10 places for Australians to retire overseas - a Citro guide

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Retiring overseas is one way to access cheaper food and living expenses while improving lifestyle goals, like travelling or being closer to your cultural roots. Allison Tait explores 10 different options and the advice you need to get around super, tax and medical care before you go.

By Allison Tait

10 places Australians are retiring overseas

1. Bali | 2. Fiji | 3. Greece | 4. Italy | 5. Malaysia | 6. New Zealand | 7. Philippines | 8. Portugal | 9. Spain | 10. Thailand

Dear Citro readers,

It's no surprise that Australia creates adventurous retirees who want to move to new places to enjoy lifestyle, language or cultural experiences they can’t get on home soil.

Our population of 26 million people is diverse and multicultural, with nearly 8 million people born in a country other than Australia and many more descended from them.

Aussie expats litter the globe and while many expats are drawn to move overseas for career opportunities, retiree expats are often drawn by the lower cost of living and travel opportunities in their chosen destination.

Before Covid-19 hit, the Australian Bureau of Statistics estimated there were 9,000 Aussies who were retired and living offshore.

So if you’re one of the thousands of Australians looking to dust off that passport and make an overseas move in retirement, read on – because there’s a lot to think about.

Writer Allison Tait has put together a list of pros and cons for 10 overseas retirement locations, interviewed two real life overseas retirees and explained the homework you need to do before you go. Read and enjoy!

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Estimated living costs of overseas retirement destinations

_{Data source accurate in early 2024: Numbeo - see their methodology.}

Cost of living indexes don’t tell you everything you need to know about what’s involved in living somewhere – the details of which can vary depending on factors such as location, lifestyle and your individual circumstances. It's the comparison that makes them useful for big decisions like retiring overseas.

Estimated living costs in Australian capital cities

_{Data source accurate in early 2024: Numbeo - see their methodology.}

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Bali, Indonesia

Weather: Expect mostly clear and sunny weather with occasional rain and temperatures ranging between 21-32°C. The dry season runs between May and October.

Average distance from Australia by plane: 4,600km

Pros: There is no doubt that one of Australia’s favourite holiday destinations is also a top option for many dreaming of an overseas retirement. Drawn by the low cost of living, familiarity and a large Australian ex-pat community, Aussies are also attracted by the short flight home.

Cons: Bali no longer offers fee-free visas for Australian visitors. You must be at least 60 years old and in possession of a retirement visa (allowing a stay of up to 12 months) to retire in Bali. Qualifying for a retirement visa requires proof of income ($1500 USD/month), along with other criteria, including life and health insurance providing cover in Indonesia. Australia does not have reciprocal health care or social security agreements with Indonesia. There is also a cultural adjustment to living in Bali and other parts of Indonesia that can be significant for some.

Fiji

Weather: Expect mostly clear and sunny weather with occasional rain and temperatures ranging between 26-31°C. The dry season runs between May and October.

Average distance from Australia by plane: 4,600km

‍Pros: For a quiet life in the sun, in close proximity to friends and family in Australia, Fiji could be an attractive option. Foreigners can apply for resident permits on assured income, assuming they have sufficient income for themselves and any dependants.

Cons: Import restrictions and some limitations on buying property may be an obstacle. Australia does not have a reciprocal healthcare agreement with Fiji, and the principal applicant must have health insurance. Australia does not have a reciprocal social security agreement with Fiji. Political instability may be a concern for some - Fiji has had 4 d'état since 1987.

Greece

Weather: Expect a Mediterranean climate with temperatures decreasing as you head north. Temperatures can hit 36°C or more in summer but can plunge to below zero. The average temperature is around 25°C.

Average distance from Australia by plane: 13,700km

Pros: With its warm climate, a relaxed lifestyle, and a variety of islands from which to choose, Greece is a picture postcard perfect retirement destination. Australia and Greece have a Society Security Agreement, allowing people who live in either country to claim their entitlement to pensions in both countries. A tax treaty is also in place to prevent double taxation of income on individuals and businesses. Greece also has a golden visa program for those who want to buy a home.

Cons: Australia does not currently have reciprocal healthcare or Medicare agreements with Greece, so your Medicare card  or private health insurance cover is not valid. You will need to apply for a national long-term visa or residence permit, and requirements vary on factors such as family ties. To obtain a residence permit, you need to apply at a Greek immigration office. 

Italy

Weather: Expect a Mediterranean climate with temperatures decreasing as you head north. Temperatures can hit 36°C or more in summer but can plunge to below zero. The average temperature is ranges between 23-28°C in summer, with cooler temperatures in the alps.

Average distance from Australia by plane: 14,400km

Pros: It’s a rare person who visits Italy and doesn’t fall in love with the place. Retirement in a centrally located European country of diverse landscapes, friendly people, great food, a laidback lifestyle and a cost of living 20-40% lower than Australia’s?  Yes, please. Added to this is a Reciprocal Health Care Agreement, which may cover some of your medical costs in the Italian public health system, and a Society Security Agreement that will allow you to submit a claim for an Australian age pension and live overseas, and it’s easy to see why Australians are drawn to the place. Italy also offers a flat tax of 7% for foreign retirees, provided they move to certain regions in the south of the country.

Cons: Language may be a barrier – not as many people speak English as you may think, particularly among the elderly – as may distance from family and friends in Australia. Italian bureaucracy can also be difficult to navigate. You will need to apply for an Elective Residence Visa Italy, a one-year visa for foreigners who intend to relocate to Italy and can do so by financially supporting themselves autonomously (requiring extensive documentation and a minimum annual income). Italy has also recently introduced a new Golden Visa, designed as a residency by investment option.

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The inside story of retiring to Italy

In 2009, Zander and Joanna* moved from Sydney to Bergamo, Italy, for a “1 to 2 year” sabbatical, working as journalists. Zander was travelling on an Australian passport with a renewable foreign correspondent visa, Joanna on a UK (EU) passport, allowing her to live and work in Italy as she wished.

Fifteen years later, Zander, 66, is retiring this year and the couple is working through a complex web of pension and superannuation details.

“The money stuff is difficult,” says Zander. “Australian superannuation is unlike the Italian system and it’s hard to get sound advice on how drawing a pension stream will be viewed for taxation purposes by the Italian authorities.”

On top of this, the treaty between the Australian and Italian governments means that Zander has to apply for the Australian Aged Pension in Italy.

“You have to apply for entitlements accrued over your working lifetime in the country of residence,” he says. “Which means I’ll be going to the Ufficio Entreate here to apply for my Australian Age Pension and will need to find a specialist to help file the application. It’s going to be awful…”

“One of the big drawbacks of living here is the language,” says Joanna, 64. “We are far from fluent, which is problematic at times, and it makes it impossible to completely integrate in a cultural sense, too.”

Brexit has also impacted on Joanna’s residency status, removing the EU entitlements. “Fortunately, I was able to apply for a permanent residency permit, as I’d been resident and working for 5 years,” she says.

But Zander and Joanna agree that it is cheaper to live in Bergamo than it is in Sydney. “Housing costs are much, much lower in smaller provincial cities like ours,” says Joanna, 64. “Food was much cheaper, but prices have risen post-Covid. And the people are just wonderful – incredibly friendly and helpful.”

All in all, despite occasional difficulties, Zander and Joanna have never regretted making the move. “The sheer wonder and glory of Italy surpasses any bureaucratic dramas you may encounter,” says Joanna. “It’s been one of the most fantastic experiences we’ve ever had.”

_{* Names have been changed to protect privacy}

Malaysia

Weather: Expect a humid tropical climate, with steady temperatures year-round averaging 27-28°C, with the west coast and east coast experiencing different wet and dry season.

Average distance from Australia by plane: 4,700km

Pros: With English widely spoken, a low cost of living, modern bustling cities and tropical rural areas, Malaysia is made even more attractive for retirees by the MM2H (Malaysia My Second Home) residency scheme. MM2H allows foreigners to apply for renewable visas of 5 years or 15 years or for permanent residency, dependent on fixed deposit requirements.

Cons: Recent updates to the MM2H scheme are still to be clarified, and may impact on applicants aged 50+. There are 3 tiers of visas available, depending on whether certain income and asset thresholds are met.

New Zealand

Weather: Expect a cooler climate, with summer temperatures averaging 20-25°C, with the south cooler than the north.

Average distance from Australia by plane: 4,100km

‍Pros: Proximity, jaw-dropping scenery and no visa requirements for Australians to work, live and retire, make New Zealand a popular choice. There’s no language barrier, political and economic conditions are similar to those in Australia, as is access to affordable healthcare.

Cons: If financial concerns are driving your interest in hopping the Tasman Sea, you might want to look further afield. Cost of living in New Zealand is comparable to Australia, particularly in capital cities, and the national average cost of buying a house is pushed up by pricey housing in Auckland.

Philippines

Weather: Expect a tropical climate with high humidity and average temperatures of 25-30°C. The country experiences the rainy season from June to November and a dry season from December to May.

Average distance from Australia by plane: 4,400km

Pros: With an affordable cost of living, widely-spoken English and beautiful beaches and 7000+ islands, the Philippines is a short flight from Australia, with regular services to major centres. Quality healthcare is available in major cities and key tourist areas.

Cons: Australia does not have reciprocal social security or healthcare agreements with the Philippines, and the visa process can be complex and require guaranteed monthly income. Research your location carefully to ensure the infrastructure and healthcare available will meet your needs.

Portugal

Weather:  Expect a Mediterranean climate with temperatures decreasing as you head north. Temperatures can hit 40°C or more in summer in central Portugal but can plunge to 3-4°C in winter.

Average distance from Australia by plane: 16,200km

Pros: Portugal continually ranks high on the lists of best countries for foreigners look to retire overseas – most recently in the International Living 2024 Annual Global Retirement Index. A small country, with a warm climate and good transport connections, Portugal also shares a social security agreement with Australia and the cost of living is lower.

Cons: Until recently, Portugal offered a Non-Habitual Residency (NHR) tax regime, a special tax status for new residents, beneficial for retirees as it exempted those residents from paying taxes on global income in Portugal for ten years. The NHR system was rescinded in October 2023, and its impacts on Portugal’s status as a desired retirement haven are yet to be seen. There is no reciprocal health care agreement with Australia. It’s also a long flight home (though more centrally located for further travel).

Spain

Weather:  Expect a Mediterranean climate with temperatures decreasing as you head north. Temperatures can hit 40°C or more in summer but can plunge to 4-8°C in winter.

Average distance from Australia by plane: 15,700km

Pros: Like Portugal, and as generations of British retirees have discovered, Spain offers a Mediterranean climate, rich culture, affordable cost of living, and good healthcare. Australia has a reciprocal social security agreement with Spain.

Cons: Spain offers a Non-Lucrative Visa allowing you to live, but not work, in Spain long term. The first is 1 year and then you’ll need to reapply every 2 years. The minimum income requirement for retired applicants for this visa is €25,560 (around $43,000 Australian) a year. Spanish tax rates and thresholds are decided by each region, so do your homework before choosing a location. Also consider potential language barriers.

Thailand

Weather: Expect a tropical climate with high humidity and average temperatures ranging between 18-38°C. The country experiences a wet season from May to October, a cool season from November to February and a hot season from March to May.

Average distance from Australia by plane: 5,800km

Pros: A low cost of living, affordable healthcare, and relaxed, tropical atmosphere draws Australians to Thailand in retirement. The country is also renowned for friendly people, great good, and a location a short flight from home and handily placed for international travel.

Cons: Long term visas require regular renewals and the system can be complex. Australia does not have reciprocal social security or healthcare agreements with Thailand.

The inside story of retiring to Thailand

Ros, 65, and Alan, 63, moved to Thailand in 2015, having decided not to wait until the Australian retirement age to travel more. “We had lost a few close family members, which made us realise that time isn’t guaranteed,” says Alan. “We felt an urgency to follow our dreams.”

The pair spent six months getting ready for the move, including renting out their home to provide some income, selling unwanted possessions and putting others in storage. The lower cost of living in Thailand meant they would be in a position leave full time work.

“While we retired from our full time jobs, our intention was not to fully retire in the traditional sense, as we were both in our 50s at the time, but we knew that with the rental income from our Australian home and other minor investments we could sustain a reasonable lifestyle without full time work.”

The couple planned the move with care. “We researched real estate in Thailand for accommodation, pricing and general cost of living to work out our monthly living costs, talked to relatives about our plans, and initially only rented our Australian house on a six-month lease, in case things didn’t go to plan.”

Travelling on Australian passports, Ros and Alan started with a 12-month visa, but soon discovered that Thailand has many different visa options depending on your circumstances. Setting up bank accounts in Thailand had to be completed after they first arrived, as it’s only possible once in the country.

Once the move was complete, Ros and Alan started their first blog to document their travels. Today, the blog is a website called Frequent Traveller, and it provides the couple with an additional source of income.

“By the end of our first 12 months, we were using Thailand as our base and would return there for a few months at a time,” says Alan.

Of course, life doesn’t always go to plan, and the Covid-19 pandemic had an effect on the couple’s longterm intentions. “We followed the news and, following discussion with our relatives in Australia, made the decision to come back to Australian fairly early [into the pandemic] as we didn’t know what to expect,” says Ros.

What they initially thought would be a short stay has lengthened due to family reasons and Ros and Alan, based once again in Australia, split their time between here and travelling overseas. “Since the borders reopened we’ve been overseas 5 times and have noticed with each trip that destinations are starting to recover,” says Alan. “Our plans are to eventually resume full time travel.”

For Ros and Alan, the pros of retiring in Thailand include the laidback lifestyle, affordable cost of living, and the people they have met. “Living in a foreign country broadens your outlook on life,” says Ros.

They do, however, warn that cultural differences can, at times, be frustrating, and that remembering you are ‘essentially a guest’ in a foreign country can go a long way. They also advise having funds set aside for unexpected emergencies.

“You may also find that some friends may not understand why would you would choose to live overseas,” says Alan. “But we are so grateful for what we have experienced and have not regretted our decision to make the move to Thailand and beyond.” Read more of Ros and Alan’s story at frequenttraveller.com.au

Before you pack your bags to retire overseas

There are 3 big things to consider before you start Googling Balinese villas or ‘cheap homes in Italy’. Read more on other things to consider before you relocate for retirement.

1. Legal and visa requirements

Even if your Australian passport allows you visa-free entry to a particular destination, it’s essential you investigate and understand the full requirements for staying on in retirement. Some countries, such as Portugal and Spain, have a Non-Lucrative Visa for those who have the financial means to support themselves and dependents without participating in gainful activities. Other countries, such as Italy, offer a one-year visa for retirees, which can be extended each year. We’ve got more details about some of the most popular destinations for Australian retirees below, but it’s essential that you check the fineprint of your particular destination yourself.

2. Financial planning - especially tax advice

Getting solid advice and detailed financial planning is essential for Australian retiring overseas. You must understand the tax laws, both in Australia and in your destination country to avoid double taxation. For instance, while superannuation or lump-sum payments might be tax-exempt in Australia, they may not be in your intended home country. The Age Pension is another area to investigate. You may still be eligible for your Age Pension entitlement but social security payments may change depending on your situation. Basically, the Age Pension becomes an Outside Australia rate, which means some supplements and entitlements may be affected. You must also meet the age requirements and pass the usual income and assets test.

3. Currency exchange and banking

Managing finances across borders and with different exchange rates brings its own set of complications. If you remain an Australian resident for tax purposes, you’ll be taxed on your global income from all sources, while foreign residents are only taxed on their Australian-sourced income. Even choosing the right banking solution can make a difference between a relaxed retirement and one wrapped up in red tape.‍

Other things to consider before you retire overseas

• Unless you retire to a country that has a social security arrangement with Australia (see the list here of 30+ countries with which Australia has International Social Security Agreements) you’ll need to apply for the Age Pension in Australia. If you’re already living overseas, you’ll need to return to Australia first.

• If you’ve lived or worked in an agreement country before, or you live in an agreement country now, you can receive a part pension from that country and a part pension from Australia

• Health insurance costs can be high. Check that your dream destination allows access to good quality public or private healthcare, or whether you can afford international health insurance that allows for repatriation to Australia if required.

Everyone’s situation will be different, and financial planning is not a step to miss.‍

And one other thing…

While the idea of a cheap retirement in the sun looks appealing, it’s important to really think about the ramifications of moving away.

For example, if the idea of missing important occasions with family and friends bothers you, think carefully about a move that will take you a lengthy plane ride from your nearest and dearest. And while people will promise to visit, lives get busy, finances take a dent and your flood of visitors may be a trickle.

For that reason, it’s always a good idea to visit possible locations several times on holidays before you take the final plunge!

_{Advice given in this article is general in nature and does not take into account your personal circumstances. It is not intended to influence readers' decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.}