New Delhi, April 16 -- America's divisive political culture and rising cost of living are fueling interest in retiring abroad. It can be a great way to cut your expenses and improve your quality of life-as long as you understand some key factors.

The prospect of kicking back in a Tuscan villa or hacienda in Tulum certainly holds appeal. But many expats devote more time to imagining their lifestyle than investigating the less romantic considerations: financial management, tax planning, and healthcare. Giving those factors short shrift can lead to costly mistakes.

There's no precise measure of how many Americans are retiring abroad. But one indicator has been heading up: The Social Security Administration paid retirement benefits to 463,4...