Retiring to a Developing Country? What Can Go Wrong

I think about retirement all the time. The average annual cost of living standard for a retiree is about $45,000. You can live in many states comfortably, like Alabama, Idaho, Kentucky, and Utah, for less than that annually. If you don’t live in states with large metropolitan hubs, then you should be OK.

However, if you’re thinking about retiring to a developing country, then $45,000 a year can go a long way. In many such continents, like Latin America, Africa, or Asia, you can live comfortably on a $1,000 or $2,000 monthly income, depending on the country. Still, if you’re not prepared to adapt and deal with culture shock, so much can go wrong.

Political Crises

You should stay in touch with your local embassy and maintain constant situational awareness of the political climate in your new country of residence. Numerous developing countries perpetually grapple with issues like poverty, oppression, infrastructure inefficiencies, and crime. Think twice before moving to a country with severe civil unrest problems or resentment of foreigners.

Tax Obligations

You have to continue paying taxes as an American citizen even if you live abroad. Its in your best interest to talk to a financial advisor about your obligations before retiring to another country. Consider: you could be doubly taxed by the United States and your country of residence if you open a foreign bank account, buy properties, or try to start a business.

Perpetual Culture Shock

In many developing countries, a dog is used for property protection and are not considered members of the family. Males may be considered superior to females. The local street market butcher or fish monger may sell their wares un-frigerated, in hot weather and in unsanitary surroundings.

The unspoken mannerisms, physical cues, and body language that make up the nonverbal communication you take for granted in the United States will have to be relearned in a new country. It takes time, but you will need to adapt to a new culture and way of life.

Visa Requirements

Depending on the visa requirements of your country, you may have to renew your visa every few weeks or months. Some countries require you to leave the country for a day and then reenter to process visa renewal. Also, you will have to pay hundreds or thousands annually for visa renewal and processing costs.


Don’t move to another for your retirement years without considering the weather. Some developing countries are hot all year round. Or, hot for half the year and rainy and oppressively humid the other half. Or you can find yourself dealing with frequent flooding or drought.


It’s hard to justify moving to a new country and not trying to learn the language. It will aid in bolstering your independence. Knowing the local language will also be of use in emergencies.

Think About Retirement Now

Retirement isn’t a goal, it’s a journey. A retiree needs to spend the rest of their twilight years making sure that their income can cover their cost of living needs. That is true whether a retire lives in Alabama or Thailand. You’re never too young to think about retirement. In fact, you should be thinking about it in your youth. It’s really too late to start thinking about retirement in old age.

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Posted in: Money, Personal Finance, Retirement, Saving Money, Travel

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