Retirement Reality: U.S. vs. Italy - Because Numbers Don't Lie
- Caesar Sedek
- Apr 28
- 5 min read
Updated: May 1
When I tell people we’re leaving America to retire in Italy, the reactions fall into two predictable categories.
Some people look wistful, imagining long lunches under lemon trees.
Others, almost instantly, frown.
“But taxes are higher there, right?”
“But you’ll make less money.”
“But what about healthcare?”
It’s always about money.
Always about fear.
I used to think the same way — until real life broke through the stories we tell ourselves.
It happened quietly, almost mundanely, the way disasters often do.
On New Year's Day 2024, my mother, who lives in Poland, slipped at home and broke her hip.
In America, that accident would have triggered a financial avalanche: ambulance rides, emergency surgery, hospital stays, rehab, physical therapy, in-home nursing, medical equipment.
Even with Medicare, even with good supplemental insurance, it would have cost anywhere from $45,000 to $100,000 out of pocket.
If she couldn’t pay? She wouldn’t get the care she needed — or I would have had to pull her into my home, scrambling to cover what insurance wouldn’t.
But in Poland which has basically the same helthcare setup as Italy...
It cost her nothing.
Not one dollar (or Złoty)
Not one bill.
Not one sleepless night wondering which bank account to drain.
She had the ambulance ride (both ways), the surgery, the hospital stay, the therapy, the equipment, the nursing care — all provided, without a billing department stalking her recovery.
I remember sitting at my kitchen table that night, after talking to her, staring at my own retirement spreadsheets and thinking:
This is never going to work here.
Not because I hadn’t saved.
Not because I didn’t work hard enough.
Because the American system itself is broken beyond repair.
And so I started running the numbers seriously.
For myself. For my wife. For my future.
Here’s what they showed.
Most Americans retire with $200,000 to $230,000 saved.
(Source: Federal Reserve 2022 SCF, Fidelity 2024 Report.)
If you stick to the classic 4% withdrawal rule, that gives you about $8,000–$9,200/year from your savings.
Social Security provides about $23,000/year.
Gross income: ~$31,000–$32,200/year.
But gross income is a fantasy.
After federal taxes (~10% effective), state taxes (4%), and Medicare Part B & D premiums ($2,700/year), you’re left with around $25,000/year to live on.
Meanwhile, your real annual expenses stack up like this:
Average US Retirement Costs (Annual) | |
|---|---|
Property taxes | $5,000 |
Homeowners Insurance | $2,000 |
Car Insurance | $1,700 |
Utilities & Internet | $3,600 |
Groceries and basic living | $18,000 |
Healthcare premiums + deductibles | $7,500 |
Total | $37,800 |
That’s a $12,000 shortfall every single year.
And that’s assuming everything goes smoothly. No surgeries. No accidents. No bad markets. I'm even ignoring the inflation for the sake of simplicity.
You burn through your savings trying to survive — and if you hit a major health event like a broken hip at 75, the math isn’t survivable.
Italy, by contrast, tells a different story.
Take that same $31,000–$32,000 income.
Apply Italian taxes (23% IRPEF on the first €28k, 35% above, plus 2% regional tax) — about 25% total.
You’re left with around €23,400/year (~$25,000/year) - about the same as in the US, BUT
No Medicare premiums.
No massive supplemental insurance needed.
No $7,500 annual health expenses hanging over your head.
Basic living expenses in Italy come in dramatically lower:
Average Italy Retirement Costs (Annual) | |
Property taxes | €200 |
Homeowners Insurance | €200 |
Car Insurance | €2,000 |
Utilities & Internet | €2,400 |
Groceries and basic living | €15,000 |
Healthcare premiums + deductibles | €1,000 |
Total | €20,800 (~$23,000) |
You actually have a small surplus every year.
Enough to live modestly, securely, even travel within Europe if you’re careful.
Now let’s talk about my situation.
Because I’m not the average saver.
After a lifetime of hard work, we’ve built a bit over $1 million in retirement savings — on top of expected Social Security.
What does that buy me in America? (again...using the 4% formula every CFP in America is pushing...more on that in the future)
Pulling 4% a year = $40,000/year from savings.
Social Security = $30,000/year.
Gross income: $70,000/year.
After taxes (~12% federal, 5% state) and Medicare premiums ($2,700/year), we’d have about $55,000/year left.
Sounds comfortable — until you run the basic living expenses again:
Average Italy Retirement Costs (Annual) | |
|---|---|
Property taxes | $5,000 |
Homeowners Insurance | $2,000 |
Car Insurance | $1,700 |
Utilities & Internet | $3,600 |
Groceries and basic living | $22,000 |
Healthcare premiums + deductibles | $7,500 |
Total | $41,800 |
$55,000 minus $41,800 leaves about $13,200/year for everything else: inflation, home repairs, car breakdowns, gifts for grandkids, trips to visit family, unexpected medical costs.
If either of us gets sick? If one serious health event hits?
We could easily lose $50,000 in one year — even with Medicare.
In Italy?
Same $70,000 gross.
About 27% tax (IRPEF + region) = €19,000.
Net: €51,000/year ($54,000).
Basic living expenses:
Average Italy Retirement Costs (Annual) | |
|---|---|
Property taxes | €200 |
Homeowners Insurance | €200 |
Car Insurance | €2,000 |
Utilities & Internet | €2,400 |
Groceries and basic living | €15,000 |
Healthcare premiums + deductibles | €1,000 |
Total | €20,800 (~$23,000) |
Surplus: nearly $29,000/year.
In America you survive as long as your money does. In Italy, you survive because you exist.
No gambling.
No praying we don’t fall or get cancer or need a hip replaced.
No rationing groceries to pay for prescription drugs.
Just life.
And that’s the point, isn’t it?
This isn’t about comparing tax brackets or obsessing over marginal savings percentages.
It’s about the simple dignity of aging without terror.
Of knowing you can fall down, break something, get sick — and still be treated like a human being instead of an actuarial statistic.
In the U.S., your survival depends on your health, your savings, your luck, your negotiating skills with insurance companies.
In Italy, your survival is considered a basic human right.
It took my mother breaking her hip for me to finally see it clearly.
And it took running the numbers — really running them, not just hoping — to know there was no way I could stay.
Scenario | Net Income After Taxes | Core Costs | Healthcare Shock | Outcome |
U.S. Average Retiree | ~$25k | ~$38k | ~$75k | Poverty risk |
Italy Average Retiree | ~$25k | ~$23k | ~€0-500 | Modest, stable |
U.S. $1M Retiree | ~$55k | ~$42k | ~$75k | Manageable but risky |
Italy $1M Retiree | ~$54k | ~$25k | ~€0-500 | Strong surplus |
Leaving America isn’t running away.
It’s refusing to play a rigged game.
And once you see the real math, it’s not even a hard decision anymore.
It’s survival.
It’s freedom.
It’s just… common sense.
I’d love to hear your thoughts.
If you’re planning your own move — or even just thinking about it — what questions are you still wrestling with?
What parts of the math feel clear, and what parts still feel murky? What other topics are top of mind?
Drop a comment below — I read every one, and your questions help shape the guides and tools I build next.
P.S.
Most blogs sell you a dream. I’m more interested in showing you the math.
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With all due respect not all your numbers are true. In US while on Medicare and having a supplemental insurance you don't pay $40K out of pocket. My yearly deductible is less than $300. I don't pay anything for doctors visits either. Yes you do have a monthly premium.