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ThonRetire

17 destinations · verified July 2026

Retiring abroad on an American passport

Scores adjusted for US citizenship-based tax — local 0% / flat-tax regimes rarely help Americans (the IRS tops up).

The IRS taxes citizens wherever they live — most treaties have a savings clause, so flat-tax regimes abroad rarely save you anything. Model Foreign Tax Credits vs FEIE and check how your Social Security is treated under each treaty before you commit.

Forbes added Vietnam to its 31 July 2026 abroad-retirement list. Cost of living is why. US Social Security is still restricted there, Original Medicare does not pay abroad, and there is no retiree visa. The American overlay on Vietnam · Vietnam vs Thailand.

What matters most to you? — optional, moves the ranking

Leave these alone and you get our balanced view. Turn one up and you will see exactly how many points it moved, on every country.

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Your top three from the United States

Ranked for an American passport, retiring now, aged about 62. IRS follows you.

#1

PanamaPanama

Central America · Tropical

90best fit /100
Flight home
3h from the US
Visa
Pensionado
Tax on your income
0% foreign income
Living cost
$2,100/mo

No double-tax treaty

Full guide
#2

PhilippinesPhilippines

Southeast Asia · Tropical

86best fit /100
Flight home
15h from the US
Visa
SRRV Classic
Tax on your income
0% foreign income (source-based)
Living cost
$1,500/mo
Full guide
#3

MexicoMexico

North America · Warm / Varied

83best fit /100
Flight home
2h from the US
Visa
Temporary Resident
Tax on your income
1.92–35% worldwide once tax resident
Living cost
$1,700/mo
Full guide
See all 17 countries ranked
All destinations ranked for an American passport
#CountryBest fitRelative scoreFlightTaxCost/moHealthResidency
1Panama Panama903h0%$2,1007.8Immediate
2Philippines Philippines8615h0%$1,5006.8Permanent
3Mexico Mexico832h1.92–35%$1,7007.54 yrs
4Uruguay Uruguay839h0%$2,3008Direct — <1 yr
5Thailand Thailand8318h0%$1,8008.2Difficult
6Costa Rica Costa Rica823h0%$2,0007.83 yrs
7Malaysia Malaysia8119h0%$1,9008.7No PR route
8Italy Italy779h7%$2,4008.65 yrs
9Greece Greece7710h7%$2,2007.95 yrs
10Portugal Portugal757h13–48%$2,60095 yrs
11Malta Malta7511h15%$2,6008.85 yrs
12Spain Spain747h19–47%$2,50095 yrs
13Cyprus Cyprus7412h0–5%$2,2008On grant — long queue
14Indonesia Indonesia (Bali)7320h5–35%$1,7006.5KITAP 3–4 yrs
15Mauritius Mauritius7220h0–20%$2,00075 yrs + $200k
16United Arab Emirates UAE (Dubai)6413h0%$3,5008.5Golden Visa
17Vietnam Vietnam5516hUnder review$1,4006.3Near-unattainable

What American citizenship changes about this list

Everything below is the same 17 countries seen through one passport. The order moves, but so does the reasoning: which treaties exist, how far you actually are from home, and where the paperwork gets easier or harder because of where you were born.

Double-tax treaties, across the whole list

10 of the 17 destinations have a double-tax treaty in force with the United States, 1 more has one signed but not yet in force, and 6 have none at all. A treaty is not a tax cut — it decides which of the two countries gets to tax your pension, so that only one of them does.

Signed, not yet in force (1)
Vietnam

No treaty does not mean no. It means the question of who taxes your pension has no agreed answer, so you have to work it out under both countries' domestic rules before you move — not after. That applies to Panama, Malaysia, Costa Rica, Mauritius, Uruguay and UAE (Dubai).

How far you would actually be from the US

This is the number people discount at 62 and regret at 74. It is not about holidays; it is about how quickly you can be at a hospital bed on the other side of the world.

Under 6 hours from the US (3)
Mexico 2hPanama 3hCosta Rica 3h

Where the passport moves the score most

Every country starts from the same baseline. These are the places where holding American citizenship changes the answer by the widest margin — up and down.

  • +7Mexico — 2h home, 180 days, treaty, drive-back option
  • +5Costa Rica — 3h, 180 days, largest US retiree colony
  • +3Panama — 3h from Miami, USD currency, pensionado
  • -6UAE (Dubai) — 0% saves an American nothing; costly living
  • -5Vietnam — SS payment restriction; 0 visa-free days
  • -5Malta — Notorious FATCA bank rejections; regime moot

US expat tax checklist

Retiring abroad as a US citizen — reality checklist

  1. You can't resign from the IRSUS citizens file on worldwide income wherever they live — only renunciation ends it (with a possible exit tax).
  2. FEIE won't cover your pensionThe Foreign Earned Income Exclusion covers earned income only — SS/401(k)/IRA draws rely on Foreign Tax Credits and treaties.
  3. Read the treaty's savings clauseMost US treaties let the IRS tax citizens as if the treaty didn't exist — flat-tax regimes abroad often save you nothing.
  4. File FBAR + FATCA Form 8938Foreign accounts over $10k trigger FBAR; 8938 has higher thresholds. Penalties for missing these are brutal.
  5. Sever state tax tiesCA, NY, VA, SC are 'sticky' states — sell/lease your home and change registrations or they may keep taxing you.
  6. Medicare stops at the borderOriginal Medicare doesn't pay abroad — decide whether to keep Part B, and budget private cover.
  7. Check Social Security payabilitySS pays almost everywhere — but is RESTRICTED in Vietnam (exception process, embassy check-ins).
  8. Estate & gift tax still follow youUS estate tax applies worldwide; renouncing as a 'covered expatriate' triggers an exit tax.

What happens to American state pension when you leave

This is the one part of the decision that is not decided by the country you move to. It is decided by the body that pays you, and the seven passports on this site are answered seven different ways. Every line below is quoted from the paying authority's own page, with the date we opened it.

A frozen pension is not a one-off cut. It is a gap that widens every year you stay.

The number that matters on the day you move is the same either way. What separates the two outcomes is time. A UK State Pension that is uprated each year and one that is held at the rate you left on start out identical, then drift apart for as long as you live — which is why the effect is invisible to any cost-of-living comparison that shows a single month. Hansard put the observed distance at roughly £7,000 a year against more than £11,000 for the same pension paid inside the UK, for 442,000 people. Australia handles the same question a completely different way, by residence years rather than by destination. The United States barely handles it as a portability question at all and instead makes it a tax question. There is no general rule across the seven passports here, which is exactly why this page exists.

Paid where you're going?
Paid in most countries, but Treasury prohibits payment into Cuba and North Korea, and SSA generally cannot send payments to seven moreA US citizen in Cuba or North Korea gets the withheld payments as a lump sum on leaving; a non-citizen forfeits them. The seven are Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.Source · Opened and read 2026-08-07
Does it still rise each year?
Calculated in US dollars and not adjusted for exchange rates — the currency risk sits entirely with youThis is the opposite failure mode to the UK freeze. The dollar amount keeps its annual adjustment; what moves against you is the exchange rate into the currency you actually spend.Source · Opened and read 2026-08-07
Who taxes it
US citizens and green-card holders stay inside US income tax wherever they live; for others, 30% is withheld from 85% of the benefit — 25.5% of the monthly amount — unless a treaty reduces itThe publication lists Canada, Egypt, Germany, Ireland, Israel, Italy, Japan, Romania and the United Kingdom as exempt by treaty, and Switzerland at 15%.Source · Opened and read 2026-08-07
Does your residence history change the amount?
No residence test for citizens; non-citizens who do not meet one of the listed conditions have payments stopped after six full calendar months outside the USSource · Opened and read 2026-08-07
What you must send back each year
Not yet sourced
Health cover you leave behind
Medicare does not travel — and the late-enrolment penalty for the years you were not enrolled is permanentThe Medigap foreign-travel emergency benefit that some people count on is capped at $50,000 for a lifetime, pays 80% after a $250 deductible, and only covers the first 60 days of a trip.Source · Opened and read 2026-08-07

The US answer to portability is unusual: the pension follows you almost everywhere, but the tax system follows you too, and the health cover does not.

In their own words

we will withhold a 30% federal income tax from 85% of your benefit amount, unless you meet the conditions of an income tax treaty that reduces your tax rate. This results in 25.5% withholding of your monthly benefit amount.
Social Security Administration — Your Payments While You Are Outside the United States, Publication No. 05-10137 (April 2026), p.30 · Nonresident alien tax withholdingFor a non-resident alien with no treaty, a quarter of the monthly benefit is gone before it arrives.Opened and read 2026-08-07
If you are a U.S. citizen or a permanent resident of the United States (Green Card holder), you are subject to U.S. income tax laws no matter where you live.
Social Security Administration — Your Payments While You Are Outside the United States, Publication No. 05-10137 (April 2026), p.29 · U.S. citizens and residentsLeaving the United States does not leave the American tax system. This is the one origin on this page where the tax question does not turn on where you move.Opened and read 2026-08-07
We calculate Social Security benefits in U.S. dollars. We do not increase or decrease your benefits because of changes in international exchange rates.
Social Security Administration — Your Payments While You Are Outside the United States, Publication No. 05-10137 (April 2026), p.1 · Payments in U.S. dollarsThe American pension is inflation-adjusted in dollars and not in the currency you buy groceries with. Over a long retirement that is a second, separate erosion from the one the UK freeze causes.Opened and read 2026-08-07
Medicare benefits are available only in the U.S.
Social Security Administration — Your Payments While You Are Outside the United States, Publication No. 05-10137 (April 2026), p.25 · MedicareThe health cover the pension is usually planned around stops at the border, and the publication adds a 10% higher premium for each 12-month period you could have enrolled but did not.Opened and read 2026-08-07

1 cell we could not fill, and why

No sourced statement on whether the annual cost-of-living adjustment applies to beneficiaries living outside the United States.

ssa.gov HTML pages do not return content to us; only ssa.gov PDFs do, and Publication 05-10137 does not address the COLA abroad. irs.gov and law.cornell.edu are also closed to us.

We publish the sentence the publication does contain, which is about exchange rates rather than about the COLA, and we do not extend it beyond what it says.

Descriptive only — this layer states what the rules are and never what to do about them, and nothing in it feeds the country rankings. 22 of 42 cells across seven passports are open-source-verified so far; the rest are listed above as gaps rather than filled from memory. Layer last reviewed 2026-08-07.