How to Retire in Puerto Rico

Puerto Rico has Caribbean beaches, historical ambiance and a vibrant culture. Perhaps the biggest draw for American retirees is that it’s easy to relocate to Puerto Rico. Here’s what you need to know about retirement in Puerto Rico.

Moving to Puerto Rico for Retirement

Applying for residency can be one of the biggest headaches and greatest expenses of an overseas move. However, Puerto Rico is a U.S. territory, so no residency permit is required for Americans to live or retire in Puerto Rico.

To establish residency in Puerto Rico, you are required to spend 183 days per year to make it your tax home. You will also need to take steps to make it clear to the IRS that Puerto Rico is your home base. You can do this by getting a local driver’s license or changing your voter registration to Puerto Rico.

[SEE: 10 Affordable Places to Retire on the Water.]

Why Retire in Puerto Rico

This island has all the makings of a tropical paradise. Puerto Rico is sun-soaked and surrounded by glorious beaches, some with surfable waves and some that are palm-fringed and completely relaxed.

Puerto Rico has a long and storied history, full of tales of conquistadors, conquests, pirate attacks and revolts. Christopher Columbus claimed the island for Spain in 1493. Rich in gold, sugar cane, coffee and tobacco, the Spanish heavily fortified San Juan to protect the island, and it was Spain’s key military outpost in the Caribbean for years.

Much of the island’s rich history can be experienced today in Old San Juan, one of the best-preserved Spanish-colonial cities in the Americas. This old town is framed by cobblestone streets and colorful colonial houses that date back hundreds of years as well as forts and castles built by Spain. Puerto Rico became an American territory in 1917.

Puerto Rico is Easily Accessible

Puerto Rico benefits from proximity to the continental United States. Just over 1,000 miles separate the mainland U.S. from Puerto Rico. You can get to Puerto Rico in under three hours flying time for as little as $100 round trip. Puerto Rico is home to many U.S. mainland-style amenities, including shopping malls, schools and golf courses.

Expats in Puerto Rico

Retirees will have no trouble settling into life in Puerto Rico. The island is a retirement haven and is home to big, active and well-established communities of retirees 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.

English holds official language status alongside Spanish in Puerto Rico. In urban and tourist areas, you can get by without speaking Spanish, though outside these areas it will make life easier if you know at least a little bit of Spanish.

[See: Retirement Spots With Year-Round Nice Weather.]

Where to Retire in Puerto Rico

San Juan. Puerto Rico’s capital, San Juan, is where you will find the biggest expat community and the best access to amenities. San Juan has an energetic lifestyle, with a buzzing bar, restaurant and nightlife scene. Old San Juan, with its Spanish-colonial architecture, is especially charming.

Dorado. Located 25 miles north of San Juan, Dorado offers a more relaxed pace of life. Dorado is more expensive than the average Puerto Rican town, but has upscale neighborhoods with American-style homes in gated communities and golf courses.

Rincon. Rincon is a laid-back area about two and a half hours from San Juan. Situated on the island’s westernmost tip, Rincon is famous for its beautiful sunsets. Lacking major hotels, this town is perfect for those after a more local lifestyle on the beach.

Cayey. Cayey is situated in the Central Mountain range at an elevation of 1,500 feet above sea level, and temperatures are cooler than on other parts of the island. Surrounded by thickly forested peaks and valleys, Cayey is a great choice for outdoor enthusiasts.

The Cost of Living in Puerto Rico

The cost of living in Puerto Rico isn’t as low as it is in the Dominican Republic or other Latin American destinations. However, Puerto Rico is less expensive than life on the U.S. mainland and considerably less expensive than other comparable Caribbean-island destinations, such as the neighboring British Virgin Islands or St. Barts.

The biggest savings will come from rent, which can be 50% lower in Puerto Rico than it is on the U.S. mainland. Daily expenses and groceries are affordable if you stick to local products rather than imported goods. Puerto Rico uses the U.S. dollar, making banking and finances easy for Americans.

[See: The Best Affordable Places to Retire Overseas in 2021.]

Health Care in Puerto Rico

American retirees can use their Medicare benefits in Puerto Rico. Coverage is the same as it is anywhere else in the U.S. This is a significant benefit over retirement in another country, where you typically can’t access Medicare. You’ll find the country’s biggest and best hospitals in the main cities. If you aren’t yet eligible for Medicare, private insurance is available.

Challenges of Retirement in Puerto Rico

Retirement in Puerto Rico has some downsides. Poverty is an issue, and a significant portion of the population lives below the poverty line. Crime can also be a problem in some areas. Puerto Rico is susceptible to natural disasters like earthquakes and hurricanes, which can cause major damage to property and infrastructure.

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