Imagine waking up to the sound of gentle ocean waves in Algarve, Portugal, or enjoying the vibrant street life and warm sunsets in San Miguel de Allende, Mexico. For a growing number of American retirees, this isn’t just a vacation fantasy — it’s daily life. In 2025, more Americans than ever are packing their bags and heading abroad to spend their golden years in new, often sunnier, locales.
The Growing Trend of International Retirement
According to data from the Social Security Administration, the number of Americans receiving benefits abroad has more than doubled over the past two decades. In 2025 alone, experts estimate that over half a million U.S. retirees are living outside the country, and Portugal and Mexico are topping the list of most popular destinations.
Why the surge? Rising living costs in the U.S., expensive healthcare, and a yearning for adventure have driven many to consider a new chapter overseas. “Retiring abroad offers a unique combination of economic relief and lifestyle enhancement,” says Barbara Klein, a retirement relocation consultant who has helped hundreds make the move.
Portugal: Europe’s Retirement Darling
Portugal has captured the hearts of American retirees with its friendly locals, mild climate, and high quality of life. Cities like Lisbon and Porto draw expats, but many retirees are also flocking to smaller coastal towns like Lagos and Tavira for a more relaxed vibe.
Tax Advantages and Financial Perks
One of Portugal’s biggest draws is its Non-Habitual Resident (NHR) tax regime, which offers significant tax breaks to new residents. Under this program, foreign pension income can be taxed at a flat 10% rate for up to 10 years — a major incentive for retirees looking to stretch their dollars further.
Additionally, Portugal has a relatively low cost of living compared to many parts of the U.S. Groceries, dining out, and even rent are typically much cheaper, making it easier for retirees to maintain a comfortable lifestyle on a fixed income.
Top-Notch Healthcare at Lower Costs
Portugal boasts a highly ranked healthcare system that is both affordable and accessible. Public healthcare is available to residents at a fraction of U.S. prices, while private insurance plans often cost less than $150 per month. For many retirees, this means they can receive excellent care without the crushing costs they might face back home.
Mexico: Close to Home, Rich in Culture
Just a few hours’ flight from many U.S. cities, Mexico offers both convenience and charm. Its warm climate, diverse regions, and welcoming communities have made it a top choice for retirees for decades — and the trend shows no signs of slowing down in 2025.
Lower Living Costs and Affordable Luxury
Living in Mexico can be dramatically cheaper than in the U.S. In popular retirement hubs like Lake Chapala, Puerto Vallarta, and Mérida, many retirees report living comfortably on $2,000 or less per month, including rent and healthcare.
Real estate is another major appeal. You can often find spacious homes or modern condos at a fraction of the price you’d pay in major American cities. And if you dream of ocean views or colonial charm, there’s no shortage of beautiful options.
High-Quality, Accessible Healthcare
Healthcare in Mexico is known for its affordability and quality. Private hospitals in larger cities offer world-class services, and many doctors are trained in the U.S. or Europe and speak excellent English. Out-of-pocket expenses are substantially lower, and it’s common to pay under $50 for a specialist consultation.
Comparing Lifestyle and Community
Beyond financial incentives, retirees are drawn to the vibrant lifestyles both Portugal and Mexico offer.
In Portugal, the emphasis is on a slower pace of life, with long lunches, local festivals, and a strong sense of community. The Portuguese are known for their hospitality and openness to foreigners, making it easy to build friendships and feel at home.
Mexico, on the other hand, dazzles with its colorful traditions, lively social scene, and an abundance of cultural activities. Whether it’s dancing during a local fiesta, exploring historic ruins, or savoring regional cuisines, retirees find that every day can feel like an adventure.
Navigating Residency and Visas
While both countries are welcoming, navigating visas and residency can be a challenge without proper guidance.
- Portugal: The most common route is through the D7 visa, designed for retirees and those with passive income. It requires proof of sufficient income (usually around €820 per month as of 2025) and health insurance.
- Mexico: Many opt for the Temporary Resident Visa, which requires proof of income (approximately $2,500 per month) or a certain amount of savings. After four years, retirees can apply for permanent residency.
Both countries have communities of expat advisors and legal professionals who can help streamline this process and avoid common pitfalls.
The Emotional and Social Considerations
Retiring abroad isn’t just about saving money — it’s a major life transition that comes with emotional challenges. Leaving behind family, friends, and familiar surroundings can be difficult. Language barriers, cultural adjustments, and homesickness are all real factors to consider.
Barbara Klein advises her clients to visit their chosen country multiple times before making the move. “Spend at least a few months there, ideally in different seasons, to get a true feel for day-to-day life,” she recommends.
Is Retiring Abroad Right for You?
Retiring to Portugal or Mexico in 2025 offers a tantalizing blend of economic, healthcare, and lifestyle advantages that are hard to ignore. Lower costs, high-quality medical care, and a rich cultural life can make these destinations incredibly appealing.
However, this dream isn’t for everyone. It requires careful planning, openness to new experiences, and a willingness to embrace change. For those who are ready, though, the rewards can be life-changing.
So if you find yourself craving cobblestone streets, fresh seafood by the Atlantic, or mariachi music under a Mexican sunset — it might be time to consider taking the leap. Your golden years could be your most adventurous yet.