If you’re part of the baby boom generation heading into retirement, you may also be dealing with a smaller-than-hoped nest egg. But despair not. You would be in good company if you chose to address the shortfall by moving to any number of countries where the cost of living is much lower and you could live on Social Security payments or small savings.
Where is the best place to execute this strategy? It depends — on your requirements, your finances and your tolerance for adventure. Here is a sampling of the best places recommended by retirement gurus.
A word of caution, though: The internet is full of breathless prose about cheap places to retire. Take it all — even articles from “experts” — with a fistful of salt. Instead of banking on what you read, do your research. Investigate carefully before you go. When you choose a destination, wait before you purchase a home — no matter how low prices appear — until you’ve lived there a year, know the local real estate market, laws, taxes and can determine whether that’s where you truly want to live.
Here are 11 places attracting expatriates in search of a good but frugal retirement:
1. Cayo, Belize
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Belize, a tiny Central American nation on the Yucatan Peninsula, is home to a large American expatriate community. The weather is kind, costs are low and the country’s official language is English. The Cayo District — with a population of roughly 72,000 — is a jumping-off point for eco-tourism adventures.
National Geographic writes: “Belize is graced with more than 180 miles of coast, thick rain forest, and Maya ruins; and beneath its Caribbean waters lies one of the most extensive barrier reef systems in the world.”
North American retirees can inexpensively. Investopedia says:
… a frugal couple living in modest housing can get along just fine on around $1,200 per month. Retirees who are willing to pay a bit more in return for greater comfort and convenience should expect regular costs above $1,700 for a couple, not including alcoholic beverages or substantial travel.
2. Puerto Vallarta, Mexico
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Faraway locations beckon to some retirees, but many more prefer living within a fairly short plane ride of the States. Mexico, with its low costs, warm weather and tradition of hospitality, fits the bill. Puerto Vallarta is on Mexico’s Pacific coast, in the state of Nayarit. “Its combination of first-class urban amenities and charming palm-fringed villages have made it an appealing retiree draw,” says AARP Magazine. Some 40,000 expatriates and foreign retirees live in Puerto Vallarta, according to U.S. News & World Report.
A two-bedroom furnished apartment with an ocean view can be had in Puerto Vallarta for around $1,000 a month — and less as you move further inland, International Living.com editors say, in an article published by the Huffington Post.
Safety is an important consideration today in Mexico, so make it part of your research. Reports from American visitors and residents there vary widely. While some parts of Mexico suffer from extreme gang violence, others are safer. Here is the U.S. State Department’s Mexico travel advisory.
3. Atenas, Costa Rica
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Costa Rica is another retiree destination within relatively quick and cheap reach of the United States. Like Belize, it is warm, inexpensive and beautiful. “U.S. retirees have flocked here for years, drawn by its mild climate, its prosperity (relative to other Central American republics), its literacy rate, its health care, and, significantly, its stable government—with no army,” says AARP.
Atenas is a small mountain town of about 5,000 — home to coffee plantations and Spanish language study programs. It is also a mountain biking mecca and the residents are proud of their ideal, temperate climate, says CostaRica.com.
Remember, though, that this is the developing world. Retirees who expect Costa Rica to be just like home but cheaper are in for a rude surprise, says a Marketplace profile of the region. Potential difficulties include intense bureaucracy, some crime, a rainy season and a level of development that can be rudimentary compared with the United States.
The level of amenities varies a good deal from place to place. Investopedia writes of “modern cities full of cultural attractions and entertainment venues, reliable infrastructure and access to high-quality health care”:
If you are a single, budget-conscious retiree, you can live very comfortably in Costa Rica for about $1,300 to $1,600 per month. A couple can cut per-person costs even further by sharing housing expenses.
4. Panama City, Panama
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Once considered a cheap retirement haven, Panama and its charms have been discovered. Costs are rising. Live and Invest Overseas’ Kathleen Peddicord writes at U.S. News: “You can live modestly in this city on a budget of $1,500 per month, but a more realistic monthly budget for an average couple of retirees would be $2,000.”
Costs are lower outside Panama City. In Pedasi, a town of about 2,500 on the Pacific Ocean, “a couple could definitely live like they did in the States for $2,000 per month, and this would be living well,” a U.S. expat tells The Street. Panama’s attractions are many: Health care is excellent and can be inexpensive, depending on where you go. Spanish is the official language of this Central American nation. The currency is the U.S. dollar, which means Americans need not worry about losing value to exchange rate fluctuations.
5. Lake Atitlan, Guatemala
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Life in Lake Atitlan, in the Mayan highlands of the Sierra Madre Mountains, is an exotic adventure. Simon Fairbairn and Erin McNeaney, a blogger couple who call themselves “digital nomads,” tracked their spending to the penny during their two and a half months in San Marcos, on Lake Atitlan. They were there during high season (November to January) in 2014 and say that their accommodations — $700 a month for a modern studio apartment overlooking the lake — were on the higher end. The couple’s total expenditures ran, on average: $1,408 per month.
Mayan traditions still very much alive in the lake region, about 75 miles from Guatemala City.
6. Buenos Aires, Argentina
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In a good Buenos Aires neighborhood, an apartment can be rented for about $400 a month or purchased for roughly $70,000, according to Bankrate. Sophisticated transportation, communications and internet services are cheap and health care, too, is a bargain. Entertainment can be cheap, but the prices in European-style restaurants are on par with those in the United States.
“Depending on where you live and your lifestyle, it’s possible to live comfortably for about $1,000 a month if you’re on your own, or about $1,500 a month if there are two of you,” and life in rural Argentina is considerably cheaper, says Investopedia. A cautionary note: Inflation has been high in Argentina. Keep an eye on the country’s economy and politics if you are interested in moving there.
7. Chiang Mai, Thailand
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“For under $2,000, I live like a king,” one American retiree in Chiang Mai, Thailand, tells Bankrate. Thai people are gracious, the food is delicious and inexpensive and Chiang Mai, a culturally rich city of about 148,000 in the country’s north, is home to many Westerners. The health care system is good and medical costs are low, Bankrate adds.
Due to its location in the hill country, Chiang Mai has somewhat cooler climate than other parts of tropical Thailand.
8. Granada, Nicaragua
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North Americans find the cost of living low in the Central American country of Nicaragua. Granada, a colonial town named after the Andalusian city in Spain. was founded by conquistadors in the mid-16th century on the shore of Lake Nicaragua. Today, it attracts a small community of American expats. Bonnie Hayman of International Living calls Nicaragua the “safest country in Central America.”
Colonial homes with high ceilings, painted tiles and private courtyards can be purchased in Granada for as little as $40,000, Kathleen Peddicord, of Live And Invest Overseas, writes at U.S. News. High school sweethearts Pat and Rich Buff, who moved to Granada from Austin, Texas., tell International Living that they live comfortably there for $1,200 to $1,500 a month.
9. Languedoc-Roussillon, France
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You’d think France would be unaffordable for U.S. retirees. But those who live there say “The Languedoc,” as the region also is called, is “French country living at its best and most affordable,” as NextAvenue contributor Richard Eisenberg writes in Forbes. One plus he names: high internet speeds. A minus: high taxes. But that’s a quibble. This is, after all, France, and Languedoc is home to France’s largest wine-producing region, lovely old villages and Mediterranean beaches.
“Languedoc-Roussillon boasts so much to see and do, from Europe’s largest nudist beach, skiing in the Pyrenees, canoeing and cycling to the UNESCO sites of the medieval Cathar citadel at Carcassonne, the Canal du Midi, fantastic markets, theater and shows in the Roman capital Montpellier, and endless village festivals,” writes Live And Invest Overseas.
Retiring in the South of France is not cheap, but homes in the Languedoc can be affordable by American standards — from $138,400 to $320,000 to purchase, according to InternationalLiving.
10. Algarve, Portugal
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Some 100,000 U.S. expats call the Algarve region of Portugal’s south their home, says U.S. News. Among the reasons: great weather, medieval towns and fishing villages, warm beaches, farmers markets, excellent local wines, safety, good health care and prices about 30 percent lower than elsewhere in Portugal. English is spoken widely, the food is excellent, and Portugal does not tax retirement income (although the United States does levy income tax on citizens living abroad. (Here’s the IRS page on the subject.)
11. Medellin, Colombia
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A few decades back, Colombia’s second-largest city was best known as the home of drug lords and gangsters. But according to The Guardian, the city has reinvented itself as a lively, fashionable place — and much safer.
The current weakness of the Colombian peso against the U.S. dollar makes it a bargain for Americans, writes resident Suzan Haskins at International Living:
For example, an upscale 1,300-square-foot two-bedroom/two-bath condo was selling in Medellín’s trendy El Poblado neighborhood in 2013 for 300 million pesos. That was about $170,500. Today, thanks to the flagging peso, that same condo would cost you just $90,900.
Medellin, located in the mountains of Antioquia province, is warm throughout the year and you can live comfortably for $2,000 a month, writes Senior Planet. The website interviewed Larry Rose, a California retiree. Rose says he and his wife spend $350 a month for a four-bedroom apartment “with veranda, garage, two baths, a large living room and a dining room in one of nicest neighborhoods in Medellin.”
Have you considered living out your retirement as an expatriate? Are you already living abroad as a way of making ends meet? Share with us in comments below or on our Facebook page.