These days, the idea of packing your bags and retiring to an exotic location might sound tempting.
While coronavirus restrictions have put a damper on travel, people are certainly planning, or at least accessing their options, for when the pandemic passes, said Dan Prescher, senior editor at the expat website International Living.
The site has seen a big bump in traffic in recent months.
"There is so much going on with Covid, with the political situation in the U.S. — there are a lot of reasons people might want to go someplace else," Prescher said.
In fact, 13% of U.S. workers and retirees aspire to live abroad in retirement, according to a survey done by the Aegon Center for Longevity and Retirement in June.
It's an idea that has gained momentum in recent years. More than 431,883 retired U.S. workers living overseas received Social Security benefits as of December 2019, the latest figures available.
Part of the allure is the ability to live comfortably on a budget, depending on where you go.
That's what drove Edd and Cynthia Staton to retire to Cuenca, Ecuador, in 2010.
The couple lost their jobs and saw their retirement savings drained during the 2008 financial crisis — and they knew they had to make a drastic decision. After much research, they found a place that fit the bill.
"We live an upscale lifestyle on a Social Security budget," said Edd Staton, who resides with his wife in a $700-a-month penthouse apartment.
"We eat out whenever we want to," he added. "We have a weekly housekeeper, we have spa treatments ... gym, yoga studio memberships, a lot of things that are considered luxuries in the United States."
The pair, who have a website and three books on retirement, also gets a lot of exercise thanks to the "walkability" of the city and the year-round spring-like weather, Cynthia Staton added.
While the pandemic has put a damper on excursions like dining out, the pair quickly realized that their daily life in lockdown in Cuenca hasn't been that much different.
Masks and social distancing are the norm, but things are starting to open back up, they said.
While it may sound glamorous, choosing your overseas retirement location will take some work.
"It is imperative to know what your financial situation will look like once you have made roots in your new country of residence," said expatriate tax specialist Katelynn Minott, a certified public accountant and partner at Bright!Tax.
The first step in the planning process is to make a wish list. Do you like the beach, city or the mountains? Do you want to be close to family? What about climate and health-care options?
"People have had vacations in wonderful places that will not be right for them to live full time," Preacher said. "Really profile yourself ruthlessly about what you want and what you can do without."
Then, take a realistic look at your budget — what income is coming in and what you can afford to spend every month.
Yes, your property taxes will likely be lower in many places, such as Latin American countries. However, you aren't off the hook for U.S. income taxes.
You'll have to file an annual tax return and depending on where you relocate to, you'll also probably have to report your income to your new country of residence.
However, the U.S. has a system of credits and exclusions it offers people to offset their tax obligation and avoid double taxation, said David Kuenzi, director of international wealth management at Creative Planning/Thun Financial Advisors.
Just be aware that if you move to a place with higher tax rates, like Germany, you'll pay the higher rate, he explained.
"The system is very imperfect and if you don't manage it properly, you could end up paying taxes on the same income in two countries," said Kuenzi, who is based in Madison, Wisconsin.
If you have a Roth individual retirement account, also be aware of the country's taxation system. While the disbursements are tax-free in the U.S., that is not the case in some foreign countries. Your new home country may count that as taxable earnings when report your income to it, he said.
Reach out to local tax advisors in the country you intend to reside in, or local expat groups, to find out about the tax rules and regulations.
In addition, review your existing estate plan and consult with a local attorney in your new place of residence. There may be differences in inheritance and estate taxes, which could result in your heirs facing steeper penalties.
For instance, European countries are going to claim the right to impose their inheritance tax on your worldwide assets, Kuenzi pointed out.
Affordable and quality health care is always on the top of the list for many looking to spend their golden years outside of the U.S.
Some locales may have inexpensive out-of-pocket health-care costs. Others may have national health-care coverage you'll be able to buy into.
The U.S. State Department's website "highly recommends" you get health insurance to cover medical and dental treatment, as well as medical evacuation to the U.S. — just in case.
That's because Medicare won't cover medical expenses outside of the U.S., said Rachel Gottleib, certified financial planner with UBS Financial's Gottlieb Rose Wealth Management.
"When you are looking where to live if you are retired or older, you have to look at the quality of health care that is available," she said.
"What is their medical response time? Do they have accredited hospitals? What are their conditions like? Do they have the prescriptions you need?"
If you decide to drop Medicare, be aware that you will face a steep and permanent penalty on premiums if you decide to move back to the U.S. and re-enroll.
The Statons belong to Ecuador's national health system and pay $83 a month for both of them for 100% coverage and no deductible.
"It's not like we were in bad health when we moved here," Edd Staton said of the couple's emphasis on finding a nation with a good health-care system.
"We knew that we weren't going to get any younger," h added. "And that could be a consideration down the road."
You'll need a local bank once you move, but keep your U.S. bank, as well, experts advise. Some U.S. banks have agreements with foreign banks that allow cash transfers without a significant fee, Bright!Tax's Minott said.
When it comes to investments, keeping them in the U.S. will avoid heavy fees.
"The U.S. tax system creates very punitive rules regarding non-U.S. structured investments," Creative Planning's Kuenzi said.
When you open a foreign account, you'll be asked for your Social Security number because foreign financial institutions must report the foreign assets held by U.S. account holders to the U.S. government as part of the Foreign Tax Compliance Act (FATCA).
You will also have to report any foreign financial accounts, such as bank accounts, brokerage accounts and mutual funds, to the IRS every year.
Once you make the move, rent a place before buying, advises International Living's Costa Rica correspondent Kathleen Evans, who lives in Tamarindo on the Central American country's Pacific Coast.
"What looks good on paper or what looks good on a week's vacation, when you come back and you live, it may not be exactly what you thought," she said.
"So we made sure to rent first and then fell in love with the area we're in and bought a condo."
Be sure to research real estate laws in the country, as well as check out visa and residency requirements in your desired locations by going to the State Department's website.
Evans encourages anyone who dreams of retiring overseas to take the leap, after doing thorough research.
"Take the risk," Evans said. "Chances are you won't regret it.
"If it doesn't work out, that's OK, because you can always go back home."
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.