The prospects for many retirees aren’t very optimistic these days, no thanks to the bearish stock market we’ve been experiencing. Many are close to retirement and wondering if what they have in their high interest savings accounts will be enough for them to retire on. They may be facing some unattractive options and possible lifestyle changes in the near future. To be in their shoes could mean contemplating about coming out of retirement and getting a job in this poor economy, or maybe executing a reverse mortgage if there’s enough equity in one’s home to draw from. But if this is your situation, why not do something even more radical, like moving to a place where the cost of living is much lower than where you are right now?
In my case, relocating for retirement is definitely a great option (if I can convince my spouse to do it). I was born and raised in the tropics, and I have no qualms returning to my native land one day. Unfortunately, the spouse thinks it’s way too hot to live where I’d like to live, close to family. But I’m “working” on him. I’m hoping that gradual brainwashing will work. Okay, that was facetious, but the truth is, by moving from Silicon Valley (with very high cost of living) to my place of birth (potentially lower cost of living), I can imagine living well on so much less. Even with a halved nest egg, we’d still be comfortable.
Costa Rica rocks.
With such thoughts, I’d like to share with you some suggestions from our contributing writer, Jacques Sprenger, about where to head, in case you’re open to living elsewhere cheaply, for the rest of your life (or at least, a good part of your future). Are you open to new cultural experiences? Willing to immerse yourself in a new environment? Then try this:
Best Places To Retire For Less
If you are retired and have a fixed income, things can get a little difficult in a slumping economy especially if you live in a neighborhood that still requires a lot of money for you to live comfortably. I’m not surprised that many older Americans are looking abroad to stretch their dollars.
1. Stretch the Not So Mighty Dollar in Panama
Mario Vilar says: Many people who are planning to move to Panama, they are ready to do it but they cannot do it or are just waiting to sell their houses. That is the biggest delay, selling their houses. Mario Vilar knows a thing or two about retiring in Panama, which, by the way also uses American dollars as a currency, but offers much cheaper accommodations and excellent benefits. Here I am. I love it too. Wow. Oh man. This place is wonderful. The people, the people make the country, says Carl Haskins, a retired parole officer. Who wouldn’t like to pay $300 a month rent for a fully furnished two-bedroom apartment, as Carl is doing?
2. Why Not Move To Nicaragua?
For the record, Nicaragua is not in the midst of a civil war, and it’s not a communist state. There’s this notion that Nicaragua and its checkered past may not be what we’d consider as an ideal haven for American retirees and yet, if your money comes from the States, you don’t pay any income tax to the local government. A household helper will cost you less than $130 a month; you can bring your own car and sell it after 5 years tax-free. Up to $10,000 of household goods can be brought in without paying tariffs and a doctor trained in the U.S. will charge only $35.00 per consultation. For the more adventurous among you, it may be the place to stay, given that it’s considered one of the safer countries in Central America.
3. There Is Another Switzerland: Costa Rica
Costa Rica, the Switzerland of America, as it is known, is probably the most expensive Latin American country; but it is still far cheaper than the U.S. It offers pristine jungles and enticing beaches. Baby Boomers have found that Costa Rica’s high standard of living offers a lower cost of living, and we can add what is widely known: that Costa Rica loves democracy, doesn’t have an Army and its crime rate is very low compared to neighboring countries. One important caveat: if you like snow, blizzards and freezing cold, Latin America is not for you.
4. There Is Also Mexico
OK, now we come to my favorite country to retire in: Mexico (swine flu notwithstanding). Why? Maybe because I lived there for more than 20 years where I met a few American retirees who lived happily in perfect climate and in very affordable and comfortable homes. Cheap housing takes on a whole new meaning here. Again, if you decide to live here, your lifestyle will determine how much you’ll want to disburse monthly. An annual physical check up by a well-qualified, bilingual, often U.S. educated physician is about US $50 plus tests. Helpers and gardeners work for US $2 per hour or a little more depending upon their length of service with you. I checked out an American colony near Lake Chapala, about half an hour south of Guadalajara where I found the weather to be mild all year round (a few ceiling fans will suffice most days).
If you are convinced you want to stay permanently, a house will not set you back more than $100,000 for a 2,000 square foot residence, or a lot less in this depressed economy if you buy a used home. As buildings are made of masonry, fire insurance is not necessary. And with the peso around 14/1, your dollars will stretch quite nicely.
Want To Learn Spanish?
Habla Ud. Español? Don’t worry about the language. English is used more than you think in foreign countries, and many people abroad do speak and understand English, such as those in the medical, business, law and tourism industries. But what isn’t fun about learning a new language? One thing though — you’ll have to adapt to the eternal mañana. Things are done at a different pace than in the U.S., so arm yourself with a ton of patience and you’ll do fine. And don’t forget to immediately register with the American consulate, just in case.
I’m certainly open to making such a move in my golden years. Are you?
Copyright © 2009 The Digerati Life. All Rights Reserved.
{ 48 comments… read them below or add one }
I highly recommend “Where to Retire” magazine. It profiles locations around the U.S. that includes a number of low cost of living areas. One of the last articles I read was about Auburn, Alabama. Alabama has some of the lowest property taxes in the country.
Here’s the site: http://www.retirementmagazines.com
Enjoy.
As a US citizen you still have taxes to pay. Do you have an information on what states do not tax pensions or social security? A reader might consider domiciling in that state…
I think choosing a place to retire will be fun, I currently work from home so I take a lot of pride in my house and have distractions to appreciate outside so may be I already live in my retirement house. With working from home I don’t have the usual commute, I already live in a pretty place with everything that I need.
Thanks, Finance Junkie. I’d been hoping to see cheaper American areas, not necessarily abroad. While this story paints a rosy picture of retiring in Central America, mainly due to cost, the fact is, there are significant crime risks, particularly in parts of Mexico due to the drug gangs. White Americans pose a tempting target and stand out like a sore thumb.
Also, while English is often spoken in these countries, it’s by no means universal. I traveled in Costa Rica and my rusty Spanish was not always helpful. You’d have to commit to learning Spanish and not assume you’ll get by with English.
Not being familiar with the legal system in these countries, i’d prefer to stay in the US. sorry.
Retiring abroad certainly isn’t for everyone. But we have a lot of immigrants in this country who may be debating about whether to live elsewhere once they retire. And there are some people who are definitely born travelers who would be more comfortable with making that move.
As for “sticking out like a sore thumb” in these places, and becoming “targets” as some people may be concerned about — I say that it depends more on how well you assimilate to a new place and culture. The more you blend into the community, the less risks there are (of anything).
Other than Latin America, there are parts of Asia that are very affordable and would be great places to retire, IMO. I can vouch for this 🙂 .
North Dakota. You don’t have to live there (why do you think most RV owners “live” there), no income tax, low sales tax (if you are actually there), and you don’t even have to show up in person to get a drivers license, etc.
Moving, however, might make sense to “lower” your payment, but remember, you have the expense of the move, etc. If you are debt free it is always cheaper to live where you are at now.
I have a feeling that with the Drug Wars and Swine Flu, not too many people are going to be retiring to Mexico for a while… Besides, the US real estate is getting cheaper itself, so people might be more inclined to just stay in the States.
I heard a suggestion once that when a place gets a bad rap, that’s when you should move there. That’s when things are cheapest! Of course you’ll have to determine if the news and the hype and sensationalism are truly unfounded. But yeah, points well taken!
I don’t think I can handle cold weather. I’m a mess when the temperatures fall below 65 degrees as it is. But if you love the snow and don’t mind blizzards, there are some really great places around the US, for sure!
Another place I’d contemplate moving to — a place that reminds me of the US West Coast with lower cost of living: Australia.
I actually am a Realtor here in Guadalajara Mexico! We are known as the Silicon Valley of Mexico!! When we look at why people choose to retire in Mexico -there are many many different reasons. Probably the most important is location location location!! Mexico is very familiar with the American and Canadian culture and embrace tourists and retirees. Lake Chapala, which is about 40 min. from Guadalajara has the LARGEST expat community outside of the USA. The quality of life, the weather, the cost of living all make it a huge huge mecca for retirees. With Guadalajara, the second largest city in Mexico (6 million) being so close – they are able to have small Mexican village living along the Lake but have all the conveniences of a big city (Costco, hospitals, theater, Universities etc) very close. Just in terms of medical care – to give you an idea – my husband had a CAT scan of his lungs, sinuses, xrays, blood work, and quite a few other tests done last week and the the TOTAL from the lab was $615 USD for all of it!!! $8,000 pesos!!! So medical care becomes a huge huge issue!! Those that have medicare in the US – if things get too expensive – they jump on a plane (or drive – 12 hrs. to the border with Texas!!) to get their treatment there!! I would say – if you are looking for affordable living ( a maid runs about 2 dollars an hr!!) Mexico is the place to be!! If anyone needs any info just give me a call!! I have relocated quite a few Expats from Tech companies in the US down here – and they never want to leave when it is time to go!!
Wonderful suggestions. However, I do have a question about the languages portion. You are right that most people in these countries, and especially the professionals, know English, but wouldn’t you still be considered an outsider unless you were fluent in Spanish? Could you really become immersed into part of the community and culture if you were just an “ignorant English speaker?” Of course this question is only directed if you intend on grasping the culture. I guess people, including myself, would be perfectly fine just living in paradise!
Then there is the consideration of proximity to family/friends. Maybe that’s worth not moving to the cheapest place.
A few months ago, I was going through some articles about Thailand and it seems a lot of westerners are retiring in the cities over there. In fact, so much, that the cost of living in some of the major cities there borders the cost of living in California. I haven’t looked it up lately, but I think California may have become cheaper than some areas there.
While living abroad in some places may be cheaper, it may not suit everyone, as you’ve said. There are places in the U.S. that are perfectly cheap to live. Texas as a nice retirement community, and we have some of the cheapest cost of living, no state tax, and the winters aren’t too terrible. The biggest challenge for the elderly here is the heat. But, with the cost of living being so much lower, they can afford to travel to a cooler place during the summer. I love to travel, but I’m not sure I’d be comfortable packing up and moving in retirement. There’s a lot more then just that involved. There’s the small matter of a visa, and some country’s require that you have a marketable skill to enter their country as a resident, so a retiree may not get approved. There’s relocation costs if you can get approved. There’s healthcare to consider – does the place you’re planning to go have adequate healthcare? What about the insurance you’ve already bought? Kind of a waste if you can’t use it. And, unless you’re planning to resign your citizenship in the U.S., you still have to pay taxes…will you have to pay double taxes?
In my opinion, there’s some pros and cons that will have to be weighed out before making that decision, and it’s not just cost of living.
I grew up in San Jose, CA, and after my parents were ready to retire they knew they couldn’t afford to stay in California. So they sold their house and moved up to a small town in western Washington State called Sequim. It’s nestled in the lovely Olympic Mountains, and due to the rain shadow, the rainfall there is only slightly higher than in California. Plus the city is near the west coast, so there are plenty of water views.
The cost of living there is much lower than in California, and Washington has no state income tax. My parents have been retired there for 12 years now, and they couldn’t be happier.
I have no qualms with living in any of the areas mentioned in the post. It’s no different than moving anywhere in the world. There will be crime, disease, stupidity, etc. It all depends on where you decide to move. I could move to a high crime area in the U.S. just as easily (though not as cheaply) as I could in Mexico, Argentina, or Costa Rica. Our plan is pretty simple. Build up a nice sized nest egg, travel to different countries to work (as a visiting professor) and live, and perhaps some day settle down.
To prepare for our goals, we’re going to learn the language and customs which has as much to do with courtesy and respect as anything. It’s silly to think that you won’t need to change yourself when you go into a completely foreign environment. Besides, the more languages you speak, the more people you can meet. That’s a good thing.
SVB – I’m with you, Mexico is OUT-standing. I’ve enjoyed every trip there and even though we’ve stayed in touristy places, it doesn’t mean that when the wife and I are living in Argentina that we’re going to find the highest crime area to live. All countries are the same. There will be wealthy, safe, and grand infrastructure areas and there will be poor, crime-ridden, and ravaged areas.
I’m no expert on crime in the U.S., but I’m pretty sure that there’s high crime somewhere.
BTW, good luck in convincing the husband. Perhaps a three month trial run would be a happy compromise.
While I would love to retire in Tahiti, I’ve recently had friend who traveled to Costa Rica and really love it!
I am wondering what the definition of “retire” is these days. It seems like retirement is becoming a luxury more than a natural progression of one’s career.
Wonderful post. I certainly enjoyed reading about all the possibilities!
Agreeing with others that there are places just as inexpensive in the States.
My NW OR coast town is one of them. As the house is paid for (bought 3 years
ago for $41,000 (2 bd/1.5 bath) the taxes and insurance combined are under $100/month… that’s darn cheap “rent”. Fishing, clamming, hunting, and gardening
supply most of my food needs. All told with food/utilities and car gas/insurance, my basic needs are under $400/month. I’m happy with that. Looking to retire right here where I am shortly. Being debt free gives me that option. 🙂
And the temperature is cool and moderate – rare to snow and rare to get over 80. Perfect!
Very interesting topic. This is actually something that I am actively looking into as we speak and it might be right that some places in the US are great and cheap but not being a US citizen makes it (almost) impossible to use that option.
I’ve been looking on places like Malaysia and Philippines and both seems to be great places if you don’t mind heat and want to live in luxury for very little money. Besides that I believe that Malaysia has a no tax policy for income from outside of the country (yet another plus).
/Mikael
The problem with the relocation would be the overcoming of the nostalgia, because it would not be easy for them to vacate the place were they were born and brought up right from their childhood. They would feel mentally cramped and this cannot be replenished with anything else.
Mexico is cheap – cheaper than anywhere in the U.S. if you own property, since property taxes are about 5% of what you’d pay anywhere in the U.S. for a comparable home.
Expats I know use VOIP like Vonage to have a “local” U.S. phone number for their family.
I moved mom down to Mexico to a private geriatric clinic after having had her in a U.S. nursing home.
Staffing levels there were at least twice that of any local U.S. facility, and costs were less than half, even for her private room.
Our entire family was very happy the care she received down in Guadalajara for the 5 years prior to her death.
We were not at all happy with any of the many local nursing homes we tried prior to her move to Mexico.
I have been thought about moving out of the country for retirement. Real estate is really not the issue for my (I looked at a duplex today for 150k ). But the cost of things like medical care is getting overwhelming. I read recently that almost everybody is just one medical emergency away from bankruptcy. Even with insurance a serious problem can cost more than the cap that insurance will pay out on a policy.
Jim,
Great point. I think the best place to retire to is to retire to places where it is cheaper from where you worked and lived but meanwhile not having to give up a lot of freedom.
Just got wind of this article about Costa Rica being considered the “happiest nation” in the world. Nice!
I think the main reason why people might want to live and spend retirement time in Mexico because Mexico is the closest retirement haven to the U.S. This may not seem like a big deal, but the convenience of a short plane ride makes all the difference in the world when you want to get back home to family and friends or attend to business matters. Flights to and from Mexico are plentiful and inexpensive and most take less time than a coast-to-coast U.S. flight. If you want to, you can easily and safely drive here.
Costa Rica is definitely quite the exotic place to retire. I’m sure as these places are cheap now, more people will flock to them which will cause prices to rise. It would probably be better to buy some land over there and sell it.
Another place that should be on the list is Belize. The country is a tropical environment (OK, hot) and they speak English. There are places other than Belize City that are actually quite nice (San Pedro, for example). Definitely don’t retire to San Diego. It’s still way too expensive for most people on fixed income.
This has really got me thinking, never contemplated Nicargua as a retirement destination, what a refreshing thought!
In terms of cost of living and quality of life – Costa Rica is definitely the place to go. Very Americanized as well.
Why do you only talk about retiring in America ?
Why don’t you consider retiring in Bulgaria?
There are many reasons for this and the first consideration is a very low cost of living: Bulgaria is known to have the lowest cost of living almost anywhere in Europe.
British people moving to Bulgaria report that they feel much happier and safer on the streets than they did at home. Many Brits have come to Bulgaria for the summer and end up staying for much longer.
One thing you might want to consider is the wet season. In Costa Rica, for instance, the rainy season is from May through November. That’s pretty much for most of Central America and probably the coast of Oregon as well.
If you’re thinking of retiring in a sunny place where you can use your Spanish, take a look at Costa del Sol.. That was my choice. 🙂 Friendly atmosphere, plenty of expats and stunning nature..
Just my 2c.
Check out: GoSpain, Travel Ezine.
Jim
I have a few friends that have moved to Costa Rica but hear Nicaragua is great as well.
Hi, I came to visit from the Boomers & Seniors: News You Can Use Blog Carnival. I really enjoyed reading the article. It does sound nice, and perfect for you as it sounds as though you have family close by. I know that would be the stumbling block for me. Too far away for me to enjoy spending time with my kids and grandkids. Plus too far away for them to help me when, down the road (a long way down, I hope 🙂 ), I may need help. It could be a nice option for a few years, though, particularly for those who already live far from family. I have a friend who moved to Hawaii for ten years to help with health issues. He loved it, but it was quite expensive. This would definitely be better price-wise and still give him the warmth he needed. Thanks for some very interesting info. 🙂
HI,
I am not close to retirement but would like to start planning. I kinda like that place where people live the longest? I cant remember what it is but I was looking for like a check list, you know with actual stats. I think Mexico is OK but with the fear of kidnappings, and drug dealers and robberies, I really don’t want to have to worry about locking my door and worried about what neighborhood I’m in or the store is in. You know what I mean.
Of course not everywhere in Mexico but most places have issues, and you can tell by all the bars on the windows. I would like to know if Italy is good, or Denmark, what’s the cost of living like? I don’t know the conversion rates either. I like also a very mild air pollution, and no need for a car, and in Mexico a bus or taxi is not very good. I would like a country with great healthcare facilities or no need for health insurance, or even a good ambulance, again not happening in Mexico. So, I guess if you can put a nice check list together of different countries with different things available or easy to get that would be nice.
I am retired and am thinking about relocating to Mexico, I am a single black male. Where could i retire in Mexico and get the most for my money.
Marhall
WHAT ABOUT EL SALVADOR???????
Retiring in Mexico continues to be a good deal. Although prices have gone up considerably, food, housing are still very affordable. Electricity, however, is high.
Drug related violence is confined to specific areas of Mexico and is not country-wide. Similarly, the swine flu was barely noticed in most parts of Mexico. Bus fares are very cheap.
Thailand is a brilliant place to retire, a retirement visa is quite easy to get and the whole country is not crazy hot if you choose to live in areas like Pak Chong which is by the north east. You will certainly get more for your money there. If you want to visit the beach, you can get to one in about 2 hours. I have a good friend who retired in Pattaya and is living the life with his partner and has never looked back!
There are some great ideas in these comments, thank you for sharing them! 😉
Having spent some time in the Phillipines and living on some other more obscure asian south pacific islands, the idea of retiring to one of those is fairly attractive to me. I am currently living in the US in Texas and am debt free. I am considering putting my home up for sale and making some changes in that direction, but haven’t found the exact location at this point. I am defintely going to reserach some of the suggestions that have been made on here and Guadalajuara was already on my list to explore in more detail.
thanks again for sharing some of your tips, and good luck with your plans!
I can vouch for living in South East Asia. Well, it’s easy for me to say as I have a network of friends and family living there and if I ever moved back there, it would be paradise for me. 🙂 Maybe in my golden years?
Rio Grande Valley in South Texas is the place to be for our winter texans. However, I am looking for an affordable cool nights/warm but not too hot days WITH LOW OR NO HUMIDITY, taxes, and housing costs. One’s safety goes without saying. Can anyone suggest someplace to me? I am getting frantic!
Jan, if you’re comfortable with Spanish, I would recommend you check out the growing city of Aguascalientes. It boasts lots of hot spring-fed bathing facilities. Aguascalientes is known for its museums and for the largest festival in Mexico, taking place every April. This well-planned city has plenty of universities, and 13 shopping malls. This area is perhaps the safest in the country as far as natural disasters are concerned. Aguascalientes is considered a great place to invest. This is the place that boasts the lowest rate of violent death in Mexico. 75% of Aguascalientes’ residents own their homes. There are non-stop flights to US cities, as well as good highway and rail access. The temperature averages range from 55F in winter to 70F in summer. See link.
I would like to become email buddies with someone who lives in Panama, not the city but maybe Azuero Peninsula or Pedasi or Santiago, places like that, I have read and reread just about everything I can get my hands on and it all sounds to good to be true, that’s why I’m looking to connect with someone that has already made the move and will be willing to tell me the day to day story about living there, I’ about ready to come anyway but it would be nice to become email pals with someone from there.
I would never move to Mexico. I don’t care where the safe areas are down there. If it is so cheap to live in Central America why wait for retirement. I am looking to move out of the country before I retire. No I am not a millionaire. But I can move there now if I sold my house and live like a King. I would like a Safe place. I like the idea of Costa Rica and Panama. I also looked into Guam and I liked very much what I saw. The best being it’s an American territory. I read in a website that Americans are hated in Belize. I could not understand why since they speak English. That turned Belize off to me. I am sure other countries in Central America we are hated too. I want a tropical place. No more snow and cold weather for me.
Retire before retirement. I am going to enjoy myself before my retirement years, where I’m not be able to enjoy them. Why would anybody else give up that chance. If you can do it, by all means do it. Enjoy your lives now. Retirement is when you make it happen.
Im 38 now and it’s my endeavor to move within 5 years. I love my country, but Im tired of wasting my money in the States, when I can live somewhere else cheaply.
I do the world travel thing. I have done over thirty countries on a budget of US $3000. I found that most often, I had dollars left over. Why? Because off the beaten path, it is really cheap. I just returned to the States, I was living for a month at what I paid for one night’s stay in Washington DC.
My favorite may always be Montserrat. Even with the fear of the earth coming apart, the island is a peace on Earth. Did six months stay for US$700 housing cost.
I am off next week to Kauai at $2500 for six months. But it is somewhere I have not been before. I am loving this my 10th year as I travel the world.
Yes, I am lucky in that I do $120,000 a year in retirement income. But I live like it has to last a lifetime and not put it into something that has upkeep. Next year I will head south (living off the coast of Australia). I will work on my book and learn how the real beach bums live. Cost for six months just over US $2000.
@John,
Your story is quite inspiring! I’m going to keep it in mind as something that can be pursued. If we are all inclined to really conserve and hold back, then your approach would be a wonderful way to live. This is also a great option for those with potentially limited retirement funds but with a great spirit of adventure. If you’re in good health, then it’s definitely a fantastic way to live your retirement. Congrats on having it all figured out. I’m envious!
I am thinking of retiring in 3 more years at age 65. My only income will be my social security, which will be a little over 900 a moth minus the medicare and supplement insurance which will lower it to around 6 or less if I stay in the USA.
On that amount monthly I will have no money to purchase a home or anything like most of these other retirees speak of. I have no home to sell to get more income and I had hoped to maybe move to Australia as i hear things are more reasonable there. Also from what I have read they have great medical coverage.
I know I will have to work to supplement my income as well. I am in good health at this time and with God’s grace hope to stay that way.
So any suggestions for a poor girl from NC?