Retiree Case Study: Living the Good Life in Greece on 7% Tax

Reading time: 15 minutes

Table of Contents

1. Introduction
2. The Greek Tax Incentive for Retirees
3. Meet John and Maria: Our Case Study Couple
4. Preparing for the Move
5. Settling in Athens
6. Financial Breakdown
7. Quality of Life Improvements
8. Challenges and Adjustments
9. Long-Term Outlook
10. Conclusion
11. FAQs

1. Introduction

As global economic landscapes shift and evolve, retirees are increasingly looking beyond their home countries for attractive retirement destinations. Greece, with its rich history, stunning landscapes, and recent tax incentives, has emerged as a compelling option for many. This case study delves into the experience of an American couple who chose to retire in Greece, taking advantage of the country’s 7% flat tax rate for foreign retirees. We’ll explore their journey, financial considerations, and the impact this move has had on their quality of life.

2. The Greek Tax Incentive for Retirees

In 2020, Greece introduced a game-changing tax law aimed at attracting foreign retirees. This legislation offers a flat 7% tax rate on all foreign-source income for eligible retirees who transfer their tax residence to Greece. This rate applies for a duration of 15 years, providing long-term financial predictability for those who choose to make Greece their retirement home.

Key Requirements for the 7% Tax Rate:

• The individual must not have been a Greek tax resident for at least 5 of the 6 years prior to the tax residence transfer.
• The applicant must relocate from a country with which Greece has a valid agreement on administrative cooperation in tax matters.
• The pension income must originate from abroad.

This attractive tax regime, combined with Greece’s relatively low cost of living and high quality of life, has positioned the country as an increasingly popular retirement destination for foreigners.

3. Meet John and Maria: Our Case Study Couple

John (68) and Maria (65) are a retired American couple from California. John had a successful career in software engineering, while Maria worked as a high school teacher. They had always dreamed of retiring in Europe, drawn by the culture, history, and lifestyle. When they learned about Greece’s new tax incentive for foreign retirees, they saw an opportunity to make their dream a reality while also optimizing their retirement finances.

Their Financial Situation:

• Combined pension income: $72,000 per year
• Social Security benefits: $36,000 per year
• Investment income: Approximately $40,000 per year
• Total annual income: $148,000
• Savings and investments: $1.2 million

In California, their effective tax rate was around 22%, leaving them with about $115,440 after taxes. The prospect of paying only 7% tax in Greece was a significant factor in their decision-making process.

4. Preparing for the Move

John and Maria spent nearly a year planning their move to Greece. This preparation phase was crucial for ensuring a smooth transition and compliance with all legal requirements.

Key Steps in Their Preparation:

1. Research and Due Diligence: They thoroughly researched Greek visa requirements, healthcare options, and living costs in various Greek cities.
2. Visa Application: They applied for the Greek Golden Visa, which grants residency to non-EU citizens who invest in Greek real estate.
3. Property Purchase: They decided to buy real estate athens, investing €280,000 in a renovated apartment in the Kolonaki neighborhood.
4. Healthcare Arrangements: They enrolled in the Greek public healthcare system and also purchased international health insurance for comprehensive coverage.
5. Financial Planning: They worked with financial advisors in both the U.S. and Greece to optimize their investments and ensure compliance with tax laws in both countries.
6. Language Learning: They began taking Greek language classes to prepare for their new life.

This meticulous preparation laid a solid foundation for their new life in Greece, addressing potential challenges before they arose.

5. Settling in Athens

John and Maria chose Athens as their new home, attracted by its blend of ancient history and modern amenities. The vibrant city offers a rich cultural scene, excellent healthcare facilities, and a large expat community, making it an ideal location for international retirees.

Their New Life in Athens:

• Housing: Their €280,000 investment bought them a spacious 100 m² apartment in Kolonaki, an upscale neighborhood known for its boutiques, cafes, and proximity to major attractions.
• Daily Life: They quickly adapted to the Mediterranean lifestyle, enjoying long lunches, evening strolls, and frequent visits to museums and archaeological sites.
• Social Integration: They joined local expat groups and began volunteering at an English-language library, helping them build a new social network.
• Cultural Immersion: They continued their Greek language classes and participated in local festivals and events, deepening their connection to Greek culture.

The couple found that Athens offered them a lifestyle that perfectly balanced their desire for cultural enrichment, comfortable living, and financial optimization.

6. Financial Breakdown

The move to Greece significantly improved John and Maria’s financial situation, primarily due to the favorable tax treatment and lower cost of living.

Annual Financial Comparison: U.S. vs. Greece

This financial breakdown illustrates the significant advantages John and Maria gained by moving to Greece:

• Their net income increased by $22,200 annually due to lower taxes.
• Their annual expenses decreased by $52,000, primarily due to lower housing, healthcare, and food costs.
• They were able to increase their annual savings and investments by $74,200.

7. Quality of Life Improvements

Beyond the financial benefits, John and Maria experienced significant improvements in their quality of life after moving to Greece:

Health and Wellness:

• The Mediterranean diet and lifestyle led to improved health markers for both.
• They reported lower stress levels and better sleep quality.
• Access to high-quality, affordable healthcare gave them peace of mind.

Cultural Enrichment:

• They enjoyed frequent visits to world-renowned museums and archaeological sites.
• Learning Greek opened up new social and cultural opportunities.
• They developed a deeper appreciation for history and art.

Travel Opportunities:

• Living in Greece made it easier and more affordable to explore other European destinations.
• They took frequent trips to Greek islands, enjoying the country’s natural beauty.

Social Life:

• They formed new friendships within both the expat and local communities.
• The relaxed Greek social culture encouraged more frequent social interactions.

8. Challenges and Adjustments

While the move to Greece has been overwhelmingly positive for John and Maria, they did face some challenges:

Language Barrier:

Despite their efforts to learn Greek, navigating bureaucratic processes and healthcare systems sometimes proved challenging. They often relied on translators or English-speaking locals for assistance.

Cultural Differences:

Adapting to the more relaxed Mediterranean pace of life and business practices required patience and flexibility.

Missing Family:

Being far from their children and grandchildren in the U.S. was emotionally difficult. They invested in technology to maintain regular video calls and planned annual family visits.

Healthcare System Navigation:

While healthcare in Greece is excellent and affordable, understanding and navigating the public system took time and effort.

Bureaucratic Processes:

Obtaining necessary permits and dealing with government offices sometimes proved time-consuming and frustrating.

Despite these challenges, John and Maria felt that the benefits of their new life in Greece far outweighed the difficulties, and they viewed these obstacles as part of the adventure of international living.

9. Long-Term Outlook

As John and Maria look to the future, they feel confident in their decision to retire in Greece. The 15-year guarantee of the 7% tax rate provides them with financial stability and predictability. They’ve calculated that even if they decide to return to the U.S. after this period, the savings accumulated during their time in Greece will significantly boost their overall retirement financial health.

Future Considerations:

• Estate Planning: They’ve begun working with legal advisors to ensure their estate is properly managed under both Greek and U.S. laws.
• Long-term Care: While currently in good health, they’re researching long-term care options in Greece for future planning.
• Community Involvement: They plan to increase their volunteer activities, possibly teaching English or contributing to local environmental initiatives.
• Travel Plans: They aim to explore more of Europe and the Mediterranean region while their health allows.

John and Maria view their retirement in Greece not just as a financial decision, but as a life-enriching experience that has opened up new horizons and opportunities they hadn’t previously imagined.

10. Conclusion

John and Maria’s experience retiring in Greece under the 7% tax regime serves as a compelling case study for retirees considering international options. Their story illustrates how careful planning, openness to new experiences, and strategic financial decisions can lead to a retirement that is not only financially advantageous but also culturally enriching and personally fulfilling.

The benefits they’ve enjoyed – from significant tax savings and lower living costs to improved quality of life and cultural immersion – highlight the potential advantages of retiring abroad. However, their experience also underscores the importance of thorough research, preparation, and adaptability when making such a significant life change.

As countries like Greece continue to offer attractive incentives for foreign retirees, more seniors may find that looking beyond their home borders opens up exciting new possibilities for their golden years. While every individual’s situation is unique, John and Maria’s story provides valuable insights into the potential rewards and challenges of international retirement.

FAQs

1. Is the 7% tax rate in Greece available to all foreign retirees?

No, the 7% tax rate is not available to all foreign retirees. Applicants must meet specific criteria, including not having been a Greek tax resident for at least 5 of the 6 years prior to moving, relocating from a country with a valid tax cooperation agreement with Greece, and having pension income originating from abroad.

2. How does healthcare in Greece compare to the United States?

Healthcare in Greece is generally of high quality and significantly more affordable than in the United States. The country has a public healthcare system that residents can access, and many expats also choose to supplement this with private insurance for more comprehensive coverage.

3. Do I need to learn Greek to retire in Greece?

While it’s possible to get by in tourist areas and larger cities with English, learning Greek can greatly enhance your experience and make daily life easier, especially when dealing with bureaucratic processes or in more rural areas. Many retirees, like John and Maria, take Greek language classes to integrate better into their new community.

4. What are the visa requirements for retiring in Greece?

There are several visa options for retirees, including the Golden Visa program, which requires a real estate investment of at least €250,000. Alternatively, retirees can apply for a non-working resident permit, which requires proof of sufficient pension income. It’s advisable to consult with a Greek embassy or a legal professional for the most up-to-date information.

5. How does the cost of living in Greek cities compare to major U.S. cities?

The cost of living in Greek cities is generally lower than in major U.S. cities, especially when it comes to housing, healthcare, and food. However, costs can vary depending on the specific city and lifestyle choices. Athens, while more expensive than other parts of Greece, is still considerably more affordable than cities like New York or San Francisco.

Article reviewed by Enzo Almeida, Business Scaling Expert | Growth Strategist | Driving Expansion in Emerging Markets, on March 22, 2025