Cross-border retirement analysis · 2026 figures

The zero-bracket problem

A married couple, both 65, living on $36,000 of Social Security and $24,000 of pension income, owes no federal income tax in the United States. That single fact quietly dismantles the standard advice about retiring abroad.

The Foreign Tax Credit can only erase U.S. tax you actually owe. When that number is already zero, every euro or peso a host country collects is new money out the door — not an offset. So the question stops being where is it cheaper and becomes who will tax you at all, and will they let you in.

U.S. tax owed$0Standard + age + senior deductions exceed AGI

Cleared for entry—of 19 jurisdictions, at this income

Best net capacity—surplus per month after tax, care, living

Drag to rotate · tap a marker to open its dossier

Dossier

Selected destination dossier

Module 02 · Solvency engine

Move the money. Watch the doors open and shut.

Visa floors are the real gate, and most of them are indexed to a local minimum wage rather than to your comfort. Adjust the household's income below: markers on the globe re-colour in real time, and the ranking re-sorts on net monthly capacity.

Filing status

Age 65

Social Security $36,000

Pension · 401(k) · IRA $24,000

Health coverage

Keep Medicare Part B while abroad Part A stays free for life. Part B pays for nothing outside the U.S., but dropping it means a 10%-per-year late penalty if you ever come home. Social Security counts as a lifetime pension Panama and Costa Rica test a guaranteed, non-depletable benefit. Drawdowns from a 401(k) generally do not qualify.

Gross · U.S. tax · Monthly

Net monthly capacity = gross − host tax − net U.S. tax − healthcare − living costs

Module 06 · The ledger

Nineteen jurisdictions, one baseline, nine columns

Annual figures for the household as configured above. The U.S. baseline sits in gold. Tap a column heading to sort, or a row to load its dossier.

Nest egg = 176.4 months of tax, healthcare and living costs at today's prices, before inflation and currency drift

Modules 03–05 · Mechanics

Four rules that decide the outcome

Cost of living gets the headlines. These are the things that actually move the number.

03 / Sourcing

Your income is U.S.-source. That breaks Form 1116.

The Foreign Tax Credit offsets U.S. tax on foreign-source income. Social Security and a domestic pension are U.S.-source no matter where you sleep. So when Spain taxes your 401(k) distribution, there is no foreign-source income in the passive basket to hang the credit on.

The model on this page assumes that hatch is open wherever a treaty exists. The escape hatch is a treaty re-sourcing clause, claimed on a separate Form 1116 marked certain income re-sourced by treaty, with Form 8833 disclosure. Where there is no treaty — Panama, Colombia, Uruguay, Belize, Malaysia — that hatch does not exist.

FTC limit = U.S. tax × (foreign-source taxable income ÷ total taxable income) Carry: 1 year back, 10 years forward — per basket At U.S. tax = $0 → limit = $0, and the carryforward may expire unused before you ever owe again.

04 / Disclosure

Two forms, two thresholds, two agencies

FinCEN 114 (FBAR) — filed with Treasury, not the IRS, when all foreign accounts combined top $10,000 at any moment in the year. Includes the account you opened for a visa deposit. Due 15 April, automatic extension to 15 October.
IRS Form 8938 (FATCA) — attached to the 1040. Living abroad, married filing jointly, the threshold is $400,000 at year-end or $600,000 at any point.
Both, often. They overlap rather than substitute. A Costa Rican Caja account and a Thai ฿800,000 visa deposit each count toward the FBAR aggregate.
Penalties are the point. Non-wilful FBAR failures run to five figures per year; wilful ones are far worse. Filing is free.

05 / Medicare

Part A is free. Part B abroad is a bet on coming home.

Part A — keep it. It costs nothing and pays for nothing outside the U.S., but there is no reason to surrender it.
Part B — $202.90 each per month in 2026, or $4,869.60 a year for a couple, buying zero foreign coverage. Drop it and re-enrolment costs 10% more in premium for every 12 months you went without, permanently.
Parts C and D — Advantage and drug plans require a U.S. service-area address. Establishing permanent foreign residency ends them; keeping a relative's address to hold a plan is fraud.
The trade. Toggle Part B above and watch every foreign surplus fall by roughly $4,870. That is the price of a return ticket to the U.S. system.

03 / Residency

183 days is the floor, not the test

Day-counting is the crudest trigger. Most European systems also apply a centre of vital interests test: where your home, your family, and your economic life sit. Spain adds a presumption if a non-separated spouse and dependent children are habitually resident there.

Worldwide — Portugal, Spain, Italy, France, Slovenia, Colombia, Mexico, Indonesia. They tax what you earn anywhere, treaty relief permitting.
Territorial — Panama, Costa Rica, Belize, Malaysia, Philippines. Foreign pensions are outside the net entirely.
Special regimes — Greece's 7% flat rate on all foreign income (15 years), Italy's 7% for southern towns under 20,000 people, Cyprus at 5% on foreign pensions, Uruguay's 11-year holiday. Each must be elected, usually in the first year, usually irrevocably.
France, quietly — under the U.S.–France treaty, U.S. Social Security and pensions are taxable only by the United States. A country nobody calls cheap can end up collecting nothing.