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How to decide where to retire?

If you've been saving for retirement for some time, you might be considering where you should retire. It would be easier to decide where to retire if there was a single ideal location that met the needs of every retiree. However, there are no destinations that have everything to meet your every need, but there are opportunities to find the information you need to find a place that at least comes close to your ideal environment. 

Where you reside in retirement can have a big impact on your finances and quality of life. Examine your existing living circumstances before assuming that you should move into retirement. The cost of living, taxes, amenities, and the availability of health care are all important variables to consider when making a retirement transfer. It's often a good idea to tour a few different regions before deciding where you want to retire.

Learn from our article about the elements you should be looking at while choosing the best spot to retire:

Should you retire at home or elsewhere?

Pre-retirees should consider whether they want to retire locally or move somewhere else. They should also consider whether a move is necessary at all. If your family and friends are nearby, or if your current location is affordable, or maybe you already have a home in your current location, you may not need to move somewhere else at all to retire. Moving into that situation may isolate you from the people and activities you enjoy.

However, if you do want to move elsewhere, for whatever reason, you need to consider the following: 

Cost of relocation

Although moving within the states of the EU is not so costly, there are other expenses that need to be taken care of before and after moving. Depending on your circumstances, you may need to sell your existing home or rent it out and downsize elsewhere. You will not have the time to take care of this part as you will be busy looking for a new home and researching your new desired location. So you will most likely hire someone to do it for you. Regardless of whether you are selling or renting your current home, there are still costs to be incurred, such as agent costs for your current home or closing costs on your new home. You will also spend on moving vehicles and help to settle down at your new place. You will need to ensure that you complete this process before you can move. 

The cost of living

Before making a move, look at the cost of living that you can expect during retirement. Some EU member states are more expensive than others, which is important to understand before relocating. You would want a lower cost of living to stretch your retirement income further while keeping your needs and health in check. Within the 27 EU states, Iceland and Denmark have the highest cost of living. Denmark also comes out on top in terms of consumer goods and services prices, being 40% above the EU average. Bulgaria has the lowest cost of living and the lowest prices for consumer goods and services, with prices being 40% below the average. 

The cost of living for the elderly in retirement

If you are already someone who is retired or nearing retirement, then you also may want to consider costs that come with ageing, such as health care and age-related disability costs. Average pre-retirees in the European Union usually spend less than average. Granted, you will be spending more than average on certain things, such as health care. Retirees all over the EU spend 42% more than the average on health care. Retirees in the Baltic states and Romania spend 65% more than average on health care. Then there are unexpected costs that come with old age that need to be taken care of, such as age-related disability, the death of your spouse, etc. Almost 40% of the households in the EU with retirees living alone could not meet these unexpected costs

Of course, you may not face these hardships during your old age, but it is necessary to understand from existing data how much you will likely need to spend during retirement in another country. 

Amenities after retirement

The location where you would retire should have high liveability indices, such as a thriving economy where you can find a job if you wish, good weather, minimal crime, good infrastructure, good hospitals and assisted living facilities, as well as adult day activities and plenty of wellness options. EU countries like Greece, Italy, Spain, and Portugal are more popular for retirees due to their warm weather and easy-going lifestyle amongst the locals. Many prefer France for its culture and Germany and similar Western European countries for their quality of life and strong protection of workers' and tenants' rights. Others look to more low-key countries for lax tax and immigration matters. 

If you have the opportunity, you may choose to visit the country beforehand to see its culture and localities. After narrowing down your options, balance the benefits with the drawbacks.

Taxes after retirement

Before choosing your retirement location, you will need to see how much taxes you will need to pay there and for what kind. Depending on your age, income, and wealth, some states will require you to pay more than others.

The kinds of taxes you need to pay attention to are income taxes, capital gains taxes, property and wealth taxes, with more explanations in the following: 

Income tax 

Most EU states have a progressive tax rate, meaning the more you earn, the more taxes you pay. In 2021, the highest top statutory personal income tax rates were found in Denmark (55.9%), France (55.4%), and Austria (55%), among European OECD nations. The lowest personal income top rates were found in Hungary (15%), Estonia (20%), and the Czech Republic (23%).

Property and wealth taxes 

Property taxes contribute to less than 5% of overall tax revenue in the EU. If you want to buy real estate to retire in another EU country, you will want to check out the International Tax Competitiveness Index (ITCI). Property taxes are measured and compared in the ITCI's property tax component, which compares the base and amount of real property taxes as well as whether a country imposes other types of property taxes like wealth taxes, inheritance taxes, or property transfer taxes. Among the OECD countries, Estonia ranks the highest in having the most efficient property tax system. Estonia's real property tax exclusively applies to the value of land, and they do not levy any other sort of property tax. 

Italy, on the other hand, ranks last. They collect high property taxes and levy a wealth tax on some selected assets, like financial assets and properties kept abroad, as well as taxes on inheritances, real estate transfers, stock issuance, and financial transactions.

Recurrent taxes on an individual's wealth, net of debt, are known as net wealth taxes. A net wealth tax is comparable to a real estate tax in principle. Instead of only taxing real estate, it now applies to all of a person's assets. Only three European countries, Norway, Spain, and Switzerland apply a net wealth tax. In France and Italy, wealth taxes are imposed on certain assets but not on an individual's net worth.

Capital gains tax

If you are retiring, chances are you have investments. Apart from the income, there are also considerations to be accounted for if you want to sell them. The profit from the sale of an asset or investment is taxed as capital gains. Some EU countries charge them, while others do not. European countries levy 19.3% of taxable capital gains from the sale of listed shares on average. With a top rate of 42%, Denmark has the highest top capital gains tax. Finland and France came in second and third, with 34% each. The sale of long-held shares is exempt from capital gains taxes in a number of European countries. Belgium, the Czech Republic, Luxembourg, Slovakia, Slovenia, Switzerland, and Turkey are among these countries. Greece and Hungary, among the countries that do pay a capital gains tax, have the lowest rates, at 15%.

Of course, your overall living quality should be a higher priority than tax planning. Low taxes are not necessarily going to make you happy if you do not like the destination. Also, lower taxes do not necessarily mean a lower cost of living. You may pay lower taxes, but the cost of living may still be high.


The location of your retirement can affect your budget standard of living. Before assuming that you should retire, take a look at your current living situation. Before deciding where to retire, determine whether you need to relocate at all or if you can retire where you are. If you do not wish to retire locally and instead relocate, you must consider the expense of relocation, the cost of living in your selected region, and the cost of living and facilities if you are a senior, as you will require significantly more. Check your taxes in the chosen place; will you be required to pay income taxes if you continue to work? Do you have to pay property taxes if you buy a house in a retirement community? Do you have to pay any additional taxes, such as those on your overall wealth or capital gains, if you sell your assets? These are crucial things to consider while assessing your quality of life after retirement.

Retirement location is important considering the costs that come with relocation and further settlement in the new destination. As a retiree, whether you are young or elderly, you need to account for the costs and quality of life in your chosen destination. Your chosen destination may not have everything you need, but if it checks out for most of the list, you may decide to give it a chance. Before making any decision, take advantage of the tools available and find answers for all the questions you have about the said location. Only then will you be able to get a big picture about your retirement location. 

Last update: 29/03/2022

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Disclaimer: Some text on this website is purely for marketing communication. Nothing published by Quanloop constitutes an investment recommendation, nor should any data or content published by Quanloop be relied upon for any investment activities. Quanloop strongly recommends that you perform your own independent research and/or speak with a qualified investment professional before making any financial decision.