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:

  1. 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).
  2. 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:
    1. For private pensions, the US is required to give you credit for any taxes paid in Spain
    2. For social security, Spain is required to give you credit for taxes paid in the US
  3. Hope nobody notices... can be tricky if you don't have a European passport and need a visa to live here.