8 Cheap Places to Retire Abroad

Last Updated Sep 7, 2010 11:25 AM EDT


Whether your inspiration is Hemingway in Paris, Kerouac in Tangiers, or some other generation of American expats, there's something oh-so-romantic about retiring abroad. There's also a practical consideration: A buck goes a lot farther in Costa Rica. At a time when nearly half of Americans approaching retirement age don't have enough dollars stashed away, the best retirement planning decision you can make might be to change planes in Florida instead of settling there. More than 500,000 retirees live overseas, and the number is increasing.

To make your expat dreams a reality, however, will take a whole lot of research. The easy path is to flock to Boca with all those other snowbirds; it’s quite another thing to head off to a place where English isn’t spoken everywhere, the water may or may not be potable and SportsCenter isn’t even one of the premium channels. If you complain about Obamacare, just wait till you need to get cataract surgery in a hospital that doesn’t take Visa.

The good news is that there are scads of Web sites, media outlets, authors, and bloggers who can help guide you to the best, most affordable places. CBS MoneyWatch.com reviewed recommendations from the most prominent list makers for their best advice and favorite destinations. We’ve also put together a list of sources for further research, and explained how to use them.

Most Recommended Countries

First, the bottom line: The eight countries or regions below came up repeatedly as great, affordable places to live, based on recommendations from International Living, AARP, Forbes, U.S News, Kiplinger’s, Retiring-Overseas, and Global Post — as well as from expat Barry Golson, author of Retirement Without Borders and Gringos in Paradise.




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Country

Why It's
Popular

Keep in Mind


Panama

Currency tied to dollar;
retiree discounts; some hospitals have U.S. affiliations; favorable tax
treatment on earned income and new homes


You may need to travel for
top medical care; rural and quiet in many spots; some corruption and
infrastructure issues

Ecuador


Currency tied to dollar;
super cheap; rated Top Retirement Haven by International Living; beaches;
hiking

Limited health care outside
major cities; political instability; some crime pockets

Uruguay

Great beaches; Montevideo
rated best in Mercer's 2009 South America Quality of Living city rankings


You may want to head back
to U.S. for serious medical issues; may be too quiet for urbanites

Mexico


Easy to visit U.S.; many
expats; good health care near big cities; can import household goods tax-free

Avoid border towns due to
drug cartels; expect petty crime and corruption


Costa Rica

Good economy; retirement
income and real estate profits are untaxed; beaches and birdwatching; lush
Central Valley

More expensive than other
Central American countries; infrastructure is straining; Golson rates food
variety a C+


France

Food and culture; No. 1 in
2010 International Quality of Life Index; health care rated best by World
Health Organization


High taxes and maddening
bureaucracy; prices high in Paris, Riviera and Provence

Argentina


European vibe; low housing
prices; English spoken freely; wine and tango

Though inexpensive, it's
getting pricier; red tape; cold in the south

Italy

Food and culture; weather;
best bargains are mostly in the south


Labor strikes; hot summers;
big cities — and some regions aren't cheap


Advice from Expats

Retiring to a foreign country has complications you won’t encounter when moving from Philadelphia to Phoenix. There may be bureaucratic tangles, language barriers, a lack of first-rate medical care, peculiar rules about taxes and property ownership, plus a sense of isolation. So MoneyWatch asked three Americans who retired south of the border for their best tips to make an overseas move as painless as possible:

  • Barry Golson, Sayulita, Mexico: “Visit a place two or three times before moving there. Try to stay a week or two to get the lay of the land and to talk to expats.”
  • Rich Lipner, Boquete, Panama: “Figure out in advance what you’d do if you lived in the country. Once you arrive, think of yourself as a guest in the country. They don’t have to adapt to you. You have to adapt to them.”
  • Barbara Kirkwood, San Pancho, Mexico: “Are you willing to learn a second language? I’ve been here nine years and I struggle with that. It’s also a good idea to rent a place for a while rather than buy immediately to be sure you’re comfortable there.”

How the Lists Compare

Before looking for your own Shangri-La, know this: Most “best places to retire abroad” lists are even more anecdotal than the U.S. lists. They generally reflect the views of the writer or a website’s visitors, whose idea of a great place to live might not be the same as yours. So tread carefully, especially before packing up and moving.

AARP

How it rates places: The “Best Places to Retire Abroad” list in the magazine’s September/October 2010 issue and on AARP.org was created by journalist Barry Golson. It echoes his Retirement Without Borders book’s picks, combining his statistical research with streetwise reporting, zeroing in on particular, affordable locales within selected countries.

Top picks: Mexico (Puerto Vallarta region), France (Languedoc-Roussillon region), Panama (Boquete region), Portugal (Cascais region), Italy (Le Marche region), Argentina (Buenos Aires), Belize (Corozal), Costa Rica (Central Valley), Nicaragua (Granada), and Spain (Costa del Sol).

Forbes

How it rates places: Forbes can’t quite make up its mind about choosing a place to retire abroad. Last October, its Web site published “The 10 Best Retirement Havens,” vaguely explaining that it used criteria from safety to decent medical care, though not affordability. Seven months later, Forbes.com was back with “The Best Foreign Retirement Havens” — a slideshow of a dozen countries chosen “after scrutinizing a lot of information” (including living costs) but “no precise scientific method or numerical ranking.” Since the Foreign Retirement Havens list gave a nod to costs, that’s the list MoneyWatch recommends for value hunters.

Top picks: Panama, Italy, Australia, Ireland, France, Spain, Canada, New Zealand, Uruguay, Malta, South Africa, and Ecuador.

Global Post

How it rates places: An American site featuring international news, Global Post’s “Low-Cost Retirement Destinations Abroad” list primarily stat-driven. The site came up with its 10 picks looking at the cost of living, high United Nations Human Development Index ratings (measuring adult literacy, life expectancy and income levels) and access to good medical care, as well as beautiful, relaxing settings and a range of activities for retirees.

Top picks: Costa Rica, Ecuador, Thailand, Mexico, Uruguay, South Africa, Panama, Malaysia, Argentina, and Bulgaria.

International Living

How it rates places: This site has two lists combining country statistics with personal experiences from its 200 contributors. “The World’s Top Retirement Havens” (also called the Global Retirement Index) is the more rigorous one, using a point system to choose the “30 top countries to retire in” based on eight categories from real estate (extra points for low prices and ease of purchasing property) to government benefits for retirees. Its squishier Quality of Life Index, reflecting an admitted “Western bias,” is a ranking of 194 countries that’s not about best value, but “where the living is, simply put, great.” So “Retirement Havens” is the better list if you’re looking for an affordable place to retire.

Top 10 picks (from “Top Retirement Havens”): Ecuador, Mexico, Panama, Uruguay, Italy, France, Brazil, Argentina, Costa Rica, and Australia.

Kiplinger’s

How it rates places: The magazine’s choices come from its “Retire South of the Border” story — which, by definition, narrows the selection drastically. The countries were selected through reporting, not a statistical sifting.

Top picks: Panama, Mexico, Costa Rica, Ecuador (Cuenca), Uruguay (Punta Del Este), and Argentina (Buenos Aires).

Retirement Without Borders

How it rates places: In Barry Golson’s excellent how-to book for would-be expats, the author ranks countries he thinks Americans might consider for retirement on an affordability scale, from “Very Affordable” to “Very Expensive.”

Top 10 picks for affordability: Argentina, Nicaragua, Ecuador, Philippines, Honduras, Thailand (inland, big city and some resort towns), Belize, Panama (inland and some resort towns), Costa Rica (inland and some resort towns) and Mexico (inland, some resort towns and villages)

Retiring-Overseas.com

How it rates places: It’s impossible to say exactly how this site selected its 12 winners (or even who runs the site). All Retiring-Overseas says is that the choices are “extremely affordable” and “Great Places Where to Retire Cheap Overseas and get More than your Money’s Worth,” which sounds like a search-engine optimization string of phrases that somehow turned into a list.

Top picks: Argentina (Buenos Aires), Italy (Calitri), South Africa (Capetown), Philippines (Cebu), Panama (Coronado), Ecuador (Cuenca), Thailand (Koh Samui), Mexico (Merida), Uruguay (Montevideo), Canada (Nova Scotia), Costa Rica (San Jose), and Austria (Vienna).

U.S. News

How it rates places: Normally a powerhouse in the ratings game, U.S. News is surprisingly flabby here. The magazine merely asked Kathleen Peddicord (author of How to Retire Overseas) to name her favorite “7 Affordable Places to Retire Abroad.”

Top picks: Panama, France, Uruguay, Belize, Mexico, Croatia, and Malaysia.

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  • Richard Eisenberg

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