An AARP survey revealed some challenging realities for Americans nearing retirement age. One-fifth of adults aged 50 and older have no retirement savings, and over half (61%) worry they won’t have enough money to cover their bills in retirement — at least in the United States, which ranks as the 12th-highest in cost of living among 146 countries, according to Numbeo.
Addressing Financial Concerns: Alternatives for Retirement
To mitigate these financial concerns, many seniors are considering retiring abroad, with Italy being a popular choice.
Cost of Living Savings in Italy
Italy offers substantial cost-of-living savings for American retirees. According to Green.org, the cost of living in Italy is about 45% lower than in the U.S., and rent prices in the U.S. are 151% higher than in Italy. For seniors on a tight budget, the reduced expenses in Italy make it a more manageable option compared to the U.S.
Lifestyle and Affordability
James Kinsella, a travel expert from TurtleTrip, notes that certain Italian cities offer a unique blend of lifestyle, culture, and amenities. With relatively affordable living costs, retirees can enjoy an active or relaxed lifestyle as they choose.
Why Americans Are Choosing Italy for Retirement
Longer-Lasting Retirement Savings
Retirement savings last much longer in Italy than in many other popular overseas destinations. For example, a $1 million nest egg could last over 56 years in Italy, compared to less than 30 years in expensive places like Bermuda, Hong Kong, and Switzerland.
Generous Retirement Systems and Healthcare
Italy is among the top 20 countries with the most generous retirement systems, according to Business Insider. Green.org also highlights that healthcare in Italy is notably less expensive, with private healthcare for an elderly couple ranging from 1,500 to 2,800 euros annually, or about $1,620 to $3,020.
Additional Benefits of Retiring in Italy
Rich History and Culture
Italy's rich history, vibrant cities, natural beauty, and renowned cuisine make it an appealing destination. The country's healthy lifestyle contributes to its ranking as having the sixth-longest life expectancy among EU countries.
Tax Benefits
Retired expats in Italy might benefit from a 7% flat tax rate for pensioners. This applies to seniors who transfer their residency to specific regions in Italy and whose retirement income comes from a foreign source. This tax benefit lasts for 10 years, provided the retiree hasn't lived in Italy in the previous five years and moved from a country with a tax agreement with Italy.
Quality of Life
Many expats report a higher standard of living in Italy due to lower costs, a milder climate, friendly communities, and access to numerous cultural and historical landmarks.
Establishing Residency in Italy
To retire in Italy, one needs to apply for an Italian Elective Residence Visa, which requires proof of sufficient income or assets, proof of accommodations in Italy, and valid health insurance across the EU. After meeting residency requirements, retirees can apply for Italian citizenship, a process that typically takes between six and 18 months. For more detailed information, consult resources such as the blog from Arletti & Partners.
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