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Cheap Places to Retire Abroad

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vernazza italy

The following is a guest post by Lisa, full-time blogger and part-time firefighter, at Home Insurance Comparison, an Australian personal finance blog created to help readers to save money on their home insurance.

Move over Florida… some of the cheapest places to retire are abroad! Between the economy, taxes, and the Social Security system hovering in a questionable state, many frugal minded individuals have become complacent with the fact that their golden years may not be all that rich. But life is what we make it… and it doesn’t necessarily have to be that way.  Retiring abroad isn’t a new concept: in recent years there have been a growing number of people who have consolidated what they own in the states and moved lock, stock, and barrel to scenic locales in France, Italy, Asia, and numerous other locations. Read on to determine whether retiring abroad is a concept which may work for you and your family.

Exotic Locales

Imagine living year-round in a sunny climate, surrounded by luscious fresh fruits and abundant vegetables – a place where walking down the street to the corner grocer is more common than the need to maintain a vehicle. The best places to retire can include the cheapest options – as long as they are safe, convenient, and still afford the same quality of living you’ve become used to.  Some of the perks which lure Americans to retire abroad are the prospect of free medical care and inexpensive health insurance.  Another fact: in a country where the cost-of-living is cheaper, you may find your way clear to employ a full-time housekeeper or gardener on a Social Security budget.

Shop Around and Compare

According to CBS Moneywatch, nearly half of Americans nearing retirement age don’t have enough money in savings to support their retirement years. That’s where finding cheap places to retire abroad can be helpful!  Moneywatch ranks the best place to retire abroad as Cuenca, Ecuador, followed by locations in Mexico, Panama, Uruguay and Italy. Cuenca is a sunny, sophisticated city near the equator.  At 8,000 feet elevation, Cuenca may be compared to Aspen, Colorado, altitude-wise.  As Ecuador’s third largest city, Cuenca boasts beautiful weather year-round, shopping in the modernized suburbs and all the comforts Americans may desire.  Americans who live there have reported doing so – living comfortably and worry-free – for about $17,000 a year.

Retirement Opportunities

In taking a closer look at the best opportunities for retirement living abroad; it is important to consider where your dollar will go farthest, where the best health care may be found, and which country is the safest. Some countries want American citizens to become part of their communities, and are willing to offer incentives so you will spend money in their country. Cash is king and you will be treated as such if you consider setting up residence in the Philippines, Mexico, Panama, Belize, or Malaysia. Attractive financial breaks may include tax incentives, free importation of goods, an easy path to a residency visa, and retiree discounts – potentially including plane tickets within and out of the country. Other exciting retirement options may exist in Costa Rica, which utilizes a retirement structure that does not tax retirement income. Pair that fact with a sunny, tropical climate, gorgeous scenery, outstanding quality of life. Austria remains one of the European countries to live in, according to Best Places to Retire.  Austrian residents enjoy fishing the countless rivers and lakes, walking or hiking the trails of Alps, and skiing. Most retirees fall in love with the more traditional, slower paced Austrian culture.

dental departures

Frugal Considerations

Before you take that leap of faith, it is recommended that you visit the city or region you’re considering – several times. Take into consideration: you may have to travel and undertake a considerable amount of research in order to find a suitable place to retire abroad. You may also need to learn a second language in order to integrate into the culture there.  And  – same as retiring in the U.S. –  many retirees still face the need to continue working in order to make ends meet. Fortunately, the age of Web 2.0 has allowed people to work from anywhere in the world to earn an extra income with online business, trading or stocks, via computer or even mobile phone. If living well in an exotic locale throughout your retirement years sounds more intriguing than playing 18 holes of golf in Florida, retiring abroad may be for you.

What are your thoughts? Where do you plan to retire, and do you see retirement begin affordable, based on your current situation?

retirebyforty’s thought: My early retirement will be in the United States, but after we both retire, all options are open. I have family in Thailand so that is a great option for me. We also love Italy and it would be unbelievable to live there for a few years. Maybe we could move every few years and experience new cultures and adventures constantly. That would be a great retirement especially if it’s more affordable.

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{ 41 comments… add one }
  • SB @ One Cent At A Time August 26, 2011, 4:51 am

    Good points Lisa mentioned. I think it depends on individual, I won’t like to live separately from my family and friends, so I will not move anywhere else after retirement, I’ll stay put

  • 20'sFinances August 26, 2011, 7:58 am

    I like the Retireby40’s thought of moving to different places in retirement. As someone in his 20’s, I think this sounds amazing. My wife and I love to travel. Although, I can’t imagine I would enjoy moving so many times when I am in retirement age. Ideally, I would like to have two homes in the U.S. One in the north and one in the south and live in each one for half of the year (to have mild winters/cool summers). I hope to be able to do this by getting a home that I can rent out to pay for the mortgage.

    • retirebyforty August 26, 2011, 9:12 am

      It would be great to have two homes in the US. One couple I know went to live in Italy for a year and they had an amazing time. I think you get much more out of it if you spend more time. A week or two is not enough to learn about new culture.

  • Financial Success for Young Adults August 26, 2011, 9:08 am

    I could definitely see myself retiring abroad. Especially if your dollar goes that much farther. I’m looking up Cuenca right now! 🙂 I speak Spanish and English.

    • retirebyforty August 26, 2011, 9:10 am

      I took 2 years of Spanish in High school, but I don’t remember anything now. I’m sure I can learn it though. 🙂

  • Marie at FamilyMoneyValues August 26, 2011, 10:00 am

    If it was just me I’d definitely look into it – what an amazing adventure. But I value family and spouse over adventure so I will stay in the states as long as they do too!

    • retirebyforty August 27, 2011, 10:11 am

      My wife loves traveling too so I think we’ll go together. Our family can always come stay with us in Italy for a few months out of the year. 😉

  • Andy Hough August 26, 2011, 10:02 am

    Living half the year in another country and half in the U.S. is another option. I loved my experience living in another country but I’d still like to be home for more than short trips.

    • retirebyforty August 27, 2011, 10:10 am

      I grew up in many different places so I guess home for me is anywhere. Half in US and half in another location is nice.

  • krantcents August 26, 2011, 12:35 pm

    Since my children live in the U.S. (California), I think I am locked in! BTW, I am not complaining, I like it here. I was lucky enough to have timing on my side and bought when housing was cheaper. It helps that I have a lot of retirement savings, pension and Social Security to help. After saying that, it will not prevent us from traveling.

    • retirebyforty August 27, 2011, 10:09 am

      10 years ago, I would say Mexico is an option for you, but now I’m too scared. I think you are already set anyway so retiring in CA is not a problem at all.

  • Buck Inspire August 26, 2011, 11:18 pm

    I always thought I would retire in the US, but great points about medical care and health insurance. Having visited the Philippines and Costa Rica, retirees will have no problem adjusting to the carefree, enjoy your life rather than stress mindsets if you move there.

    • retirebyforty August 27, 2011, 10:08 am

      Yeah, healthcare is so expensive here in the US. First rate healthcare (surgery and such) is available in other countries for much cheaper. I’m not sure about health insurance though.

  • 101 Centavos August 27, 2011, 4:48 am

    Six months in Italy, and six months in Thailand, now *that’s* a retirement plan….

    • retirebyforty August 27, 2011, 10:07 am

      That sounds great! 🙂
      I know Thailand is quite affordable, but I need to research more about Italy.

  • Barb Friedberg August 27, 2011, 11:59 am

    I have some concerns about health care in some international locations. But the scenery and cost of living are certainly compelling.

  • B Kelly @ MoneyMasteryAcademy August 28, 2011, 6:28 am

    Thailand is a good choice as are many countries in South East Asia. Try Malaysia or Singapore (if you like a metropolitan lifestyle) … the diverse culture in these countries can be quite interesting .. the weather is warm and lovely too..

    • retirebyforty August 29, 2011, 9:22 am

      I’ll have to visit those countries. Singapore is quite expensive, isn’t it?

      • RealSinkie September 15, 2011, 6:18 am

        Singapore is very expensive. A small state-built home will cost you a cool half million dollars, im talking about 110 sq m max, and to top it off, at the end of 99 years the state takes it back. If you opt for a nicer apartment with facilities like a pool and is a gated estate, prices start at 700k usd for a 80 sq m hole in the wall.

        Living expenses vary, but to put it at a basic line, utilities will cost you $300 a month, cooking at home for 2 will cost an average of $200 a week. Traveling will cost around $120 a month. A beer at a bar costs over $10. I don’t see how Singapore is a retirement haven unless one is rich… In which case, why choose Singapore?

        • retirebyforty September 15, 2011, 10:18 am

          Thanks for your input. I know Singapore is probably the most expensive place in SE Asia. Hong Kong? Singapore is probably a good place to go for work, but I think it’s way more affordable to retire in Thailand or other countries around there.

          • RealSinkie September 15, 2011, 4:41 pm

            Agreed… in terms of vibrancy of economy and variety of skilled jobs, Singapore would be a good place to go. So would Hong Kong.

            Earn in these places, retire in Koh Samui in Thailand!

  • Darwin's Money August 28, 2011, 8:08 am

    I like the idea of having the money to do extended stays in various locales but I can’t imagine ever giving up my citizenship and living somewhere else permanently. Italy sounds cool – anywhere in western europe really. I am looking forward to traveling the world more when the kids are older. Who knows, maybe we’ll find a country we fall in love with!

    • retirebyforty August 29, 2011, 9:23 am

      You can’t really give up US citizenship. You’ll keep it and probably get a tourist visa or some kind of retirement visa for other countries.

  • Rick August 28, 2011, 2:00 pm

    Hi, thanks for sharing this information with everyone, Retireby40. I think that spending half of the year abroad and the other half in the U.S. is ideal. Everyone wants the best of both worlds. However, if paying for and maintaining two homes is not an option, I think the idea of moving to Mexico is wonderful. I’m currently looking into it and I blog about it on http://www.retireinnayarit.com. The cost of living is much lower and you have the added benefit of Mexico’s convenient geographic location (unlike other comparable retirement spots in Europe and Central America) and a very considerable amount of U.S. retirees, something to make you feel even more at home. What are your thoughts? I’d love to hear them.

    • retirebyforty August 29, 2011, 9:25 am

      Mexico just have a terrible reputation lately. I’ll go over to your site and check it out. I like Mexico for the convenient location too.

  • Sandy @ yesiamcheap August 28, 2011, 4:06 pm

    Costa Rica has been getting really popular. I keep hearing about how easy they make it for people to retire there. My step-father wants to retire to St. Kitts but my mom isn’t quite in agreement yet. We’ll see where they end up.

    • Rick August 30, 2011, 6:27 am

      How do you think St. Kitts compares to other retirement spots? I’m not really familiar with that area.
      Hope to hear from you soon.

  • Rick August 30, 2011, 6:25 am

    Well, the thing is, it’s easier to write the country off completely than do the research to find out which are the safe parts of the country (believe me, it’s the majority of Mexico). For instance, Riviera Nayarit, in the state of Nayarit, is very safe and known for being a wonderful host to expats. With modern conveniences, friendly people and a growing population of American retirees, I feel like it’s a great example of the lifestyle Mexico can offer. I blog about retirement in Mexico to learn about the subject and keep folks like me up to date. Let me know if I can answer any questions and feel free to stop by and leave your comments on my blog. Have a great day, Rick

  • Jen @ Master the Art of Saving August 30, 2011, 5:58 pm

    Right now retirement seems impossible (still working on that) but we would love to live abroad. We’re actually planning a trip to Italy next year to check it out and see if it’s somewhere we’d enjoy living. Must make more $$$

    • retirebyforty August 30, 2011, 10:52 pm

      I can’t imagine anyone not liking Italy. 🙂 I would love to live abroad for a few years too. It’s going to be difficult to pull off with a kid though.

  • Teri Green October 11, 2011, 1:23 am

    Definitely, retiring abroad is one of the cheapest places to retire and you’ve got some sort of a bit of adventurism within you to enjoy it at ease, this is one way of enjoying your retirement and not being dull about it. But I would advice you to select atleast 3 or 5 of them, filter them with your categories, like cost of living, health care, weather, and etc. then if you have some extra cash and leisure time, try and visit these places and get a feel of them, see the positive and negative side of them and balance it. You might want to consider also some asian countries like Malaysia or Thailand, and even the Philippines.

  • John Scherber February 17, 2014, 2:48 pm

    We chose San Miguel de Allende six years ago for its combination of climate, culture and the basic warmth of its people. I became interested in the process of becoming an expat and wrote a book based on conversations with 32 Americans and Canadians who had also made the move. It’s mainly a way of getting inside their heads. It’s called San Miguel de Allende: A Place in the Heart. Here’s a link to an excerpt on my website:?www.sanmiguelallendebooks.com/aplaceintheheart.html

    • retirebyforty February 17, 2014, 5:06 pm

      Sounds great! I’ll drop by to check it out. The book that is. 🙂

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