Beautiful weather, an affordable cost of living, and a relaxed vibe await retirees on these Caribbean islands. [Pat Doherty - Travel and Leisure]
When retirement approaches, many begin to consider where they want to spend their golden years. While some retirees are most comfortable in the familiar surroundings of their hometowns, others envision themselves in an idyllic location — one that might offer beaches, sunshine, delicious food, palm trees, and a laid-back atmosphere. Perhaps they fell in love with a place they visited, and, for many, that place might be one of the islands in the Caribbean.
For some retirees, the goal is to reduce their living expenses and live comfortably on a limited fixed income. Others, meanwhile, prioritize luxury and amenities, ideal weather, and beautiful scenery. Living costs, ease of obtaining residency, tax benefits, financial requirements, expat communities, residential developments, and lifestyles vary among the islands, so a solid amount of research should go into making this important decision.
So, before you go out and buy your “I Live Where You Vacation” T-shirt, an extended visit with input from locals and expats is highly recommended. The U.S. State Department also offers advice about what to consider before retiring abroad. With insight from experts on the subject, we’ve selected some of the best Caribbean islands for retirement.
Puerto Rico
As a U.S. territory, Puerto Rico offers many advantages for retirees seeking a tropical climate without relocating abroad.
Health care is widely available, and Medicare is accepted. Retirees can own property in Puerto Rico, too, with no restrictions or visas. For qualified retirees, the Individual Investors Act waives island and federal income taxes on dividends, interest, and capital gains for residents who live in Puerto Rico for at least half the year.
The cost of living is around 11 percent lower than on the mainland, and rents are about 53 percent less. In the major cities, like San Juan and Ponce, English is widely spoken, but it’s helpful to know at least some Spanish. The weather is warm, although humid at times, and hurricane season comes each year from June through November, peaking in August and September.
A number of established retiree communities, as well as assisted living facilities, are available. “Retirees will have no trouble settling into life in Puerto Rico,” according to an article by U.S. News & World Report. “The island is a retirement haven, home to big, active, and well-established retiree communities from the U.S. mainland. Most retirees settle around San Juan and the beach neighborhoods east of the city, though pockets of expats can be found around the island.”
Isla Mujeres, Mexico
Located in the Caribbean about eight miles from the coast of Cancun, Isla Mujeres was once a fishing village. The atmosphere is still laid-back, and the cost of living is affordable. The small island offers beaches, clear and warm waters for snorkeling and diving, delicious restaurants, and vibrant nightlife. Apartments, condos, and hotels are available, and rents and overall cost of living are relatively low. Most residents get around on motor bikes or golf carts, saving the expense of an automobile.
Retirees can apply for a temporary residency visa or permanent visa (after four years) at their local Mexican consulate, with financial qualifications. Those with legal residency can enroll in public health insurance for a small premium. Many purchase private insurance to cover medical expenses or pay out of pocket. Medicare is not accepted, though it is advisable for U.S. citizens to maintain coverage in the event they need to return to the U.S. for treatment.
U.S. Virgin Islands
The main islands of St. Thomas, St. Croix, and St. John are attractive places to retire for those seeking mild weather, beautiful beaches, outdoor activities, and access to restaurants and nightlife. As a U.S. territory, the U.S. Virgin Islands require no visas or passports for relocating. Medicare is accepted, and medical facilities are available on all the islands. The U.S. dollar is the currency, there’s no sales tax, and English is widely spoken.
The overall cost of living is higher than in the U.S., and rents are about six percent higher. A look at recent listings showed a wide range of rental costs, and like in most places, location, views, and amenities make a difference. Purchasing real estate on the islands works similarly to the mainland U.S., with attorneys representing both the buyer and seller. Travel + Leisure A-List advisor Margie Hand said, “When I was in the U.S. Virgin Islands this past June, I was shocked at all the people I met who had retired there. Some were working at stores in town, and one was an artist who sold pieces to local stores.”
Turks and Caicos
Turks and Caicos is a British overseas territory consisting of eight main islands and more than 300 small ones. Average temperatures range from a high of 88 degrees Fahrenheit in July to 81 degrees Fahrenheit in January, and the climate is relatively dry. English is the official language, and the currency is the U.S. dollar. “These islands are some of my favorites in the Caribbean,” Hand told T+L. “However the cost of living may be high for some retirees.” In Providenciales, the most populous island that's also home to the international airport, monthly rents range from abut $1,500 to $3,660 in the city center. Condos, town houses, residences, and vacant land are available to purchase at a range of prices, plus there are no restrictions on property ownership by foreigners.
The government grants temporary residency permits with annual applications and offers investors permanent residency if they purchase property to use as a home. The investment must be $300,000 or $1 million, depending on the island, and the funds can be used for new construction or renovation of an older property. There are no taxes on real estate, income, inheritance, or estates. And the new Health City Medical Centre on Grand Cayman provides a range of high-quality, affordable health care.
Anguilla
On Anguilla, the northernmost of the Leeward Islands, the lifestyle is casual, and fishing, snorkeling, golf, tennis, and sailing are popular activities for visitors and residents. The cost of living here is on the high side, but apartments are available starting between $1,000 and $2,000 monthly. However, there are no income taxes, VAT taxes, or taxes on capital gains or inheritance.
Steve Haines, a longtime resident of Anguilla and a real estate broker at Trophy Properties, represents Four Seasons Anguilla Residences. He told T+L, “Some of the greatest things about the island are the wonderful people, perfect weather, and unbelievable food.” He added, “I’m seeing retirees who buy residences for year-round [living], as well as others who spend half the year here. It’s a combination of both.” Haines also noted that the island’s new airport — in progress — will make it easier to reach the destination in the future — perfect for visitors and residents.
Retirees are able to purchase property with an Alien Landholders license and additional fees. Those who own property are able to obtain permanent residency. With one hospital on the island, residents may need to travel to nearby St. Maarten for medical care or to one of the other islands — something to consider when retirement planning. Private insurance that includes transportation to the U.S. or a nearby large city is advisable.
Dominica
Dominica, nicknamed the “Nature Island,” is considered one of the most affordable Caribbean islands for retirees. There's an income tax based on residency status and income sources, but the destination offers tax incentives for retirees, including a reduced rate for those over age 65. “Navigating the landscape of Dominica taxes can be a crucial factor for individuals and businesses considering the island nation as a destination for investment and residency,” according to a recent article by Rihab Saad, managing director at Next Generation Equity.
For retirees who decide to make Dominica their permanent home, the Dominica Citizenship by Investment Program enables foreigners to establish permanent residency by making an investment of at least $100,000 in a government fund or real estate.
Both public and private health care services are available, and private insurance is recommended. Haines, who often spends time with friends who live in Dominica, said, “The island reminds me of Hawaii — very lush with fruit trees and gorgeous scenery. [It's a] beautiful place to live.”
Dominican Republic
Located on the island of Hispaniola (along with Haiti), the Dominican Republic is one of the most affordable islands in the Caribbean for retirement. The cost of living here is about 47 percent lower than in the U.S., and rents are about 75 percent lower. The tropical climate, convenient location (it's about two hours from Miami), outdoor activities, and entertainment at resorts and hotels also make the destination an attractive option for retirees. Most expats and retirees live in Santo Domingo, Santiago, or Punta Cana.
The Dominican Republic offers a retirement visa for long-term residency with modest financial requirements, and those who decide to spend their golden years here can start with a standard tourist visa while the retirement visa is in process. Social security and pension benefits are not taxable, but all residents must pay taxes on income from financial investments such as stocks and bonds, certificates of deposit, and more.
Aruba
According to a September 2023 article by Ashley Kilroy, an investment and insurance expert at SmartAsset, “Expats will need to purchase private health care insurance. Although this is an additional expense, it costs less to see a doctor and receive treatment in a private hospital in the Dominican Republic than in the U.S. International health insurance may cost up to $200 per month, and it covers most procedures and emergencies, and even some prescriptions.”
This small island in the southern Caribbean offers a stable political climate, warm weather, and a location outside the hurricane belt. Resorts, museums, shops, and towns provide plenty of activities and entertainment. While the overall cost of living in Aruba is slightly higher than in the U.S., rents are about 57 percent lower. There's an income tax, and retirees are eligible for exemptions on foreign pensions and annuities.
Quality health care — both public and private — is available, too. Foreign tourists can stay in Aruba for up to 90 days (180 days for citizens of the U.S. and the Netherlands). To stay longer, an application must be made to the Department of Immigration and Naturalization Services for a residence permit. A guaranteed annual income of at least $50,000 may qualify applicants age 55 and over for the status of “retired with guaranteed income.” According to luxury Caribbean property specialist 7th Heaven Properties, “The Government of Aruba welcomes foreign investment and there are no restrictions on foreign buyers buying property on the island with a view to moving to Aruba.”
Ambergris Caye and Caye Caulker, Belize
Located on Central America’s northeastern coast, just south of Mexico, Belize (formerly called British Honduras) consists of a mainland area and about 450 islands. Two of the islands (called cays) are popular retirement destinations: Ambergris Caye and Caye Caulker. Both are a short flight or boat trip from the mainland. On a trip to Ambergris Caye a few years ago, I met retirees from the U.S. and Europe, happily adapting to the slower pace of life, living without cars (just about everyone drives a golf cart), and spending less than they did at home.
Belize correspondent for International Living, Shane Kenny, who moved his family to the country in 2019, noted in a recent article, “With Ambergris Caye being such a hot tourist destination, it’s also one of the more expensive places to live in Belize.” Of Caye Caulker, about a 30-minute ferry ride from Ambergris Caye, Kenny said, “Many consider Caye Caulker to be the laid-back, smaller version of Ambergris Caye. Be prepared to walk everywhere, as the streets are unpaved and there are no cars on the island — just a few golf carts.”
The government of Belize explains how to acquire residency or retirement status through the Visitor's Permit Extension, Qualified Retired Person Program, and permanent residency. Also making Belize an attractive retirement spot, the official language is English and the currency is U.S. dollars along with Belizean dollars.
