Italy is one of the most popular vacation spots in Europe. It’s also a great option if you’re thinking about retiring abroad. The country is known for its delicious food, beautiful towns and mild weather, making it about as ideal a retirement destination as you’ll find. In addition to this, the cost of living and rent in Italy are far lower than in the U.S. If retiring in Italy is your dream, talk to a financial advisor about building a financial plan that can cover your living expenses.
Getting an Italian Visa
While a visa is unnecessary if you’re merely visiting Italy from the U.S., you’ll need to apply for one in order to gain permanent residency. You will also have to provide proof of sufficient retirement funds with which you can support yourself. More specifically, these annual income requirements are $35,000 (at time of writing) for individuals and $42,920 (at time of writing) for married couples.
The most popular Italian visa for retirees is the Italian Elective Residence visa. Applications are examined on a case-by-case basis, so there are no minimums you need to meet. With that being said, this visa won’t afford you the right to hold a job in Italy. That’s where the need to provide evidence of significant income or assets comes in.
You should prepare to offer proof that you either rent or own a home in Italy. The visa process also calls for proof of an EU-wide valid health insurance. Once you obtain all the necessary documentation, you can get an entry permit so that you can go to Italy and apply for the permit of stay and, ultimately, the residency visa.
The final stipulation of this Italian visa is that you take a number of classes once you’re actually living there. These classes help you exhibit adequate understanding of the Italian language and Italian civil structures.
Housing Costs in Italy
Italy is far less expensive than the U.S. when it comes to housing. According to April 2023 data from Numbeo.com, average rents in Italy are almost 55.3% lower than they are in the U.S. For a one-bedroom city center apartment, you can expect to pay about $718 per month in rent. That same apartment located outside of the city center would run you about $561.
Since rents and overall housing costs are so much less expensive than in the U.S., with just the minimum income you’ll likely have plenty of money to cover all other day-to-day expenses. Food, entertainment and other consumer goods are similarly priced to what you’d find in America, though the country’s overall cost of living (excluding rent) is 14.7% lower than in the U.S.
Taxes in Italy
Even though you won’t be able to work in Italy with a residency visa, you still need to file taxes as an Italian resident. Foreign income tax rates in Italy are generally quite low, and the country has a 7% flat tax policy on foreign pensions. To take advantage of this, you’ll have to live in certain towns in southern Italy.
As is the case with any American citizen living abroad, you need to file your taxes in the U.S. too. It can be difficult to navigate both the U.S. and Italian tax codes at once, so consider working with a financial advisor or tax professional in the U.S. who can help you out.
Healthcare in Italy
The World Health Organization (WHO) ranks Italy’s healthcare system second-best on its list of the countries with the top health system performance. While you’ll need proof of current EU-wide valid health insurance to obtain an Italian visa, you can apply for Italian nationalized healthcare once you’re a resident. English-speaking doctors also tend to reside in larger cities, like Rome or Lazio.
You unfortunately won’t be able to take advantage of Medicare in Italy. You may also need private insurance to cover things not covered by the Italian national plan. For instance, this type of Italian private insurance can cover specialist fees and private hospital treatment. These plans will likely run you from about $1,482 to $2,622.
Safety in Italy
A 2022 Global Peace Index study from the Institute for Economics & Peace looked at 23 different factors related to overall safety in a country. Some of the most prominent categories include access to weapons, violent crime, political instability, terrorist activity, military expenditure and more.
Italy came in as the 32nd safest country on a list of 163 nations around the world. That puts it ahead of Great Britain and Greece. In other words, safety should not be a major concern if you’re considering retiring in Italy.
An abundance of visually captivating landscapes, rich history and unique food makes Italy a top retirement destination worldwide. As a result, it can be a little difficult to obtain a visa. That’s because you’ll likely need to report more assets and income than you would elsewhere. All that said, the tax incentives and allure of an Italian lifestyle can be irresistible.
Tips for Achieving Your Retirement Goals
- Retiring is difficult enough to do on its own, let alone in another country like Italy. Luckily, a financial advisor can help you prepare for this transition. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- It’s tough to plan for your retirement if you aren’t sure what kind of costs you’ll have. To get an idea of what to expect, stop by our retirement calculator. To use this, you’ll need a few details. These include where and when you want to retire and how much you have in savings.
Photo credit: ©iStock.com/mammuth, ©iStock.com/Elena Odareeva, ©iStock.com/Aleh Varanishcha