Want to slash your taxes in retirement? These 5 countries make it possible — and some cost far less than the U.S.

Although, you could significantly reduce this burden by choosing to live in a tax-friendly destination (2) (plus, you may be able to leverage tax treaties and IRS tax incentives).

Some countries have a territorial tax system, meaning you’re only taxed on income you earn locally. Others have introduced tax-friendly frameworks to attract foreigners, such as flat-tax options or lower taxes for a specified timeframe.

In some countries, however, residency triggers taxation on global income — and that includes your pensions and investments. So it’s a good idea to discuss your plans with an international tax advisor.

Here’s a sampling of tax-friendly countries where you could potentially slash your retirement costs by hundreds each month. Keep in mind that even if these countries don’t tax foreign-based income, you’ll still have to pay tax on any income earned locally.

Panama

Panama doesn’t tax foreign-based income, which means your pensions, retirement funds and other savings are tax-exempt. Another bonus? Panama accepts the U.S. dollar as a main form of currency, so you don’t have to worry about currency conversion.

Panama’s Pensionado Program (3) requires a minimum of $1,000 in guaranteed income per month, so it’s accessible to many American retirees. Plus, it offers a one-time duty-free tax exemption of $10,000 in household goods. An added bonus? Panama has an active American expat community.

Greece

If Mediterranean living is more your vibe, Greece offers a 7% flat income tax rate on all foreign-sourced income, including pensions and investments — a rate that’s much lower than U.S. tax rates, regardless of income bracket — for up to 15 years.

“Greece’s simplified flat tax on foreign income can help reduce overall tax friction when coordinated with U.S. tax credits and treaty protections,” according to Relocate (4).

Plus, the cost of living in Greece is about 30% to 40% lower than in the U.S. Real estate is relatively affordable and property taxes (5) are moderate to low.

Belize

Just a short flight from many U.S. airports, Belize offers tax exemptions on foreign income as part of its Qualified Retired Persons (GRP) program (6), which also includes the duty-free import of personal effects for the first year. To participate in the QRP program, you must be at least 40 years of age (recently lowered from 45) and have proof of $2,000 a month in foreign income.

Belize is the only nation in Latin America where English is the official language (7), but you still get the benefits of a laid-back Caribbean lifestyle. To maintain your status you only need to spend one month per year in the coutnry.

The Philippines

While Thailand and Malaysia are popular expat destinations in Southeast Asia, the Philippines is another emerging option for retirees (8). Not only does the country offer a low cost of living, it also offers tax exemptions on foreign-based income. And the U.S.-Philippines Tax Treaty helps prevent double taxation on any taxes paid locally (9).

You must be at least age 35 to apply for the country’s Special Resident Retiree’s Visa (SRRV) (10), which provides perks such as a travel tax exemption and senior discounts on medical services and medicine (11). English is widely spoken and Filipinos are globally renowned for their hospitality.

Costa Rica

Costa Rica doesn’t tax foreign income (12), and its Pensionado program requires a minimum monthly income of only $1,000 per month (13). The program has a number of other perks, such as an import tax exemption for household goods and a 20% discount on doctor’s bills.

While Costa Rica isn’t the cheapest destination in Latin America — costs are rising due to its increasing popularity — it’s still cheaper than the U.S (14). It also has one of the best healthcare systems (CAJA) in the world.

What else you need to know

While more Americans are moving overseas to save money during their golden years, it’s important to consider the bigger picture. While a favorable tax environment is important, you’ll also want to examine the overall cost of living and access to quality healthcare.

For example, Medicare doesn’t work abroad (15), so you’ll need to find out whether you can join a country’s national healthcare system or if you’ll require private medical insurance (and how much that will cost). Also, you’ll want to confirm whether long-term care needs are covered as you age.

These costs should be factored into your overall budget — though in many countries they’re quite reasonable. For example, the cost of insurance for someone aged 65 to 70 is about $100 to $200 a month in Costa Rica, $80 to $150 in Thailand and $150 to $250 in Portugal, according to Greenback Expat Tax Services (16).

Even if you don’t have to pay tax on foreign income, you’ll want to research the costs of daily living, such as housing, transportation and groceries. For example, maybe your budget won’t accommodate Western Europe, but you could live comfortably in Southeast Asia.