Retire in Argentina with $200,000 of Savings
Living abroad is gaining traction as an option for retirees seeking a change of scenery, new cultural experiences, a better climate, access to affordable healthcare and a lower cost of living. One destination that truly shines in all these aspects is Argentina, South America’s second-largest country, bordering Chile, Bolivia, Paraguay, Brazil and Uruguay, and the South Atlantic Ocean. Some of the world’s most spectacular scenery can be found in Argentina – everything from rich plains, majestic mountains and verdant jungles, to massive glaciers, thundering waterfalls and coastlines inhabited by elephant seals, penguins and whales.
Rooted in all this natural beauty is a cultured country that has often been compared to Europe in terms of its architecture, art, music and literature – without the high cost of living. But just how affordable is this South American country for expat retirees? Here, we see if it’s possible to retire (Retirement: U.S. vs. Abroad) in Argentina with $200,000 of savings.
A low cost of living
The cost of living in Argentina is low. Depending on where you live and your lifestyle, it’s possible to live comfortably for about $1,000 a month if you’re on your own, or about $1,500 a month if there are two of you. Utilities are relatively inexpensive: Electricity is subsidized (though not as much as it used to be), and you might spend about $100 a month for power, heat, water and garbage collection, plus another $40 for Internet.
Like anywhere, rent takes up a big part of a monthly budget. According to Numbeo.com, a city- and-country cost-of-living database website, the average monthly rent for a one-bedroom apartment in the city center is $535; outside the city center, rent falls to an average of $412 per month. For a three-bedroom apartment, the average rent is $1,032 inside the city and $834 elsewhere. If you live in a rural area, you can expect to pay even less. A four-bedroom, two-bath riverside house on 15 acres in Patagonia, for example, might cost $350 a month.
In most cases, Argentina imposes no restrictions on foreign ownership of property. Depending on your situation, it could make financial sense to buy instead of rent. According to numbeo.com, the average cost per square foot to buy in the city center is $309; outside the city, you’re looking at an average of $240 per square foot. Again, if you settle down in a rural area, your dollar could go a lot further. For example, prices start at $75,000 for a 30- to 40-acre property in Mendoza (the world’s fifth largest wine-producing region), or about $110,000 for a 1,700 square-foot alpine chalet with lake views in Bariloche. If you do buy, plan on paying cash to avoid the double-digit mortgage interest rates.
As for healthcare, Argentina has a well-developed national healthcare system that is available to expats; however, because of long waits for treatment, some expats chose to buy private health insurance, which will add to your monthly costs.
About that $200,000…
Crunching the numbers, how long would your $200,000 last during retirement in Argentina? If your budget is closer to $1,000 a month, your savings will last nearly 17 years ($200,000 ÷ $1,000 = 200 months, or 16.6 years). Spend closer to $1,500 a month and the same savings will last about 11 years ($200,000 ÷ $1,500 = 133.33 months, or 11.11 years). Of course, these are overly simplified examples that don’t account for other income or expenses. Just like living at home, you’ll likely have some unexpected costs – or maybe even an unexpected windfall – that will affect your budget.
Keep in mind, too, that most people have more than their savings for retirement. Even without a pension, 401(k) or IRA, you will probably collect Social Security benefits during retirement: 9 out of 10 people aged 65 and up receive benefits. For 2015, the average retired worker’s Social Security benefit is $1,328 each month, which could go a long way toward covering your budget in Argentina and making $200,000 in savings last much, much longer.
The Bottom Line
Argentina has all the makings of an ideal retirement spot, especially for those wanting an affordable alternative to Europe and a temperate climate. Expats enjoy life here because of the beautiful scenery, cosmopolitan cities, fine wines, rich culture and Spanish-colonial architecture, plus the low cost of living. It’s possible to live comfortably for about $1,000 a month on your own, or about $1,500 a month for two people. Of course, you can live more frugally and spend less, or live lavishly and spend more. The $1,000 to $1,500 per month is just a starting point.
It’s worth noting that the economic situation in Argentina is tenuous, with the current inflation rate at 15% and the interest rate at 24% (the highest in the world). As with moving to any country, it’s important to pay close attention to current events to see if and how you may be affected.
Also note that U.S. citizens traveling to or residing in Argentina (or any foreign country) are encouraged to enroll in the Department of State’s Smart Traveler Enrollment Program (STEP), which provides security updates and makes it easier for the nearest U.S. embassy or consulate to contact you and/or your family in case of an emergency.
Rules and regulations vary by country, including visa and residency requirements. In addition, taxes for those retiring abroad can be quite complicated. As such, it is always recommended that you work with a qualified attorney and/or tax specialist when making plans for retiring abroad (see Plan Your Retirement Abroad).