2012 Retirement Index 

Why Ecuador is the World’s Best Retirement Haven

Why did Ecuador top the 2012 Retirement Index?

One of the key strengths that saw Ecuador surge to the top of the 2012 Retirement Index is its rock-bottom cost of living. However, prices vary from one part of the country to another. Let’s take a look at some of the most popular locations within Ecuador…and the budgets that come with them. First up is Ecuador resident and IL’s writer Suzan Haskins…

Cotacachi, The Hidden Treasure—$1,166 per month

How much does it really cost to live in Ecuador? I’ve reported in the past about couples living in this country on no more than $500 or $600 per month. Although I’ve no reason to doubt their numbers, that seems like remarkably low-budget living to me.

So now that my husband and I have been living off and on in Cotacachi for the last couple of years, I’ve put pencil to paper to tally our own cost of living in Ecuador.

Here’s what I’ve found: Thanks to the temperate climate we have no heating or air conditioning costs and our most expensive monthly electric bill over the last seven months was $23.05. Our highest monthly water bill was $9.24. A bottle of propane that we use for cooking and hot water costs $3. We buy one for the stove once a month and one for hot water every six weeks for a total cost of $4.50. So far, then, our highest monthly costs for utilities: $35.79.

We own our apartment outright so we don’t pay rent or have any mortgage expense. But we do pay $100 per month for our Homeowners Association fees. And we spend $85 per month for our cellphone service and high-speed wireless Internet. (Our association is currently looking at options to reduce this latter expense.)

We buy our fresh produce, meat, poultry and seafood mostly at the open-air mercados in Cotacachi, Otavalo or Ibarra. We spend about $40/week there and another $40/week on staples (flour, rice, bread, cleaning products, etc.). We don’t sacrifice when it comes to food—we eat very well.

We like to cook and we eat a diet of absolutely fresh foods—no prepared “convenience” items and no soft drinks. Our downfall, though, is wine and beer. We figure we spend $70/week here…yes, almost as much as our food bill! Total monthly food and alcohol expenses: $675.

We like to dine out on occasion and we spend about $40/week for that, so $180/month. Occasionally we’ll rent a movie via the Internet which adds another $20/month at the most. So figure our total monthly entertainment expenses at $200. We also spend, on average, $10/month on transportation and $60/month on prescriptions.

If you’re trying to estimate how much it might cost you to live here, you can assume that you’ll spend anywhere from $150/month to $700/month to rent an apartment or house. (These figures are for the small town of Cotacachi. You’ll spend more in a metropolitan area like Cuenca or Quito.

So…those couples I mentioned who are living in Ecuador on $500 to $600/month? You can see how it can be done. If we eliminated alcohol, HOA fees and prescription medications (expenses you may not have, for example), our monthly expenses would be around $700. If we watched our food and entertainment pennies just a bit, we could definitely reduce that amount to under $600.

Suzan and Dan’s Monthly Budget

Utilities: $36

HOA fees: $100

Food and alcohol: $675

Entertainment: $200

Transportation: $10

Communications: $85

Prescriptions: $60

Total:  $1,166 ($38/day)

Cotacachi, Ecuador’s Perfect Getaway—$1,573 per Month

Jack and Debbie Moss have lived in Cotacachi, in Ecuador’s highlands, for two years. Originally from South Florida, they looked at several other countries, as well as destinations within Ecuador, before deciding on the small town of 8,000 people.

“Since Ecuador’s official currency is the U.S. dollar, there are no problems determining the cost of any goods or services. Local products and labor is quite reasonable, but imported goods are more expensive,” says Jack. “At the local market, large eggs are $1.20 a dozen, bananas are 17 for 50 cents, avocados are a quarter each, long stem roses are a dollar a dozen while fresh raspberries, strawberries and blackberries are a dollar a quart.”

Jack and Debbie’s Monthly Budget

Rent (they own their condo): $0

Property tax: $5

Condo fees: $100

Electricity (four TVs, electric washer and dryer, electric dish washer): $45

Water and sewer charges: $3

DirecTV:  $100

Internet:  $50

Cell phones (two):  $35

Transportation (by taxi): $75

Health insurance (for two on IESS—Ecuador Social Security): $115

Groceries (includes wine):  $550

Household items:  $50

Maid (one visit per week):  $50

Vitamins (sent from the U.S.):  $100

Toiletries: $20

Dining out/entertainment:  $125

Miscellaneous (donations, etc.): $150

Total:  $1,573

Cuenca, Ecuador’s Most Attractive City—$1,415 per Month

Moving south, let’s take a look at what things cost in Cuenca. Nestled in the Ecuadorian highlands and with a population of just under a half million, this vibrant colonial city is the country’s third largest conurbation. It’s located in a picturesque valley at about 8,200 feet above sea level and enjoys a moderate climate all year round.

Cuenca’s climate, pace of life and peppering of colonial building has made it popular with tourists and expats alike. Then, of course, there’s the cost of living. Here, you can live more cheaply than in Quito, but still find most of the big-city amenities. Below, we’ve included the cost of a car although most expats in Cuenca find they don’t need to own one.

Sample Budget for a Couple in Cuenca

Housing (rental of a luxury two-bedroom apartment): $500

Utilities (including phone, Internet and CATV): $150

Maid (twice a week): $60

Groceries: $300

Maintenance and fuel for one car: $140

Clothing: $70

Entertainment (dining out eight times per month plus other): $175

Health care: (four $30 visits to a doctor per year for two people): $20

Total: $1,415.

Quito, Colonial Ecuador and Hidden Valleys—$1,600 per Month

The Ecuadorian capital just drips with history. Modern Quito was founded by Spanish settlers in 1534 but by then the site had already been home to an ancient Inca city for centuries. Its population of two million lives among the remnants of the colonial era…buildings that make up the jewel in Ecuador’s architectural crown.

Here’s a sample budget for a couple living well in Quito. The expenses are approximate, but we’ve erred on the side of extra spending to come up with a budget that allows for a very comfortable lifestyle.

Sample Budget for a Couple in Quito

Housing (rental of a luxury two-bedroom apartment): $600

Utilities (including phone, cable TV and Internet): $150

Groceries: $325

Entertainment (two dining out eight times a month and other entertainment): $225

Health care (four $30 visits to a doctor per year for two people): $20

Maid (twice a week): $60

Clothing: $70

Total: $1,600

Vilcabamba, Ecuador’s Valley of Longevity —$1,075 per Month

Vilcabamba, meaning “Sacred Valley,” is a small rural town resting in a secluded mountain basin in southern Ecuador. Known for its picturesque natural setting and peaceful, slow-paced way of life, it was once used as a holiday retreat by Incan royalty.

The town is also notable because its residents live to remarkably old ages. Whether it’s the minerals in the water, the high anti-oxidant levels in the local fruit and vegetables or the steady climate that has made 100-plus-year-olds a common occurrence is still unknown.

Sample Budget for a Couple in Vilcabamba

Housing (rental of a three-bed apartment in town or a three-bed country home): $300

Maid (twice a week): $60

Utilities: $50

Phone charges: $20

Health care (four$30 visits to a doctor per year for two people): $20

Clothing: $30

Maintenance and fuel for one car: $140

Water rights (for one family, which varies between neighborhoods): $2

Eating out (six times per month): $175

Groceries: $250

Total: $1,075

Climate Map

 Ecuador also scored well because of its climate, which varies dramatically depending on what region of the country you’re in. These variations are due mainly to altitudinal differences and distance from the equator. Our interactive map explains some of the regional differences:



Editor’s Note: This article was taken from a past issue of International Living’s monthly magazine. To get full access to all past and future articles and to receive the magazine in the mail or online each month, simply click on the below button to subscribe to International Living magazine at the special introductory price of $49. You will get instant access to the current issue of the magazine as well 10 years of back issues. As an added bonus, we will also send you a FREE report – How to Retire in Paradise on $30 a Day. (You can cancel your subscription at any time.)


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