Those dreaming of the expat life for retirement may consider Italy near the top of their list of destinations; the country ranked 16th on International Living’s list of Best Places to Retire for 2020.
And if you can afford to retire in the United States, you can likely afford to retire in comparable style in most places in Italy. There’s one main difference: If you run short on cash, it’s not going to be easy to pick up a part-time job in Italy; the unemployment rate stood around 9.7% in 2019, according to Eurostat. Besides, foreigners need a special visa to work legally in Italy. (If you have the right skill set and can score some remote work online from Italy, that’s a different story.)
Nevertheless, the current comparable exchange rate for Americans with retirement savings or income in U.S. dollars compared to the euro, combined with the troubled Italian economy, have made it a relatively affordable place to live.
- If you're looking to retire abroad, you might want to consider spending your later days in Italy.
- Italy is consistently ranked among one of the top retirement destinations for expats.
- The country is a member of the European Union, but tends to have a lower cost of living than other EU countries.
- You'll need to arrange for a residence visa and show that you have enough income and assets to last you in retirement.
Some Sample Costs
Here are some sample numbers from 2020 provided by Numbeo.com, which tracks consumer prices globally. The average monthly rent for a one-bedroom apartment in Italy ranges from about $519 outside a city to $680 in a city center. Buying an apartment costs about $214-$366 per square foot, depending on location. A meal out for two at a mid-level restaurant averages $55. (All prices were converted from euros.)
For comparison, here are the averages for the United States. A one-bedroom rental costs about $1,089 a month outside a city, on average, and $1,357 a month in a city center. Buying an apartment averages about $193-$265 per square foot, depending on location. That meal for two at a mid-level restaurant costs about $55.
If you’re an American, you’ll see the limitations of an “average” price. There are big differences between San Francisco and San Antonio, for instance, in cost of living, among other things. The same regional variations apply to Italy. But these averages can be used in a back-of-the-envelope estimate of how much income you need to retire in Italy. Using the standard affordability measure that income should be four times your rent, you need a minimum annual income of about $24,912-$32,640 in order to live in modest comfort in Italy.
However, keep in mind that this is just the amount needed to cover annual expenses; the Italian government may require that you show significantly more income to obtain a visa.
If you keep up with the international news, you know that Italy does not need any additional strain on its social services. So, although an American can visit Italy for up to 90 days with no special visa, permission to live there longer term requires proof of sufficient independent income.
For most Americans, that means obtaining an Italian Elective Residence visa. Applicants must prove that they have stable and adequate income and assets to live in Italy. No minimum is stated, and individuals are evaluated on a case-by-case basis. But keep in mind that income from current employment does not count, and this visa does not permit you to take a job in Italy.
The required documents include proof of income and assets, proof of a leased or owned home in Italy, proof of overseas health insurance covering 100% of all medical expenses, and even a confirmed flight reservation.
To get the process started, an applicant must first request an entry permit at an Italian Consulate in the United States. Once the entry permit is obtained, the applicant can go to Italy, file for a document called a “permit of stay” and then apply for the actual residency visa.
The law also requires Americans living in Italy to sign an “integration agreement” and earn 14 credits (you get 16 credits for signing the agreement for a total of 30 credits) over a two-year period by taking classes or passing a test, in Italian, on the country's civil structure and culture, and completing a number of other requirements.
Italy on a Budget
Those required Italian language lessons will come in handy for a retiree on a budget in Italy, as living like an Italian in Italy will cost a lot less than living like an American in Italy.
As is true in virtually any developed country, Italy has every luxury that an American could want, for a price. It has high-rise apartment buildings equipped with air-conditioning, elevators, and dishwashers, often in enclaves that are dominated by foreign business-people, well-heeled tourists, and expats.
Or, you can live like an Italian. If you speak the language, you can bypass the expensive help of businesses that cater to English-speaking expats. Whole neighborhoods that you didn’t know existed will be open to you, and the restaurants that serve them will be better and cheaper.
The Bottom Line
Given the current exchange rate and economic conditions in Italy, you can expect to retire as well there as in the United States, or better, provided you can meet the income requirements for a visa.