Best Places to Retire Overseas That Use the U.S. Dollar

Currency risk can be a legitimate concern when preparing for a move overseas. The exchange rate between the U.S. dollar and the currency of the country where you decide to retire could change dramatically over time. You could move to a place where your retirement income of $1,500 a month affords a rich, comfortable lifestyle, only to find that five years from now you need 25% more to maintain the same standard of living.

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

How to Avoid Currency Risk in Retirement

You can mitigate currency risk by investing in a home of your own in the country where you’d like to live. Housing is typically the biggest part of any retiree’s budget, and by buying your home rather than renting you can eliminate fluctuations in monthly costs and your exchange-rate exposure. However, not everyone can afford to buy a home overseas in retirement.

You could also convert U.S. dollars to the local currency in advance with the help of a foreign exchange service. Ideally, you could buy the foreign currency you need to pay your bills when the dollar is strong. However, this requires trying to time exchange rate fluctuations, which even professionals are not always able to do.

The other way to protect against exchange rate risk is to move to a country where no exchange of currencies is required. The list of places that accept the U.S. dollar isn’t long, but it includes some of the world’s best options for living, retiring and investing overseas. For example, Ecuador uses the U.S. dollar as its official currency. Belize and Panama don’t use the dollar, but peg their currencies to it.

Popular retirement spots overseas that accept U.S. dollars include:

— Ecuador swapped its sucre for the U.S. dollar.

— Belize pegs its dollar to the U.S. dollar 2:1.

— The dollar is the de facto currency in Panama.


Ecuador is a top choice for retirement overseas on a budget. The Spanish-colonial city Cuenca is home to one of the world’s biggest and most welcoming expat communities. The weather is temperate year-round, and the cost of buying a home is temptingly affordable.

Ecuador dropped its official currency, the sucre, in favor of the U.S. dollar in 2000. High rates of inflation and a dramatic devaluation of the sucre were making for a very unstable economy. Ecuador saw pegging its currency to the dollar as a fix, and since making the change Ecuador’s economy has been far less shaky.

[Read: The Best Places to Retire in Latin America]


Belize is a sun-drenched retirement haven where English is the official language. The country pegs its dollar to the U.S. dollar at a rate of two to one. You can easily and freely spend U.S. dollars in Belize. They are accepted everywhere, alongside Belize dollars. If you give a shopkeeper $20, he’ll give you change for $40 in Belize currency.

However, when you take money out of a U.S. bank account from a Belize ATM or wire funds to a bank account in Belize, the bank will make the exchange of currencies not at the rate of two to one, but at a less favorable rate of perhaps $1.98 or $1.99 to one, and then take the difference as the transaction fee.


Panama is a popular overseas retirement spot. The highlands town Boquete is home to one of the biggest expat communities in the world. The benefit-rich retiree pensionado residency program, accessibility to the U.S., year-round sunshine and developed infrastructure draw many retirees to the area.

Panama pegs its balboa to the U.S. dollar at a rate of one to one, but the U.S. dollar is also accepted as legal tender. Balboas are only minted in coin form, and there are no paper balboas.

[See: The Cheapest Places to Retire Abroad on $1,000 Per Month]

Real Estate Trades in Dollars in These Countries

Some countries have come to price real estate in U.S. dollars in regions that are particularly attractive to foreign buyers, including Mexico, Nicaragua and the Dominican Republic. Pricing houses and condos for sale in dollars makes sales transactions simpler, and American buyers don’t have to think about exchange rates when buying property.

Roy Walsh

Roy Walsh

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