How your US retirement income is taxed here.
These come straight from the same country data the Glidepath engine uses to calculate your tax. Not a marketing summary.
Costa Rica uses a territorial tax system, so it does not tax your US retirement income.
There is no US-Costa Rica income tax treaty, so there is no foreign tax credit to offset your US bill (you have no Costa Rican tax to credit).
Joining the Caja (CCSS), the public health system, is mandatory. Its contribution is about 10-15% of your declared income and works like a health tax.
What could change this.
Rentista income proof is scrutinized more strictly than it used to be, and the Caja bill can run higher than modeled.
When: Practice is shifting now
Compliance traps that catch US retirees here.
Investment products that look ordinary to locals can be tax traps for US citizens. These are the ones specific to Costa Rica.
Costa Rican investment funds (fondos de inversión) are PFICs
A local bank's investment fund is a costly place for your visa deposit. To the IRS these count as PFICs, taxed punitively and needing yearly Form 8621 paperwork.
Voluntary complementary pension plans (ROPV) are PFIC and reporting traps
The voluntary complementary pension (ROPV) usually holds PFICs and adds foreign-pension reporting, so many US retirees skip it unless a US tax specialist clears it.
No treaty: double Social-Security exposure if you work
If you take a job or freelance in Costa Rica, you could owe both US self-employment tax and Costa Rican health contributions - no treaty prevents the overlap.
Healthcare as a retiree.
You must join the public Caja (CCSS) as a voluntary member (asegurado voluntario) to get residency. Contributions are set from the income you declare to immigration, usually about 10–15% of it, split between the health branch (SEM) and pension branch (IVM). A minimum-pension Pensionado may pay about $65–130/month. A Rentista declaring $2,500 can pay about $200–560/month. Caja coverage includes your family. Most expats also keep private or cash-pay cover to skip Caja wait times.
By default this plan models the Rentista route (about $4,100/year of mandatory Caja for the household), since Pensionado requires a lifetime pension. A Pensionado couple at the $1,000/month floor pays far less - roughly $1,200/year. A standalone international plan for two runs about $3,000–6,000+. The exact Caja charge is set at the Caja's (CCSS) discretion.
This models the mandatory Caja premium on the Rentista route ($2,500/month declared income) - the default when no lifetime pension is in payment, since Pensionado legally requires one - plus typical private out-of-pocket costs quoted by the local market. A residency-route setting lets you pin Pensionado ($1,000/month, roughly 3.5x cheaper) instead. It leaves out an optional private plan from the state insurer, INS (Instituto Nacional de Seguros), which runs about $100–250/month per person and takes no new policyholders past age 74.
The retirement visa route.
Costa Rica has two main retiree residency routes: Pensionado for people with a lifetime pension, and Rentista for those living on other steady income. Both require joining the public health system.
- Pensionado: a guaranteed lifetime pension of at least $1,000/month, paid into and exchanged through a Costa Rican bank.
- Rentista: proof of stable unearned income of $2,500/month for 2 years (a static $60,000 bank deposit alone is increasingly not enough - authorities now want verifiable recurring income).
- Inversionista (an alternative route): a qualifying investment of $150,000.
- Both routes require mandatory enrollment in the public health system, the Caja (CCSS).
What could this cost you?
A fast, illustrative estimate for Costa Rica - no login, nothing stored. Every country page carries its own, tuned to that country's tax treatment.
Your monthly spending power in Costa Rica on about $1M
These odds are about a withdrawal this size holding up over time - not about how far that amount goes here.
A lean lifestyle in Costa Rica
Day to day, that looks like a small apartment in a lower-cost town, transit or one older economy car, cooking at home with the odd cheap meal out. For health, the public health system, with out-of-pocket costs a real worry.
As a US citizen, you keep filing US taxes wherever you live.
Costa Rica: Territorial: US-source income outside the Costa Rica tax net
This is a fast estimate, not the full simulation, and not financial advice. It only flags the tax question. The full plan works out what you'd actually owe on each side of the border. It also models real balances, every account type, and healthcare, year by year.
The terms you'll run into.
- Pensionado
- Costa Rica's retiree residency category requiring a guaranteed lifetime pension of at least $1,000/month, which must actually be exchanged into colones through a local bank.
- Rentista
- Residency for those without a pension: proof of $2,500/month of stable unearned income for two years (historically a $60,000 bank deposit, though verifiable recurring income is increasingly demanded).
- Caja / CCSS
- The Caja Costarricense de Seguro Social - the national social-security and public-healthcare system all legal residents must join. Enrollment is mandatory to obtain and renew residency.
- Asegurado voluntario
- The Caja's 'voluntary insured' category for non-working residents and retirees. Contributions are assessed on the income declared to immigration, not on a local salary.
- Territorial taxation (renta territorial)
- Costa Rica's territorial-source principle: only Costa Rican-source income is taxed. Foreign pensions, US Social Security and foreign investments stay outside the tax net.
- SEM (health branch)
- The Caja health branch, Seguro de Enfermedad y Maternidad. It pays for doctor visits, hospital stays, and prescriptions.
- IVM (pension branch)
- The Caja pension branch, Invalidez, Vejez y Muerte. Retirees usually still pay into it, even while drawing a foreign pension.
US terms that follow you to every country
- PFIC
- Passive Foreign Investment Company - the IRS label for almost any non-US fund, ETF, or pooled investment. Owning one triggers punitive US tax rates and Form 8621 paperwork. The single most common trap for Americans investing abroad.
- FBAR
- Foreign Bank Account Report (FinCEN Form 114). A yearly online filing that lists your non-US accounts once they total over $10,000. Not a tax - just a report - but penalties for skipping it are severe.
- FATCA
- A US law that makes foreign banks report American customers to the IRS. It is why some foreign banks refuse US clients, and why you may also file Form 8938 with your return.
- Form 8621
- The IRS form you must file for each PFIC you own. Complex enough that most preparers charge per form, per year.
- Form 8938
- The FATCA companion form filed with your US return, listing foreign financial assets above a threshold. Overlaps with, but does not replace, the FBAR.
- Forms 3520/3520-A
- US reporting forms for foreign trusts. Some foreign retirement and insurance wrappers count as trusts, dragging their owners into this heavy annual paperwork.
- UCITS
- The standard European fund format (an EU regulatory label). Fine for Europeans - but to the IRS, a UCITS fund is a PFIC.
- Totalization agreement
- A US bilateral deal that stops you paying Social Security tax to two countries on the same work, and lets work credits in each country count toward one benefit.
- Foreign tax credit
- The US mechanism that stops double taxation: tax you pay to your residence country offsets your US bill on the same income, dollar for dollar. You effectively pay the higher of the two totals - not both.
- Saving clause
- The clause in every US tax treaty that lets the US keep taxing its own citizens as if the treaty did not exist. It is why moving abroad never ends US filing.
- Foreign grantor trust
- The IRS classification some foreign pension and insurance wrappers fall into. It means the owner reports the trust personally, on Forms 3520/3520-A, every year.
Nothing on this page is invented.
Confidence: verified. Last verified July 17, 2026. Every figure above comes from one of the sources below - the same country data the full plan uses to compute your projection.
See the full country-by-country build sheet on the coverage page.