Retiring Abroad? Here’s Why More Americans Are Moving to Portugal and Mexico in 2025

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.