Return to Your Home Country to Retire: Repatriation Retirement

It seems like repatriation retirement — returning to your home country after years in the U.S. — is on the rise. Just ask George Roque. He was 18 years old when he left behind his parents and sister in his small farming village in northern Portugal.

It was 1977, several years after a military coup plunged the country into tumult. Many of Roque’s friends were leaving. He had an aunt living in New Rochelle, N.Y. and decided to visit her.

He never planned to stay until he was 66 years old, but after the first year of menial jobs, he enrolled in college, earned a master’s degree, received citizenship and started a career in finance. Along the way he married a New Yorker and had three sons.

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Now he is retired and is planning to move back to Portugal this summer, a country he has often visited but hasn’t lived in for almost 50 years.

“I was educated as an American. My brain is designed to think like an American,” Roque says. “I love this country.”

But growing old here is a different story. Everything is expensive. He and his wife, Barbara — who has learned Portuguese — are increasingly worried about their physical safety when they walk around Manhattan, where they now live.

“The country has changed so much since I came here,” Roque says. He started thinking about moving back to Portugal when Donald Trump was first elected president; the second election solidified his decision.

Repatriation retirement: politics and cost of living

According to a 2023 survey of immigrants living in the U.S., about 19% of respondents said they wanted to return to their home country, while 21% said they weren’t sure. But anecdotally, it appears that a lot more people are considering it since the 2024 election.

Paul Kurucz, an international repatriation consultant with a focus on Canada, says he is hearing from many Canadians living in the U.S. who plan to return. He estimates that he receives about 15 calls a month from those inquiring about repatriating and that about five to seven of those are retirees.

“There are a number of different pieces going on,” he says. “The election did throw a lot of people off. Some are also concerned about the cost of living in many places and the cost of health care. They’re eyeing our free health care system.”

Those who decide to repatriate will face similar challenges to the many Americans who choose to retire to a foreign country. But some of those obstacles will be very different.

Returning to live in a place considered home comes with its own emotional baggage. “Just the expectation that they're going to slot right back into where they were ten to 15 years ago — it’s not going to happen,” says Craig Storti, an intercultural consultant and author of The Art of Coming Home. “They think they're going home, but they're actually going from home to a place that initially — no matter how often they visited — is going to feel foreign.”

People often idealize what it’s like in their home country and filter out the negative, he adds. “There’s bound to be some disappointment. The country isn’t the same and they’re not the same person who left.”

Leola Reis, 61, knows that Kingston, Ontario, in Canada, where she and her husband grew up, won’t be the same place they moved away from 30 years ago.

“I think one of the things we realized was you can't step in the same river twice, so whatever expectations you might have about going back, you really have to manage them,” she says. “The city is very much changed, so we're looking forward to getting to know it again. We call it Kingston 2.0.”

Reis, who worked in women’s health, and her husband, George Pullman, 61, a professor at the University of Georgia, were content living in Atlanta and both are American citizens.

“But as we got older and closer to retiring, the size of the city and, definitely the heat, helped hasten our decision,” Reis says. “And it’s become impossible to ignore the current political climate and how it affects the things we care about.”

As soon as they saw how complicated the move was, they hired Kurucz as a repatriation consultant and joined a Facebook page, “Canadians living in the U.S. with an exit plan.” It has more than 3,000 members.

“Access to a consultant and the wisdom of the group,” helped a lot, especially with logistics, Reis says. For example, they discovered that it probably wasn’t a great idea to bring their cars to Canada, as car warranties aren’t always honored. Besides, they will need something hardier in Kingston than what they drive on the streets of Atlanta.

As Reis also learned, it’s very important to understand the economic implications of retiring overseas.

Social Security and taxes

For those who have U.S. citizenship, the issues will be no different than any American choosing to retire to another country. For non-U.S. citizens, it is more complicated.

U.S. citizens can receive Social Security payments while living in virtually any country. They are also required to file income tax in the U.S. So it’s critical to know if the country you’re planning to retire to has a tax treaty with the U.S., which more than 70 countries do.

Tax treaties for income and assets — including IRAs and 401Ks — spell out which country has the right to tax which streams of income; in most cases that allows people living abroad to avoid taxation by both countries, says Philip Pizzuti, an international wealth manager with Creative Planning.

There are also treaties for gift taxes and estate taxes that typically give the same tax exemptions offered in the U.S., he adds.

But be aware that most tax-treaty countries don’t recognize the tax-exempt status of health savings accounts or Roth accounts, which means you may be subject to double taxation.

If you’ve invested in the Roth for five years, there’s no tax liability to withdrawing the money, so “either we would recommend you deplete it before moving abroad if you’re going to actually need the money during your retirement, or, if there's an excess of assets available, plan to leave it to your heirs,” Pizzuti says.

It’s also important to understand that even in countries with very favorable tax policies, U.S.-based trusts, estate plans and mutual funds may pose a problem, he says. For all those reasons, check with someone familiar with international wealth planning before opting to head back to your home country.

Some people want to continue to own their house or apartment in the U.S. but be aware of the tax implications if you are still considered a state resident, Pizzuti adds. To avoid taxes, you may need to prove that you are planning to leave forever with no intention of moving back; for example, by showing you’re not voting in local elections and you don’t have a storage facility that might indicate a plan to return at some point.

In some cases, clients and their tax preparer write to the state taxing entity with details demonstrating they have no plan to return to the state.

Green-Card holders

Those who never received U.S. citizenship but lived here as permanent legal residents — also known as green card holders — have some other obstacles to overcome. They will likely lose their Social Security payments if they live abroad continuously for six months unless they are returning to a country that has a totalization agreement with the U.S. Some 30 countries that have such agreements, including most European countries, as well as Australia and Canada.

Green card holders also should be aware that they are required to live for 183 days in the U.S. every year to maintain their permanent residency. One way to avoid losing permanent legal status is to apply for a re-entry permit, says Rosanna Berardi, managing partner of Berardi Immigration Law in Buffalo, N.Y.

Such a permit is good for three years and can be renewed a number of times, she says. Even if someone is positive they will not return to the U.S., Berardi says, she would urge them to file for a re-entry permit before going overseas.

“It gives them some breathing room,” in case they change their mind, she says. “Getting a green card back is incredibly difficult.” While one can file for the permit themselves, typically a lawyer does it to make sure all the bases are covered, Berardi adds.

Medicare is not transferrable to other countries, but some may choose to continue paying for one or all parts of Medicare in case they change their mind and return to the U.S., Pizzuti says; otherwise, you will likely have to pay 10% more for the cost of part B for every year you were without it. It also means you have insurance if you choose to return to the U.S. for medical care.

In any case, even if you think you know the healthcare system in your home country, research it and the availability of any specialists that you may need.

For Jean Peccoud, 60, a professor at Colorado State University and founder of the bio-tech company GenoFab, health care costs play a large role when he thinks about the possibility of moving back to his native France.

“The U.S. is good when you can make a lot of money, but as soon as there are health care issues, it's financially problematic,” says Peccoud, who has lived in the U.S. since 1999. “There are a lot of other places where you can have a decent quality of life and decent health care at a fraction of the cost.”

‘A lifestyle that excites’

In the past, many retirees moving to Canada were most concerned with being near a hospital and good medical care, Kurucz says. But that narrative has changed over the two decades.

"There was an assumption that when you hit 60 years old, you’re preparing to die,” he says. “That started to shift and now I probably say about 90% of my clients are choosing a lifestyle that excites them rather than living near a hospital.”

Be aware that moving is tough, Stoti warns, so be careful to avoid making hasty decisions. “It is very common in the first three or four months to think you’ve made a mistake.”

His advice: Avoid romanticizing your time abroad and remember what you didn’t like about the U.S. and why you chose to leave. Expect some disappointments in your home country.

“There’s a tendency to filter out the negative stuff,” he says.

And keep in mind that couples typically don’t readjust at the same time. Try to be sympathetic to each other if "one person is kind of down and the other is flying through it,” he adds.

Roque and his wife, who bought and refurbished a 200-year-old farmhouse complete with a vineyard in Ponte de Lima, an ancient village about 100 miles from where George grew up, are well-prepared for their move. But they know it won’t be easy.

They are culture lovers who can walk from their Manhattan apartment to some of the best opera and jazz clubs in the world. It will be far more difficult to find such activities where they’re moving. While one of their sons lives in Portugal, the other two will remain in New York.

And they will miss their community. “It's kind of difficult to make friends in your 60s,” he says.

But they are also looking forward to the experience. “I think the tendency for us, when we get to our 60s, is to close up and stick to the familiar,” he says. “This is a new adventure — let's see if it works out. If it doesn't, we can sell all of this, and find something in Maine.”

Thinking of moving abroad?

Here are a few things to keep in mind:

• Even if you think you understand your home country’s tax and health system, consult with an expert in international moves. This could include a consultant in the field, a financial planner, a wealth manager and possibly an immigration lawyer. Check online for groups that share support and advice.
• Talk before the move with children, grandchildren or others you hope to see on a regular basis about how you will connect. Weekly video calls? Holiday visits? Meeting up in a third country? Many who retire abroad find themselves coping with loneliness, so plan ahead.
• Manage expectations around everything. Life has gone on without you and family and friends may be less available than you hoped. The weather may be hotter or colder than you remember. The roads may be dirtier. Keep it to yourself or join an on or off-line support group for expatriates as a place to vent.
• Understand that, like all major changes, repatriation happens in emotional phases. On her website, business consultant Kisha Solomon lays out six stages: Reverse culture shock, mourning/loss, nostalgia, withdrawal, memorializing and integrating.

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that’s right on the money.

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