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World's 10 best cities to retire on a budget

Thirteen years ago, Suzan Haskins and Dan Prescher decided to ditch their day jobs and retire overseas, where they could live for a relative pittance and never have to shovel snow. Now, the senior editors of International Living magazine are hoping to help others follow their lead with a new book called "The International Living Guide to Retiring Overseas on a Budget."

The duo took time out from their idyllic life in Ecuador to rank the cities that are best-suited to U.S. retirees. The criteria they used was heavily financial -- cost of housing, transportation, groceries, eating out and health care. They also factored in city amenities and the vibe of the expatriate community, as well as how easy or difficult it is to fly back home to see friends and relatives. Areas that draw a lot of U.S. expatriates, so you can socialize and shop in English, were favored.

Just how much does it cost to live in these communities? That, of course, depends on you. But Prescher and Haskins say their personal annual expenses in Ecuador amount to about $25,000 a year, and they're not skimping.

10. Malaga, Spain
Spain was hard hit by the global economic crisis, but that provides opportunities for those looking for real estate, which is in abundant supply. Malaga is the gateway to the Costa del Sol -- one of Spain's primary tourism regions. The city of more than 1 million people is both quaint and vibrant, with plenty of shops, museums and food "to die for." Spanish is the primary language, of course, but you can get by with English, too. Apartments and condos in the city center are relatively small by U.S. standards -- averaging a bit under 1,000 square feet. But a nice place can be had for $950 per month, and less if you're willing to live farther from the beach or the center of town. You can also move to one of the nearby seaside villages, where living is cheaper. Buses and trains into town are frequent and convenient.

9. Penang, Malaysia

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If you love adventure and don't mind the unfamiliar, Southeast Asia may be just the ticket. A plus for Malaysia is that English is the unofficial first language. Many foreign retirees favor Penang Island -- a quick 50-minute flight from the capital of Kuala Lumpur. Here you can rent a stylish three-bedroom, three-bath ocean-view apartment for just $950 a month. The health care is so good that Malaysia has become a top medical tourist destination. And eating out costs a pittance. The main drawback is that flights home are costly and time consuming. This is truly the other side of the world.

8. Cuenca, Ecuador

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Smaller than the capital city of Quito, Cuenca has few big city problems but still offers cultural activities and the benefits of infrastructure. Founded in 1557, Cuenca was declared a UNESCO World Heritage site in 1999. It's full of stunning colonial architecture, quaint cobblestone streets, shops, restaurants and art galleries. Rental prices range from $300 to $800 a month for a furnished apartment near the historical district. Expatriates say they can live here comfortably on just $1,800 a month. The main drawback is that both international airports are hours away. On the bright side, it doesn't cost much to fill up your tank for the drive. Gasoline runs $1.50 a gallon.

7. Granada, Nicaragua

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On the Northern shore of Lake Nicaragua lies Granada, one of the oldest and most historic Spanish colonial towns in Central America. Warm weather and affordable living makes the city a magnet for expatriates, who enjoy the fact that health care and insurance costs are about one-fifth what you'd pay in the U.S. Public transportation is inexpensive and reliable and the political climate has been stable for decades. Once lagging infrastructure has also been upgraded, so it's an easy drive to the capital of Managua, where you can get to the international airport or the touted Vivian Pellas Medical Center -- a top choice for residents and expatriates alike.

6. Coronado, Panama
About an hour outside of bustling Panama City, along the beautiful Pacific coastline, lies Coronado. Long popular with locals for holiday weekends, the beach town has recently become a favorite of expatriates, who appreciate the modern shopping centers and supermarkets, as well as the health clinic. There's even a golf course and an equestrian center. Panama's official currency is the U.S. dollar and the country offers discounts for retirees on everything from utility bills to restaurant meals, entertainment and medical services.

5. Boquete, Panama
Once a garden spot get-away for Panamanians wanting to escape summer in the capital, Boquete has a large expatriate community that loves the lush mountain setting, rushing rivers and coffee plantations. The weather is mild; the beaches are just a short drive away, as are shops and world-class health care facilities. Food prices are crazy cheap. A nice meal of meat, beans, rice and plantains will cost you $3 if you want to go out. Ahi-grade tuna, freshly caught, will set you back $3 a pound. Jumbo shrimp sell for $6 a pound.

4. Atenas, Costa Rica

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The tropical beauty of Costa Rica is hard to beat. Expatriates prefer the picturesque small town of Atenas to the capital city of San Jose. Close enough to San Jose for convenient access to health care and services, Atenas makes it easy to live on a budget of $2,000 a month. Costa Rica's world-famous beaches are about 45 minutes away. The international airport is a 30-minute drive.

3. San Miguel de Allende, Mexico
U. S. soldiers used to study here on the G.I. bill and ever since, San Miguel de Allende has become a magnet for writers, poets and artists of all stripes. One of the best preserved colonial towns in Mexico, the vibe is laid-back and funky, and the expatriate community is welcoming and organized. Housing is affordable. Health care is downright cheap, with one couple reporting that they pay $350 a month for coverage that was better than their Colorado health plan that cost $1,200 a month.

2. Puerto Vallarta, Mexico
Made famous by John Huston's Night of the Iguana, Puerto Vallarta is the quintessential beach destination, with white sands and spectacular views. Tourism accounts for half of the local economy, so don't worry if you need to brush up on your Spanish. And you'll have no trouble finding great restaurants, shopping, hotels and health care. The international airport is one of the nation's busiest and best appointed, with direct connections to most major cities. The amenities and tourism make Puerto Vallarta a bit more expensive than some of the other towns on the top list, but you can still get a fully furnished beach front apartment for less than $1,000 a month. And if you're wiling to live a few blocks inland, you can rent a three-bedroom home for just $300.

1. Lake Chapala, Mexico
Just an hour south of Guadalajara lies Lake Chapala -- roughly in the same latitude as Hawaii, but at the elevation of Denver. That combination leads to near-perfect weather, which has helped make this a top destination for expatriates for 70 years. Medical care is about one-quarter the cost as in the U.S.; and if you're willing to eat like the locals, food costs are a pittance. Lunch for four at the local Wednesday market, including fish tacos and drinks, will cost you about $17. Forget high utility bills. The temperate climate makes utility costs modest. Housing is affordable and the airport is only 30 minutes away.
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