More than 373,000 Americans had retired abroad by 2013, according to the Social Security Administration, and for various reasons. For some, the decision to retire overseas could be based on a desire to experience different cultures and surroundings. Others may want to be closer to relatives or friends.
But for a certain percentage of would-be retirees, the decision to retire in a foreign country is one based mostly on economics. Why? Because it is often far less expensive to put roots down in developing countries with less-established economies. And when you’re living on a fixed income, the notion of a luxurious lifestyle somewhere else can be quite alluring.
But, should retirees really consider an international move based on the financials alone? Dan Prescher, senior editor of InternationalLiving.com, says no.
“If you don’t have a sense of adventure, a real desire to experience another culture, some patience, and a sense of humor, you won’t have a good time abroad no matter how inexpensive a place is… you’ll simply be an economic refugee,” explains Prescher.
And that makes sense. After all, it takes more than a roomy budget for someone to be happy in America. If you wouldn’t enjoy what your new country has to offer, having some extra cash probably won’t improve your life considerably. According to Prescher, there is also a lot to consider when choosing a life abroad that has nothing to do with money.
“The rest of the world is not America Lite… nor does it want to be,” he says. “You will not find exactly the same life you had back home at half the cost. These are unique countries with their own cultures, economies, histories, and ways of doing things. If those unique characteristics bother you or don’t interest you, there is no point in moving to those countries no matter how low their general cost of living.”
8 Cheap Places to Retire Abroad
But what if you are interested in other cultures, open-minded to new experiences, and want to live on a fraction of your normal budget? If that’s the case, you have plenty of research ahead of you. The truth is, there are dozens of countries that offer a considerably lower cost of living than the U.S., Canada, or Europe, and often with beautiful scenery, perfect weather, and plenty of expat camaraderie to boot.
If you’re looking for an inexpensive place to retire abroad, consider these eight countries that might just be exactly what you’re looking for.
The Huffington Post called Nicaragua an “up-and-coming retirement destination” in 2013 for a reason, and that reason seems to center around its unbelievably low cost of living.
Nicaragua has the lowest cost of living in Central and South America, according to the stats. Meanwhile, the United States Department of State reports that Nicaragua experiences lower rates of crime and homicide than neighboring Latin American countries. Nicaragua’s Granada has become an extremely popular place for adventurous American retirees due to its beautiful location along the coast of Lake Nicaragua, its lively expat community, and its relevant historical and architectural attractions.
According to statistics haven Numbeo, you can get a gallon of milk in Nicaragua for around $1.11, a pack of cigarettes for $1.10, and a one-bedroom apartment in a city center for around $244 per month.
Another country with insanely cheap prices on everything from housing to groceries is Vietnam. In Vietnam, you can get a domestic beer for around a buck, a bottle of water for around 50 cents, and a three-bedroom apartment outside of a city center for around $538 per month.
With beautiful scenery, an unbelievable culinary scene, and culture galore, Ho Chi Minh City has become a popular place for Americans and Europeans to retire on a budget. As the U.S. Department of State reports, most travelers should feel just as safe in Vietnam as they do suddenly rich. “Violent crimes, such as murders, armed robbery, and kidnapping, remain very rare in Vietnam, especially for the expatriate community,” the State Department says.
According to International Living, a typical couple can expect to live comfortably in Ecuador for somewhere between $1,600 and $2,400 per month. Even on the high end, that’s less than $30,000 a year for quality living in a tropical, beautiful, and unique environment brimming with culture and opportunity.
As International Living reports, an upscale two-bedroom, two-bathroom home in Ecuador will likely run you only $600 per month. Meanwhile, $25 should e enough for utilities, and $15 should cover a basic cell phone package. Apparently, it’s also possible (and popular) for Americans to buy into the local health care system for around $140 per month, or $250 for a private health plan for a retired couple.
Thailand is not only beautiful, it’s also cheap to live, enjoy leisure activities, and eat. For example, a meal at an inexpensive restaurant will likely run you somewhere in the neighborhood of $1.50, while a three-course meal for two at a mid-range restaurant will only cost you around $15. A one-way bus ticket costs a little over 60 cents, and the average Internet bill comes in at less than $20 a month.
But here’s the kicker: a one-bedroom apartment in a city center usually only costs around $336 per month, making retirement in Thailand an attractive proposition for those who want to experience international city living on a rural Midwestern budget.
French blogger Pauline of ReachFinancialInedpendence.com has been living in Guatemala off and on since 2004, mostly due to the low cost of living and her desire to live a semi-retired lifestyle built entirely on online income.
According to Pauline, you can find a two-bedroom, fully furnished apartment in the capital city for $500-$800 per month. In many parts of Guatemala, you can visit a doctor for $10 or spend a night in a mid-range hotel for around $30.
But one of the biggest draws of life in Guatemala for early retirees is the affordability of household help. According to Pauline, in Guatemala, you can hire a full-time maid/cook/nanny for around $200 a month, a full-time handyman/maid for $300 per month, or a house cleaner for $7-$10 per day.
Several factors continue to make Belize a go-to destination for those considering a cheap retirement abroad. The fact that its citizens speak English as a first language is a likely draw, as is its proximity to crystal-clear blue waters and reputation for amazing snorkeling and outstanding scenery.
What’s more, you can rent an unfurnished house for around $400 per month in Belize, according to International Living, and even hire your own part-time maid and gardener for around $130 per month each. According to the Huffington Post, Belize also makes it extremely easy for foreigners to establish residency and even run a business completely tax-free.
With a three-bedroom apartment in a city center costing only $402 per month, it’s no wonder the Philippines remains a popular destination for Americans who want to retire abroad. According to Numbeo, a local bus ticket in most cities will run you less than 20 cents, while a meal for two at a mid-range restaurant only costs around $14.
According to a recent article in U.S. News and World Report, you can see a doctor in most regions of Southeast Asia for less than $20 while also receiving much better care than you might expect. Meanwhile, they report that a retiree couple could reasonably expect to live an upscale lifestyle on less than $1,000 per month, including in-country travel. The local government also sweetens the pot by offering one of the easiest paths to permanent residency in the world.
Panama was named International Living’s “World’s Best Retirement Haven in 2014″ for a reason, and part of the allure is definitely its low cost of living and the overall value it offers for each and every retirement dollar.
As International Living reports, a couple can live comfortably in beautiful Boquete for less than $1,500 per month including rent, utilities, transportation, groceries, household goods, and entertainment. Meanwhile, a similar lifestyle in Panama City may only run $2,000-$2,500 per month.
But the icing on the cake is Panama’s treatment of wealthy expats who can prove their ability to sustain themselves. Actually, retirees who can prove incomes of at least $1,000 per month are welcome to apply for legal residency and all of the perks that come with it.
Should You Retire Abroad?
Does all of this sound tempting? If retiring abroad on the cheap sounds like a move you might want to make, you’re certainly not alone. However, there are certain factors you should consider before you pack up your life and board a plane to Panama.
According to International Living’s Prescher, the first thing anyone should do is take some time to honestly profile themselves.
“Be honest about why you’re moving in the first place and what you’re willing to live with… and without,” explains Prescher. And if you find that you may not enjoy the reality of retirement abroad nearly much as the idea of it, there’s no shame in that, he says.
“If you absolutely need a certain brand of peanut butter or sheets of a certain thread count or a bowling alley nearby or the grand baby in your lap twice a week to be happy, then that’s what you need to be happy… and if the place you’re going doesn’t have these things and you can’t find acceptable substitutes or do without them, don’t go there. You won’t be happy,” he says.
Before you decide, Prescher and other experts suggest doing your research. Take some time to learn as much as you can about different destinations and cultures and put some effort into reaching out to other retirees who have already experienced it.
With the collective wisdom of the Internet at your disposal, there is no reason to fly blindly into a new situation that you may or may not like. Use technology not only to do your research, but to seek out real answers to your most important questions. There is simply no reason not to.
“The Internet has changed almost everything about being an expat. Instant communication with friends and loved ones back home, the ability to handle financial matters online, the availability of media programming and entertainment from back home… these are huge benefits to expats once they move,” explains Prescher. “But before you move, it’s now easier than ever to do focused, intensive research on very specific locations and to benefit from the experiences of expats already living the life in those places. Take advantage of it.”
Have you thought about retiring abroad to stretch your savings? Let us know in the comments.