Retiring Overseas: Key Financial Strategies for U.S. Citizens

By Ankita D’Mello

Picture this: You have put in years of hard work and are finally at the point of punching out for the last time to enjoy retirement in southern Italy, Thailand or any number of beautiful places.

It’s a pretty popular concept. According to a Monmouth University poll from 2024, more than one in six Americans aged 55 and older say they would like to move to another country. However, there are a lot of financial considerations to take into account when retiring abroad. Some are more obvious than others, but they can all have a big impact.

Whether you’re planning to spend your days frequenting a White Lotus-esque resort or you’re keeping to a tighter budget, here are a few tips to keep in mind as you embark on this next phase of life.

Figure Out How Much the Living Abroad Costs You

Certain expenses may seem cheaper in other countries (Italian wine, anyone?), but the costs of different items can vary by location. For example, Portugal is often seen as an attractive and affordable destination for retirees, but gas there can be very expensive compared to the U.S. Denmark may look like a great destination due to its high standard of living and safety, but if you’re a frequent shopper, you’ll be facing some of the steepest prices on clothes globally.

As a starting point before you even consider moving somewhere new, compile a list of categories you spend the most money on. From there, research how much they cost in the country you’re looking to move to and see how your cost of living might change. There are online forums, like Expatica or Expat Exchange, where people share information that can help inform your decision on where you will spend retirement. If you’re already set on a specific destination, you can take this information to begin crafting your budget.

Challenges of Moving Money Internationally

Many expats maintain some sort of financial presence in the U.S., such as a house they are still paying a mortgage on and/or renting out to others, consulting work they are handling remotely or money they’re sending to children. As such, you’ll want to be on top of the best ways to manage sending and receiving money between the U.S. and your new home. While the world is increasingly more connected, international transactions can still be tricky if you aren’t prepared.

Moving money abroad is traditionally slow, expensive and opaque. It’s often difficult to know how much money will arrive on the other end of a transaction and when, which can be stressful—especially if you or your family are reliant on income coming from abroad. However, if you know what to look out for, these challenges are manageable.

The first thing to watch is currency volatility, which refers to fluctuations in the value of a currency. For Americans moving abroad, the changing value of the dollar can make a tangible difference to how far your money can stretch. Say you are living in Spain and want to purchase a car. You don’t have enough cash on hand, so you transfer money from your U.S. bank account into Spain. If you do this during a time when the dollar has dropped in value against the euro, your money will be worth less than it might have been at a different time.

To mitigate this risk, you could convert a large sum of U.S. dollars into euros during a time when the dollar is stronger, instead of making ad-hoc conversions as you need them. Many expats do this to ensure they have a reserve and won’t have to worry about fluctuating exchange rates impacting the value of their funds.

Another challenge when managing money across borders is hidden fees. Unfortunately, many financial institutions will falsely advertise “no” or “low” fees on international transfers while simultaneously marking up the exchange rate they offer. In other words, they still charge a fee to send money, they just don’t tell you what it is. A simple way to check whether your provider is marking up their exchange rate is by checking the mid-market rate, which is the rate that you will see on Google. For example, if you see a provider advertise a rate of 1 USD = 0.80 EUR with no additional fees and the mid-market exchange rate is 1 USD = 0.85 EUR, you can easily identify there is a hidden cost.

On top of concealed charges, there are also more explicit fees that providers may tack on, such as:

While each fee may appear small, they all add up. As of May 2025, if you move to Europe and want to send €1,000 to someone in the United States, you could be paying anywhere from €1.99 to €41.55 in fees with many traditional banks and services, demonstrating the importance of comparing providers.

There are alternative providers, like Wise, that allow you to move and manage money internationally conveniently, affordably and transparently. It’s always important to compare available solutions, but no matter which you choose, make sure it’s the provider that meets your unique needs, trusts you to know what you’re paying, and saves you money in the long run.

Align Taxes and Estate Planning for International Living

Consider consulting with a lawyer and financial adviser before making your move. Things like your trust, will and powers of attorney may or may not be enforceable in your new destination. Every country has different laws and regulations, so you may need to update your documents or procure new ones in line with local policies.

In terms of taxes, remember that leaving the U.S. doesn’t exempt citizens from paying U.S. taxes; you still must file annually with the IRS. You also must take into account the tax laws of your new country, though policies do exist to address double taxation. It’s best to consult a tax professional to ensure you are not missing anything.

The Right Health Care for Living Abroad

Those considering moving abroad should also look into health care and insurance costs in their new destination. There are some countries that require health insurance to secure a visa, and you should note that Medicare does not cover health care overseas. Many large insurance companies offer private plans tailored to expats.

If you have earned Social Security benefits, you will still be able to receive them in your new country. The government has a tool where you can double check your eligibility depending on which country you will be moving to.

You can also elect to receive your Social Security payment directly deposited into your non-U.S. bank account, however it will be converted to your local currency at the daily exchange rate. To avoid fees associated with currency exchange, you should ensure you use an international bank account or specialized cross-border payments provider that helps minimize associated fees.

Importance of Communication

Moving to another country necessitates some candid conversations and a lot of organization, especially around money. As with all aspects of life, proactive communication can help mitigate personal and financial issues before they even begin.

For example, if you have children or other dependents who you support financially, you’ll want to ensure you have a system in place to handle any international money transfers efficiently and affordably. More specifically, you’ll want to make sure everyone involved in sending money internationally is leveraging services that minimize fees and markups on both ends.

Another key component for married retirees or those in a long term relationship is financial management with your partner. Although retirement age couples might have more experience with finances, they are not immune to relationship-related money issues. A recent survey by Wise found that a quarter of boomers say they are sometimes uncomfortable speaking to their partner about money, with the primary reasons being fear of causing a disagreement and having different ideas about spending and saving. Thirty-four percent (34%) of this age group disagree about money at least once a month.

You deserve to enjoy retirement in whatever location you please. But it’s hard to focus on pickleball, deep sea fishing, touring wineries and [insert other retirement activity here] when you have questions and concerns about your finances or when you’re battling costly and confusing fees.

Doing your research ahead of time, making a financial plan and having a team of people in your corner are vital to ensuring a seamless transition to international retirement. You’ve spent the past few decades financially preparing for this part of your life, so now it’s time to enjoy (and protect!) the savings that made it possible.

About the author: Ankita D’Mello

Ankita D’Mello is principal product manager at Wise, responsible for building the payments infrastructure for USD and CAD and defining product strategy to grow the Wise account in North America. Ankita is passionate about driving Wise’s mission by helping customers manage their financial lives across borders and solving complex problems at scale. In January 2025, she was also listed as one of American Banker’s Most Influential Women in Payments.

Related: Medicare and International Travel: Your Guide

Related: Working Abroad? A Guide to International Remittances