I moved from Minneapolis to Mexico when I was 54 in search of an affordable place to retire. My cost of living dropped by 50% — but living abroad later in life has its challenges

Why Americans are retiring abroad

The Social Security Administration reports that more than 760,000 older Americans are receiving benefits abroad. And it’s easy to see why so many opt to go this route.

First, the cost of living can be cheaper across the board. Of course, this depends on your destination of choice. But LeGeros pays about $600 a month for an apartment in Puerto Vallarta, compared to the median $1,500 rental price in Minneapolis, according to Zillow. He acknowledges that while his IRA provides him with plenty of income given his current expenses, it wouldn’t be easy to live off his savings back in the U.S.

There’s also health care to consider. The standard monthly premium for Medicare Part B, which covers outpatient care, is $174.70 in 2024, or almost $2,100 per year. And that’s in addition to whatever premium costs come with Part D, a necessary add-on for drug coverage.

In Mexico, people with a temporary or permanent visa can apply for coverage under the Instituto Mexicano de Seguro Social (IMSS), Mexico's national health care program. The cost there is roughly $500 per year for residents of the country.

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The challenges of retiring abroad

There may be cost savings to retiring in another country, but that doesn’t mean you won’t face other challenges. For one thing, if you don’t speak the language, that right there could prove difficult. And while you can always learn, you may feel like you’ve never quite mastered it. If that’s the case, you may be limited to living in larger cities abroad where English is more prevalent, which could eat into your savings.

There are also social and cultural challenges you might encounter. LeGeros told Business Insider he struggled with social interactions and knowing when to show up for events. He also pointed out that drivers aren’t as cautious in Mexico as what he’s used to, and that as a cyclist, he was hit by a car and nearly lost a leg.

Access to health care might also be a challenge abroad, even if it’s affordable. And language barriers could become problematic in the context of managing medical conditions. There’s also the quality of care to consider. In some cases, it may be superior to that of the U.S., but that’s not a given. And at a time in life when health issues tend to arise, that’s taking a big risk.

Finally, retiring abroad can be difficult if you’re leaving behind loved ones and a support system. It can be even harder to build a social network when you don’t speak the language or have a completely different background than those around you that makes it harder to fit in.

This isn’t to say that these challenges can’t be overcome. But do plenty of research before you decide to retire abroad, because it’s not necessarily as glamorous as it might seem. And before you commit, try living somewhere new for three or four months to see how it goes. That way, you’ll have an out if it doesn’t live up to your expectations.