International Living Community

Hi Rocky,

Let’s start with the general issue of taxes on your retirement income.

The US is effectively the only country in the world that taxes its citizens’ income no matter where they live or where they earn it. In the case of tax advantaged retirement income, it’s going to be subject to normal US taxes no matter where in the world you may live. The main tax break for US citizens living abroad, the Foreign Earned Income Exclusion, only applies to income from current employment or business. Passive income like pensions is not included in the tax break.

On the specific question about Costa Rica, there’s good news: the country does not tax foreign source income, whether active or passive. So, if you live in Costa Rica, you won’t pay tax on your US pension income. However, once you are a resident, you will be liable for a 12.5% contribution to the National Health scheme.

Costa Rica is the exception, not the rule.

Most countries, including Portugal, another favorite destination, do tax foreign passive income, including pensions. But most countries have a tax treaty with the US that prevents double taxation of the same income.

For example, if you lived in Portugal, you would pay Portuguese tax at normal rates on your US source pension income. But any taxes you’ve already paid on that income to the IRS would be deducted from your Portuguese tax obligations.

That doesn’t mean you wouldn’t end up paying tax on your pension; it all depends on what your tax bracket is in Portugal compared to the United States. If your Portuguese tax bracket is higher, you’ll end up paying more tax on your pension than you would if you remained in the US.

That’s why it’s critically important to understand relative tax brackets and tax policies in a country before you decide to move there. The ideal scenario is someplace like Costa Rica that has a fully territorial tax system, i.e., one that doesn’t tax foreign source income at all.

For more details about taxes in Costa Rica, check out our Escape to Costa Rica guidebook.

Hi Eny,

In the more popular expat areas of Belize general acceptance of the LBGTQ+ community is growing… thanks to the influence of expats from the US and Canada.

The country’s first Pride parade was held in 2017, with Pride week also being celebrated in subsequent years. You’ll find many networks on Facebook to connect to the gay community, and especially on Ambergris Caye, you will find a well-established and visible gay community.

That being said, I would not expect acceptance to equal what you have come to expect in the US or Canada at this point.

Megan Rodden, an American expat living in Placencia, summed things up very well in one of her blog posts:

“The experience in progressive and touristy hot-spots such as San Pedro is going to be light years apart from the experience in say, a rural, conservative Mennonite community in Toledo. Belizeans in general are a very live-and-let-live people but it was only in 2016 that they finally abolished their anti-sodomy law, recognizing discrimination based on sexual orientation unconstitutional. I think, in general, there’s mostly apathy regarding LGBTQ issues with a small population on either side of the spectrum either condemning or crusading for equality.”

So, there has been movement in the right direction, and in most expat areas you should be fine. But there is still work to be done.

Hi Karl,

For individuals in the LBGTQ+ culture who are looking for social acceptance and legal protections, Ecuador is a viable option.

Study Ecuador’s political history, and you’ll find this forward-thinking county protects more rights than expected. In 1998, Ecuador became one of the first countries in the world to constitutionally ban discrimination based on sexual orientation.

Since 2008, same-s*x couples can engage in civil unions with all of the rights of marriage (except for adoption), including participating in things like the national health care system or other legal contracts with all the rights of a married couple.

Under the 2016 Gender Identity Law, transgender people can now change their legal gender solely based on self-determination, without undergoing surgery. Ecuador is also one of the few countries in the world to have banned conversion therapy. In 2018, the Inter-American Court of Human Rights ruled that same-s*x marriage is a human right protected by the American Convention on Human Rights, legalizing it in Ecuador.

Because LBGTQ rights are part of the constitution, there’s no worry about the supreme court taking away your rights. There are also much-needed treatments in Ecuador for HIV medicines and doctors in Ecuador who specialized in HIV/AIDS treatments.

It’s easy to find friends at local expat events, gay friendly bars, and through social media like Nomadicboys.com and the LGBTQ Expats Living in Ecuador Facebook page. But mostly, members of the gay community just make friends with expats and Ecuadorians, regardless of sexual preference.

Cuenca is a gay-friendly community and there are many couples here. Because it’s a cultural center, there’s more of an understanding of different lifestyles as writers, artists, and musicians bring a more open ideology.

As for other locations in Ecuador, Quito and Guayaquil are the two major cities in the country with the largest gay scenes due in part to the younger millennials living there. The city of Montañita, a village by the coast is famous for its bohemian vibe and very liberal attitude. It is a tourist town where if you are gay, you can feel extremely comfortable walking down the streets holding hands. In other Ecuadorian cities, it’s suggested that you do not show overt PDA, especially in smaller villages where there is less of an understanding of changing ideals on sexuality.

You can read an overview of how the countries on our beat rate for LGBTQ rights on the dedicated page on our website.

Hi David,

Costa Rica, being a Catholic country, is socially conservative for the most part. However, the tide is changing.

Same-s*x marriage was legalized in May 2020 under President Carlos Alvarado Quesada’s administration. It is one of the first countries in Latin America to not only recognize same-s*x marriage, but to legalize it.

The Costa Rican people (especially in the cities and in the international expat communities) continue to be welcoming towards expats and tourists, regardless of sexual preferences or gender identification. However, in the more rural areas, it is still best to avoid obvious public displays of affection.

There is a large LGBTQ scene around San José, where you can find a variety of bars and events supporting the community. An online search can point you in the right direction. Each year, the city hosts a big pride parade and event.

Manuel Antonio, on the Central Coast, continues to be the number one alternate lifestyle tourist destination. There you will find hotels, bars, and tours catering to this growing tourism demand.

Tamarindo, on the Gold Coast, hosted the country’s first ever Glitter Festival to promote diversity in Guanacaste tourism. It also recently opened a popular gay bar further cementing this Guanacaste beach area as an LGBTQ-friendly option in the country. It’s reopened for the season as of last weekend, and its drag shows are reportedly super fun.

Hi Joe,

Colombia legalized same-s*x marriage in April 2016. Same-s*x couples married abroad are now entitled to the same visa, healthcare benefits, and inheritance and pension rights as heterosexual spouses, once they take a stamped marriage certificate and identification papers to the nearest designated office in Colombia.

In 2015, same-s*x adoption laws allowed gay couples the same rights as heterosexual couples when adopting children. That same year, Colombia legalized the right to change legal gender without requiring surgery.

Discrimination in employment and housing based on sexual orientation is illegal and is explicitly covered in the law. However, gender identity is implied but is not explicitly mentioned.

The major tourist cities of Medellín, Bogotá, and Cartagena have a growing number of gay and gay-friendly bars, clubs, and hotels. Bogotá elected Claudia López as the country’s first openly lesbian mayor in 2019.

One resource I recommend is Out in Colombia Travel, started by a U.S. expat. It’s an LGBTQ+ travel and tourism agency whose goal is to create life-changing and memorable experiences for gay travelers and to help create cross-cultural exchanges that unite the global LGBTQ+ community.