Retiring abroad is a trend that's not going away anytime soon. Between insufficient retirement savings and the high/rising cost of living, many Americans are looking ahead to retiring somewhere cheaper – and, perhaps, warmer (see Retirement Funds Too Little? Retire Abroad).
That's why we're always interested in International Living's 2017 Best Places to Retire list. This year's study is based on 24 countries measured against each other on 10 factors: buying & renting, benefits & discounts, visas & residence, cost of living, fitting in, entertainment & amenities, healthcare, healthy lifestyle, infrastructure and climate.
Also considered is safety: International Living says that "we only recommend locations that we can vouch for as being safe for expat retirees." We checked the list against the U.S. State Department Travel Warnings and mention any key findings below. The world being what it is, street crime is a problem in all the countries, as it is in the United States. But some have other issues you should know about.
Here are this year's picks.
After reaching third place last year in the rankings, Mexico jumped to number one, just edging ahead of Panama. More than a million Americans live in Mexico, enjoying its lower cost of living, sunny days and proximity to the States. The weaker peso and strong dollar have made the cost of living even more appealing this year. Mexico also has senior discount cards and high-quality, reasonably priced healthcare. And having Social Security or savings will qualify most American would-be expats for residency. Mexico does still have issues relating to crime in certain states. Click here for the U.S. State Department's Travel Warning, dated April 15, 2016.
If you plan to visit family and friends frequently, being in Mexico means you’ll only have a slightly longer flight back home than if you moved somewhere else in the U.S. For more, read How Much Money Do You Need to Retire in Mexico?
Panama dipped down to second place this year (it claimed the top spot in 2016), but it’s still a great bargain for retirees. Pensioner discounts allow those living on Social Security to enjoy lower prices while not sacrificing the proximity to the States. Panama ranked 100 of 100, the highest of any country for "benefits & discounts." See Retiring in Panama: The Pros & Cons for details. What's more, having the Canal brings a high level of infrastructure and a broad international mix of people to the country that makes it especially easy for expats to fit in and feel comfortable.
Most people know that Ecuador’s located on the equator, but they don’t realize that the location makes its weather incredibly stable year round. A range of altitudes provides climate variety. Ecuador claimed second place in last year’s rankings, likely for its senior discounts, beaches and affordable real estate. Read more in Retire in Ecuador with $200,000 of Savings?
4. Costa Rica
Costa Rica is a popular vacation spot for many Americans, but many are finding enough reasons to stay year-round. A slew of adventure activities combined with cheap rentals (less $1,000 a month) means retirees can enjoy their lifestyle without sacrificing the basics. It's easy for most retirees to get residency permits and the healthcare rates second to best in the IL survey – 96 of 100. What Does It Cost to Retire in Costa Rica? will give you the details.
Couples can live more than comfortably in Colombia on less than $2,000 a month. What's more, it's in the eastern time zone and Florida is just three hours away by plane. For more, see 4 Reasons Why Americans Retire in Colombia. Colombia’s place on this list might surprise people worried about its history of drug cartel violence, but its decreasing crime rates mean it’s a generally safe destination for vacationers and retirees. Despite this (and recognizing the improvement), the U.S. State Department still issued a Travel Warning for Colombia on April 5, 2016, replacing an earlier one from the previous year.
As the only Asian country on this list, Malaysia offers high-quality food, four UNESCO World Heritage sites and a frugal cost of living. It's also one of the few places in Southeast Asia where you can buy property freehold (Hong Kong and Singapore are the other two, says International Living). And it rates top of the survey (97) for healthcare. Retire in Malaysia with $200,000 of Savings? will give you more reasons. The U.S. State Department has security information, but no Travel warning for Malaysia.
Spain claimed ninth place last year, but has increased its rankings this year. Travel within Europe is inexpensive, and if you live within a smaller city, your dollars will go far. How Much Money Do You Need to Retire in Spain? will tell you how far and The Top 5 Retirement Cities in Spain will tell you where. At 98, Spain topped the list for infrastructure and rated 90 for both entertainment and healthy lifestyle. As for security, the State Department warns that "all European countries remain potentially vulnerable to attacks from transnational terrorist organizations," but has no particular warning for Spain.
A low cost of living, beautiful beaches and relative closeness to the U.S. make Nicaragua a choice for retirees who can’t afford to stay in America (see 6 Countries Where You Can Live Off Social Security). Only Cambodia (99) rated better for cost of living than Nicaragua (97). In recent years the country has become more comfortable and modern, though there are still problems with crime and security, as well as an "authoritarian" government that "limits freedom of expression and peaceful assembly," according to the U.S. State Department.
Spain’s neighbor offers potential retirees a comfortable lifestyle, complete with sandy beaches and ample amounts of seafood. Low real estate prices make it easy for a couple here to afford a middle-class lifestyle even living on a budget. At 82, Portugal has the lowest cost of living of the European countries in the International Living list (Spain is 78 and Malta, 77). How Much Money Do You Need to Retire in Portugal? will give you the details and also check out the Top 4 Retirement Cities in Portugal. Portugal has the same security concerns as Spain.
The European island chain of Malta, located in the Mediterranean between Sicily and North Africa, is a hidden treasure. Retirees can expect 300 days of sun per year and 7,000 years of history to explore, plus lots of beach activity. It's a quick flight to Paris and a three-hour ferry to Sicily. Healthcare is excellent and cheap, and Malta rated the highest of the group (92) for ease of fitting in. One reason: English is one of the country's two official languages, along with Maltese. Malta belongs to the EU and shares the same security issues as Spain and Portugal.
The Bottom Line
If you’re struggling to save for retirement or are living on a tight budget right now, moving abroad might be an answer to your problems. Reading Retirement: U.S. vs. Abroad is a good way to start thinking about it. Plan Your Retirement Abroad will help you with the next steps.
Consult a financial planner who can help you see how far your dollars will go, and if you’ll be able to have the kind of living you envision.