Retirement Abroad: This Popular European Country Offers Lower Living Costs

More Americans are looking at European retirement destinations for cheaper living, and, luckily, several European countries with rich cultures serve as great places to retire cheap. Italy, in particular, stands out as a strategic choice for cost-conscious retirees. Per the Italian National Institute of Statistics (ISTAT), average Italian household expenses were €2,728 (about $3,165) a month in 2023. That reflects significant cost savings compared to the U.S., where, per the Bureau of Labor Statistics, households spent around $77,280 annually in 2023 — or roughly $6,440 each month. This means American retirees could potentially lower their monthly expenses by more than half by moving to Italy.

Part of this is because food is more reasonable in Italy. Eurostat found that non-alcoholic beverages cost 18% less than the EU average in 2023, unlike Ireland at 40% above average, while alcohol prices are 16% below the EU average. Italy's tax break program could also solidify the decision for many people — the country has a flat 7% tax on foreign income for up to 10 years. This applies to retirees who relocate to specific central Italian regions or towns with fewer than 20,000 people. With smart international Social Security retirement planning, this can allow Americans to get the most out of their retirement savings abroad.

Southern Italy offers the most affordability for retirees, with Calabria's coast offering the cheapest rental prices in southern Italy. Calabria had the lowest asking prices at €950 (about $1,102) per square meter in July 2025. Molise came in second at €1,035 ($1,201) per square meter, with Sicily at €1,171 ($1,359). Compare that to more northern areas, such as Trentino Alto Adige for €3,556 ($4,126) per square meter, and you could be paying nearly four times as much.

Southern Italy isn't just about cheaper homes. Calabria's Tropea, known as the "Pearl of Tyrrhenian," mixes medieval streets with dramatic coastline. Eating out there is easy on the wallet too, around €10–20 (about $12-23) a meal. Sicily offers a tourist-focused atmosphere. Taormina leans on its Greek theaters, lively expat crowd, and solid healthcare system. The tradeoff is higher housing prices, pushed up by heavy tourist demand. Molise feels quieter. In Campobasso, life runs at a village pace, with average monthly costs sitting near $1,074 for one person. Public transport is just €1.29 (about $1.50) a ride, and locals have life expectancy of around 82 years. With Social Security checks of $1,500–2,000, you'd still have cash for trips, hobbies, and a rainy-day fund while soaking up Italian life.

Americans can buy property in Italy without Italian roots or substantial affluence. Foreigners get the same civil rights as Italian citizens under reciprocity rules, meaning U.S. citizens have equal property ownership rights. With that said, you should start the process six months before your move for a smoother transition. You'll need to get a codice fiscale — your tax ID number from the Italian Revenue Authority — for handling administrative tasks.

Italy's property market is favorable for buyers right now. Southern regions saw 5.1% annual price growth in Q4 2024, according to Italian National Institute of Statistics' official House Price Index. Nonetheless, getting professional help is important. Federazione Italiana Agenti Immobiliari Professionali (FIAIP) connects U.S. buyers with bilingual professionals from their 10,000+ members and 15,200 agencies spread across Italy. Their international services work with foreigners. Italy's legal setup protects foreign property rights.

Property purchase can support your residency application but doesn't automatically qualify you. The elective residence visa requires about €31,000 (roughly $35,972) in yearly passive income, per person, as of 2025. However, if you're hoping to maintain your retirement lifestyle, you'll need to make sure you have adequate savings, since this visa does not allow you to work. Pensions/retirement accounts, annuities, rental income, and investment returns are all accepted to meet this requirement — but not job income.