The advent of pandemic-era remote work, which has proven remarkably resilient in the face of intermittent corporate efforts to curtail it, has opened up all kinds of possibilities for working and living abroad, including for those who want to keep their hand in the work world through semi-retirement.
For many boomers and late Gen-Xers, this is the time to consider a life change, to finally live the European lifestyle or globetrot like the stereotypical digital nomads 30 or 40 years their junior.
But with “work” and “retirement” increasingly elastic terms, semi-retirement abroad is going to equate to different scenarios for different people, given varying employment backgrounds, lifestyle expectations, and financial situations. Some questions to consider:
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What is semi-retiring abroad?
That depends on you. The short version: working less than full-time, in another country. Finding a definition that fits you — one that will ultimately lead to a decision, or a cluster of decisions — requires a kind of self-audit, and avoidance of magical thinking. It may mean consulting experts; it definitely means taking stock of your financial situation and doing a ton of research.
The 90-day rule. The least painful version of semi-retirement, at least when focusing on Europe, is taking advantage of the 90-day rule. The 90-day rule says that with a valid U.S. passport, an American can stay 90 days within any 180-day (six month) period in the 29 Schengen countries (25 European Union and 4 associated countries) for tourism or business, but then must leave for the next 90 days.
You can hole up in many desirable countries for 90 days, after which you must wait 90 days before starting the cycle again, meaning you can spend a total of six months living in Europe during each year. (Various extensions are available in some countries). This pattern can be either a long-term way of life, or a test-run for spending even more time abroad.
There are too many stories of people with rose-colored glasses jumping in to living abroad “permanently” and finding the culture shock too much to manage. Remember, you’re giving up easy access to family, friends, and other connections. A few three-month stints represents a great way to sample your life abroad.
What people semi-retire abroad?
That’s easy: the same people who have been working from home for the last five years, or more. The best candidates for feasible semi-retirement abroad are knowledge workers, sole practitioners, and independent contractors — those who need only a laptop and a reliable wi-fi connection to service their clients.
The worst candidates are full-time employees who are required to come into the office and otherwise do a lot of business events and facetime with colleagues. A conversation with the boss about scaling back your workload and moving to Italy doesn’t sound promising. But if you’re the rare part-time employee who already works remotely, semi-retirement abroad could work for both you and your boss.
What are some ways to semi-retire abroad?
For those who are ready to embark on this major life decision, there are several avenues on offer.
Ancestry visa. Those who can prove family heritage in another country may be able to apply for an ancestry visa, which is a road to citizenship. Rules vary depending on the country.
The process starts with collecting documents (passports, birth or marriage certificates, etc.) that prove that one of your ancestors was or is a citizen of that country. Different countries require descent by different generations. For example, France, Germany, and the Netherlands require parental descent, while the requirements for Spain, Portugal, and Malta are more relaxed: proof of descent through a grandparent (or a parent) is sufficient.
Golden visa. The much-hyped golden visa can earn you residency: the “golden” means money — you must make a financial contribution to the country, such as buying real estate or making a philanthropic donation.
The status of golden visas is in flux in several countries: When flush foreign home buyers spike housing pricing for locals, pushback often follows. For example, Spain is shutting down its golden visa program, and foreigners seeking a golden visa in Portugal can no longer do so through a real estate purchase; instead, they must contribute to an investment fund.
Greece’s golden visa program remains intact, with a real estate investment starting at 250,000 euros (certain conditions pending). But that number jumps to 800,000 euros if you want to purchase a home in a coveted destination such as Mykonos, Santorini, Crete, or Rhodes.
Digital nomad visas. Digital nomad visas, which typically last a year or more (five years in Thailand), are great for semi-retired freelancers. Typically, all you need is a valid passport, be able to meet the minimum income requirement, and provide documents proving you are an independent contractor, such as a professional portfolio. (Keep handy tax forms such as a Schedule C, or 1099s).
Income requirements vary, but a very doable part-time income of $1,000 to $3,500 per month is typical. (At the lowest end, with no minimum, is Uruguay, where you need only provide an affidavit promising you can support yourself). In some countries, digital nomads can apply for permanent residency and even citizenship.
How do I know if semi-retiring abroad is right for me?
The 90-days on/90-days off tryout period is easy to undertake. You may want to spend 90 days in your country of choice; 90 days home for the holidays; 90 days back in your country of choice; and the final 90 stays traveling elsewhere, either independently or on a couple of cruises or land tours. That plan should give you an idea if you’ll be comfortable living and working (a bit) outside the U.S. for most or all of the year.
Best countries to semi-retire abroad in
Let’s cut to the chase: Most U.S. citizens contemplating life abroad are dreaming about Europe. Note that the list of 27 European Union countries mostly overlaps with the list of 29 Schengen countries, and currently U.S. travelers need only a passport for entry. (The status of some countries is evolving: Cyprus, for example, is expected to join Schengen by the end of 2025).
There is generally no passport control between the countries, but there are exceptions. For example, because the U.K. is neither a European Union nor a Schengen country, you must show your passport if you’re arriving from, say, France. As a U.S. citizen, you don’t need a visa to enter European countries, though the long-delayed European Travel Information and Authorization System, or ETIAS, is scheduled to be implemented in 2025; the application will be quick and easy to complete.
Those drawn to the Mediterranean and who want to semi-retire with a minimum of fuss — that means a year as a tourist, or longer — can easily bop back between Greece (a member of the EU and Schengen) and Turkey (a member of neither) every 90 days, and you don’t even need to fly. The ferry between Turkey and the beautiful and historic island of Rhodes takes less than two hours.
Outside Europe, tropical Thailand allows travelers to stay for 60 days, with the possibility of a 30-day extension. Expect interest in Thailand to rise even more due to the recently passed gay marriage law, while the third season of The White Lotus, which was filmed in the country, will certainly generate increased awareness.
Note that many villa rental companies, such as Airbnb, offer significant monthly discounts for long-term guests.
What countries are easiest to retire abroad to?
That depends. First, it’s helpful to consider the country where you’ll experience the least culture shock — a place where you know and enjoy the atmosphere and the language.
You’ve hit the jackpot if you can locate your ancestry-based documents and relocate to one of Europe’s greatest hits: Italy, France, Greece, or Spain. You’ll be able to travel (or even live) in any one of the Schengen countries once you’ve completed the process in your nation of ancestry. That flexibility is a major advantage.
Greece is especially attractive because of the lack of a language barrier. Though English is widely spoken in the heavily touristed countries of Europe, especially in the major cities, English is especially prevalent in Greece. That’s by necessity. Unlike Spanish, French, or Italian, Greek is not widely taught or spoken outside the country, so the locals have adapted. With delicious, healthy cuisine; a seemingly endless supply of islands, beaches, and archeological sites; and exceedingly welcoming people, Greece should top anyone’s list —especially since the country's golden visa program remains intact.
A strong ex-pat community is essential. Even countries that have a reputation for being super-friendly to American tourists can be traditional, erecting social barriers to foreign newcomers who want to stay put. You can find expat communities on social media, but there’s nothing like first-hand experience when you’re “auditioning” countries. Mexico, Spain, Costa Rica, and Thailand have well-established expat scenes.
If I semi-retire abroad, do I still need to pay U.S. income taxes?
In a word, yes. If you’re a U.S. citizen or permanent resident, federal and state taxes apply, no matter where you live. As far as paying taxes in your new home country, policies vary.
For, example, expat semi-retirees favor Costa Rica because U.S. retirement income is usually tax exempt: you need only pay Costa Rican taxes for income generated in that country — not for income earned in the U.S. or other countries. If you retire in Costa Rica for the long term and meet the residency requirements (by staying more than 183 days in a year), then you may have to pay taxes on U.S. income, although there are tax breaks available to limit or even eliminate the taxes. To learn more, read how to retire in costa rica with these three tax benefits.
In any event, semi-retirees moving abroad would do well to consult with an international tax accountant to complete the proper tax forms and avoid or minimize double taxation.
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