Retiring abroad is a growing trend, as data from various countries shows. This shift also suggests a rethinking of the boundary between active life and retirement, which today is more fluid than ever before. What can we expect, and which destinations are the top-rated in 2025?
International retirement: A growing trend
Data from multiple countries clearly indicate that retiring abroad is becoming increasingly popular. According to Investopedia's analysis of official US statistics, the number of American retirees relocating internationally grew from 500,000 in 2016 to 760,000 by 2024, with projections for 2025 showing no signs of this trend slowing down. Mexico remains the preferred destination for these retirees, followed by Canada, their other neighbor.
This trend is mirrored in Europe, especially in Switzerland, where Le Temps labels it a "social phenomenon." Statistics from the Swiss Federal Statistical Office show over 180,000 Swiss retirees have chosen France, Portugal, and Thailand as their top destinations.
In France, retirement insurance figures reveal that 7.2% of retirees live abroad, with Portugal being the favored destination. Effective January 1, 2025, France will implement a new regulation aimed at curbing social fraud involving the receipt of benefits meant for residents who live in the country for a specified number of months each year rather than abroad.
Similarly, in Germany, the Deutsche Rentenversicherung (retirement insurance) notes an increase in the international transfer of pensions, with about a third more being sent abroad over the last two decades. Annually, 1.8 million pensions are dispatched to German retirees in nearly 150 countries, with Italy, Spain, and Austria being the top choices.
Other countries like Belgium and the United Kingdom also report significant numbers of retirees moving abroad.
It's essential to recognize that these retirees are not just nationals of the respective countries but also include foreign-born workers who return to their countries of origin upon retirement.
The motivations behind this shift are diverse, ranging from the desire for a change of scenery and the return to one's roots, to the appeal of better weather and more affordable living costs. As Fortune magazine highlights, "Baby boomers are massively leaving America to retire abroad because the United States is simply too expensive..."
New forms of international retirement in 2025
The concept isn't new, but the discussion around flexible retirement models, especially abroad, has grown since the end of Covid. By "flexibility," we mean moving away from viewing active life and retirement as two distinct phases.
Continuing to work well beyond traditional retirement age
A key trend is the rising retirement age, as noted by the US Bureau of Labor Statistics. By 2030, there's expected to be a significant increase in workers aged 75 and older. The adage "sixty is the new forty" is becoming a reality, not just in the US but globally.
Hybrid forms: Semi-retirement
Many retirees are opting to continue working part-time, engage in consulting, or start new businesses. This shift often coincides with a move abroad, blending lifestyle changes with income generation.
Consider the case of an American photographer: “When I turned 70, I reduced my expenses but didn't fully retire. I can't see myself ever fully retiring. Living abroad, I started a photography business and took on projects as my time and interest allowed.”
'Gap year' or sabbatical for pre-retirees
HR professionals note a rising trend, especially in Canada, where employees seek extended time off beyond standard annual leave—often referred to as a "mini-retirement" or "golden gap year" by sources like Canadian radio CBC.
Such sabbaticals are increasingly common as retirement approaches, offering a chance to explore personal projects or even relocate abroad temporarily.
For further insights, see the experiences shared by Mark and Jody, founders of the “Retirement Transformed” website.
A clear aspiration: Living off one's annuities
A recent survey by Ifop reveals that nearly 62% of French people dream of retiring from work to live off their annuities.
This isn't merely wishful thinking. There's a growing number of retirees who sustain themselves through passive income from investments or rental properties, bolstered by better financial planning and investment options.
Countries offering “investor visas” recognize the potential benefits, providing residency permits in return for investment, tapping into this affluent retiree demographic...
The top 2025 destinations for retirement abroad
International Living magazine recently unveiled its 2025 ranking of the best destinations for retirees. This index is carefully crafted, relying on firsthand experiences and assessing seven critical categories: housing, visas, cost of living, healthcare, governance and development, climate, and personal affinity.
Panama
Panama emerges as a standout, lauded for its safety and stability. According to experts from the ranking team, retirees can live comfortably here with $2,400 per month.
The country boasts high-quality infrastructure and affordable healthcare. Additionally, Panama offers attractive fiscal policies, including no tax on foreign income and a modest property tax rate of 0.5% for most primary residences.
Portugal
Portugal continues to charm retirees with its scenic diversity and historic allure. The cost of living remains low, with couples needing about $2,500 to $3,000 per month for a comfortable lifestyle, depending on their choices and location.
Its healthcare system receives high marks for both its private and public facilities.
Costa Rica
Costa Rica is a haven for nature lovers, home to approximately 6% of the world's biodiversity. It's celebrated for its relaxed lifestyle and the warm relations retirees often establish with locals.
A monthly budget of $2,500 is typically sufficient for a couple to live comfortably with affordable and reputable healthcare.
Mexico
Mexico is favored for its proximity, natural beauty, and rich culture, making it a perennial favorite among North American expatriates. The hospitality of the local people is frequently praised.
Despite past safety concerns in some areas, expatriates report that Mexico can be very safe, provided common sense precautions are taken. The cost of living, particularly in real estate, remains a significant draw.
France
While France may have a higher cost of living compared to other top destinations, it is widely acclaimed for its quality of life and cultural richness. Housing and healthcare provide good value for money, especially outside major urban centers like Paris.
France's renowned cuisine, arts, and landscapes continue to make it an attractive destination for retirees looking to enjoy a distinguished and vibrant lifestyle.
