≡ Menu

Does It Make Financial Sense To Move Abroad?

Going abroad can be an excellent way to live within your budget during retirement.


As things heat up politically, many people are wondering if it makes sense to pack up and move abroad to a more tranquil location. Whether it is to live the Dolce Vita in Italy, enjoy some siestas in Spain or sip ouzo on a Greek island, these dreams are hard to resist.

When thinking of moving abroad, the thoughts usually focus around what you envision your life will be like. Such as the lifestyle you hope to enjoy, or the experiences you hope to have. But, the reality of moving abroad is complicated and things rarely ever go as you had imagined.

There is a financial aspect to keep in mind throughout this, as well. Does it even make sense on a financial level to move to another country? Even with the perceived lifestyle benefits and other potential advantages, the finances might not make sense.

In this article, we will cover some of the things to keep in mind before making a move to another country.

Cost of living

The US and UK have some of the highest average salaries in the world so moving somewhere else usually involves a step down as far as your salary goes.

Unless you are moving to Switzerland for a high paying banking job, then you are likely to end up making less money. But, it pays to take a wider view of things by not just looking at the lower numbers on your paycheck.

Many countries have a much lower cost of living than where you currently live in many cases. So, even though you may potentially be making less money, you may end up with more money saved since it costs less to live.

For instance, if you are living in the Northeast USA, then you likely are paying a very high mortgage and that is the thing holding you back from reaching your financial goals. If you can move to someplace like Spain and do the same job, your housing costs will be a fraction of what you are currently paying.

And if you are one of the expats that is working for an American company with an office abroad and making an American wage, then you can really see a massive benefit in the low cost of living.


Many of the countries where you would likely be moving have a very comprehensive social security system. With public healthcare and pension plans, they usually have higher taxes to pay for these things.

Which means that your taxes are almost guaranteed to be higher. So, does this mean that you will have less money to save or invest? It all depends of course, but if you are able to also enter the public health system then you are usually going to end up with more money in your pocket.

For instance, if you are working in the US, your employer generally is paying for most of your healthcare policy. But in most cases it is only 60% to 70% of the premium and there are usually deductibles. This means that you end up paying up to $10,000 per year in healthcare costs even when you are healthy. If you have a health problem then this number could go even higher.

If your increase in taxes is less than what you were paying for health insurance then you end up coming out ahead. Even if you have to pay for private insurance, if there is a public option that it competes with, the costs are generally much lower so you’ll still save money.


If your working life is over and you want to stretch your retirement savings, then a move abroad almost always makes financial sense. You don’t have to worry about taking a reduction in your salary and a rise in the quality of your lifestyle won’t require more spending.

Many countries are eager to attract retirees from wealthy countries to come and buy property and help the economy. This means that getting a visa to live permanently in another country is usually much easier when you are retired than if you are looking for a job or putting kids in school.

The only problem is that since you haven’t been paying into the social system, you aren’t likely to be on the public health system. Which means that you will be paying for your own health insurance in most cases. This is usually much cheaper than what you would be paying for Medicare supplemental insurance, however.

If you go to a low cost of living country and stay away from the high tourist areas, you can find a very affordable situation that offers a very high standard of living with reduced costs than what you would have achieved had you stayed home.


Filed under: Travel Guide

About the Author:

has written 823 posts on Vagabond Journey. Contact the author.

0 comments… add one

Leave a Comment