12 Best Islands for Retirement
When defining anything as “the best,” retirement destinations included, it’s necessary to understand the criteria along with considerations of personal needs and tastes. To some, the best is the most luxurious and indulgent regardless of price. To others, the best means value — getting the most for bang for your buck. The best climate, scenery, location, health care, and things to do also come into the picture.
Many international islands offer incentives to retirees and welcome them as long as they can prove a minimum amount of income or savings. Both local and U.S. taxes are a consideration, and American citizens should be sure to understand the IRS requirements. The U.S. Department of State offers a checklist on retiring abroad as well as access to visa requirements and specific information for other countries. The U.S. State Department travel advisories page is another useful resource, as is STEP (the Smart Traveler Enrollment Program). Since Medicare does not apply overseas, retirees living abroad must think about arrangements for health coverage, prescriptions, and availability of medical care.
It’s a good idea to take a lengthy vacation on any of the islands to get a feel for housing and daily living costs, social life, quality of medical care, language, infrastructure, transportation, and safety. Issues such as unreliable Wi-Fi, electrical blackouts, traffic, and unavailability of familiar products are minor inconveniences to some and game changers to others.
For the adventurous or retirees seeking a change of scenery, lifestyle, or a more economical place to settle, we have rounded up some ideas. More research is recommended, of course, before you start packing up and planning your farewell parties, but these islands may get you thinking about your future home.
Located south of Sicily, Malta’s climate is sunny and warm, with temperatures rarely falling below the 50s. English is the second official language of Malta, and many residents speak Italian in addition to Maltese. Living costs are somewhat lower than in the U. S., and there’s a large expatriate community including both Americans and Europeans, especially those from the U.K.
Health care is provided through a public system for Malta and European Union citizens, but high quality private health care is available for retirees, and coverage is not expensive. Water sports, golf, and other outdoor activities are widely accessible, and Malta is also home to museums, historic sites, and cultural events.
Just about a two-hour flight from Miami and four hours from New York, Puerto Rico offers many advantages as a retirement home. Medicare is accepted, and health care is widely available, especially in or near major cities. As a U.S. territory, Puerto Rico allows property ownership with no restrictions, and no visa is required. For many retirees, another advantage is the Individual Investors Act, which exempts residents of Puerto Rico from paying island or federal income tax on dividends, interest, and capital gains. Residents (with a minimum of 183 days per year on the island) are also exempt from federal income tax.
The overall cost of living is lower on the island, and rentals are significantly less in most areas. Outdoor activities, nightlife, and shopping are readily accessible, with resorts, restaurants, and shows designed for tourists and locals. Weather is warm, although hurricanes and the rainy season are part of living in the tropics. The island is recovering from recent destructive storms.
Isla Mujeres, Mexico
This small island is set in the Caribbean Sea, a ferry ride from Cancun, eight miles away. Once a fishing village, the island is now popular with tourists, especially during the season when snowbirds arrive from colder climates. Weather is warm year-round, with the rainy season and possible tropical storms arriving in late summer and fall. Spanish is the primary language, but English is widely spoken as well.
Life is casual, and the cost of living is generally lower than in the U.S. The currency is Mexican pesos, the exchange rate provides good value, and U.S. dollars are accepted in many places. Temporary resident visas are good for up to four years, with proof of a minimum net monthly income of about $1,400. After that, it’s possible to obtain a permanent resident visa, again with proof of income or savings. Rentals are available in a variety of price ranges, and home ownership is permitted. Private medical insurance is required, and there are pharmacies, doctors, and a hospital on the island. Nearby Cancun offers more extensive options for medical care.
San Juan Islands, Washington
Instead of a tropical island, some retirees prefer cool air, snow in the winter, small towns, and outdoor living. These islands, located in Puget Sound off Washington’s west coast, stay cool in the summer and get only about half the rain of Seattle. There’s more activity during the summer, when tourists or part-time residents arrive. Fishing, hiking, kayaking, and boating are popular.
Life on the islands is quiet, and it may be desirable to ferry to the mainland for supplies, entertainment, or medical care. Not necessarily a destination for retirees seeking to economize, home prices here are generally above $300,000, plus there are heating bills to consider. An advantage is that the state does not tax social security, pension, or retirement account income. For a laid-back lifestyle in a healthy, scenic, uncrowded environment, one of the San Juan Islands could be a good choice.
Once a British colony, Barbados retains Commonwealth status after gaining independence in 1966. English is spoken here, and many places accept U.S. dollars, although the island’s currency is the Barbadian dollar. Beautiful beaches, friendly people, fascinating history, a stable government and economy, excellent health care, and a range of rentals and properties to purchase make Barbados a popular retirement spot, albeit not among the most economical. Weather is tropical, and the island’s location in the eastern Atlantic is away from most hurricane paths.
Foreigners are permitted to purchase property, and retirees over 60 can apply for Immigrant Status with proof of sufficient income. After five years, retirees can also apply for permanent residence. There are expat groups in the major towns, with many retiring from the U.K. Residents (more than 182 days per year) are responsible for income tax, with a large allowance for pensioners over the age of 60.
Mallorca is the largest of the Balearic Islands, located in the Mediterranean off the coast of Spain. Catalan is the official language here, but Spanish is spoken as well. Beaches, sunny weather, mountain scenery, and delicious food attract tourists as well as retirees. Outdoor activities are abundant year-round, and cultural events, shopping, and museums offer plenty to do.
Excellent health care is available, and cost of living is lower than most U. S. cities. Long-term visas are available, entitling holders to reside, work, study, or conduct research in Spain. Foreigners are permitted to purchase property in Spain, and rentals are also available.
Big Island of Hawaii, Hawaii
The largest of the Hawaiian islands offers a variety of terrain, from beaches to mountains, as well as climates that include sunny shores and chilly hilltops. There are white-sand beaches, lava rocks, waterfalls, and volcanoes to explore, too.
Hilo, on the windward rainier side, is home to the University of Hawaii at Hilo, and real estate prices start at lower levels here than on the other side of the island. Tourists tend to prefer the less rainy parts of the island, leading to a quiet lifestyle for residents. There’s a downtown area, shopping, gardens, museums, theater, and farmers’ market for fresh produce and seafood. In contrast, Kailua-Kona on the dry west coast is popular with tourists. Real estate prices are higher here, and beaches are warm and sunny. You’ll also find golf, water sports, and luxe resorts with restaurants, spas, and entertainment.
In Hawaii, property and sales taxes are low. Social security and most pensions are exempt from state income tax, and residents over the age of 60 receive a homestead exemption, further reducing their property tax bill.
This small island off the west coast of the Malaysian peninsula is home to thousands of expats who enjoy the tropical weather, beaches, shopping, restaurants, and entertainment along with the low rents for modern, spacious apartments. There’s much to explore in Malaysia, including rivers, mountains, and jungles. Kuala Lumpur, a modern, sophisticated city, is about 50 miles away for a change of scenery.
Foreign retirees are eligible for the “Malaysia My Second Home (MM2H) program, a renewable, 10-year multiple-entry social visit pass or visa. Proof of minimum income and assets is required, along with a fixed deposit in a Malaysian bank. Pensions and investment income are not subject to Malaysian tax. English is spoken in most places, as Malaysia was formerly a British colony.
U. S. Virgin Islands
Three main islands — St. Thomas, St. Croix, and St. John — make up the U.S. Virgin Islands, an easy move with no passports, visas, or applications required. Surrounded by the Caribbean, with white-sand beaches, rain forests, and coral reefs, the islands blend modern comforts with Caribbean culture. St. Thomas is the most populated of the islands, with resorts, shops, and nightlife. The other islands also offer entertainment and shopping, but are generally more low-key.
English is widely spoken, the U.S. dollar is the currency, and Medicare is accepted. The islands have much to offer, but low prices are not the main attraction. With a tropical climate comes the annual hurricane season, and the islands have suffered through several over recent years. Medical facilities and overall infrastructure were damaged, but recovery is well underway.
This Caribbean island, surrounded by the Atlantic Ocean and Caribbean, is one of the least expensive Caribbean islands for retirees. A two-hour flight from Miami, the D.R.’s airports have been upgraded, and highways and roads have also been improved. The tropical climate, beaches, water sports, and outdoor activities make it a pleasant place to live.
With proof of a minimum monthly income of about $1,500, retirees may stay in the country and enjoy various tax benefits. Since Medicare and Medicaid do not cover retirees living out of the U.S., private insurance is advised, so that treatment in private hospitals — generally of higher quality than public — can be accessed. Most expats live in the main cities of Santo Domingo and Santiago, with many in the popular tourist towns as well. Certain areas are not considered safe based on crime rates, so it is advisable to check the latest information.
Set in the eastern Caribbean, Anguilla is the northernmost of the Leeward Islands, about 150 miles east of Puerto Rico. Sandy beaches, water sports, golf, natural beauty, and luxurious resorts offering nightlife provide plenty for retirees to do. Not necessarily a retirement destination for budget-conscious individuals, Anguilla attracts those wanting to take advantage of the tax benefits offered. There are no Anguilla income taxes, VAT taxes, or levies on capital gains or inheritance.
Anguilla is relatively remote, and residents generally travel by ferry to St. Maarten to stock up on supplies. There is only one hospital on the island, so private insurance that includes transportation to the U. S. or a nearby large city is advisable. Foreigners are permitted to purchase real estate on Anguilla with a special license, and rentals are available. English is spoken along with Creole.
Turks and Caicos
Providenciales is the main island in Turks and Caicos, offering white-sand beaches, sportfishing, and world-class snorkeling and diving in its coral reefs. Weather is relatively dry with year-round temperatures in the 80s. Resorts add to the entertainment options with golf, tennis, and shows.
The cost of living is high, but there are no taxes on income, capital gains, or inheritance. Visitors can obtain temporary residence permits, and for permanent status, it is necessary to purchase property that will be used as a home. Real estate costs vary by island, and there are no restrictions on property ownership by foreigners. Modern medical facilities are available, but private insurance is advisable, including coverage for transportation.