If you’re well off and you’ve always dreamed of living on the Riviera, glamorous Monaco might be your ideal retirement destination, with world-renowned events such as the Formula 1 Grand Prix, the Monte-Carlo Rolex Masters tennis tournament and the Monaco Yacht Show, and attractions like the Casino de Monte-Carlo. In this wealthy principality, you won’t have to fear for your safety or wonder when the electricity will come back on, and the country’s healthcare, rule of law, financial institutions and transportation networks are sound.
While Monaco, the world’s second-smallest independent state, is not part of the European Union, it is nearby many other desirable European destinations. Monaco’s official language is French, but English is a close second, so you’ll be able to get by if you speak only English. The country has mild, wet winters and warm, dry summers.
Visas and Residency
You don’t have to become a resident to buy or rent property or to stay in Monaco for up to three months. But if you want to live there year-round, you’ll need to get a residence card, and – unless you’re a citizen of the European Union, Liechtenstein, Norway or Iceland – that means getting a long-stay visa from France first.
Get this document from your nearest French consulate. You’ll need to prove your identity, show that you have a place to live in Monaco, prove that you can support yourself financially and prove that you don’t have a criminal record. You’ll have to renew your residence card repeatedly, first at one-year intervals, then at three-year intervals. Eventually you’ll be eligible for a 10-year residence card. More than 60% of Monaco’s population of just under 40,000 are immigrants, so you’ll be in good company.
Cost of Living
If you’re coming from the United States, you'll be subject to the dollar's relationship to the euro, which varies slightly with the economic times. You won’t need to own a car, though; the nation is so small – 2 square kilometers, or about three times the size of the national mall in Washington, D.C. – that you could cover it all on foot. There are even elevators to take you up steep streets. There’s an inexpensive bus system as well, and you can always take the tourist train or even hire a limo. Most groceries are priced reasonably, as are many restaurant meals.
Housing will be your biggest expense. In 2018, buying an apartment in Monaco costs about $6,000 per square foot. Compare that to about $1,300 in New York City and about $700 in Los Angeles. Or to the price of other European cities, like London at $1,600 or Paris, where you can buy an apartment for about $1,100 per square foot.
Indeed, you might feel out of place in Monaco if you aren’t rich. While the United States has the greatest number of ultra high net worth individuals in the world, Monaco has the highest concentration of them, with 574 ultra high net worth individuals per 100,000 residents, compared with 12.7 per 100,000 in the United States.
Many very wealthy people choose to live in Monaco because it has no income tax, unless you're a French citizen, and no capital gains tax. It also has a limited estate tax – you can leave your holdings to your spouse and direct heirs and pay no taxes. You will pay taxes when you buy things, as Monaco has a value-added tax (VAT) of 20%. Depending on your residency status and sources of retirement income, you might also pay taxes to your home country. U.S. citizens are required to pay U.S. taxes even if they live abroad.
You might be wondering if a foreigner can become a citizen of Monaco, not just a resident. The requirements to become a naturalized citizen of Monaco are that you have lived in Monaco for at least 10 consecutive years, that you renounce your citizenship to any other country and that becoming a naturalized citizen of Monaco will relieve you of any military service obligation in your former country. A woman can become a citizen of Monaco by marrying a Monégasque man (while Monaco has a generally favorable record on LGBT rights, it is the final Western European country not to recognize same-sex marriages), and any foreigner can appeal directly to the Prince for citizenship without meeting the 10-year residency requirement. However, the Prince has the right to refuse any request for naturalization for any reason, even if you meet the basic requirements.
The Bottom Line
Monaco offers a pleasant climate, modern comforts and glamour. It also has plenty of activities to keep you entertained, plus it’s a short flight or drive to other exciting European destinations, like the French Riviera, which is just down the hill.
If you can afford the high cost of housing and feel comfortable among the elite, Monaco might be the right retirement destination for you.