How to Master Retirement Math and Live Abroad in 2025

Living the dream used to mean a cozy retirement in Florida or Arizona. Not anymore. More and more retired Americans are trading familiar surroundings for exotic addresses across the globe. And many are doing it on a budget.

While the cost of living keeps climbing stateside, smart retirees stretch their savings using the dollar’s power abroad. Think beachfront living for the price of your suburban apartment, or gourmet meals at diner prices. More than escaping the American cost crunch, retiring abroad is about upping your lifestyle while spending less.

The math of spending less while living more

Let’s do a rough comparison. A comfortable retirement in most U.S. states sets you back some $4,500 to $7,000 monthly. Expat retirees are living their best lives on perhaps half that. 

Take Costa Rica, where pensioners can live off $1,600 to $2,000 monthly in return for year-round beach weather and other tropical perks. Couples in coastal Lisbon, Portugal can rent an apartment in the historic center and get top-tier healthcare for as little as $3,000. Try doing that in San Francisco, where the same lifestyle would easily set you back more than double.  

It’s factoring in the small, everyday expenses when America’s rising costs really show.  That $5 cappuccino in Manhattan? It’s $1.50 in Mexico City. Your $200 weekly grocery bill? Cut it in half in Thailand.

Finding the retirement destination that fits your needs

Affordability abroad versus the U.S.’ rising cost of living might be increasingly important for Americans retiring abroad – but it’s certainly not the only factor informing overseas retirement plans.

Healthcare access is right there on top of many retirees’ priority list. We all know how fast the American healthcare system can drain retirement savings. Recent research shows that the average 65-year-old might spend $165,000 on healthcare and medical bills throughout their retirement. 

Many countries offer high-quality medical care at a fraction of the cost. Countries like Portugal and Costa Rica offer it through universal healthcare, while countries like Thailand and Panama require expats to get insured. Adding complementary travel insurance ensures retirees are fully covered for medical emergencies or unexpected situations – and against the exorbitant medical bills they might have faced for similar treatments back home.

Visa policies can make or break your retirement plans. Mexico and Costa Rica roll out the welcome mat for US citizens with special retirement visas, while Malaysia’s government is selective in the kind of retirees they want to attract by setting investment thresholds (read: the wealthy kind). 

There are also the matters of safety, climate, lifestyle, and whether the culture is a fit. Rio de Janeiro is a gorgeous tropical metropolis but there’s a reasonable chance your phone gets snatched if used in public. And while the tropics might seem like paradise to some, the heat and high humidity can feel oppressive to others. 

And then there’s the practical consideration of location.

You can’t put a price on family moments

It’s easy to see why Thailand is loved among U.S. retirees. The tropical nation offers an incredible lifestyle at affordable prices. But for some, being a twenty-hour flight away from family and friends can complicate things. For many Americans, the ideal country to retire is one close to home. 

That’s why they gravitate toward destinations like Mexico, Costa Rica, Panama, or even Portugal – places that balance exotic living with manageable travel times back home. After all, being home for those special moments is easier when you don’t spend whole days in planes and half your monthly allowance on airfare.

The best retirement destinations for Americans in 2025

When picking the best countries to retire in with the above factors in mind, some destinations consistently rise to the top. And among countries with high affordability and accessibility, Costa Rica comes first. 

Promoting the “Pura Vida” and with an established expat community, Costa Rica ticks all the right financial and lifestyle boxes. It’s near enough to the United States and the country’s political stability, excellent healthcare, and tropical climate make it a natural choice for retiring abroad. 

Mexico comes in at a close second for one obvious reason: its shared border with the US. But Mexico promises much more than being a car drive away, from rich culture and colonial charm to 40% lower living cost than the US. For some, though, Mexico has a too familiar ring to it.

For those, there’s the old-world allure of Portugal. 2025’s top European retirement destination offers a top-quality Mediterranean lifestyle while being more affordable than any other Western European nation. And there’s Malaysia, Colombia, or the Philippines – all unique destinations that escape many retirees’ attention but that offer an incredible price-to-lifestyle ratio. 

Wherever you choose to spend your golden years, your retirement can be both extraordinary and affordable.