Nestled between Argentina and Brazil on the south Atlantic Ocean, Uruguay has become a popular retirement destination in recent years. Landing at number 20 on International Living magazine's "The World’s Best Places to Retire in 2018," this lively land may be the smallest country in South America, but it offers big advantages over its larger neighbors: a stable economy, mild climate, stunning beaches, affordable healthcare, friendly people and a low crime rate.

To top it off, Uruguay has less economic disparity than most other countries in Latin America and is one of the best-developed in terms of infrastructure. Along with its excellent roads and public transportation system, it also has safe drinking water and one of the fastest internet speeds in Latin America.

If you want to plan your retirement abroad, this beautiful coastal country is definitely one to consider. Here are four of the best cities for expats to settle down. (For more, see: Plan Your Retirement Abroad.)

Montevideo

The capital of Uruguay, Montevideo features a vibrant cultural scene and breathtaking waterfront views. An eccentric blend of old and new, the historical city is located at the southern tip of the country near the mouth of the Rio de la Plata, an expansive river that runs through the southern portion of Uruguay. Though dotted with high-rise office and condo buildings, trendy restaurants and sprawling shopping malls, the town is also home to a handful of pristine parks and two major markets where you can buy everything from fresh fruits and vegetables to unique antiques. Want to go for a peaceful waterfront jog, bike ride or take your dogs for a walk? Head to the Rambla of Montevideo, a boardwalk avenue that runs along the banks of the Rio de la Plata.

Salto

Located about 300 miles up the Rio de la Plata from Montevideo, Salto is the second largest city in Uruguay with around 100,000 residents. Although many consider it a mini-version of the capital, Salto tends to be more affordable than Montevideo.

The city features riverfront parks, a variety of restaurants, a shopping mall and a multiplex movie theater. However, Salto’s main attraction is its famous hot springs. Known as “termas” in Uruguay, these hot springs draw tourists from all around South America who want to experience the soothing warmth of natural “hot tubs.” Although Salto offers an extremely reasonable cost of living (you can rent a small apartment or house for as little as a few hundred dollars per month, though prime city-center residences cost more), there is one drawback: The closest international airport is a seven-hour bus ride away.

Punta del Este

Of course, the big-city atmosphere isn’t for everyone, which is why many retirees choose to settle in quieter, smaller venues.

Punta del Este is often hailed as the classiest beach resort town in South America. With miles of immaculate sandy beaches, luxury hotels, swanky nightclubs and even Vegas-style casinos, the area is known as the "St. Tropez of Uruguay," and has long been a summer-vacation hotspot for wealthy South Americans. Punta del Este features more amenities and services than any other city in Uruguay. It's typical of the better residential towers to feature multiple pools, computer centers, daily maid service, valet parking, 24-hour security, theaters or screening rooms and beach attendants.

La Barra

La Barra is another popular seaside spot for retired expats. Featuring beautiful beaches, quiet wooded neighborhoods, fine restaurants, and a dynamic nightlife, this sophisticated beach resort town is another excellent retirement destination. The town is also extremely “walkable,” clean, well-maintained and, by American standards, highly affordable. 

The Bottom Line

Thanks to its beautiful beaches, low crime rate and modern infrastructure, Uruguay is skyrocketing in popularity as a retirement destination. This South American country may be small in size, but it’s big on culture and beauty. Plus, with a wide array of regions, Uruguay has something for everyone – from fast-paced cities to upscale beach resorts to quiet rural towns. While the cost of living varies depending on the locale, overall the country is relatively affordable, especially given its amenities. (For some context, see What Does Retirement Abroad Cost?)