Our Retirement Math In Europe Was Missing Three Expenses

Most retirement planning has a cute little flaw.

It assumes you’re going to keep living the same life, just with more free mornings.

Then you move to Europe and realize your “same life” plan was built on a U.S. default world: U.S. healthcare rules, U.S. travel distances, U.S. banking friction, U.S. tax routines, and a U.S. idea of what an emergency looks like.

Europe can absolutely lower your day-to-day costs. In many places it does. But the way Americans get surprised is predictable: they budget rent, groceries, and a few weekend trips, then get punched in the face by three expenses that do not feel like “cost of living.”

They feel like background noise. Until they aren’t.

These are the three that blow up retirement math over and over:

1. Healthcare that is cheap until it’s not, plus the Medicare decision you thought you could ignore.
2. Long-haul family travel, because you are not retiring into a vacuum.
3. Currency friction and cross-border admin, the slow leak that adds up to real money.

If you plan for those three up front, Europe stops feeling like a financial gamble and starts feeling like a normal life you can afford.

Expense #1: Healthcare is not one number, it’s a stack of decisions

Americans talk about “European healthcare” like it’s a single product you buy at the border.

In reality, it’s a stack: your legal status, your local system access, your private coverage choices, your out-of-pocket costs, your prescription habits, and the big U.S. question sitting behind it all.

Are you keeping Medicare Part B?

That one decision can quietly cost you thousands over time, either because you keep paying for coverage you rarely use, or because you drop it and later get punished when life changes.

In the U.S., Medicare generally does not cover routine care outside the country. If you live abroad, that makes Part B feel optional. Many retirees are tempted to drop it and pocket the premium.

Here’s the part people miss: if you drop Part B and later decide you need it, you can face a late enrollment penalty that increases your premium permanently, plus potential delays in getting coverage. Kiplinger described this as a recurring trap for retirees abroad, including the permanent 10% penalty per year delayed. That’s not a minor detail. That’s a long-term cost baked into your future. (Kiplinger, January 2026.)

Now stack the European side.

Even in countries with strong public systems, out-of-pocket spending exists, and it can be higher than Americans expect. OECD country notes published in late 2025 reported out-of-pocket payments representing about 21% of health expenditure in Spain and around 29% in Portugal, which is high by EU standards. That doesn’t mean your personal spending will be 21% or 29%. It means out-of-pocket is a real part of the system, not a rounding error. (OECD, 2025.)

Then you add the private insurance layer.

Many Americans in Europe carry private insurance either because it’s required for residency pathways, because they want shorter wait times, or because they want a predictable experience in a second language. Private plans can be very affordable compared to U.S. norms, until you hit age-based pricing.

A January 2026 Portugal retirement cost guide described entry-level private insurance for early to mid-60s starting around €60–€90 per month, with more comprehensive coverage or older ages pushing €120–€250+. That range is realistic for planning because it captures the “starts cheap, climbs fast” pattern. (Idealista, January 2026.)

Here’s how it actually shows up in retirement math.

The three healthcare line items people forget to include

• Private insurance premiums in euros, rising with age, sometimes rising sharply after 60.
• Out-of-pocket for dental, vision, copays, prescriptions, and private specialist visits when you don’t want to wait.
• U.S. re-entry protection, which usually means Medicare Part B or an alternative plan that acknowledges you might return.

If you are 58 and healthy, the premium number might look cute. If you are 67 and need regular care, you want a plan that is boring, stable, and easy to use.

A practical planning baseline for a couple in their early 60s, living in Spain or Portugal, often looks like:

• Private insurance: €140–€400 per month depending on age and coverage
• Out-of-pocket buffer: €100–€250 per month for routine care, dental, prescriptions, and surprises
• Medicare Part B decision: either keep paying the premium, or plan explicitly for the cost of penalties and delays if you later return

That is the honest stack. And it’s the first missing expense that breaks retirement budgets because it feels like “healthcare is cheaper there,” so people budget one line and ignore the rest.

Expense #2: Flying back to the U.S. is the new property tax

This is the one nobody wants to admit because it makes the whole “we’re moving for peace” story feel complicated.

You are not just moving to a new country. You are moving away from your people.

And if you’re 45–65, your people tend to get more important, not less.

Aging parents do not schedule their health events around your new life. Adult kids can be fine for years, then suddenly not fine. Grandkids show up and change your priorities overnight. Family funerals, weddings, and emergencies are not theoretical.

So you start flying back.

The cost is not just the ticket. It’s the whole trip:

• Flights
• Airport transport
• Pet care
• Extra insurance coverage if you are away longer
• Airbnb or hotel costs if you can’t stay with family comfortably
• Lost routine and recovery time, which can create its own spending

A lot of retirees budget one “big trip” per year like it’s a vacation. Real life is messier.

A realistic pattern for Americans living in Europe is more like:

• One planned trip back for family time
• One unplanned trip for a life event
• Occasionally, a third trip because someone’s health declines and you’re rotating with siblings

If you plan for one and you take two, your budget will feel like it’s constantly failing.

What to budget, in euros, without pretending you’re a robot

For two adults living in Europe, planning for U.S. family travel:

• Two round-trip flights per year: €1.600–€3.600 total, depending on season, departure city, and flexibility
• Ground transport and extras per trip: €200–€600
• Lodging buffer if needed: €0–€1.500 depending on family situation

That’s a wide range because it depends on your life. But that’s the point. You need a buffer, not a perfect estimate.

The psychological trap is that people treat these trips as “optional.” They aren’t optional if you care about your family and want your marriage to survive the distance.

Here is the cleanest framing: the travel budget is now a recurring fixed expense, like property tax used to be. You may not pay it monthly, but it’s part of the cost of choosing a life far away.

If you don’t include it, you will feel like Europe is “getting expensive,” when actually you just forgot to price your relationships.

Expense #3: Currency friction and cross-border admin are the slow leak

This is the most boring missing expense, and the most predictable.

Americans often retire on income that is still denominated in dollars: Social Security, pensions, IRAs, brokerage withdrawals. Your spending in Europe is in euros. That means your retirement budget has a hidden variable baked into it: the USD to EUR exchange rate.

You cannot control it. You can only manage the risk.

Then you add the friction that comes with moving money across borders:

• Bank transfer fees
• FX spreads, the hidden markup in “good enough” exchange services
• Card foreign transaction fees
• ATM fees
• Extra tax prep or accounting because your life is now multi-jurisdiction
• Visa renewals and document costs
• Notary translations and apostilles when required

None of these are individually catastrophic. Together, they can easily become a few thousand euros per year for a couple.

SmartCurrencyExchange published a retirement-to-Spain guide in February 2026 highlighting currency exchange risk and the importance of managing transfers and rate exposure. That’s not a niche concern. It’s a central financial variable if your income is in USD and your expenses are in EUR. (Smart Currency Exchange, February 2026.)

Creative Planning also included currency fluctuations and tax complexity among the major hidden costs of retiring abroad, which aligns with what people experience in real life. (Creative Planning, October 2023.)

The currency math nobody wants to do

Let’s make it real.

Say your household spends €3.000 per month in Europe. That’s €36.000 per year.

If the euro strengthens against the dollar, your dollar income buys fewer euros. Even a modest swing can change your real spending power by thousands.

You don’t need to predict rates. You need to build the budget with two numbers:

• Your “comfortable” euro budget
• Your “still fine” euro budget, assuming a worse exchange rate environment

Then you decide what you cut first if the dollar has a weak year.

That decision is what makes retirement stable.

The admin fees that hide inside “moving money”

A practical annual planning line for a couple often looks like:

• Transfer and FX friction: €300–€1.200 per year depending on how you move money
• Extra tax prep or professional help: €500–€2.500 per year depending on complexity
• Document renewals and fees: €150–€800 per year depending on your residency route and family structure

This is not fear. It is just the cost of living a cross-border life.

If you budget zero, you will spend it anyway. You’ll just feel annoyed about it.

Why these three expenses show up harder after 55

The 45–65 crowd gets hit differently than younger expats because the margin for “we’ll figure it out” is smaller.

• Health becomes less optional.
• Parents age fast.
• Kids and grandkids become real gravitational forces.
• Your tolerance for bureaucracy declines.
• You care less about novelty and more about stability.

Europe can be a fantastic stability play, but only if your budget is honest.

The cruel part is that these costs often show up in year two, not month two.

Year one is honeymoon. You spend on setup and feel like it’s a one-time spike. You reassure yourself.

Year two is when you realize the spikes repeat. Renewals repeat. Family travel repeats. Health costs creep. Currency swings hit. And suddenly your budget feels “wrong.”

It wasn’t wrong. It was incomplete.

The retirement budget that works in Europe is built like a stress test

A Europe budget that lasts is not built on best-case scenarios. It’s built on resilience.

Here’s a simple way to rebuild your budget with the missing expenses included.

Step 1: Start with your true monthly euro baseline

Rent, utilities, groceries, transport, eating out, household spending.

Call this number your “normal month.”

Step 2: Add the three missing expense buckets as monthly equivalents

Even if you pay them annually, convert them to a monthly number so they stop feeling like surprises.

Example for a couple:

• Healthcare stack: €300–€700 per month
• Family travel fund: €150–€400 per month
• Currency and admin friction: €100–€300 per month

Now you have a budget that includes reality.

Step 3: Add a currency shock buffer

Pick a percentage that reflects your risk tolerance. Many retirees choose 5–10% of total annual spending as a buffer when their income is in USD and spending is in EUR.

It’s not magic. It’s just acknowledging the variable.

Once you do this, you stop needing to argue with yourself about whether Europe is “getting expensive.” You see what’s happening and you respond like an adult.

Pitfalls most people miss when they do their retirement math

This is where retirees get trapped in bad assumptions.

They assume healthcare is solved because Europe has public healthcare.
Your access depends on status, local capacity, and the reality of out-of-pocket spending. OECD data shows out-of-pocket shares are meaningful in Spain and especially Portugal, even within public systems.

They treat family travel as a luxury, not a duty.
Then an emergency happens and the budget breaks. The travel fund is not about vacations. It’s about being present.

They move money casually and lose to friction.
Small fees and bad exchange rates are the retirement version of a slow leak under the sink. You don’t notice until the floor is ruined.

They plan a “five-year story” and ignore year-two reality.
Year one is novelty. Year two is maintenance. If you can’t afford maintenance, you can’t afford the life.

They don’t decide whether they might return to the U.S.
If you might return, the Medicare Part B decision becomes a serious financial choice, not a detail you ignore.

If you avoid these pitfalls, Europe becomes less stressful, not more.

Your first 7 days to rebuild your retirement plan without fantasy

This is a one-week sprint that makes your plan sturdier. It’s not glamorous. It works.

Day 1: Write your real life obligations list

Not your dreams. Obligations.

Parents, kids, grandkids, health needs, pets, property back in the U.S., anything that will pull you across the Atlantic.

If you pretend these won’t matter, your budget will get ambushed.

Day 2: Decide your Medicare posture

You don’t need a perfect answer today. You need a posture:

• “We are likely to return at some point.”
• “We are unlikely to return.”
• “We don’t know.”

If you don’t know, assume you might return. That assumption is usually safer.

Then price the choice. Include the cost of keeping Part B versus the long-term penalty and delay risk if you drop it and re-enroll later.

Day 3: Price private insurance for your actual ages

Not “starting at” marketing numbers.

Look for a range that fits your 60s, and write down two numbers:

• A low-cost plan that meets requirements
• A more comprehensive plan you might want later

Portugal planning guides in January 2026 discussed ranges that climb with age and coverage. Use that mindset: plan for the climb, not the teaser rate.

Day 4: Build your family travel fund

Pick a conservative number and automate it mentally.

Example: €250 per month into “U.S. trips.” That’s €3.000 per year. For many couples, that’s the minimum to avoid panic.

If you don’t use it, great. It becomes a cushion. If you do use it, you’re not wrecked.

Day 5: Create a currency plan that is boring

Decide how you will move money and how often.

Then build a rule like:

• “We transfer quarterly, not randomly.”
• “We keep a 3–6 month euro cash buffer.”
• “We do not make big one-time transfers in a panic week.”

Currency guides aimed at retirees emphasize managing exchange exposure. You don’t need sophistication. You need consistency.

Day 6: Add the admin line item

Pick a yearly number and stop pretending it’s zero.

For many couples, €1.000–€3.000 per year covers tax help, renewals, document fees, and random cross-border annoyances.

Write it down. Include it.

Day 7: Stress test the whole budget

Run your budget under two scenarios:

• Normal exchange environment
• Worse exchange environment

Then pick what you cut first in the worse scenario.

If you don’t pick, life will pick for you, and life has terrible taste.

Where this lands in real life

Europe can be a brilliant retirement choice. It can also be a slow-motion budget shock if you build your plan around the wrong assumptions.

The biggest financial mistake Americans make is thinking Europe is cheaper, so the budget can be looser. The truth is that Europe can be cheaper on daily spending, and still require tighter planning because your life is now cross-border.

If you include the three missing expenses, your retirement stops feeling like a gamble:

• Healthcare becomes a stack you can manage.
• Family travel becomes a planned cost, not a crisis.
• Currency and admin friction become a known leak you contain.

That’s the whole trick.

Not perfect forecasting. Not magical countries.

Just honest math.