Pension Tax Savings
Why Retirees Choose Paraguay
0% Pension Tax
Foreign retirement income is completely tax-free
Low Cost Living
$1,200-2,000/month for comfortable lifestyle
Flexible Presence
Visit once/year to maintain residency
Tax Benefits for Retirees
Paraguay's territorial tax system is particularly advantageous for retirees:
What's NOT Taxed in Paraguay
- ✓ US Social Security
- ✓ 401(k) distributions
- ✓ IRA withdrawals
- ✓ Private pension payments
- ✓ UK State Pension
- ✓ Canadian CPP/OAS
- ✓ Annuity payments
- ✓ Foreign investment income
Cost of Living for Retirees
| Expense | Comfortable | Luxury |
|---|---|---|
| Rent (2BR apartment) | $400-700 | $800-1,500 |
| Groceries | $250-350 | $400-500 |
| Dining out | $100-200 | $300-500 |
| Health insurance | $150-300 | $300-500 |
| Utilities | $50-100 | $100-200 |
| Transportation | $50-100 | $200-400 |
| Entertainment | $100-200 | $300-500 |
| Monthly Total | $1,200-2,000 | $2,500-4,000 |
Healthcare for Retirees
Private healthcare in Paraguay is good quality and affordable compared to the US:
Top Hospitals in Asunción
- Hospital Italiano: Full-service, English speakers
- Sanatorio Migone: Modern facilities, specialists
- Hospital Bautista: Comprehensive care
- Centro Médico La Costa: Outpatient services
Health Insurance Options
- Local plans: $150-400/month comprehensive
- International plans: $300-600/month global coverage
- ASSE (public): Basic coverage, longer waits
- Pay-as-you-go: Affordable for routine care
Prescription Medications
Paraguay vs Other Retirement Destinations
| Factor | Paraguay | Costa Rica | Portugal |
|---|---|---|---|
| Pension Tax | 0% | 0% (foreign) | 10-20% |
| Cost of Living | $1,200-2,000 | $2,000-3,000 | $2,500-4,000 |
| Presence Required | 1x/year | 4 months/year | 183 days/year |
| Healthcare Cost | $150-300/mo | $80-150/mo | $50-100/mo |
| Path to Citizenship | 3 years perm | 7 years | 5 years |
Lifestyle Considerations
Climate
Subtropical climate with warm summers (Dec-Feb) and mild winters (Jun-Aug). No heating needed. Air conditioning recommended for summer. Pleasant year-round for those who enjoy warm weather.
Language
Spanish is the primary language. English is limited outside expat circles. Basic Spanish makes daily life much easier. Many retirees take Spanish classes or use translation apps.
Social Scene
Growing expat community, particularly American and European retirees. Facebook groups, expat meetups, and social clubs provide community. Paraguayans are friendly and welcoming.
Safety
Paraguay is one of the safest countries in South America. Petty crime exists (as everywhere) but violent crime is rare. Safe neighborhoods include Villa Morra, Carmelitas, and Las Carmelitas.
FAQ
Are US Social Security payments taxed in Paraguay?
No. Paraguay's territorial tax system means foreign-source income is not taxed. US Social Security, pensions, 401(k) distributions, IRA withdrawals, and other retirement income from outside Paraguay are tax-free in Paraguay.
What is the cost of living for retirees in Paraguay?
A comfortable retirement lifestyle costs $1,200-2,000/month in Paraguay. This includes housing ($400-700), food ($300-400), healthcare ($150-300), utilities ($50-100), and entertainment. Luxury living is possible at $2,500-3,500/month.
Is healthcare good for retirees in Paraguay?
Private healthcare in Paraguay is good and affordable. Asunción has modern hospitals including Hospital Italiano, Sanatorio Migone, and Hospital Bautista. Private health insurance costs $150-400/month for comprehensive coverage. Routine care and medications are very affordable.
Do retirees need to live full-time in Paraguay?
No. Paraguay's minimal presence requirements mean retirees only need to visit once per year (temporary residency) or once every three years (permanent residency). Many retirees split time between Paraguay and their home country or travel extensively.
Can I receive my pension in Paraguay?
Yes. You can receive pension payments via international wire transfer to a Paraguay bank account, or maintain a US/home country bank account and transfer funds as needed. Most expats use a combination of both approaches.
Is Paraguay safe for retirees?
Yes. Paraguay is one of the safest countries in South America. Asunción has low crime rates compared to other Latin American capitals. Expat-friendly neighborhoods like Villa Morra, Carmelitas, and Las Carmelitas are particularly safe.