(MONEY Magazine) – First, the good news: Jane Parker, co-author with Allene Symons of Adventures Abroad (Gateway Books, $12.95; 800-669-0773), estimates that a couple can live in some foreign retirement Edens for a third to a half the cost of an equivalent lifestyle in the U.S. "You can manage comfortably for $1,800 to $2,000 a month in Portugal or $1,000 to $1,200 in Mexico and slightly more in Costa Rica," she estimates. On those budgets, you could afford a 1,000- to 2,500-square-foot home in a middle-class neighborhood, buy fresh food in open- air markets, dine out on local delicacies and attend plays, concerts and operas for $8 or less. Weighing factors that American retirees consider important when moving abroad, Lifestyle Explorations, a Boston company, has pinpointed these locations as particularly attractive: Canada's Maritime Provinces (New Brunswick, Nova Scotia and Prince Edward Island), Costa Rica, Honduras, Ireland, Portugal and Uruguay. Before you pack your belongings, however, the experts recommend you make the following moves: Look before you relocate. Then, look again . . . and again. In choosing where to retire abroad, start by considering most of the same criteria that apply Stateside, including an affordable cost of living, amenable climate and good health care (see the table on page 69). To be sure your needs will be < met, visit an area several times before retiring there even part time. Extended visits will also help you learn the locals' attitude toward Americans and whether cultural habits are compatible with your personal tastes. For a free packet of information about living in any of the places recommended by Lifestyle Explorations, call 508-371-4814. Make sure your taxes don't rise. Many countries have higher federal tax rates than the U.S.; for instance, the top rate is 57% in France. Find out whether you must pay taxes to your new country, to the U.S. -- or to both. Internal Revenue Service Publication 901: U.S. Tax Treaties spells out agreements with 40 countries. Also, check out IRS Publication 593: Tax Highlights for U.S. Citizens and Residents Going Abroad. (Call 800-829-3676 for free copies of both.)

Be ready to revamp your investments. Municipal bond interest, for example, may be tax-free only for U.S. residents; your new host country may tax it. And you may want to reduce your portfolio's volatility. Technology makes it a cinch to trade anywhere in the world, but you may be slow to catch market movements if you're in Tonga or Bali. "I have a general rule," says financial planner Malcolm Makin of Westerly, R.I. "The more exotic the culture you're moving to, the more boring your investment strategy should be." Be aware that the dollar can be a fickle friend. In 1985, a dollar bought 10 French francs; three years later it was worth only 5.5 francs, and some expatriates with incomes and savings in U.S. currency could no longer afford to live there. You can be hurt even worse, however, if you convert your retirement fund to local currency. A cautionary example: In 1976, Mexico began devaluing the peso, and Americans who had retired there and put their assets in pesos saw their dollar value ultimately decline more than 75%. That meant many of them would have been impoverished if they had returned to live in the U.S. And don't make the mistake of assuming you will never want to come back. Just five years ago, the respected guide Travel and Retirement Edens Abroad included a chapter with this title: "Yugoslavia -- A Friendly Place to Visit and Retire."