Moving Abroad for Retirement? 7 Reasons To Consider a U.S. Territory

Many retirees think about moving abroad in retirement to save money, experience a different climate, live the island life or all of the above. Though there are pros and cons to many destinations for U.S. ex-pats, you may want to take a good look in your own backyard for the ideal retirement destination.

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So, GOBankingRates dove in and discover why a U.S. territory should be a strong consideration for your retirement dreams.

What is a U.S. Territory?

Before we jump into the “why” of living in a U.S. territory, let’s identify what they are and how many you have to choose from. Though there are 14 U.S. territories, not all operate the same.

Here are the ones that have their own governance but are still subject to U.S. Congressional power:

• Puerto Rico

• The U.S. Virgin Islands

• The Northern Mariana Islands

• American Samoa

In this article, what we’ll discuss refers mainly to these territories.

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1) The U.S. Legal System

“Unlike retiring abroad, where navigating foreign healthcare and legal systems can be difficult and long, U.S. territories follow familiar American federal laws and regulations to varying degrees,” said Marina Shepelsky at Shepelsky Law Group.

For instance, these jurisdictions will have similar laws regarding things taxes, civil codes like driving and property ownership.

“Additionally, property ownership and other legal matters align with familiar U.S. legal principles, offering peace of mind,” Shepelsky explained. “In contrast, many other countries would not allow a foreigner to own property in their country outright or make it difficult to own land there. Corrupt local judicial systems do not offer the same protections to landlords as a system in U.S. territory.”

2) Healthcare System

Another benefit of relocating to a U.S. territory is that you can still use U.S. healthcare systems and health insurance.

“Medicare and Medicaid are accessible in territories like Puerto Rico and the U.S. Virgin Islands, ensuring continuity of care for retirees,” Shepelsky said.

It’s worth noting that, in some cases, you can get decent healthcare in a territory, but you’ll likely find better options on the mainland for complex issues. If your health declines and you need specialists or otherwise intensive medical treatments, you could face additional travel costs due to your healthcare needs.

3) Tax Benefits

When moving overseas, American expats could be subject to double taxation. Depending on your situation, you may be able to exclude income earned in a U.S. territory from U.S. tax, though you may have to file a return in some territories.

In some other cases, there may even be tax advantages to moving to a territory.

“Puerto Rico, in particular, has some incredible tax incentives under Act 60, which can reduce income and capital gains taxes significantly, giving retirees more financial flexibility,” said Antwyne DeLonde, a former financial advisor and portfolio manager, and the CEO of VisionX Econsystems.

“One of my clients was able to sell a business stateside and reinvest in retirement properties there while enjoying a much lower cost of living.”

4) Property Ownership and Estate Planning

In some countries, foreigners are not allowed to own property as noncitizens or nonresidents. However, in U.S. territories, ownership, estate and succession laws closely mirror the U.S. legal system, though there may be some key differences and restrictions.

Check local laws and work with a legal professional to get a strategy that will work for your particular needs within a given territory.

5) Island Lifestyle with American Flare

Living on a tropical island with a unique history and culture that shares some characteristics with the U.S. mainland gives you the best of both worlds.

Though living in a U.S. territory may not be exactly like any place you’ve experienced before, there will be some similarities to “back home” with a distinct yet refreshing twist. More than likely, you’ll experience familiarity with many imported elements of American culture that arrived to these places because of their territory status.

This could be comforting for retirees who don’t want to experience a drastic culture shock in relocation.

6) You Don’t Need To Learn a New Language

In the territories above, English is at least one of the official languages. This is good news for retiring U.S. expats who don’t want the stress of learning a new language or the difficulties of communication barriers when settling in a new place.

7) No Passport or Visas Needed

You don’t need a passport or visa to travel to Puerto Rico, the U.S. Virgin Islands, Guam or the Commonwealth of the Northern Mariana Islands. By eliminating the need for additional travel documents, you’ll also eliminate another layer of administrative work, saving both time and money.

The Bottom Line

Shepelsky summed up the benefits of moving to a U.S. territory in retirement: “Retiring on U.S. territory offers U.S. citizens or permanent resident retirees a unique opportunity to enjoy the best of both worlds: The serenity of an island retreat or Caribbean paradise but with the legal and systemic comforts of being within the U.S. framework.”

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This article originally appeared on GOBankingRates.com: Moving Abroad for Retirement? 7 Reasons To Consider a U.S. Territory