How your US retirement income is actually taxed here.
Straight from the same profile Glidepath's engine taxes against - not a marketing summary of it.
Models the 7% pensioner regime: a flat 7% on all foreign-source income - pension, Social Security, gains, and dividends - for 10 years. Social Security is treaty-nuanced: Art. 18(2) gives Italy the taxing right, but the saving clause lets the US tax its own citizens (see the compliance notes).
Requires a qualifying southern town and not being Italian-resident the prior 5 years. Town population cap is ≤20k, rising to ≤30k under Law 34/2026 (effective ~7 April 2026).
The regime also waives IVIE/IVAFE foreign-asset wealth taxes and RW reporting. Standard regime (no 7%) would be IRPEF 23–43% + 26% on gains - much higher.
What could change this.
The Art. 24-ter foreign-pensioner regime is granted for a maximum of 10 tax years and cannot be renewed. From year 11 you revert to standard IRPEF (23–43%) plus 26% on gains and IVIE/IVAFE wealth taxes - a large step-up late in retirement.
When: Year 11 after you move (the regime is non-renewable)
Treaty Art. 18(2) assigns Social Security to the residence state (Italy), but the US saving clause lets the US tax its own citizens; practitioners read the carve-out inconsistently. The residual-US-tax-on-investment-income point under the 7% regime is also not cleanly modeled.
When: Filing-position dependent; no near-term resolution
Compliance traps that catch US retirees here.
Local investment wrappers that look ordinary to a local resident can be a US tax trap for a US citizen - these are the ones specific to Italy.
7% regime leaves residual US tax; SS treatment is treaty-nuanced
Under treaty Art. 18(2) social security is taxable only in the residence state, so Italy holds the primary right over US Social Security once you are Italian-resident - but the US saving clause lets it tax its own citizens, and the carve-out is read inconsistently. More importantly, IRA/401(k) draws, dividends and gains taxed at only 7% in Italy usually leave residual US tax: the 7% is a low foreign tax credit, so the US still collects the gap. Model US tax as the gap, not $0, on investment income.
Italian unit-linked life-insurance / polizza wrappers carry PFIC exposure
Italian unit-linked (Branch III) life policies and bank wrappers hold underlying non-US funds that are PFICs (Form 8621) regardless of the 7% Italian treatment; depending on structure they can also raise foreign-trust reporting (Forms 3520/3520-A). Keep US retirement/brokerage assets US-domiciled and avoid local investment-linked policies. Any EU/Italian UCITS fund bought locally is also a PFIC.
7% election can be lost retroactively
Failure to pay the substitute tax by the deadline, or ceasing to reside in a qualifying town, voids the regime for that year - reverting you to full IRPEF (~23–43%) plus ~26% capital-gains tax, IVIE/IVAFE and Quadro RW. Any favorable split modeled here assumes the election stays valid all 10 years.
Healthcare as a retiree.
Public SSN via voluntary registration (iscrizione volontaria), which retired residents can join; the annual fee is income-based (7.5% up to ~€20,658 then 4%) with a 2024+ minimum of €2,000 and maximum of €2,788.87 per person/year. The Elective Residence Visa itself requires private health insurance (≥ €30,000 cover) for entry, so many retirees keep private/international cover for the first year before joining the SSN.
The €2,000–2,788.87/yr SSN voluntary fee is per adult and counts worldwide income; the ERV mandates private insurance (≥ €30,000 cover, incl. repatriation) at least for entry/renewal, so budget for private cover in year one even if switching to SSN later.
Models the voluntary-SSN path at its statutory 2,000 EUR minimum plus the GIMBE national-average out-of-pocket; higher incomes pay up to 2,788.87 EUR/yr, and fully-private couples pay 2,400-7,200 EUR/yr in premiums instead.
The retirement visa route.
Elective Residence Visa (Residenza Elettiva): ~€31,000–32,000/yr stable passive income single (~€38,000 per couple; consulates often demand more), no employment permitted, plus private health insurance covering ≥ €30,000 valid across Italy/Schengen including repatriation.
What could this actually cost you?
A fast, illustrative estimate for Italy - no login, nothing stored. Every country page carries its own, tuned to that country's tax treatment.
Your monthly spending power in Italy (7% south) on about $1M
A lean lifestyle in Italy (7% south)
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.
Italy (7% south): 7% flat on all foreign income (10 yrs, southern town ≤20k pop.)
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 actually run into.
- Regime agevolato 7%
- A substitute-tax regime (Art. 24-ter TUIR) letting foreign pensioners who move to a qualifying small southern town pay a flat 7% on ALL foreign-source income for 10 tax years; requires non-residence in Italy for the prior 5 years.
- Comune agevolato
- An eligible municipality (population cap raised from 20,000 to 30,000 by Law 34/2026, effective ~7 April 2026) in the south or a 2009/2016 earthquake-reconstruction zone.
- Visto per Residenza Elettiva
- Italy's long-stay retirement visa for the financially self-sufficient living on passive income, with no right to work - the practical entry route for a US retiree.
- IVIE / IVAFE
- Italy's wealth taxes on foreign real estate (IVIE) and foreign financial assets (IVAFE) - both waived for beneficiaries of the 7% regime.
- Quadro RW
- The foreign-asset/account disclosure section of the Italian tax return (the local FBAR analogue); the 7% regime exempts the beneficiary from filing it.
- Iscrizione volontaria al SSN
- Voluntary enrollment in Italy's national health service for non-working residents, via an annual income-based fee.
Nothing on this page is invented.
Confidence: verified. Last verified June 1, 2026. Every figure above comes from one of the sources below - the same profile the paid engine uses to actually compute your projection.
See the full country-by-country build sheet on the coverage page.