By the staff of International Living

What’s there to love about life overseas? Even more than you may imagine… For 30 years, International Living has been publishing information on retiring overseas. And, every September in the IL magazine, we cover the best countries in the world to retire to.

Where should you go? And why? In our annual Retirement Index, we rank the top 25 places in the world to retire — and lay out why they make sense — so you can more easily target the destination that’s right for you.

No matter where you may choose, the good news is that it’s a lot easier to go abroad today than it was even just 20 years ago. Easier to get there (and get around). Easier to keep in touch. Easier to find the goods and services you’re used to.

See below for the full article on our top retirement havens in 2010, but before you do, sign up for our FREE report which covers our top 10 countries this year in more detail.

Simply enter your e-mail below to subscribe to International Living’s free daily e-letter and we’ll immediately send your free report–International Living’s 2010 Retirement Index–The World’s Top 10 Retirement Havens.

The World’s Top Retirement Havens in 2010

We have a winner… a place where smiles come so naturally that friendliness seems genetically wired. Here 12,400-foot mountains shade verdant-green rainforests… and five-mile-long stretches of Pacific sands sit nearly undisturbed (for now). In colonial towns, music fills 200-year-old churches and hundreds of roses burst from market stalls.

Yet for all its scenic appeal and cultural riches, a couple can live well here on less than $600 a month…and $1,200 buys you a millionaire’s lifestyle.

This retirement paradise? For the second year running, it’s Ecuador…

And thus begins our not-so-simple answer to the question we hear most often: “Where in the world should I retire?” Is Ecuador right for you? Only you can be the judge. Here we lay out the many benefits this varied country has to offer. And we bring you four more good options, too… the countries that top this year’s annual Retirement Index…

1. Ecuador—the World’s Most Affordable Haven

In Ecuador, there’s something for everyone—beaches, rural highlands, jungle escapes, colonial cities. You can enjoy a four-course lunch for $2. A taxi ride in the capital, Quito, costs $1. You can stay in a nice hotel for less than $20 or get a 30-minute massage for $15.

Ecuador offers the best-value real estate in Latin America. You can find a brand-new two-bedroom/two-bath condo—with city or ocean views—for less than $50,000. A hacienda-style home in the mountains lists for $90,000. A high-end home with floor-to-ceiling windows on two acres of hilltop overlooking the Pacific? $83,000.

When you move to Ecuador, you can import your household goods duty-free. Retirees get discounts on everything from airfares to utilities.

But for many, the real draw is the climate. Ecuador lies on the equator. The beaches are tropical, but up in the Andes, the weather is mild and spring-like year-round.

Plus new frontiers still exist in Ecuador: places where pioneering investors can position themselves now for handsome profits in the years to come.  

Insider’s Pick: The Best Neighborhoods in Quito

Modern, sophisticated Quito offers some of the world’s lowest real estate prices. If you’re looking to settle there, start your search in one of the following neighborhoods: Gonzalez Suarez offers a Park Avenue setting high on a ridge with views of Quito to the west and the charming Italian-esque Guapalo Valley to the east. Adjacent to that, Bella Vista gets our vote for equally spectacular views. We love La Floresta for its bohemian charm. And we can’t overlook Old Town, Quito’s historic city center that’s been undergoing gentrification for the last few years and is rich with colonial architectural gems. – Suzan Haskins, IL’s Latin America Editorial Director

2. Panama—The Best Retirement Program on the Planet
Panama earns top marks for its second-to-none pensionado (retiree residency) program. When you qualify, you can save on almost everything, with discounts like 50% off entertainment, 30% off public transport, big discounts on airfares, and even 25% off eating out. (Click here for a video with more information on the benefits of Panama’s famed pensionado program.)

But what good are savings without the lifestyle to match? Nothing to worry about there. Panama City is a throbbing, vital, First-World city with Third-World prices. Attend an opera, go to a gallery or get down in a disco. You find music from every corner of the world…international cuisine…and people from all walks of life and from all over the planet.

Home to more than 80 of the world’s biggest banks, Panama City is a thriving business center, and an entrepreneur’s paradise. In part because it’s so easy. Sure, you’ll contend with the “relaxed” Latin culture. But in Panama, things work. Throughout much of the country, the infrastructure is first class. (A lot of it was built by the U.S. for military and Canal personnel.) And Panama is easy to get in and out of. You can travel anywhere in the world from the airport, often direct.

If you prefer to live outside the city, good news: A cool-weather mountain hideaway in Cerro Azul or Volcan can be yours for $85,000. Looking for beach? You don’t have to pick between the Caribbean and the Pacific coasts — they’re only a 45-minute drive apart.

Insider’s Pick: El Cangrejo, Panama City

One of the most affordable sectors of Panama City’s upscale Bella Vista district is El Cangrejo. Rent here for as little as $500 a month, buy for as little as $90,000. Expats young and old enjoy El Cangrejo’s bohemian feel. The singles scene here is also probably one of the best (or most notorious). The area is full of little restaurants and bars, as well as pharmacies, beauty salons, Internet cafes, and even clinics. On Via España, you’ll find a large El Rey grocery store and rows of shops, and Via Veneto offers up casinos and restaurants (along with pawn shops and the like). –Jessica Ramesch, IL’s Panama Editor

3. Mexico—Comfortable Living Close to Home
The perfect mix of centuries-old traditions and contemporary lifestyle, Mexico ticks all the boxes: wonderful weather, vibrant colonial towns, postcard-perfect beaches, rugged highlands, welcoming locals (many of whom speak English). Whatever retirement setting you imagine, you can find it just south of the border. Mexico has the great advantage of being close by and easy to get to. Lots of folks simply get in their cars and drive.

There are established expat communities where you’ll fit right in — like San Miguel de Allende, Ajijic, or Puerto Vallarta. But there are not-yet-discovered places as well — like Tulum, on Mexico’s Caribbean coast. There you can pioneer a new life of luxury on a white sand beach, for a small fraction of what a comparable lifestyle would cost you at home.

In Mexico your dollars stretch. In romantic, sophisticated Puerto Vallarta, for instance, on Mexico’s Pacific coast, you can get a two-bedroom condo with an ocean view for as little as $150,000. On the Yucatan Gulf coast, an easy drive from Merida’s international airport, you can still find houses just a block from the beach selling for less than $100,000. Prefer the mountains, or a colonial city? There are plenty of those to choose from, too. Get a three-bedroom house on the outskirts of San Miguel de Allende for only $180,000, for instance—or a 754-square-foot one-bedroom right in the center for $95,000.

Given its popularity with tourists and expats alike, Mexico is a land of opportunity for entrepreneurs.

Insider’s Pick: Gracious Merida Combines Old and New

Merida, capital of the Yucatan Peninsula, is a happy combination of old and new: a gracious, historic colonial city with modern conveniences like shopping malls, an international airport, and excellent hospitals. You can enjoy a relaxed life here, with friendly locals, music in the streets almost every night, and several thousand expats to make adjusting easy. You can still buy a colonial property here for under $200,000… and  a couple can live comfortably on about $2,000 a month. —Glynna Prentice, IL’s Mexico Editor

4. France—For a Long, Satisfying Life
If you hanker for a sun-dappled farmstead tucked into green hills…a table on your veranda groaning with succulent cheeses and fine wines, or a life of style in a new city pad, then look no further than France.

From the undiscovered wilds of Brittany on its Atlantic Coast, to the flower-filled villages of Alsace on the German border, La Belle France (Beautiful France) is a happy reality. The French emphasis on savoring the good life is easy to get used to and it’s remarkably affordable once you look beyond Paris.

You can find a home for less than $150,000 surrounded by vineyards, orchards and rolling fields. Or an apartment in the heart of France’s gastronomic capital, Lyon, for $125,000.  

But it’s for health care that France really stands out. The French live on average three years longer than residents in the U.S. In the past 10 years, the number of French people living to the age of 100 has doubled. The World Health Organization says this country offers the best health care in the world. As a resident, it can be yours for less than $150 a month.

Insider’s Pick: Saint Antonin-Noble-Val

Saint Antonin-Noble-Val is provincial France at its best. Facing the towering white cliffs of the Aveyron Gorge, this riverside town is in the Tarn-et-Garonne departement, deep in the sun-kissed southwest.

The town has an arty, bohemian feel—perhaps due to its long-standing tradition of small craft industries. Although the tanners and furriers have vanished into history, its medieval streets remain home to stained glass artists, potters and artists. And its Sunday street market is the answer to a gourmet’s prayer: a feast of artisan breads, potted duck confit and country produce. Authentically French for sure, but you’ll also find residents from the United States, Britain, Holland and Germany in St Antonin-Noble-Val and its surrounding villages. Currently on sale is a town home with an attached bookstore business for $125,000. See: www.agencelunion.com. –Steenie Harvey, IL’s Roving European Editor

5. Italy—Culture, Romance, and Artistic Riches
Italy is undeniably romantic. From the days of the grand tour when the first tourists stood in the shadow of the Coliseum, Italy has attracted expats.

As many of them have found out, it’s not all about the big draws like Venice, Rome and Florence.

There is another Italy. One where you can find a nice house for $50,000—or less. One full of idyllic hill towns, medieval villages, wild-flower meadows and gurgling streams. Where lemon, hazelnut and orange-tree orchards grow in the shadow of monumental mountains.

In fact, there is more than one hidden Italy to explore. Affordable Tuscany still exists, and you can find apartments in medieval villages for less than $60,000. Or imagine…a two-bed apartment in a small fishing village on the stunning Amalfi Coast for just $160,000. It exists.

Insider’s Pick: Lunigiana

Never heard of the Lunigiana? This unspoiled tip of Tuscany is only a 30- to 40-minute drive from the colorful fishing villages of the Cinque Terre–and the city grandeurs of Pisa and Genoa are but an hour’s drive. Tucked away in the chestnut woods between the Apuan Alps and the Mediterranean, the Lunigiana ticks a lot of boxes: the drama of ruined castles on the skyline; villages with weekly markets and communal banquets on their patron saint’s feast day; trattorie frequented by locals, not tourists.

Fivvizano…Licciana Nardi…Pontremoli…Bagnone. Perhaps because few travelers know about the Lunigiana’s ancient marble towns and villages, habitable village houses can still be had for under $100,000. Near the old Medici stronghold of Fivvizanno, a stone village house with terrace, garden and lovely views is $88,000. See: www.larchitrave.com. –Steenie Harvey, IL’s Roving European Editor

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Our Annual Retirement Index: How It Works

In this year’s Retirement Index, we ranked and rated 25 countries in eight categories to come up with the world’s top places to retire. We took facts and figures from a huge range of sources. Then we ran the results past our in-country experts for that unique ingredient: their good judgment.

You have to consider a lot of variables when choosing your retirement haven. There’s no cut-and-dried formula that will spit out the name of the place that’s right for you. After all, your priorities are uniquely yours. What’s important to you may not be so pressing for the next person.

It’s not a purely by-the-numbers, scientific call. It’s much more nuanced than that. And so we’ve crunched the numbers, yes. But we’ve also made adjustments based on what we know to be the reality on the ground.

We have asked the important questions of each destination. All of the countries in our index have something to offer you. So even if they score poorly in a specific category, remember: They’re still the very best places in the world to call home.

There’s no measurement for dreams or taste. We simply strive, in these pages, to help you match what’s most important to you with a place you can actually pinpoint on the map.

See below for more details on how our Retirement Index numbers are crunched.

International Living’s Top 25 Countries to Retire in 2010

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How our Global Retirement Index is scored

Real Estate. Countries where real estate prices are low and the purchase of real estate is relatively easy receive the highest scores. We use our own experiences plus reports from our contributing editors and real estate contacts around the world to rate each country. Weight: 15%

Entertainment, Recreation, and Culture. This category considers the number of newspapers per 1,000 citizens, the number of museums and cinemas per capita, the number of university students, the literacy rate, and the variety of cultural and recreational offerings. Weight: 10%

Cost of Living. This score is based on statistics from the Indexes of Living Costs Abroad, Quarter Allowances, and Hardship Differentials, published by the United States Department of State, and on data published by Business International. We also use our firsthand experiences living and traveling in these countries. The lower the score, the higher the cost of living. Weight: 20%

Safety and Stability. This measure of unrest in each country is based primarily on Interpol data and State Department statistics. It also takes into account the civil liberties and political rights granted by each government. Our own experiences and reports from expatriates living in these countries also influence the safety scores. Weight: 5%

Health Care. Considered in this category are the cost of a typical visit to a general practitioner and the cost and coverage particulars of health insurance. Weight: 20%

Climate. Countries with temperate weather throughout the year, moderate rain fall, and little risk of natural disaster come out on top in this category. We use data representing each country as a whole instead of favoring one region over another. Weight: 5%

Special Benefits. This category considers government provisions that make moving to and living in each country easier and more affordable for foreigners. Taken into account are property rights for foreign residents, property tax rates, duty-free imports on personal belongings, currency controls, employment restrictions, voting rights, and transportation discounts for seniors. Weight: 20%

Infrastructure. This section considers the number of cars and telephones per 1,000 residents, the length of railroad track in usable condition, the number of airports, the quality of the country’s road and highway network, and the availability of telecommunications. Weight: 5%

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Free Report on Our Top 10 Retirement Havens

Learn more about our top 10 retirement havens in 2010 in our FREE report — International Living’s 2010 Retirement Index–The World’s Top 10 Retirement Havens.

Simply enter your e-mail below to subscribe to International Living’s free daily e-letter and we’ll immediately send your free report.