Kiplinger\'s Personal Finance - 04.2020

58 KIPLINGER’S PERSONAL FINANCE^ 04/2020

pocket for basic care at private facili-

ties and use either the public health

program or a private policy for major

surgeries. Even if you end up paying

the full price for a major procedure,

you’ll likely pay less than you would

stateside. According to Patients Be-

yond Borders, which offers guidance

for medical tourists, a hip replacement

averages $17,200 in Costa Rica and

$15,500 in Mexico, compared with

$36,300 in the U.S. without insurance.

Another option: Some large insurers

offer international health policies for

expats. The Group Medical Insurance

Plan from the Paris-based Association

of Americans Resident Overseas (www

.aaro.org) is available to U.S. expats

living in most countries. In 2020, the

annual premium for a single person

between age 60 and 69 who has a Silver

level hospitalization and medical plan

(covering 80% to 100% of expenses) is

4,017 euros, or about $4,360. You must

also pay a $30 annual fee and be an

AARO member, which runs 65 euros

(about $70) yearly for an individual or

85 euros (about $90) for a couple. ■

YOU CAN CONTACT THE AUTHOR AT LISA _GERSTNER

@KIPLINGER.COM.

RETIREMENT

Countries with the largest number of retired expats, based on retirees who receive

Social Security benefits:

BY THE NUMBERS

Where the Most U.S. Expats Retire

SOURCES: Social Security Administration, Master Beneficiary Record, 100 percent data; U.S. Postal Service geographic data.

CANADA 70,722

JAPAN 47,7 34

MEXICO 30,919

UNITED KINGDOM 24,370

GERMANY 24,137

PHILIPPINES 20,403

POLAND 17,935

ITALY 17,181

GREECE 14,322

tax services for expats at https://

acareturnpreparerdirectory.com.

Tax breaks for expats. On the bright

side, some countries have tax treaties

with the U.S. to alleviate the burden

on expats. U.S. citizens who live in

several countries—including Canada,

Germany, Italy, the U.K. and Switzer-

land—don’t have to pay U.S. income

tax on Social Security benefits. Inter-

national treaties regarding gift and

estate taxes may help you avoid double

taxation on your financial gifts to others

and on your assets after your death.

The U.S. also offers tax breaks to

citizens living in other countries. The

foreign tax credit allows you to reduce

your U.S. tax obligation, in the form of

a credit or itemized deduction, based

on the foreign taxes you pay to your

country of residence. The foreign

earned income exclusion applies to

foreign earnings that you get from a

job or self-employment in your coun-

try of residence (but not to passive

income, such as from a pension or

investments). In 2020, you can exclude

up to $107,600 of foreign earnings

from your income for U.S. taxation.

HEALTH CARE

Your U.S. tax liability may follow

you to a new country, but Medicare

doesn’t. If there’s any chance you

may eventually live in the U.S. again,

however, it’s wise to pay your Medi-

care Part B premiums. If you enroll

in Medicare Part B later than the

time you first become eligible, your

monthly premium goes up by 10%

for each 12 months that you delay.

Plus, you can use Medicare coverage

if you visit the U.S. to get health care.

The good news is that many coun-

tries offer high-quality health care at

prices much lower than you’d pay in

the U.S.—and for some retirees, that’s

one of the main reasons they decide to

move overseas. Usually, you have three

ways to put together an affordable

health care plan: Pay out of pocket,

enlist in the country’s public health

care program (if it’s available to foreign

residents) or use private insurance,

says Dan Prescher, a senior editor for

International Living who splits his

time between Mexico and the U.S.

If joining a country’s government-

run health system is an option, premi-

ums may be as low as $25 to $100 a

month per person—or it may be free,

according to Live Richer, Spend Less:

International Living’s Ultimate Guide

to Retiring Overseas, which Prescher

coauthored with his wife, Suzan

Haskins. You may face extended wait

times to see physicians or to undergo

nonemergency procedures, and public

clinics and hospitals can be crowded.

For better service, explore private-

sector choices in your country of resi-

dence. Some private insurers don’t

offer new policies to those older than

65 or 70 (though they will continue an

existing policy), and premiums may

run higher than those for a country’s

public system. But your medical costs

could still be one-fifth to one-fourth

of what you’d pay in the U.S., says Pre-

scher. Because doctor visits and proce-

dures are often relatively affordable

without insurance in foreign coun-

tries, you may be able to pay out of