Retirees moving abroad to avoid RMDs

What happened: Retirees are exploring international retirement options to avoid U.S. Required Minimum Distributions (RMDs). Portugal's Non-Habitual Resident (NHR) tax regime, which closed to new retirees in 2026, exposed IRA and Social Security withdrawals to a progressive tax scale reaching 48%. Meanwhile, Costa Rica's territorial tax system exempts foreign-source income, attracting retirees with $500,000. Ecuador's Pensionado visa requires $1,446 monthly income, affordable for a $350,000 portfolio. Spain's Costa del Sol offers a $35,000 lifestyle on a $500,000 portfolio, but only in affordable towns. Some retirees are using qualified charitable distributions (QCDs) to avoid RMD taxes.

Market impact: This narrative impacts international real estate markets, particularly in Portugal, Costa Rica, Ecuador, and Spain, as retirees seek affordable living options. It also affects U.S. financial services providers, as clients explore strategies to mitigate RMDs, such as Roth conversions and QCDs. Companies offering international retirement planning services may see increased demand.

What to watch next: The IRS's guidance on QCDs and their potential expansion. Portugal's response to the NHR regime's closure and any new tax incentives for retirees. Costa Rica's potential changes to its territorial tax system. The U.S. government's stance on international retirement and any updates to RMD rules. Upcoming earnings from international real estate investment trusts (REITs) and financial services providers.