials Worth Stocking up on at Walmart, Target and Sam's Club
Skip Amazon and shop these anti-Prime Day deals at Walmart, Target or Sam's Club to save on all of your household essentials.
-
I'm a Financial Planner: Here Are Some Long-Term Care Insurance Tips for Every Age
Strategies include adding riders to life insurance for younger individuals and considering hybrid or traditional long-term care policies for those in their mid-50s and 60s.
-
Engineering Reliable Retirement Income in 2025: An Expert Guide
For dependable income, consider using a bucket strategy and annuities in tandem to promote structure, flexibility and peace of mind.
-
Crazy Markets Shouldn't Derail Your Retirement if You Follow This Financial Pro's Plan
Being nervous about retiring in a volatile market is a red flag that you're relying too heavily on your investment portfolio, rather than a comprehensive plan.
-
Mississippi Tax-Free Weekend 2025 Is Here: What to Know Before You Shop
Tax Holiday Just in time for Prime Day, Mississippi is celebrating a tax holiday in July. Find out how you can save on back-to-school essentials.
-
Key to Financial Peace of Mind: Think 'What's Next?' Rather Than 'What If?'
Even if you've hit your magic number for retirement, it's hard to stop worrying about money. Giving it a clear purpose is one way to reduce financial anxiety.
-
Three Estate Planning Documents a Business Owner Can't Afford to Skip
A business owner's estate plan should protect the company and its employees as well as the entrepreneur's heirs. These three documents are critical.
-
Financial Fact vs Fiction: Why Your 'Magic Number' Isn't Actually Magical
Do you think you're diversified if you're invested in the S&P 500 and Nasdaq? Do you think your tax rate will fall in retirement? Think again — and read on for other myths that could be leading you astray.
-
Opportunity Zones: An Expert Guide to the Changes in the One Big Beautiful Bill
The law makes opportunity zones permanent, creates enhanced tax benefits for rural investments and opens up new strategies for investors to combine community development with significant tax advantages.