Living Abroad After Retirement While Paying Less Tax
Relocating abroad after retirement has become a major trend of this century. After finishing their working lives, many retirees want to start a new chapter in warmer climates, benefiting from both improved quality of life and attractive fiscal incentives. For high-net-worth clients, relocation services are often offered by private banks. For middle- and upper-middle-income retirees who are not digital nomads, there was previously no dedicated support, whereas lower-income retirees have generally tended to find this option altogether financially unfeasible.
Federica Grazi has changed that. An Italian from Milan who has lived abroad for 11 years, she brings a background in international relations with governments, strengthened by many years at JP Morgan. She shared her journey with us over the phone.
In 2024, she launched her startup Mitos Relocation Solutions:
“I wanted to dedicate myself to a personal project aligned with my professional experience. My goal is to become the world’s leading company in this field. I myself am an expatriate—I now live in London—but I’ve lived in eight countries, including Russia, Thailand, Spain, and Switzerland. I also obtained dual citizenship in the UK.”
Federica also has extensive volunteer experience with organisations helping retirees, such as Age UK and the Third Age Project, where she became a trustee. She explains that this idea is particularly common in “northern” countries, including the UK, the United States, and Scandinavia.
The Most Tax-Friendly Countries for Retirees
Beyond seeking milder climates, retirees often look for better financial conditions. “In the UK, over 50% of retirees would consider moving abroad,” Grazi says. Popular destinations include Europe, the Caribbean, Southeast Asia, and Mauritius. Historically, Spain and Portugal have been the most attractive, though their fiscal and immigration incentives have recently declined.
“However, some countries still actively encourage foreign retirees and the economic benefits they bring. Greece and Albania, as well as Italy, are leading the way. Greece offers a flat tax of 7% for 15 years. Europeans can move relatively easily within the continent, while non-EU citizens can also qualify if they can demonstrate financial self-sufficiency. Italy provides incentives for those relocating to the south in municipalities with fewer than 20,000 residents (7% tax rate for 10 years). There’s also a flat-tax option allowing retirees to pay a fixed €200,000 in taxes—previously €100,000—which is worthwhile if one has at least €1 million in income.”
Albania is currently very attractive for retirees, with extremely low living costs, lower still than in Greece, and most locals speak Italian fluently. Importantly, these incentives are based on previous residency, not nationality.
Italian Citizens Returning from Abroad
This also applies to Italians who have worked abroad for 5–10 years: they can return to Italy and access similar incentives. The countries currently sending the most requests are the US and the UK, with demand in the US rising under Trump. Popular destinations include Crete in Greece and Tuscany and Umbria in Italy. Within the EU, Portugal and Spain remain attractive. Overall, Italy is still the most requested destination due to its rich history, but Greece and Albania are emerging as strong alternatives.
How to Plan a Move Abroad After Retirement
What are the practical first steps? Grazi advises: “Choose your destination, optimise your taxes, and prepare thoroughly. When planning a multi-year move, preparation is key. I always recommend visiting the area—not just in peak season—and speaking with other expats.”
She also emphasises checking whether a country is open to immigration, whether public healthcare is accessible, and whether private insurance is available, especially for those over 65. Understanding how much you can benefit from fiscal incentives is equally important. “Optimising your calendar is crucial,” she adds, “because the number of days you spend in a country can affect your tax residency.”
Finally, the relocation itself should be coordinated with local consulates to avoid import taxes. Currently, Grazi mainly assists clients moving to Greece and Italy, though she is beginning work in Cyprus and Albania.
Do retirees ever regret the move? “Yes, it can happen, and returning is always an option. At first, it’s natural to feel disoriented, so it’s important to give yourself time. Policies can change over the years, so I always recommend having a contingency plan. Gradual relocation, maintaining financial and tax contacts in your home country, keeping savings, and diversifying currencies are all wise precautions.”
