Boomers Fleeing America for Affordable Retirement Abroad

Impact Wealth Reports on the Growing Trend of U.S. Retirees Seeking Affordable Living Overseas

Allan Fawcett

As the cost of living in the U.S. continues to climb, a significant number of baby boomers are choosing to retire abroad. This trend is driven by the desire for a more affordable and enjoyable lifestyle, which many find increasingly elusive in America.

The Story of Allan Fawcett: From Tech to Tranquility

Allan Fawcett, a former computer science professional, embarked on his retirement journey in 2011 with plans to explore Europe. After decades in the tech industry, he was eager for a change. “Computer programming destroyed my brain,” Fawcett shared. “I needed an escape.”

What began as a temporary escape transformed into a permanent relocation. Shortly after retiring, Fawcett met his wife, Elisabeth, and the couple decided to settle in Spain. Now 67, Fawcett enjoys a leisurely life in Barcelona, playing tennis, reading, and socializing with fellow expatriates. The couple travels frequently, including plans to attend the Paris Olympics.

“The same lifestyle wouldn’t be possible in the U.S.,” Fawcett notes. He highlights the affordability of housing, food, and wine in Spain, coupled with the convenience of public transit and walkability. “It’s a good life here,” he says. “Outdoor dining is everywhere, the weather is amazing. Everything is very cheap.”

A Growing Trend Among Retirees

Fawcett’s experience mirrors a growing trend among American retirees. Data from the Social Security Administration shows that over 700,800 people received Social Security payments abroad in December 2022, a significant increase from less than 400,000 in 2000. This trend is largely driven by the high cost of living and healthcare in the U.S., which makes it difficult for many retirees to live comfortably on a fixed income.

Case Study: Susan Keenan Sweeney’s Move to Hungary

Susan Keenan Sweeney and her husband, Joe, exemplify the benefits of retiring abroad. In 2015, the couple moved to Hungary, Joe’s birthplace, seeking a lower cost of living and a slower pace of life. Sweeney, a former banking software professional, found the high costs of housing and healthcare in Florida unappealing.

In Hungary, they bought a home surrounded by vineyards, enjoying fresh produce, a strong sense of community, and the free public transit system for those over 65. “It costs us next to nothing to live here,” Sweeney says, adding that their biggest expense is a U.S. Hulu subscription.

The Pros and Cons of Living Abroad

While the benefits of retiring abroad are numerous, there are also challenges. Sweeney and Fawcett both point out the cultural adjustments and bureaucratic hurdles involved in relocating. Language barriers can be significant, as Sweeney mentions considering a return to the U.S. for major medical care due to these challenges.

Additionally, while healthcare and living costs are generally lower, the income tax burden can be higher, and the process of moving financial investments can be complicated. Despite these drawbacks, both retirees agree that the overall quality of life is superior to what they experienced in the U.S.

Expert Advice on Retiring Abroad

Mindy Yu, director of investing at Betterment, advises those considering retirement abroad to plan carefully. “It’s crucial to avoid seeing retiring abroad as the cheaper option and instead begin saving as early as possible, while diversifying your portfolio to avoid risk,” Yu says. Consulting a tax professional with international expertise is also essential to navigate new tax obligations.

Long-Term Plans for Expat Retirees

Fawcett and Sweeney are both committed to their new lives abroad. Fawcett intends to stay in Spain, especially as his wife cares for her elderly mother and has grown children nearby. Sweeney and her husband also plan to remain in Hungary, though they might relocate from the countryside to Budapest eventually.

“I would urge anybody who is going to do it, go on vacation and rent a house and look around. You find yourself in some places where you never would have dreamed you’d be,” Sweeney advises. “If you’re retired and you have a few months, what the hell?”

Conclusion

The trend of American retirees moving abroad underscores the challenges of living on a fixed income in the U.S. With rising costs and limited social services, many find a more affordable and enjoyable lifestyle overseas. As more baby boomers explore this option, the allure of a comfortable, budget-friendly retirement abroad continues to grow.

For more stories on financial trends and retirement planning, visit Impact Wealth.