If Wyoming, Alaska or Minnesota – the best states for retirement – don’t do it for you, you might want to consider such overseas retirement options as Portugal, Malaysia or Ecuador. (Pictured above: Chiang Mai, Thailand)
Why? For starters, the seaside Algarve region of Portugal was ranked the top destination for Americans who want to retire abroad, according to a new report from Live and Invest Overseas, out earlier this week.
“It’s the most affordable option in Europe,” said Kathleen Peddicord, author and publisher of Live and Invest Overseas, a website with information for those who want to retire, invest, do business and own real estate outside the U.S.
“For just $1,500 a month, you can live in the quintessential Old World culture in the Algarve, where you’ll find medieval villages, some of the best beaches in Europe and amazing weather,” she added.
Other attractive aspects of the Algarve region include undervalued real estate – as well as recent legislation that allows resident foreign retirees to receive pension and foreign income in the country tax free for 10 years, if they qualify for the new non-habitual resident status.
The region, with its miles of beaches, is also a top golfing destination with dozens of courses.
To come up with the best places to retire overseas – which admittedly is not for everyone – Live and Invest Overseas looked at 12 criteria. Those are: climate, cost of living, crime rates, amount of English spoken, entertainment, environmental conditions, existing expat community, health care, infrastructure, real estate, residency options and taxes.
Here are other top oversea destinations for retirement, as well as their main attractions, based on this source:
Cuenca, Ecuador: beautiful climate, affordable living and expat community
George Town, Malaysia: budget living, low taxes, good weather, expat community and English
Chiang Mai, Thailand: inexpensive living, expat community, weather and good health care
Dumaguete, Philippines: affordable living, great beaches, expat community, balmy climate and good health care
Pau, France: Old World European lifestyle, low crime and good health care
Medellin, Colombia: city living on a budget and good health care
“Collectively, these are the world’s most affordable, most welcoming, friendliest, safest retirement choices right now,” according to the report.
From a tax standpoint, the report also noted that most countries don’t tax retirement income, although as an American receiving Social Security, you would pay U.S. taxes on that income.
Taxes on non-retirement income are a bit more complex and you should check the tax situation in your target country to understand if you owe tax in the U.S. and/or in the country in which you’re retiring. You should also consult with your financial adviser about other implications of such a move.
As to the local cost of living, Live and Invest Overseas noted that will depend largely on how you choose to live. Your main expenses would be mostly centered on housing, utilities, groceries and entertainment.
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