Retiring in Spain: A Guide for US Expats

With its sunny climate, rich cultural heritage, and relaxed Mediterranean lifestyle, Spain has become one of Europe’s most popular destinations for American retirees. From the vibrant streets of Madrid and Barcelona to the beaches of the Costa del Sol and the historic towns of Andalusia, Spain offers an appealing blend of beauty, comfort, and affordability.

As of 2024, an estimated 50,000 Americans live in Spain according to Spain’s National Statistics Institute (INE), drawn by its moderate cost of living, excellent healthcare system, and accessible long-stay visa options.

In this guide, we’ll cover everything US expats need to know before retiring in Spain, including visa pathways, healthcare access, Social Security, taxes, and how retirement income is treated both locally and in the US.

How to Retire in Spain

For Americans dreaming of a culturally rich, sunny, and relaxed retirement in Europe, Spain offers one of the most welcoming and straightforward paths to settling down. As a member of the Schengen Area, living in Spain also gives you the freedom to travel throughout most of Europe without additional visas.

Before you start planning your move, it’s helpful to know which visa you will qualify for.

Today, the Non-Lucrative Visa (NLV) is the primary option for retirees, allowing you to live in Spain as long as you don’t work and can demonstrate adequate financial means. If you have a steady income from Social Security, pensions, or investments, this will be the visa that best fits your needs.

Spain previously offered an investment-based residency route called the Golden Visa, but the government discontinued the program for new applicants in April 2025.

Beyond the paperwork, consider the kind of life you hope to build in Spain: a laid-back coastal town on the Costa del Sol, a dynamic city apartment in Madrid or Barcelona, or a slower-paced village surrounded by olive groves and historic charm. Clarifying these preferences early makes the visa process and your transition to life in Spain much smoother.

Visa Options in Spain for US Retirees

With Spain’s investment-based residency route discontinued, retirees now rely on the Non-Lucrative Visa (NLV). Below, we break down the essentials to help you understand the process.

Non-Lucrative Visa (NLV)

The Non-Lucrative Visa is the most common route for retirees or financially independent Americans who can support themselves without working in Spain. Applicants must demonstrate sufficient financial means, typically through income sources such as Social Security, pensions, rental income, investment returns, or retirement savings. You must also provide private health insurance, a criminal background check, and proof of accommodation.

The Non-Lucrative Visa is initially valid for one year. You can renew it in two-year increments as long as you continue to meet the financial requirements and spend more than 183 days per year in Spain. After five years of continuous residency, you can apply for permanent residency. Once you have maintained legal residency in Spain for ten years, you may be eligible to apply for Spanish citizenship.

Costs and Processing Times

Processing for Spain’s Non-Lucrative Visa (NLV) typically takes 1–3 months, depending on the consulate.

Applicants must demonstrate a minimum monthly income of €2,400 (approximately USD $2,700) for the main applicant, plus €600 per month (approximately USD $700) for each dependent family member.

Application Costs:

• Visa Fee: – USD $128.50 (varies by consulate and nationality)
• Residence Permit Fee: – USD $133.34

Note: Costs vary based on your nationality, the Spanish consulate where you apply, and euro-to-dollar exchange rates at the time of payment.

Spanish Tax System

Spain determines tax residency based on physical presence or personal/economic ties. The general rule is spending more than 183 days in Spain during a calendar year, or having your main economic interests or family household located there.

Spanish tax residents are taxed on their worldwide income, while non-residents are only taxed on Spain-sourced income. For retirees, this often includes pensions, investment income, rental income from property in Spain, or US Social Security received while residing in Spain.

Spain uses a progressive income tax system, combining both state and regional rates. In total, the combined rates range from about 19% to around 47%, depending on the autonomous community (region) and the income level. Certain income categories, such as capital gains, interest, and dividends, are taxed at flat rates ranging from 19% to 28%, depending on the amount.

The Spanish tax year runs from January 1 to December 31. Individual income tax returns are typically filed in the spring, with the filing deadline usually falling on June 30 of the year following the tax year.

Retirement Income and Pensions in Spain

Retirees must consider how both the IRS and Spain treat their retirement income once they move abroad. Here are the key points:

• US retirement income is still taxed by the IRS. Traditional 401(k) and IRA withdrawals are taxed as ordinary income, while contributions reduce taxable income. Qualified Roth IRA withdrawals remain tax-free provided you’re at least 59½, and the account has been open for at least five years. Contributions are made with after-tax dollars.
• Spain may tax US retirement accounts differently. Some tax-deferred accounts in the US may be taxable locally, including contributions and investment growth; the exact treatment may depend on your residency or domicile status.
• Foreign pensions are usually taxable in the US. Contributions and growth inside a foreign pension may be taxable in the US, and distributions are generally treated as ordinary income unless a tax treaty provides relief.
• US retirement accounts cannot be rolled into Spanish pensions without tax consequences. If you move money into a foreign pension plan, the IRS does not consider it a qualified rollover. Instead, the transfer is treated as a taxable distribution and taxed as ordinary income. It may also expose the assets to complex Passive Foreign Investment Company (PFIC) rules if invested in foreign mutual funds (more on PFICs below).

Social Security Benefits in Spain

The good news is you can still collect US Social Security benefits while living in Spain. The Social Security Administration pays benefits to retirees in over 150 countries, including Spain. Payments can usually be deposited directly into a local Spanish bank account, making it easy to receive your benefits abroad.

Your Social Security benefit amount doesn’t change just because you live overseas. However, benefits may still be taxable in the US depending on your total income level.

If you become a Spanish tax resident, Spain may also tax your Social Security income.

US Taxes for Retirees Living in Spain

Living in Spain doesn’t exempt you from US taxes. Even after retiring abroad, US citizens and Green Card holders must continue filing annual US tax returns, regardless of their location.

Most retirees rely on the Foreign Tax Credit (FTC) to offset taxes paid to Spain, since it covers pension, Social Security, and other passive income. For those who still have limited earned or part-time income, the Foreign Earned Income Exclusion (FEIE), which allows you to exclude $130,000 in 2025, may apply instead.

The US–Spain tax treaty helps determine taxing rights on pensions, Social Security, and other retirement income, and coordinates the rules to prevent double taxation. In short, you’ll still file with the IRS each year, but with the right credits or exclusions, most retirees don’t end up paying tax twice.

Don’t Forget About State Taxes

Some “sticky states”, like California, New York, and Virginia, may still consider you a resident for tax purposes if you keep ties there. If you’re planning a permanent move abroad, it’s worth cutting those ties.

For details on state residency rules, visit our State Guides.

Additional Reporting: FBAR and FATCA

It’s common for retirees abroad to keep money in foreign bank or investment accounts for everyday spending, savings, or to receive income, such as pensions, Social Security deposits, or dividends. If the combined balance of your foreign accounts exceeds $10,000 at any point in the year, you must file an FBAR (Foreign Bank Account Report).

Retirees living in Spain may also need to file Form 8938, the Foreign Account Tax Compliance Act (FATCA), if their foreign financial assets exceed $200,000 at year-end or $300,000 at any time during the year.

Investing in Spain as a US Retiree

When it comes to investing while living in Spain, US retirees need to be especially cautious with foreign mutual funds, Exchange-Traded Funds (ETFs), and other pooled investments. The IRS generally classifies these as Passive Foreign Investment Companies (PFICs), which are subject to punitive tax treatment and complex reporting requirements. Each PFIC must be reported annually on Form 8621, and income is often taxed at the highest ordinary rates, sometimes with interest charges added. This treatment can quickly erode or even wipe out any investment gains, leaving you with little benefit.

Because of this, it’s recommended that you stick with US-domiciled mutual funds and ETFs. These remain under familiar US tax rules and don’t trigger PFIC reporting, making compliance far more straightforward and more tax-efficient on the US tax side. It’s wise to review local tax reporting rules as well.

For personalized help building a compliant retirement investment strategy, visit MyExpatInvest.

Healthcare in Spain for US Expats

Spain offers one of the best public healthcare systems in Europe, known as the Sistema Nacional de Salud (SNS). Non-Lucrative Visa and Golden Visa holders gain access only after authorities approve and register their residency, so coverage does not begin immediately.

You must provide proof of private health insurance when applying for either visa. This covers the gap before you can register with the SNS, which typically occurs within a few weeks to a few months after arrival.

Many retirees choose a global health insurance plan to ensure full coverage while abroad, though private insurance in Spain is generally affordable and easy to arrange until public healthcare access begins. Popular options include Adeslas, Sanitas, and Asisa, which offer comprehensive, visa-compliant coverage.

Note: Because Medicare does not cover healthcare abroad, you must maintain private health insurance until you are fully registered in Spain’s system.

Cost of Living in Spain

Spain remains relatively affordable compared to much of Western Europe, though prices vary widely by region. Major cities like Madrid and Barcelona tend to be more expensive, while coastal towns, smaller cities, and interior regions offer excellent value for retirees. Overall, a couple can live comfortably on €2,000 to €2,800 (about $2,300 to $3,200) per month in most areas, including cities such as Valencia, Seville, Málaga, Alicante, and many mid-sized coastal or inland regions. Expect to budget more if you plan to live in upscale hotspots like central Madrid or Barcelona. These figures include rent, utilities, groceries, transport, and other basic expenses.

Housing is typically the largest expense. Rentals in smaller towns or mid-sized cities often start around €600 to €800 (about $700 to $900) per month, while similar apartments in Madrid, Barcelona, or popular coastal areas usually range from €1,500 to €2,500 (about $1,700 to $2,800), depending on neighborhood and size. The cost of living is significantly less than in the US, and many retirees find they can enjoy a higher quality of life in Spain for far less than they would spend back home.

Benefits of Retiring in Spain

Spain has long been one of Europe’s top retirement destinations, and for good reason. The country offers an appealing mix of comfort, culture, and natural beauty that makes daily life both vibrant and deeply enjoyable.

Some of the biggest draws include:

• A warm Mediterranean climate with abundant sunshine and mild winters.
• Exceptionally diverse landscapes — from sandy beaches and olive groves to mountain ranges, volcanic islands, and dramatic coastal scenery.
• Historic cities and charming towns rich in art, architecture, and centuries-old traditions.
• A world-famous culinary scene, with regional specialties like tapas, paella, jamón ibérico, and fresh seafood from coast to coast.
• Renowned wines from Rioja, Ribera del Duero, Priorat, and many other celebrated regions.
• A lively cultural atmosphere, showcased through flamenco, fiestas, local markets, and Spain’s strong sense of community.
• Excellent public and private healthcare, modern infrastructure, and a cost of living that remains attractive compared to much of Western Europe.
• Spain has one of the largest expat retiree communities in Europe, making it easy to settle in and find support.

Best Places to Retire in Spain

When choosing where to live in Spain, think about the lifestyle you want: coastal relaxation, vibrant city life, or a quiet countryside pace. Spain’s diverse regions make it easy to find a place that fits your priorities and retirement goals.

Costa del Sol

Spain’s most famous retirement region, known for year-round sunshine, sandy beaches, golf courses, and a large expat community. Places like Málaga, Marbella, and Fuengirola offer a relaxed Mediterranean lifestyle with excellent healthcare and amenities.

Valencia

A vibrant yet affordable coastal city with great public transport, a mild climate, and excellent healthcare. Valencia combines beach living with culture, green spaces, and a slower pace than Madrid or Barcelona.

Alicante / Costa Blanca

Known for its warm climate, friendly expat presence, and lower cost of living. Towns like Alicante, Jávea, and Altea are popular with retirees seeking seaside living without big-city prices.

Madrid

Spain’s capital offers world-class museums, dining, and public services. While more expensive, it’s ideal for retirees who want culture, international connections, and excellent healthcare access.

Barcelona

Famous for its architecture, beaches, and cosmopolitan living. Barcelona suits retirees who enjoy vibrant urban life paired with Mediterranean weather and walkable neighborhoods.

Mallorca (Balearic Islands)

A scenic island with crystal-clear waters, charming villages, and a relaxed, upscale lifestyle. Ideal for retirees seeking nature, tranquility, and strong expat networks.

Canary Islands

With a mild climate year-round, volcanic landscapes, and a slower pace of life, the Canary Islands (like Tenerife and Gran Canaria) are perfect for retirees who want warm weather and affordability.

Enjoy Your Retirement in Spain

Spain offers retirees an exceptional quality of life, from affordable living and excellent healthcare to a vibrant culture and relaxed Mediterranean lifestyle. With one of the largest expat retiree communities in Europe, settling in and finding your place in Spain feels both welcoming and effortless.

MyExpatTaxes helps you make the most of your new chapter in Spain by ensuring your US tax filings are simple, accurate, and fully compliant. Our team helps you unlock every benefit available, so you can focus on enjoying your retirement abroad.

With MyExpatTaxes, many expats discover they owe little or even no US tax. Sign up today and keep more of your money in retirement.

Frequently Asked Questions