There is an emerging group of Americans who, tired of the high cost of living in the United States, are seeking a better quality of life in another country. They exchange advice in Reddit forums like AmerExit (with 57,000 members) and I Want Out (with 2 million members), consult relocation service providers – which cost from a few hundred to several thousand dollars per unit – and teach others to follow in their footsteps. They use terms like “geoarbitrage” (the notion of saving money by moving to somewhere cheaper) and acronyms like FIRE (short for “financial independence, retire early”).
This group views the move as the first step in a long-term plan. They are migrating to save money for the future, to pay off debts, or to have more of what life has to offer in their home country.
It is complicated to know exactly how many Americans have moved to other countries, and even more so when or why. The U.S. State Department estimated in 2020 that a total of 9 million U.S. citizens lived abroad, compared to an estimate of 5 million in 2010 – although these numbers include dual citizens born and raised outside the country.
In a recent survey by Monmouth University, one-third of Americans stated they would like to settle in another country, compared to just 12% who said the same in a 1995 Gallup poll. In the 2023 InterNation survey of 12,000 expatriates from 172 countries, the U.S. was the country of origin for the majority of expatriates.
High Cost of Living in the U.S.
The Bureau of Labor Statistics reported that the average monthly expenses for families in the U.S. jumped from $5,111 in 2020 to $6,081 in 2022. In a new survey by the Financial Technology Association, 61% of American workers indicated that they lived paycheck to paycheck.
While there is no doubt that Americans enjoy a higher material standard of living than most of the world, the country does not compare well to other wealthy Western countries in various quality of life indices: Americans work more, take fewer vacations, spend more on healthcare, and die younger than people in other high-income economies.
And where are they going?
Data from the global recruitment company Deel suggests that the UK, Germany, Canada, and France are among the top seven international destinations for those seeking jobs from the U.S. In places with universal healthcare, government-subsidized childcare, and cultures that encourage a better work-life balance, money can stretch even further.
And it has never been easier for Americans to test international waters. More than 50 countries offer digital nomad visas to remote workers able to prove they have sufficient funds to support themselves. Combine a strong U.S. dollar with the relative ease of obtaining remote work, and it’s no wonder that Americans of all ages are open to considering housing options abroad.
But there’s something to consider
Once they move, these individuals often find it relatively difficult to return. Typically when they relocate, they do not have large savings or investments that provide them with financial security. And generally, in the countries they choose to live in, they opt for a more modest, less hectic life, but also earn less. Ultimately, a lower cost of living often means significantly reduced incomes, which can hinder someone’s financial ability to return home.
There is another downside to consider. The United States taxes its citizens regardless of where they live. This means that – depending on the country you move to – you may have to pay income tax twice.
So, the key is to think and sift through a lot before making such a decision.
Source: Business Insider