For generations, Italy has been a favorite retirement spot for wealthy expats intent on claiming their place in the sun, preferably one with a spectacular view and its own olive grove. But is it possible to do it on less than a millionaire’s stash, say with a nest egg of $200,000? The answer may be yes, as long as you’re willing to forego the olive grove and live like a local instead of like an American movie star. 

It should be said first that $200,000 can’t be, and probably won’t be, your only source of income. Nine out of 10 Americans age 65 and over receive Social Security, with the Social Security Administration reporting an average payment of $1,461 (after a cost-of-living (COLA) adjustment) monthly in 2019. A couple may double that. Also consider any other sources of income, such as a pension. Many Americans continue working after age 65. Although getting a job is difficult or even impossible in a foreign country, Internet-based freelance work is now an option for almost anyone with a skill to sell.

Running the Numbers

Transferwise, an online money transfer service, lists average salaries in Italy that range from $16,120 for a cashier to $25,426 for a web developer. That is between $1,343 and $2,118 per month. Using the standard affordability measure that income should be four times rental cost, this estimate is based on multiplying the average annual cost of renting a one-bedroom apartment in Italy by four. That one-bedroom rental will cost an estimated $507 a month outside a city, or $668 a month in a city center, according to the latest data from Numbeo.com, a cost of living comparison website. (These estimates were last updated in October 2019.) 

Assuming that you need a conservative $32,000 to live in Italy and you only have average Social Security income totaling $17,532 a year. If you drew on your $200,000 nest egg to make up the difference, you would exhaust your savings in a little over 14 years.(Obviously, this is a very rough calculation, assuming no growth in your income, your $200,000 investment, or your costs of living.) 

Finding Your Place

So, is Italy an impossible dream on a budget? Maybe not. If you want to live well in Italy on a budget, you need to live like an Italian. And you need to find your place in the many parts of Italy that have not been utterly transformed by expats and tourists.

First and foremost, that means traveling well away from the over-publicized beauties of Tuscany, Venice, and Rome. There are wide disparities in costs of living in Italy, with the southern regions being considerably less expensive than the north. The bonus: Southern locales have far more balmy climates than some of Italy’s most fabled northern cities; notably, Venice and Milan.

Here are a few examples of locations where other expats have found happiness on a tight budget:

  • Le Marche. A region along the Adriatic coast, due east of Florence. This part of Italy has everything from snow-capped mountains to pristine beaches. According to AARP magazine, living here with an annual income of $20,000 (excluding the cost of housing) is at least “feasible.” A one-bedroom apartment outside the town of Rimini can be rented for $502, or in the center of town for $633, according to the latest numbers from Numbeo.com.
  • Agrigento, in the western region of Sicily. A couple tells ExpatExchange.com that they settled in the small town of Cianciana after finding that it had some of the lowest housing costs in Italy, plus local amenities that include an English-speaking doctor and dentist. Prices for a one-bedroom apartment in the region average $223 outside of one of the towns, and $474 in the center.  
  • Abruzzi, also on the Adriatic Sea but farther down the “boot” of Italy, has beautiful beaches of its own and a reputation for welcoming expats. Pescara and Chieti are among the most popular towns. One-bedroom rentals in and around Pescara range from about $461 to $595.
  • Puglia, on the “heel” of Italy’s boot, has attracted many British and American retirees, who tout its low cost of living and stunning natural beauty. Rents in and around the town of Lecce range from about $409 to $502.  

The Bottom Line

Your modest nest egg of $200,000 won’t go far in the parts of Italy that have already been American-ized (or British-ized) to the max. But if you get off the tourist trail, particularly if you head south, you may find your perfect retirement destination at an affordable price.