4 Countries That Welcome American Retirees

These countries offer tax breaks and other perks to foreigners who retire there.

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Older couple
Jennifer Sharp/Getty Images
By Kathleen Peddicord

Some countries roll out the welcome mat for foreign retirees, offering sometimes significant tax breaks, in-country discounts and other perks to anyone who qualifies for resident retiree status. The age you qualify as a retiree can have a broad definition, depending on where you go. For example, in Belize you can qualify for retirement residency and the associated perks as young as 45, and Panama has no stated minimum age requirement for its Gold Standard retiree residency program.

Costa Rica was the first country to make a concerted effort to attract foreign retirees with a program of special benefits. Its pensionado program was responsible for bringing tens of thousands of foreign retirees, mostly Americans, to the country in the 1980s and 1990s. While the pensionado visa is still available in Costa Rica, many of the tax breaks and other special perks it once offered have been discontinued. Costa Rica has also become more expensive, both as a place to live and as a place to own a home. For these reasons, while Costa Rica is perhaps the world's best-known overseas retirement haven, it no longer qualifies as one of the best.

Today, these four countries are working hard to attract foreign retirees:

Belize. Just over a decade ago the government of Belize enacted legislation to allow qualified retired persons to obtain permanent residency in their country. This is a quick and efficient program. As a QRP you could become a full-time resident of the country, but you can also enjoy the benefits if you spend as little as one month a year in Belize.

Belize's QRP residency program isn't only for senior citizens. It's available to anyone age 45 or older, and it grants a host of incentives designed to encourage foreigners to come and bring their money. These incentives include a permanent exemption from Belizean taxes, including income tax, capital gains tax, estate tax and import tax on household goods, automobiles, boats and even airplanes.

The only requirements to qualify for Belize's QRP program are that you be 45 or older, consider yourself to be retired and have at least $2,000 a month in guaranteed income to support yourself in Belize. While pension income can be shown to meet the last requirement, the easiest way to prove financial means is simply to deposit a minimum of $24,000 per year into a Belizean bank account.

In practical terms, the "consider yourself to be retired" requirement means that, as a QRP, you can't apply for a work visa. This is not to say that you can't do international, Internet or even local Belize business as an entrepreneur. You just can't take a job working as an employee of someone else in Belize.

Even if you're not contemplating retiring in Belize for several years, this is the time to apply and lock in the benefits of the current QRP law. Once you've qualified, a one-month holiday in Belize each year will maintain your QRP residency status while you work toward your ultimate retirement plan.

Ecuador. In recent years, Ecuador has raced to the top spot on lists of the world's most desirable retirement destinations, especially for retirees on a budget. The country offers diverse lifestyle options, from colonial Cuenca to cosmopolitan Quito and from the sleepy mountain town of Cotacachi to the fishing village of Playas.

Ecuador's retiree residency program offers the following benefits:
  • 50 percent off all public transportation.
  • 50 percent off national and international airfare.
  • 50 percent off all cultural, sports, artistic and recreational events.
  • 50 percent off electricity, water and telephone service.
  • A special discount on property tax.
  • Relief from Ecuadorian income tax.
  • A discount on vehicle tax.
  • A discount on judicial fees.
  • A refund of value added tax (sales tax).
  • And, perhaps best of all, you never have to stand in line. Seniors age 65 and older always go to the front.
The process of applying for and receiving retiree residency status in Ecuador has gained a (probably deserved) reputation for being complicated. However, the government has made an effort to simplify things. In addition, a new immigration office has opened in Cuenca, where many foreign retirees are choosing to base themselves.

However, the program also has some restrictions. As a retiree resident of Ecuador, you can leave the country for no more than 90 days per year for each of the first two years or you lose your status. After the first two years, you cannot be out of the country for more than 18 consecutive months.

To qualify for Ecuador's retiree visa program, you must be able to show guaranteed income of at least $800 per month, plus an extra $100 for each dependent relocating with you. If the income you're using to qualify for the program is from a source other than a pension or Social Security (investment dividends, for example), the amount of $800 per month for five years ($48,000) must be deposited in a bank in the country in advance.

Nicaragua. Nicaragua is a land of contrasts at an interesting time in its development. The civil war is history, and Nicaraguans today want nothing more than peace and prosperity. Geographically, Nicaragua is blessed, with two long coastlines and two big lakes, plus volcanoes, highlands, rain forest and rivers. In this regard, it has everything Costa Rica has, while also being less discovered and less developed. It is available for adventurers, eco-travelers and budget-minded retirees at bargain rates compared with costs in the United States, Costa Rica and almost anywhere else in Central America. Nicaragua is one of the most affordable places in the world to enjoy a comfortable, full and rich retirement.

The challenge for Nicaragua is persuading the world to take the country seriously as a potential retirement option. Nicaragua continues to work hard to overcome its troubled past and the world's general misinterpretation of the current reality in this country. As part of this effort to attract foreign investment, the country has instituted a pensionado program that is competitive with those on offer in Panama, Belize and elsewhere in the region.

To qualify for retiree residency in Nicaragua, you can be as young as 45. The best part of Nicaragua's pensionado program is the minimum monthly income requirement, which is the lowest offered by any country. You need a pension or Social Security of just $600 per month (plus $100 per month for each dependent) to qualify.

As a pensionado in Nicaragua, you:
  • Pay no tax on out-of-country earnings.
  • Can bring up to $20,000 worth of household goods into the country with you duty-free.
  • Can import one automobile for personal use duty-free and sell it after five years, if you'd like, without incurring any sales tax.
Panama. Panama offers what has become the world's best-known pensionado program after the once-heralded program from Costa Rica. Panama's pensioner status offers some of the deepest retiree discounts available anywhere, making it one of the most generous retiree packages in the world.

The government of Panama is fairly relaxed with regard to the minimum age to apply for this visa. Typically if you are over the age of 18 and receive a guaranteed pension from any government entity, including Social Security, the Armed Forces or a private company, then you can apply.

Your pension must be at least $1,000 per month, plus $250 per month for each dependent, including children under 18. Once you've qualified, you enjoy all pensioner visa benefits for life. These include:
  • 50 percent off entertainment anywhere in the country, including movies, theaters and concerts.
  • 30 percent off bus, boat and train fares.
  • 25 percent off airline tickets.
  • 50 percent off hotel stays Monday through Thursday.
  • 25 percent off hotel stays Friday through Sunday.
  • 25 percent off at sit-down restaurants.
  • 15 percent off at fast food restaurants.
  • 15 percent off hospital bills (if no insurance applies).
  • 10 percent off prescription medications.
  • 20 percent off medical consultations.
  • 15 percent off dental and eye exams.
  • 20 percent off professional and technical services.
  • 50 percent off closing costs for home loans.
With Panama's pensionado visa, you are also entitled to a one-time tax exemption on the importation of household goods (up to $10,000) and a tax rebate on every two years of import duties for the importation of a car (sales tax and luxury tax still apply).

In the past it was possible to apply for pensionado visa status on your own. However, the Panamanian government has since enacted a law requiring a lawyer to submit all visa applications. Also, because of the great volume of foreign retirees applying for pensionado visa status in Panama, the process can take up to several months.

Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 28 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring and investing overseas in her free e-letter. Her newest book, "How To Buy Real Estate Overseas," published by Wiley & Sons, is the culmination of decades of personal experience living and investing around the world.


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rogerdrake34

Its a sad state of affairs when our own people can't afford retirement in this country. This is more so because that is all they can afford after an entire lifetime of working? I don't know if its possible for everyone, but hopefully most young people today have the opportunity to at least plan for the fact that they need to put away a higher percentage of their income. I am 36, not young but not old either, and I have every intention of retiring in the United States, hopefully in warm weather. Personally to prepare for what I will need I have made some changes to put more money away. This is the best of what I have done:
1. I eat out at least 1 less time per week, This saves 50-$100 per week minimum, and if you skip fancy meals it saves even more.
2. My company saves 5% in a pension plan for me. I also put away 6% in my 401k, and I get a 3% match. It isn't the full 15% that experts recommend saving for retirement, but it is close.
3. It's embarrassing to admit what I was paying, but some hotshot financial advisor sold me this life insurance policy for $290 a month. I understand it saves a cash value, but it was ridiculously expensive, and I can get a higher return investing that money in other places. After doing some research I realized that you can get Term policies for the same coverage online for way less. I got mine from Life Ant Insurance and it only costs about $14 a month. At least the wife and kids are protected if something happens to me.
4. I got rid of my financial advisor, and switched all my funds to low cost Vanguard investments. Over time between fund fees and financial advisor fees I will hopefully accrue an amazing amount of more money.
5. I was able to negotiate a better deal on both rent and cable. I didn't even know that cable companies negotiate with you until my friend told me. Between the two I save an extra $55 a month. Not huge but over time its going to add up big time.

Who knows maybe costs will keep rising. But if I can't retire in the US with all of that then we have bigger problems than retirement location on our hands.

June 21 2014 at 5:56 PM Report abuse rate up rate down Reply
Yup James

Anybody here ever try oil trading? I've been trading oil and making very good money. I tried the forex and that was no good and stocks can be too volatile for my tastes but with oil trading I'm making very good trades and money. I'm using the method by Bionic Traders for oil trading, just Google Bionic Traders and you should be able to find them.

June 20 2014 at 1:30 AM Report abuse -1 rate up rate down Reply
gjcluff

Sure, I'm going to go retire and purchase property in unstable countries. Just wait until the next revolution.

June 19 2014 at 10:33 PM Report abuse -1 rate up rate down Reply
foxylynx

Panama sounds the most appealing - one would have to visit and then rent before buying. But, the way the U.S. is going - I think more and more people will consider a move. Most of us can't afford Europe and many can't afford the U.S.

June 19 2014 at 7:19 PM Report abuse rate up rate down Reply
jimmac01

So if I show up on their beach, naked and crying, are they going to kick me back into the water?

June 19 2014 at 5:42 PM Report abuse rate up rate down Reply
1 reply to jimmac01's comment
gpfs

No, point fingers and laugh maybe though....

June 19 2014 at 11:50 PM Report abuse rate up rate down Reply
Kim

I think I will stay right where I am :)

June 19 2014 at 4:57 PM Report abuse +2 rate up rate down Reply
Iselin007

The economy is so messed up you should be grateful for the tolls to Staten Island

June 19 2014 at 2:59 PM Report abuse -2 rate up rate down Reply
Iselin007

Belize was the Island the car thieves shipped vehicles in containers to. The Islanders would be driving the cars around with the license plates still attached.

June 19 2014 at 2:47 PM Report abuse -1 rate up rate down Reply
DESPERADO

I would still pick Mexico. Much safer than Detroit or Chicago..

June 19 2014 at 2:35 PM Report abuse -5 rate up rate down Reply
1 reply to DESPERADO's comment
Iselin007

Maybe you can convince those crossing the border to go back.

June 19 2014 at 3:01 PM Report abuse +2 rate up rate down Reply
1 reply to Iselin007's comment
DESPERADO

Enlighten yourself. They cross the border to work or join obamas welfare army, not to retire..

June 19 2014 at 10:35 PM Report abuse rate up rate down
Iselin007

If they were such a great deal why do they have to advertise? Some investor crooks will get rich and you will never hear from them again.

June 19 2014 at 2:22 PM Report abuse rate up rate down Reply