Looking for a place to retire with little more than a Social Security check?
Our sister site, ThinkAdvisor, looked at the cost of living scores from International Living’s 2016 Annual Global Retirement Index and found that these six countries are the most affordable places to retire.
“If you’re living on $3,000 in the United States and if you could have [the same standard of living] and move somewhere and have it cost $1,500 a month – you’ve just doubled your money,” Dan Prescher, a senior editor at InternationalLiving.com, told ThinkAdvisor via phone from his home in Ecuador. Adding, “And there are a lot of places like that around the world.”
For example, Southeast Asia in general is very affordable, Prescher said.
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“Vietnam, Cambodia, Thailand and Malaysia are all very affordable from a [U.S.] point of view,” he said. “The cost of living is just a lot less.”
How much retirees spend is all dependent on what lifestyle they want to live, though. Some retirees choose to live much more simply and cheaply, while those that live more extravagantly will have higher costs of living.
“It’s all relative,” Prescher said. “These are pretty general numbers based on what people living there tell us, economic factors that we can get, and what expats tell us they’re living on.”
International Living’s scores are based on the informed judgment and real-world experience of in-country expats, in addition to hard data, including the cost of real estate and medical procedures. The publication uses its extensive network of editors, correspondents, contributors and contacts based around the world to amass the information, data and insights it uses for the annual global retirement index.
Prescher stressed that there is more to take into consideration than just cost of living.
“It’s not just about a place where you can live cheap,” he said. “You want to pick a place that you love and intrigues you and you want to learn more about. If it has everything you want and it’s affordable, that is icing on the cake.”
Prescher said retirees should write down all the things they can’t live without before determining their retirement location.
“If you can’t live without a bowling alley [or] Italian roasted red pepers, make sure wherever you’re going has those things,” he said.
Or, he added, if retirees want to never drive a car, they’ll need to go somewhere with public transportation. In addition, if retirees have health problems, they’ll want to pick a location that’s close to a main metropolitan area with great health care.
However, if affordability is high on retirees’ list, then these six places are worth taking a look at:
Cost of living score: 90
Cost of living for two people: $1,500 to $1,700 per month
A lifestyle that would cost $5,000 a month in Nebraska or $9,000 a month in New York would only cost retirees about $1,595 or less per month in Ecuador, according to International Living.
Prescher and his wife currently live in Ecuador for about $1,500 a month, he said. When the pair lived in Omaha, Nebraska, they would often pay $250 to $300 a month for heating and air-conditioning. In Ecuador, the climate requires neither.
They also own their own condo, which helps keep costs low.
“Our only carrying cost is about $60 per year in property taxes,” he told ThinkAdvisor.
According to International Living, a rental of a luxury three-bedroom, unfurnished apartment in Cuenca would cost around $500 a month
Cost of living score: 91
Cost of living for two people: $1,500 per month
According to International Living, a couple can comfortably call Guatemala home for $1,500 a month or less.
While Guatemala is not as developed as other places in Central America, such as Panama or Costa Rica, International Living says the warm weather and cheap, farm-fresh produce make it easy to enjoy a healthy retirement year round.
Rents within the city limits run anywhere from $200 a month for a small one-bedroom apartment to $700 a month for a fully furnished, restored colonial house, according to International Living.
Land is also very affordable, according to expats who live in Guatemala.
Lots large enough to build a home along the river could cost about $7,000, whereas properties on higher ground could cost between $30,000 and $40,000.
Cost of living score: 92