Retiring abroad is more than just a passing trend. As many as 3.3 million Baby Boomers in the United States are making plans for an overseas retirement. In fact, more than half a million people living outside of the U.S. receive some sort of Social Security benefit.

From Europe to the Caribbean to South and Central America, more and more retirees are looking beyond the Sunshine State to more exotic (and financially friendly) destinations. It's a big decision that begs one very obvious question: How will retiring abroad affect my finances?

What Retiring Abroad Could Mean for Your Expenses

Retirement is the long-term financial goal that typically gets the most attention, and for good reason—the strongest asset you have when it comes to retirement planning is time. Thanks to the power of compound interest, the sooner you begin saving, the better. Every person's individual needs are different, but it's generally wise to assume that you'll need approximately 70 percent of your pre-retirement income to see you through your golden years.

Of course, if your expenses are lower, you could live a more comfortable lifestyle for much less. This is where retiring abroad comes into consideration. While most of us don't have much wiggle room in terms of our income during retirement, our expenses during retirement are very much within our control.

On average, Americans 65 and older spend roughly $45,756 each year, according to the Bureau of Labor Statistics. That works out to be about $3,800 each month. Meanwhile, most American homeowners spend over a third of that amount on housing alone—with retirees spending an additional $4,274 each year on out-of-pocket health care expenses.

The picture changes quite a bit, however, when you look at these big-ticket expenses outside of the United States. For example, one expat rents a furnished, two-bedroom apartment in Costa Rica for just $700. In Costa Rica, the high-quality health care also costs considerably less. Factor in the country's slower pace and breathtaking natural beauty, and it's easy to see why many more Americans are retiring abroad in droves.

How to Prepare for Retiring Abroad

Preparing for retiring abroad requires many of the same elements as retiring stateside. No matter where you settle down, enjoying a smooth retirement comes down to making a realistic budget. How much money will you have coming in during these years? To determine this, factor in everything from 401(k) and IRA distributions and pensions to Social Security benefits and any passive income streams you may have in the works.

This should provide a pretty clear idea of what you'll have to work with each month. Not sure where to start? A CERTIFIED FINANCIAL PLANNER™ professional can bring things into focus for you pretty quickly. They can help you budget for the long term and make the most out of your income in retirement. Another area they can help you understand is how retiring abroad may impact your taxes.

From there, begin researching destinations that will stretch your money the furthest. Deciding on where to retire abroad involves more than just money, of course. You'll also want to think about where you'll be happiest. Some may prefer to keep a U.S. residence and spend part of their time stateside. Others may be drawn to the idea of living overseas fulltime.

At the end of the day, it's your retirement. It should be a time of financial comfort that doesn't come at the expense of your emotional well-being. The nuances of retirement planning can be a lot to digest, but a CFP® professional can make the journey a whole lot easier.