Can I keep my US bank accounts and brokerage?

Bank accounts yes, with FBAR filings. Brokerage is trickier — many US brokers (Vanguard, Fidelity) restrict trading by non-US-resident clients. Schwab International and Interactive Brokers are the usual workarounds.

Does my US driving licence work in Spain?

For the first 6 months only. After that you must take the Spanish theory and practical tests — there is currently no reciprocity agreement between Spain and any US state (a treaty has been signed but not implemented as of 2026).

What about Medicare Part B premiums?

Most retirees abroad drop Part B (you cannot use it overseas) — but late-enrolment penalties apply if you ever move back. The maths usually favours keeping Part A (free) and dropping Part B (~$175/month).

Will I lose my Social Security if I move abroad?

No. Social Security is paid worldwide except in a handful of restricted countries (Spain is not one of them). Direct deposit to a Spanish or US account works fine.

Is the NLV income threshold post-tax or gross?

Gross. The consulate looks at the gross pension/income figure shown on your statements.

By nationality

Retiring from the USA to the Costa Blanca

American retirement to Spain has tripled since 2020. The path is well-trodden — but Social Security, IRAs, Roth accounts, Medicare and the US's worldwide tax system all interact with Spanish residency in ways that catch first-timers off-guard. Here is how it really works.

Last updated 1 June 2026

The visa — Non-Lucrative or Digital Nomad

US passport holders are non-EU, so a long-stay visa is required for residency beyond 90 days. The two routes retirees use:

Visa	Best for	Income required	Work allowed
Non-Lucrative Visa (NLV)	Fully retired, pension / passive income	~$31,000/yr + ~$7,800 per dependent	No
Digital Nomad Visa (DNV)	Still doing some remote work / consulting	~$2,900/month from non-Spanish clients	Yes (remote, non-Spanish)

Social Security & the US–Spain treaty

Under the US–Spain double-tax treaty (Article 20), US Social Security is taxable ONLY in your country of residence. Once you are Spanish tax resident, Social Security stops being taxed in the US and becomes taxable in Spain at progressive rates (19–47%). File a Form W-8BEN with the SSA so they stop withholding US tax on the payment.

Social Security continues to be paid to a US or Spanish bank account anywhere in the world — there is no penalty for living abroad.

401(k), Traditional IRA & Roth IRA

Account	US tax	Spanish tax (once resident)
Traditional IRA / 401(k) distribution	Taxable at federal rates	Also taxable in Spain — treaty credit avoids double tax
Roth IRA distribution	Tax-free after 59½ + 5-year rule	TAXABLE in Spain — Spain does not recognise Roth status
Roth conversion	Taxable in US	If done while Spanish resident, also taxable in Spain
Required Minimum Distributions (RMDs)	Required from 73	Taxable in Spain as pension income

Do your Roth conversions BEFORE you become Spanish tax resident

Spain treats Roth distributions as ordinary pension income. Any conversions or large withdrawals planned for the early retirement years should be completed in your last US-resident calendar year to avoid Spanish tax.

Healthcare — no Medicare in Spain

Medicare does not cover care outside the US. American retirees on the NLV must hold a private Spanish health insurance policy (Sanitas, DKV, Adeslas — typically $100–$220/month per person at 65+). Once permanently resident, Convenio Especial gives access to the public system at €157/month if 65+. Many keep a small Medicare Part A enrolment back home for hospital cover during US visits.

FBAR, FATCA & US-side filing

✦FBAR (FinCEN 114): file annually if any non-US account exceeds $10,000 at any point in the year
✦FATCA (Form 8938): file with your 1040 if aggregate foreign assets exceed $200k (single) or $400k (married, filing abroad)
✦1040: US citizens always file a US return regardless of residency
✦Foreign Earned Income Exclusion does NOT apply to pension/Social Security — only to earned income, which retirees rarely have
✦Foreign Tax Credit (Form 1116) is the main tool to avoid double taxation on Spanish-taxed income

Estate & gift planning

Spain has its own inheritance and gift tax (Impuesto sobre Sucesiones y Donaciones), applied to Spanish-tax-resident heirs and to Spanish-situs assets regardless of heir residency. The Valencian Community gives a 99% reduction for close family (spouse, children, parents) on inheritances — among the most generous regions in Spain. US-side estate tax exemption (currently $13.6M) is unaffected.

Non-Lucrative Visa

Step-by-step from a US consulate.

Healthcare

Convenio Especial and private options.

How foreign pensions are taxed

IRA, 401(k) and Social Security in detail.

Tax residency

Timing the move to protect Roth conversions.

Best places to retire

Where American retirees actually settle.

Wealth tax

How IRAs and US assets interact with Patrimonio.