At home, prices are rising. It costs more to put gas in the car, buy groceries, and pay for health insurance. At the same time, retirement savings eroded in the market downturn. And with interest rates at near-zero today, it’s difficult to rebuild.
More than ever, retirees need to stretch their dollars. Here are ﬁve communities overseas where it’s remarkably easy to do. In these best-value havens, you can pair ﬁnancial security with a superb lifestyle.
Anne Watson-Russell, age 62, has done it. She says her pension wouldn’t cut it back home. She needed to go where she could live comfortably on $1,500 a month. Now, having moved to Panama, she says her biggest challenge is deciding which of the seven nearby beaches she should pick for her daily swim.
Eighty-three-year-old Patrick Robinson wanted his savings to last, so he moved to one of the healthiest—and most affordable—places on earth, Vilcabamba, Ecuador. His monthly budget is around $1,300 and he couldn’t be happier.
Jonathan Look and his wife Vonda chose Chiapas, Mexico, where they say you can live well on $1,400 a month. In Nicaragua, Rebecca Teeters and her husband Shylow live in a colonial town house on the shores of Lake Granada for just $700 a month—they say it’s their dream come true…
If you’re looking overseas for a low-cost alternative to an uncertain retirement at home, there’s good news. You can ﬁnd it in places that offer not just “cheap” living, but a whole basketful of beneﬁts, too—places where a mild spring-like climate is yours all year round…beaches are of powder-white sand…snow-capped mountains soar above colonial towns…and your costs could be as low as $700 a month.
In our annual Global Retirement Index (published in January), we ranked and rated the 19 best retirement havens in the world. You can stretch your dollars in any of them and live better than you can back home—for less. But the ﬁve here offer an outstanding bang for your buck: Ecuador, Panama, Malaysia, Nicaragua, and Mexico.
We asked our editors and in-country correspondents to pinpoint within each nation a speciﬁc community to recommend—places that have lots to offer retirees and can be enjoyed on a budget of $700 to $2,000 a month.
See below for the full article on The Cheapest Places to Retire, but before you do, sign up for International Living’s free daily postcard e-letters in the box below and receive a special report: Retire in Luxury on Your Social Security Check.
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Some of the Cheapest Places to Retire
Ecuador—Vilcabamba: From $700 a month
Johnny Lovewisdom, a quirky spiritual seeker, ﬁrst put Vilcabamba, Ecuador on the gringo map in the 1960s. He advocated (among other beliefs) breatharianism—that one can live on air and sunshine alone. (He died in 2000…some say of malnutrition.)
While clean air and constant sunshine are abundant in this lush valley in southern Ecuador, so is fresh, organic food. The healthy lifestyle is just one reason expats are drawn to Vilcabamba today.
Many residents live to be 100 years old or more. That may be thanks to clean water, clean, stress-free living, or the near-perfect climate. Just shy of the equator and at an elevation of 5,000 feet, temperatures average between 65 and 81 F, day in and day out. Estimates put the number of permanent foreign residents at about 150 and part-timers at perhaps another 100.
Although it takes some doing to get to Vilcabamba, it’s a small price to pay. Literally. Vilcabamba is among the lowest-priced retirement havens in the world. John Curran and his partner, Sue, own their home (so no rent paid) and say they live comfortably on a budget of less than $600 a month, although they admit that costs have risen in the last ﬁve years as Vilcabamba has gained popularity.
John pays less than $1.25 a month for gas for cooking and hot water. His monthly water bill is just $1.70 and electricity adds another $30 to the monthly utility bill. Thanks to the temperate climate, there’s no need for heat or air conditioning. Gasoline in Ecuador costs less than $1.50 a gallon.
John and Sue are careful with their spending. They don’t go out often, and they do as much of their own vehicle maintenance and home repairs as possible.
“We don’t have household help,” says John (although the going rate for a common laborer is just $10 a day). School teachers by profession, John and Sue are in their 40s, and they’re careful with how they spend. But as John puts it, “It’s not that we have ‘extra’ money because of the low cost of living; it’s that we are able to retire here at an early age because our costs are low.”— Suzan Haskins
Cheap Places to Retire -Panama—Santa Fe: From $800 a month
I’m sitting in an ancient Lada Niva—a Russian 4×4 made for rugged terrain. We’ve stopped so our cowboy (and his herd of cows) can pass safely. It’s a chance to take in the view…
In the distance I can see the national park, where hiking trails crisscross hills lush with rainforest. In the treetops above me, I’ve seen monkeys and toucans and several species of birds I can’t name. This is Santa Fe de Veraguas, Panama — a tiny mountain hideaway about 200 miles west of Panama City.
It’s the kind of place where $5 will get you a sack of fruit and vegetables…and two chicken breasts for dinner. Where the town’s one Internet café charges 60 cents an hour and your monthly water bill is rarely over $3. Where most home rentals are less than $400 a month and crime is spoken of as an abstract idea seen on TV.
A couple on a budget could get by on $800 a month in Santa Fe, easy. Expat residents Erica and Kevin Moore agree. They retired here to live the good life for less. (Though they got so excited about the beautiful landscapes, they ended up opening a boutique inn called Casa Mariposa.)
“Even the cost of health care here is impressive…and the care is excellent,” they say. Kevin had gone to various dentists in the U.S. for a problem he was told would cost up to $1,000 to ﬁx. When he moved to Santa Fe, he approached a Panamanian dentist who worked in the neighboring town. “There’s a new technology we can use to ﬁx this problem quickly,” he said. “But you’ll have to think about it, as it’s expensive—as much as $180.” Done. Kevin reports that the care was top notch.
Kevin and Erica are very clear about one thing: While the cost of living here is great, it’s not the only reason they’ve chosen Santa Fe for their “quasi-retirement.” They love it because it’s a great place to live overall. From its rural, rugged mountain-scape… to the mild sunny days and cool evenings… to the welcoming locals and the small expat community, Santa Fe has it all.—Jessica Ramesch
Malaysia—Penang: From $1,200 a month
My wife and I ﬁrst came to Penang, Malaysia for a holiday in 2008 and after two weeks, which we extended to three, decided that it was the perfect place for us to live. From the region’s best street food to smart restaurants, bars, shopping malls, and movie theaters, it had everything that we needed and more.
George Town, Penang’s capital, is a UNESCO-listed city and dates from 1786. Most of the buildings in town were built between 1810 and 1890, and it’s these historic streets that are the main attraction for visitors to the island. We loved its history, but also its deserted white-sand beaches, pristine jungle trails, constant sunshine, and affordability.
There is a lively street culture anchored in religious festivals, a recently opened performing arts center, and events like the Penang World Music Festival and the annual George Town Festival (a month of performances).
Our apartment is a short distance from the local market, where we can buy vegetables, fruits, bread, meat, seafood, and all manner of goods. An entire bagful of fresh fruit, including mangoes, bananas, apples, oranges, and pineapples, costs just $4.
High-speed Internet is reliable and costs $30 a month, and the premier cable TV package for $40 includes favorites like HBO, CNN, and the BBC.
We live in a spacious 2,100-square-foot apartment with four bedrooms and three bathrooms. We also have a carport, swimming pool, and well-equipped gym. The apartment is fully air-conditioned and ﬁtted with ceiling fans, and costs $900 a month. We have a maid who comes for $12 a month.
Penang is known internationally for its good medical care, which is downright cheap. Six world-class hospitals are situated within George Town. All the medical staff speak perfect English. And an annual check-up costs $12.
Originally from Oregon, Denise Fornberg and her husband Pelle have been living in Penang for just over a year. Denise noticed a small mole on her arm had changed color, and she decided to have it removed. The initial consultation and operation, followed by postoperative care, cost $194. She estimates that, if she’d had it done in the U.S., it would have cost $1,000.
Penang is an exciting place to live and we have no regrets about moving here. Well, just one…that we didn’t do it years ago. Where else could you eat out ﬁve nights a week, sampling any cuisine you want, and still live for under $2,000 a month?—Keith Hockton
Nicaragua—Granada: From $700 a month
Nicaragua offers the lowest cost of living in Central America, and there may be no better place to retire here than Granada. Ancient pastel-painted, colonial-era buildings with terracotta tile roofs spill along the north shore of Lake Nicaragua, the largest lake in Central America. Views of the nearby Mombacho Volcano add to the postcard-ready image.
Granada is known, too, for its colorful horse-drawn carriages that clip-clop their way atop cobblestone streets, toting neck-craning tourists and locals alike. The latter go about their daily business with the languid, carefree aura that comes from living in the tropics.
In the enclosed courtyards of the city’s colonial homes—some of which have been converted to boutique hotels and cherished homes, Nicaragua’s famous rocking chairs—made of rich tropical hardwoods and wicker—beckon.
Many are occupied these days by North American retirees— but only for brief moments. They’ve not come to rock away their golden years, but for the active and adventuresome retirement that Nicaragua offers.
By some estimates, Granada is home to as many as 1,000 expats—a socially active group that enjoys cultural events, outdoor activities, and volunteer endeavors. All in a place where a couple can live quite comfortably on $18,000 a year. My friends are always asking me, after living here for nine years, when I am going to move back to the United States, “ says Janice Gallagher. “I just laugh. I could never afford to have the lifestyle in the U.S. as I do here…nor the peace of mind.
“I can get up in the morning, take a yoga class, get a manicure and pedicure, have a massage, meet my friends for happy hour, and do it all for less than $30! I have a housekeeper/nanny, a chauffeur, gardener, and someone to take care of the horses and other animals for me for less than $400 a month.”
Janice lives on a small farm just outside Granada. But she has plenty of friends who live in the city itself, where you can still buy historic homes in need of renovation for less than $50,000, and $150,000 buys you a large, already-renovated and fully-furnished home complete with swimming pool.
“Where else can you buy a beautiful head of organic lettuce for less than 50 cents or enjoy a cold beer for $1?” asks Janice. “No, I think I am staying put in Nicaragua a while longer!”—Suzan Haskins
Mexico—Campeche: From $1,400 a month
Just 100 miles south of Mérida on Mexico’s Yucatán Peninsula, Campeche has long been under the radar for expats. But that is changing fast as visitors discover the charms of this city, considered one of the safest in Mexico.
Campeche is one of Mexico’s few World-Heritage cities to sit by the sea—it’s right on the Gulf of Mexico. A three-mile-long malecón (boardwalk), with running and cycling paths, mini-park spaces, and workout equipment, runs beside the water. Just a few blocks inland lie the city’s World-Heritage neighborhoods and historic center, with their rows of attractive candy-colored, Spanish-colonial facades.
The historic center (just eight blocks square) and the three historic neighborhoods are very walkable, and it’s possible to live in these areas without a car. Campeche has a small-town or even village feel—remarkable in a city of almost 300,000.
Improvements now under way will make the city even more attractive to expats. The government is rapidly widening the highway to Mérida to four lanes. When ﬁnished, travel time to Mérida’s international airport will be barely an hour and a half. A long-promised shopping mall, which will hold high-end retailers like the Liverpool department store, is well under way on the city’s outskirts. Campeche already has a Walmart Super Center, a Sam’s Club, and numerous large supermarkets, plus a large traditional market just outside the historic center.
“The weather is good, the people are friendly, and there are fresher fruits and vegetables year-round here than you get back home,” says expat Daniel Record of life in Campeche.
Day-to-day expenses are relatively low. You can buy a week’s worth of fruits and vegetables at the market for as little as $7. A sandwich or tacos from one of the many small loncherías (lunch joints) will cost you $2 to $3, while a seafood plate at a sit-down restaurant may run $10 or $12.
You can rent a small local house for as little as $400 a month. Comfortable modern homes, with two or three bedrooms, rent unfurnished for $500 and up. These same homes sell from $150,000.
Colonial properties, which most expats want, cost more. Unrenovated colonials for sale start at about $80,000—most cost more—and there are almost no renovated colonials on the market. The same holds true for rentals: Only a handful of furnished, renovated colonials are available—and they are almost constantly rented at $1,000 a month or more. More colonial rentals are desperately needed; it’s a business opportunity looking for an entrepreneur… —Glynna Prentice
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