Spain looks like a great place to retire... no need to worry about finding a job, and life is pretty cheap. Just remember to do a bit of tax planning before you move. In addition, you might want to consider writing yourself a new will to elect to use the laws of your country of citizenship, rather than Spanish law (there's some nasty surprises there like forced-heirship).
Once you become a resident in Spain, they'll want to tax your pension just like any other Spaniard. Basically you have three options:
- Don't be a tax resident. Either try to only stay here less than 183 a year, or use the "tie-breaker" provision to remain a resident of your home country (if the tax rates are lower there).
- Have your pension taxed in Spain like any other poor sod that lives here. In many taxes, a tax treaty will help you avoid double taxation. In the case of the US/Spain tax treaty, there are two types of pension, private and social security:
- For private pensions, the US is required to give you credit for any taxes paid in Spain
- For social security, Spain is required to give you credit for taxes paid in the US
- Hope nobody notices... can be tricky if you don't have a European passport and need a visa to live here.