How to retire in Spain from the US

Evidence tier: A1 Evidence type: Auto-discovered official publication Source: Wise Blog Official publication date: 2026-06-29 Captured: 2026-07-16T20:32:08.212Z

Spain ranks among the top retirement destinations for Americans, and it makes sense why. You get warm weather, excellent healthcare, walkable cities, and a pace of life built around long meals and siestas.

But retiring abroad raises many questions. Which visa lets you stay long-term? How far will your Social Security check stretch? What happens with your pension, Roth IRA, and US taxes once you're a Spanish resident?

This guide walks you through everything that you need to know.

We'll also introduce the Wise account, which allows you to send, spend, and receive your money across the globe in over 40 currencies – all at the fair mid-market rate.

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The financial reality: cost of living in Spain vs the US

Money goes further in Spain.

On average, the cost of living runs 36% lower than in the US, and rent is 66% cheaper. For a single retiree, estimated monthly costs land around 817 USD, not counting rent.¹²

Here's how everyday retiree expenses in Spain compare to the US:

<table><tbody><tr><td><strong>Expense¹</strong></td><td><strong>Spain</strong></td><td><strong>US</strong></td></tr><tr><td>1-bedroom apartment (city center)</td><td>1,034 USD</td><td>1,647 USD</td></tr><tr><td>3-bedroom apartment (city center)</td><td>1,628 USD</td><td>2,650 USD</td></tr><tr><td>Meal at an inexpensive restaurant</td><td>17 USD</td><td>20 USD</td></tr><tr><td>Meal for 2, mid-range restaurant (3 courses)</td><td>57 USD</td><td>77 USD</td></tr><tr><td>Monthly transport pass</td><td>34 USD</td><td>65 USD</td></tr><tr><td>Basic utilities (monthly)</td><td>151 USD</td><td>215 USD</td></tr><tr><td>Mobile phone plan (monthly)</td><td>18 USD</td><td>61 USD</td></tr><tr><td>Dozen eggs</td><td>3 USD</td><td>4 USD</td></tr><tr><td>Bottle of mid-range wine</td><td>6 USD</td><td>15 USD</td></tr></tbody></table>

Cost of living adds up fast for retirees living on fixed incomes.

The average Social Security benefit runs around 2,071 USD monthly in 2026.³ In much of the US, that barely covers rent. In Spain, the same check can cover a city-center apartment, groceries, utilities, transportation, and regular dining out, with room to spare in smaller cities.

For retirees living on US Social Security, pensions, or investment income, your USD converts into a comfortable Spanish lifestyle that the same income wouldn't be able to buy back home.

Spain's retirement visa: the Non-Lucrative Visa (NLV)

The Non-Lucrative Visa (NLV) is the standard route for Americans retiring in Spain.

It lets you live in the country full-time as long as you can support yourself with income earned outside Spain. You can't get a job in Spain, but you can live on your pension, Social Security, and investments.

The visa is built around Spain's IPREM, the official income index.

To qualify for the Non-Lucrative Visa, you need to prove 400% of the annual IPREM for the main applicant, plus 100% of the IPREM for each family member you bring.⁴

Here's what the 2026 IPREM thresholds require:⁴⁵

<table><tbody><tr><td><strong>Household</strong></td><td><strong>Minimum per year</strong></td><td><strong>Roughly per month</strong></td></tr><tr><td>Single applicant</td><td>28,800 EUR</td><td>2,400 EUR</td></tr><tr><td>Applicant + spouse/dependent</td><td>36,000 EUR</td><td>3,000 EUR</td></tr><tr><td>Each additional dependent</td><td>+7,200 EUR</td><td>+600 EUR</td></tr></tbody></table>

You can show this through income, savings, or a combination of both.

Keep in mind that consulates often want to see a buffer above the minimum, and they look at how stable and accessible your funds are, not just the total balance on one day.

Spain Retirement Visa Requirements and Documentation

The NLV has a core rule that your income must be passive.

You can live off pensions, Social Security, rental income, dividends, or investment returns. What you can't do is work, and that includes remote work or freelancing for clients back home.

Even though the money comes from outside Spain, the Spanish government treats any active work as a violation of the visa's terms.

In addition to proving your income, you'll also need to get together a few different documents:⁶

• Private Spanish health insurance with full coverage and no copayments
• A clean FBI criminal history record
• A medical certificate confirming you're free of diseases that would pose a public health risk

For Spanish health insurance, the costs climb with age.

A standard private health insurance policy runs roughly 1,200 EUR to 1,800 EUR per year, but premiums rise sharply once you pass 65. Applicants aged 70 and above can pay 2,500 EUR or more annually.⁶

Budget for this as a fixed yearly expense, and shop around to find the best deal.

Pitfalls of retiring to Spain as an American

Retiring in Spain as an American can be a great idea, but it can also come with a few financial traps that catch many Americans off guard. Let's take a closer look at them.

The 183-day rule

Once you pass 183 days in Spain within a calendar year, Spain considers you a tax resident.

That status means Spain taxes your worldwide income, including foreign pensions and US Social Security benefits, at progressive rates from 19% to 47%.⁷

Since the NLV essentially requires you to live in Spain, most retirees become tax residents by default. That said, some government pensions get better treatment under the US-Spain tax treaty, so check which rules apply to your income.

Roth IRA taxes

In the US, Roth IRA withdrawals are tax-free because you already paid tax on the contributions. Spain doesn't see it that way.

Spanish tax authorities generally don't recognize the Roth's tax-free status and may tax your withdrawals as savings or investment income at rates between 19% and 28%.⁸

Your 401(k) and traditional IRA are treated differently. Spain usually classifies these as pension income, applies a reduction, and taxes the rest at progressive rates that can reach 47% in some regions.⁸

Wealth tax

Spain charges an annual wealth tax on global assets above certain thresholds. These thresholds vary by region, and depending on where you settle and how much you own, this can add a meaningful yearly cost that doesn't exist in the US.

Luckily, your primary residence may be exempt up to 300,000 EUR.⁶

Exchange rates and bank fees

Your income arrives in USD, but you spend in EUR.

Every conversion through a bank costs you twice, once through transfer fees and again through an exchange rate marked up above the mid-market rate. Exchange rates also shift, which means that the EUR value of your fixed USD income can rise and fall month to month.

Over the course of your retirement, these costs can drain thousands from your retirement savings.

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Where to live: best places to retire in Spain

There are many places in Spain for American retirees to choose from. The right option depends on your priorities, such as proximity to quality hospitals and whether you want to be close to the shore.

Here are some of the best places in Spain to live on a retirement income.

Alicante

Alicante sits on the Costa Blanca and draws one of Spain's largest foreign retiree populations, thanks to mild winters and a long beachfront promenade.

The region has both solid public hospitals and private clinics, and the international airport is convenient for flights back to the US.

You'll find established expat networks, English-speaking services in many areas, and a Mediterranean climate that suits anyone who wants to spend retirement outdoors.

The estimated monthly costs for a single person are 829 USD, excluding rent.⁹

Valencia

Valencia gives you big-city resources without big-city prices, which is part of why retirees consistently rank it among Spain's best places to retire. It has excellent healthcare, a beautiful historic center, miles of cycling paths, and a beach within easy reach.

The pace feels calmer than Madrid or Barcelona, but you still get cultural events, good restaurants, and reliable public transport. For retirees who want coastal living with full urban infrastructure behind it, Valencia hits a sweet spot.

The estimated monthly costs for a single person are 824 USD, excluding rent.¹⁰

Málaga

Málaga is a city in the Costa del Sol, where you'll find warm weather most of the year. The city has become more modern over the past decade, and you'll find strong medical facilities, a busy international airport, and a large community of foreign retirees.

Many Americans settle in Málaga for the beaches, but you'll also enjoy museums, a walkable old town, and easy day trips along the coast.

The estimated monthly costs for a single person are 823 USD, excluding rent.¹¹

Madrid

Madrid, the capital of Spain, is a great place for retirees who want urban energy, world-class hospitals, and the convenience of excellent public transport.

You won't be close to the beach, but in exchange, you get the deepest concentration of medical specialists and cultural institutions in the country.

That said, the trade-offs are a higher cost of living and a continental climate with cold winters and hot summers. But if proximity to top healthcare and an international community matters more to you than coastal weather, Madrid is hard to beat.

The estimated monthly costs for a single person are 933 USD, excluding rent.¹²

Barcelona

In Barcelona, you get Mediterranean beaches together with the resources of a major international city, including top-tier hospitals and a large English-speaking community. However, costs run high, and the tourist crowds can feel relentless in peak season.

If you are looking for a combination of sea, architecture, healthcare, and connectivity, many American retirees tend to gravitate to Barcelona despite the price.

The estimated monthly costs for a single person are 932 USD, excluding rent.¹³

Palma de Mallorca

Palma offers island living with surprisingly robust services for a place of its size. The Balearic capital has good hospitals, an established expat scene, and direct flights across Europe, making it less isolated than you'd expect from an island setting.

It's the priciest option on this list, and that's the trade-off for island life. But for retirees who want sea air, a mild climate, and a solid community without sacrificing healthcare access, Palma earns its premium.

The estimated monthly costs for a single person are 968 USD, excluding rent.¹⁴

Santa Cruz de Tenerife

Santa Cruz de Tenerife sits on the largest of the Canary Islands, where warm temperatures hold steady all year. The year-round mild weather is the main draw for retirees, especially those who want to spend their days outdoors without having to deal with summer extremes.

You get beaches and volcanoes, but also good hospitals and direct flights to the mainland and the rest of Europe. Overall, there's enough infrastructure to make daily life comfortable.

The estimated monthly costs for a single person are 879 USD, excluding rent.¹⁵

San Sebastián

San Sebastián, in Spain's Basque Country, offers a different climate and culture from the sun-soaked south. It's greener, cooler, and famous for its food scene and elegant bay.

Healthcare in the region is among the best in Spain, and the walkable city, world-class cuisine, and beautiful coastline are all major draws for retirees.

That said, it's quite expensive, with the estimated monthly costs for a single person averaging 889 USD, excluding rent.¹⁶

Smaller towns to consider

Cádiz, Cáceres, Cuenca, Jaén, and Mérida stretch your budget further and immerse you in more traditional Spanish life.

The trade-off is fewer English speakers and, in some cases, longer drives to major hospitals, so think about healthcare access carefully if you have ongoing medical needs.

Managing your finances between the US and Spain

Once you've settled on a city, the practical side of retirement kicks in.

Your retirement income is in USD, but your rent, groceries, private health insurance premiums, and tax bills all come due in EUR. Converting your money from one currency to another comes with a cost.

In addition to charging transfer fees, banks also convert your USD at a rate marked up above the mid-market rate, so you lose money on every Social Security deposit or pension payment you bring into Spain.

Wise can help you spend less money on fees and currency exchange rate markups.

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Sources

1. Numbeo - Cost of Living Comparison Between Spain and the United States
2. Numbeo - Cost of Living in Spain
3. Social Security Administration - What is the average monthly benefit for a retired worker?
4. CostaLuz Lawyers - IPREM 2026 for Spain’s Non-Lucrative Visa
5. IPREM - Home Page
6. Taxes for Expats - How to Retire in Spain
7. Experts for Expats - Taxes in Spain
8. PCC Wealth - Retiring to Spain from the USA
9. Numbeo - Cost of Living in Alicante
10. Numbeo - Cost of Living in Valencia
11. Numbeo - Cost of Living in Malaga
12. Numbeo - Cost of Living in Madrid
13. Numbeo - Cost of Living in Barcelona
14. Numbeo - Cost of Living in Palma de Mallorca
15. Numbeo - Cost of Living in Santa Cruz de Tenerife
16. Numbeo - Cost of Living in San Sebastian

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