# Retiring in Florida vs Spain



## elamaral (Jan 31, 2015)

I posted it on Spain Expat forum, but there are not too many American expats there - mostly British. So, somebody suggested to post it on the USA forum, to see if I can get more feedback from the American expats.

So here's our story: I am Russian-born Canadian/US citizen and my husband French-born French/American citizen now living and working in the United States (Colorado). I had my share of living in cold places all of my life (Moscow, Toronto, now Colorado) and with age (me in late 40-s, husband in early 50-s) the cold weather just gets harder and harder to tolerate now... So, as many thousands of others on this forum, we started to dream (and plan) where should we settle for our early retirement (hopefully - in 3-5 years from now). Living in the US - our initial option was to move to Florida (St. Augustine area) - this would be easier in terms of moving, settling, taxation, etc. But both of us being from European origin, very wordly and well-traveled, and between us being fluent in 3 languages (English, French, Russian - unfortunately no Spanish, but started to learn), we are having our doubts now if we'll really enjoy being retired in Florida as much, if we would settle in the South of Europe (Spain sounds the best option for us, France is nice, but might be too expensive, especially at the coast (we want to be close to the sea). I am wondering if people on this forum with similar background/experience/situation could share thoughts/experience and help with advice. Here's the areas I need to figure out (oh, and as far as perspective location in Spain, I am thinking about Javea / Malaga area):

So here it goes - Florida vs Javea (or coastal south of Spain);

Climate:
Florida is very nice from November through April, but extremely hot and humid during summer/fall months. How about Javea, - are winters too cold (I checked area weather averages, but how it feels in reality, when you live there)?

Cost of living - which one is more affordable?

Moving: any experience how much will cost to move 3-bedroom house contents from US to Spain?

Taxes:
(we will have retirement income from our current job and also Social Security (after 67, so it's still far away), and 401K retirement savings. What kind of tax brackets are we looking into if we retire in Spain and become residents. What types of our pension income will be taxed - is it much higher in comparison to US?

Medical Insurance:
I understand, we'll need to buy a private health insurance in Spain through the whole time we live there - How much it will be (full coverage, including vision and dental for 2 persons of our age)? In the US, until Medicare kicks in, we would be paying about $800-900 per month for 2 people)

Real estate taxes, house insurance, other taxes and fees.

Electricity, gas, utilities cost. Internet, phones, etc. Are these comparable?

Culture - this is no brainer, - we love Europe and European culture, food, architecture, life style, - so we won't need to adjust here.

Family:
Kids are grown up and independent (except for the youngest, who will be just out of college by the time we plan to retire). They will visit, of course, but this is the hardest part - to move so far away from them? On another hand, we have the rest of our family (husband's mother, sisters, nephews/nieces living in France, and my mother, sister/brother, their kids living in Russia), so this part of the family will be closes and be able to visit more often.

Entertainment: with Internet and ability to travel in Europe, - no worries here.

So, these are the main points. Thanks!


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## UKcitizenUSAresident (Feb 16, 2015)

Thought I would join in on this but may not be able to offer any help. I am in my mid-thirties and have a similar dilemma! I literally have just driven back to the Midwest in the USA from Florida to see if I would like to live there, or whether I would rather live in Spain where my parents have a place to live and I have stayed for months and months of my life over the years. I am torn! I want sunshine and don't want to have to shovel snow in the winter!


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## boriskhol (Feb 15, 2015)

We don't live in Spain, but from doing similar research found a good website numbeo.com. It will give you an opportunity to compare prices, including rent between different places in USA and Spain. By the way, do you know that you will be penalized by IRS if you start withdrawing money from 401 before you are 59? We are also in our late 40s and have thoughts of retiring in Spain but don't plan on leaving US until we can start using our savings. I hope this helps and not too much of cold shower. Will be glad to share any additional info with you, just write.


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## BBCWatcher (Dec 28, 2012)

boriskhol said:


> By the way, do you know that you will be penalized by IRS if you start withdrawing money from 401 before you are 59?


That's not quite correct.

The "normal" minimum age to withdraw 401(k) funds without penalty is 59 1/2. That assumes you've actually retired.

The age drops as low as 55 if you leave the specific company sponsoring the 401(k) plan during or after the year in which you reach your 55th birthday, and only for that 401(k) plan. (Not for IRAs.) The age drops even further to age 50 for police, fire, and medics who otherwise meet the same requirements.

Check the rules very carefully. The IRS's Web site has some good guidance.


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## Bevdeforges (Nov 16, 2007)

A couple of considerations/ideas to throw into the mix here:

Cost of living - consider where your retirement funds are coming from. If they are US-based (i.e. the 401K plans), you have to consider the exchange rate risk if you move outside the US. Right now, the euro is falling against the dollar, so things look good. But there is nothing as constant as change. A few years ago, US retirees were leaving Europe because they were taking a beating on the exchange rates.

Taxes - as US citizens you'll be filing two sets of tax returns each year, and you'll be subject to the US-Spain tax treaty. Normally, this means that retirement benefits are taxed in the source country (so, for you, the US), but the treaties vary. Retirement benefits from a 401K (or IRA) may not be considered "income" at all in Spain (again, you'd have to check this) because you'll actually be paying deferred US tax on money earned prior to your Spanish residence. But in any event, if you choose Spain, you'll have all the "joys" of US expat taxation. (See our Expat Tax section for all the various points of view on that!)

Medical insurance - you may want to take a look at something like the AARO medical insurance for expats. Insurance - AARO - Association of Americans Resident Overseas AARO is a US expat association that offers a group-type medical insurance designed to meet most countries' visa requirements. At a minimum, they publish their rates sheet, so it gives you a starting place for evaluating other expat insurance plans you run across. Even though AARO is based in France, they do design their insurance program to meet the needs of US expats around the world and I believe their coverage may be a bit more "European" in concept than most US coverages. It may or may not make any difference to you, but it's worth taking a look at, if only as a basis for comparison. (You need to be a member of AARO in order to take their medical insurance.)

Cheers,
Bev


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## UKcitizenUSAresident (Feb 16, 2015)

elamaral said:


> So here it goes - Florida vs Javea (or coastal south of Spain);
> 
> Climate:
> Florida is very nice from November through April, but extremely hot and humid during summer/fall months. How about Javea, - are winters too cold (I checked area weather averages, but how it feels in reality, when you live there)?


I can vouch that in the winter, Spain can feel cold at that time of the year (my parents' place is about 100 miles further south from Javea). However, "cold" is a relative term! Down there "cold" is in comparison to the rest of the year there. 

I just came back from Florida where it felt just as "cold" as it is in Spain at this time of the year in winter, so they are very comparable (except no hurricanes or tornadoes in Spain!). 

Don't forget in the summer/fall in Spain it can easily feel as hot as Florida - if not hotter! And of course, without the rain!


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## elamaral (Jan 31, 2015)

UKcitizenUSAresident said:


> Thought I would join in on this but may not be able to offer any help. I am in my mid-thirties and have a similar dilemma! I literally have just driven back to the Midwest in the USA from Florida to see if I would like to live there, or whether I would rather live in Spain where my parents have a place to live and I have stayed for months and months of my life over the years. I am torn! I want sunshine and don't want to have to shovel snow in the winter!


It's been snowing a lot this winter in Monument, Colorado, where we live. My husband is sick of constantly shoveling the snow, and I am tired of watching him shoveling!  In fact, he's shoveling the snow right now, good that, at least, both of us working in IT, we can work from home today!
And we are not into winter activities that much anymore, so I feel confined in the house during 6 cold months, I just want so much to be able go on a hike, walk around, spend time outside... Spain also attracts me in a way, that there are so many interesting cities and sites to visit within close distance. You cannot beat this living in the US.


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## elamaral (Jan 31, 2015)

BBCWatcher said:


> That's not quite correct.
> 
> The "normal" minimum age to withdraw 401(k) funds without penalty is 59 1/2. That assumes you've actually retired.
> 
> ...


This is correct. My husband has a retirement from his company, which he could start touching end of March this year (when he turns 55) but at a reduced percentage, but if he starts withdrawing later, when he turns 60 - then he will get full retirement amount. So, our plan is to wait with pension withdrawals till he's 60, and same with 401K withdrawals. I am not even 50 yet, so we won't be able to use my 401K savings until I reach 59.5 age.


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## UKcitizenUSAresident (Feb 16, 2015)

Yes that is true! Lots of towns and little beaches to explore nearby, no long distances to drive to try somewhere new. I've only been here for a few months in the US and already I feel housebound in winter which is not what I am used to being a Brit who likes to walk everywhere at any time of the year!

If you do decide on that area of Spain just be prepared for the masses of English, Dutch, German, French and Belgian expats who live down there too! You can almost avoid the need to learn Spanish if you live there because there are so many English speakers (including the Dutch and Germans, of course, who all seem to speak excellent English!).


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## elamaral (Jan 31, 2015)

UKcitizenUSAresident said:


> I can vouch that in the winter, Spain can feel cold at that time of the year (my parents' place is about 100 miles further south from Javea). However, "cold" is a relative term! Down there "cold" is in comparison to the rest of the year there.
> 
> I just came back from Florida where it felt just as "cold" as it is in Spain at this time of the year in winter, so they are very comparable (except no hurricanes or tornadoes in Spain!).
> 
> Don't forget in the summer/fall in Spain it can easily feel as hot as Florida - if not hotter! And of course, without the rain!


Yes, people are posting on Spain blog, that they are having unusually cold winter this year in Javea. I am checking their weather forecast and it's between 50-60F through the week. How about comparing it with -10F in Colorado? A few neighbors even had water pipes busted... 
To be fair, the previous week was rather warm here, almost all snow melted, but today we have a big snowfall again.

For summers, it's funny, how people think their weather is the worst! On Florida blogs, people are complaining how they don't ever get a break from the heat and humidity, how they cannot live a few hours without air conditioner, how they sweating like pigs all the time, and that their kids complain that they are hot even while swimming in the pool!

I guess, some years are worse than others, - when we visited Barcelona a few years back in July - it was warm/hot (30 - 35 degrees C), but to me it felt very pleasant, don't even remember running air conditioner too much...


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## elamaral (Jan 31, 2015)

boriskhol said:


> We don't live in Spain, but from doing similar research found a good website numbeo.com. It will give you an opportunity to compare prices, including rent between different places in USA and Spain. By the way, do you know that you will be penalized by IRS if you start withdrawing money from 401 before you are 59? We are also in our late 40s and have thoughts of retiring in Spain but don't plan on leaving US until we can start using our savings. I hope this helps and not too much of cold shower. Will be glad to share any additional info with you, just write.


Yes, numbeo is a cool site. I compared with Denver and got this: "You would need around 2,286.81€ (2,609.32$) in Valencia to maintain the same standard of life that you can have with 4,300.00$ in Denver, CO (assuming you rent in both cities). This calculation uses our Consumer Prices Including Rent Index." If the dollar holds strong, we can have a very comfortable life in Valencia area on our retirement money (of course, this is not considering retirement income taxes we'll have to pay in Spain - according to my calculations so far, it will be almost double from what we would be paying in the US). Meanwhile, medical insurance will be way much cheaper in Spain, so until Medicare kicks in - this should level the difference with income tax payments. I replied to another person, as far as 401K withdrawals, that we are planning to wait till my husband turns 59.5 to start our withdrawals (he will be 55 in a month, so in 4.5 yeas from now). For my 401K, since I am younger, we'll have to wait even longer. He also has pension from his job, which he can start touching at 55 (but he plans to work 4 more years, so he can have the full pension amount). So, we cannot retire right away, we need to wait 4 - 4.5 years, but it makes sense to start planning in advance, so by the time of retirement we are settled on where we want to live. And where do you live in the US?


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## elamaral (Jan 31, 2015)

Bevdeforges said:


> A couple of considerations/ideas to throw into the mix here:
> 
> Cost of living - consider where your retirement funds are coming from. If they are US-based (i.e. the 401K plans), you have to consider the exchange rate risk if you move outside the US. Right now, the euro is falling against the dollar, so things look good. But there is nothing as constant as change. A few years ago, US retirees were leaving Europe because they were taking a beating on the exchange rates.
> 
> ...


Thanks Bev, good advise! I was thinking about the exchange rates, but hopefully, US dollar will keep strong, - US economy has been more or less stable so far, in comparison to many countries in Europe. Even British Pound went down, so you never know... Well, I guess we can always return to the US, in the worst case!

About expat taxation between Spain and US, - I started to research this, looks like double-taxation can be avoided, but we'll still have to pay higher tax rate on our US retirement income when we become tax residents in Spain. So, we'll need to account for this extra expense.

Also, thank you for the medical insurance provider suggestion, I'll check out AARO.


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## boriskhol (Feb 15, 2015)

It looks you have done a lot of research and closer to you goal than we are. Spain is a beautiful country. Just a short question, is health insurance in Spain really that cheap? Many people say it is, but when you start checking prices for people in their late 50s 60s, especially for people who would need at least temporary coverage in US it looks very expensive. 
We live in Minnesota. Regards.


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## BBCWatcher (Dec 28, 2012)

From January 1, 2014, quality medical insurance in the United States has dropped in price _a lot_ for those with low or moderate incomes (and any amount of wealth), especially in those states that expanded Medicaid. (Though you have to be a citizen or 5+ year legal permanent resident to qualify for Medicaid.)

Granted, on average, medical care in the U.S. is still likely to be more expensive (insurance costs plus out-of-pocket costs) compared to Spain. That said, Spain has a 21% VAT (notably) and the U.S. doesn't. In fact, in certain U.S. states the sales tax rate is zero, but sales tax rates are always much lower than Spain's VAT rate.

So is paying a 21% VAT rate on practically everything you consume, but with lower out-of-pocket costs for medical care, an overall better financial deal than what you'd experience in the United States? "It depends." Obviously if you tend to consume little or no medical care, or if you have a low or moderate income (and thus qualify for the most attractive U.S. medical insurance benefits or subsidies), the U.S. would tend to be more financially attractive, other things being equal.


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## kenny 62 (Nov 1, 2009)

*Info please*

Hi my wife is american citizen in UK ON A ( SPOUSE VISA ILR ) I AM a british citizen she has been here in the UK approx 8 years we was looking on moving either to USA or SPAIN but dont no were we would stand with my wife going to spain or me going to the USA ,


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## Bevdeforges (Nov 16, 2007)

Basically, to move to the US, your wife would have to sponsor you for a visa (i.e. show that she has the resources and a place for you to live). To move to Spain, you would be the one to "exercise your EU rights" to settle there, and then there is a simplified process for her to get a residence permit to "join" you.
Cheers,
Bev


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## Newyorkaise (Nov 30, 2010)

Kenny, has your US wife obtained her UK citizenship? If she's been in the UK long enough to qualify, I'd strongly advise that she obtain it before you make any move to the US or Spain.

As a UK/US dual citizen, she'd be able to sponsor you to live in the US; you'd both be able to move to Spain without your having to show that you are personally "exercising your EU rights"; and if things go amok and you decide to return to the UK, you'd be able to do so without having to worry about changes in spouse visa regulations.

Just a thought, but I'm a big proponent of leaving your options open, and having her get her UK citizenship is well worth the effort, in my view.

Best of luck to you both!


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## BBCWatcher (Dec 28, 2012)

Newyorkaise said:


> If she's been in the UK long enough to qualify....


She has.


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