Do you have less money saved for retirement than you’d hoped? Is your pension or Social Security check too small for you to live out your retirement years comfortably in the United States? Or maybe you have saved enough, but want to do something more exotic than strolling the back nine in your newfound free time.

In Ecuador, your money will stretch further—perhaps even allowing you to afford things that would be considered luxuries in the U.S.—and you can spend your days strolling cobblestone streets while admiring Spanish colonial churches and views of the Andes. If you can handle the inconveniences, cultural differences and potential dangers of living in a developing country, Ecuador might be an ideal retirement destination for you. Here’s an overview of what you need to know.

Key Takeaways

  • Destination retirement is a trend that allows people to extend their retirement savings while also living in a tropical climate.
  • Ecuador is a favorite destination for retirees, located in South America right on the equator.
  • Ecuador also uses the U.S. dollar as its national currency, making currency conversion issues a breeze.
  • While beautiful and mostly friendly, Ecuador is still considered a developing nation, so some of those hardships may present themselves.

Why Retirees Love Ecuador

Ecuador is a small country, similar in size to Arizona, located on the northwest coast of South America. It has a slower pace of life than the U.S., which you can enjoy while relaxing on its Pacific coast beaches, hiking in the Andes mountains and valleys, or exploring the Amazon rain forests and Galapagos Islands. Year-round, residents enjoy 12 hours of daylight and 12 hours of darkness because of the country’s location on the equator. 

Seniors 65 and older, including foreigners, enjoy numerous discounts in Ecuador. They get 50% off on public transit, airfare, electricity, water, phone service and cultural and sporting event tickets. They’re also eligible for refunds of a significant portion of the 12% sales tax. U.S. expat retirees won’t have to pay Ecuadorian taxes on Social Security income, and property taxes are low and often discounted for those 65 and older. Ecuador’s official currency is the U.S. dollar, so American expats don’t even have to worry about fluctuating exchange rates.

Mild climates mean low heating and cooling costs. You can buy organic produce for a fraction of what you’d pay for conventional produce in the U.S. In general, prices are so low that you’ll probably be able to afford to hire a maid. You may even be able to afford a vacation home in addition to your primary residence. Depending on whom you ask, the cost of living in Ecuador might be $12,000 or $24,000 per year. Any of these prices are a steal compared with living in the U.S or Western Europe.

Visa Requirements

Obtaining residency can be a frustrating and bureaucratic process. It's a problem certainly not unique to Ecuador. You should research and prepare carefully before moving, then take the remaining steps immediately upon arriving in Ecuador to make sure you meet all the deadlines. 

To obtain permanent residency, retirees often apply for a pensioner visa. You’ll need to show a minimum income of $800 per month, plus $100 per month for each dependent. Other visas include a work visa for professionals, student visas and visas for those who can demonstrate a stable source of investment income. You will be required to furnish a criminal record report from your home country and, if you’re married, a copy of your marriage certificate. Your papers must be authenticated by the secretary of state for the state issuing the documents, then translated into Spanish after you arrive in Ecuador.

Healthcare

You can always pay for private healthcare, but if you become a legal resident of Ecuador, you can take advantage of public health insurance. The primary enrollee must pay 17.6% of their income. A spouse or other family member can be added for an additional 3.41% of income per month. If you are on a pensioner visa claiming the minimum amount ($800 in income plus $100 for a dependent), your fee would be $168.08 per month. For that low price, you'll get access to the public healthcare system, which covers in-hospital care, outpatient care, prescription drugs, vision and other types of care.

The country has been upgrading and expanding its healthcare system in recent years, but supply hasn’t quite caught up with the increased demand under the new system, so you might experience waiting lists or shortages. In addition, because Ecuador is a developing country, you can’t expect access to high quality or lifesaving healthcare in every part of the country. Bigger cities tend to have better options. What's more, if you aren't fluent in Spanish, you could have trouble communicating your needs. 

The big cities have numerous hospitals, specialists and U.S.-trained doctors. If you don’t participate in the government system, you can purchase private health insurance. These plans range from as little as $66 per month to $842 monthly for comprehensive coverage. You can also hire someone to live with you 24/7 if you need extensive care. 

Places to Live

Numerous cities and towns across Ecuador have become havens for expats. Here are a few popular options.

Cuenca

With a population of 600,000, Cuenca is the third-largest city in Ecuador. It's also a popular expat destination, with an estimated 4,000 to 5,000 calling the UNESCO World Heritage site home.  You can mostly get by in Cuenca without knowing Spanish, or learn it at one of the many language schools, but your experience will certainly be simpler and richer if you can communicate with the locals.

The city sits at 8,400 feet above sea level. Living at such a high altitude may help you lose weight, but increases your chance of developing skin cancer and can cause problems if you have high blood pressure or heart disease. You also might experience flu-like altitude sickness until you get used to the change. Year-round, high temperatures are typically in the high 60s and lows are in the high 40s, but the temperature can vary significantly within the same day, and the most rainfall is in March with an average accumulation of 3.8 inches. 

Cuenca arguably has the best infrastructure in Ecuador, as well as major hospitals, a large shopping mall and international universities. In addition, its location is convenient when you want to hop on a plane, thanks to Cuenca's Mariscal La Mar International Airport.

A good source of information from an American who knows Ecuador well is the book “100 Points to Consider Before Moving or Retiring in Ecuador” by Nicholas Crowder.

San Diego native Susan Schenck moved to Cuenca in 2010. “Cuenca is the best city for being an expat,” she says, because it is safe and filled with culture, has an ideal climate, and the expat community is so active that for the most part, she feels like she’s in the 51st state of the United States. It costs her less than $800 a month total to live there, including rent and expenses—that’s less than $10,000 per year—which means she has part of her pension left over to travel.

You don’t need a car because it’s a walking city, but you can take a bus for less than a dollar and taxis are a few dollars more. She adds that the city’s walkability helps people lose weight fast. However, her costs may be lower than some, with several sources putting the cost of a furnished rental at anywhere from $625 to $1,500 a month. It all depends on what kind of location and amenities you want, of course. If you want to buy, a desirable property typically costs $50,000 to $150,000. 

For more information, GringosAbroad.com, a website published by Canadian expats Bryan and Dena Haines, is an excellent resource for anyone considering moving to Ecuador in general and Cuenca in particular.

Quito

Quito is the capital city and has a population of 2.78 million, making it the country's second-largest city after Guayaquil. You will find all the entertainment and culture you'd expect from a major city: concerts, nightclubs, theaters, shopping and museums. Quito's elevation is 9,350 feet. Temperatures range from mid-40s to low-70s year round, with dry summers and wet winters. You can buy a place for as little as $50,000, or rent for as little as $500 a month.  

Because of its large size, expats have an easier time finding the comforts of home here. A small-town escape is just 60 to 90 minutes outside the city. If you want easy access to the U.S., it's just a four-hour direct flight from Quito to Miami. There are also direct flight connections with Atlanta, Houston, Dallas and Fort Lauderdale. 

Some expats criticize Quito as being crowded, dangerous and dirty, but others say it depends on what part of the city you're in, as with large American cities. Quito is a UNESCO World Heritage site, boasting a revitalized old town area of colonial buildings and churches. Its massive urban park, Parque Metropolitano, is more than 1,700 acres, or about twice the size of Central Park in New York City.  If healthcare is a concern, know that Quito has one of the country's best hospitals. 

Loja

Known for its music scene, Loja is a city of about 170,000 in southern Ecuador.  Though lesser-known, it does have a small expat community. The weather is comfortable year-round, and Loja is said to have less crime than bigger cities. Like Cuenca, it's a walking city where you won't need a car and can take a cheap cab, and you can get out of town by bus. Loja is at an elevation of 6,750 feet and, like other Ecuadorian cities, has no shortage of Spanish colonial architecture. Cost of living can be exceptionally low, at perhaps around $1,000 per month, including rent. 

If none of these three options sound right for you, they aren't your only choices. Look into the coastal vacation town of Bahia de Caraquez or the small towns of Vilcabamba and Cotacachi. 

The Realities of Life in a Developing Nation

While retirement in Ecuador may seem rosy, those considering a move should fully understand the political and economic climate. Political instability, corruption, bribery and expropriation remain problematic. Public debt is low compared with the U.S. and more than 100 other economies, though Ecuador in 2008 did stop paying interest on private bonds, calling the debt "immoral and illegitimate."  

It's a developing country. There is pollution, pickpockets and underdeveloped infrastructure. You may require medication to avoid getting infected by amoebas and parasites and will need to boil and filter tap water, or rely on bottled drinking water.

You also may need to be more careful to avoid crime and rip-offs. Whatever you would do to protect yourself in the U.S., do it even more. For example, if you buy real estate you should do a title search and, if you're buying new construction, purchase from a reputable company.

Ecuador's highly praised slower pace of life can sometimes come across as laziness or indifference to Americans. "A Type A person who wants everything to be done quickly and perfectly would be stressed here, unless he or she learns to relax," Susan Schenck says. "Customer service is not what we from the U.S. or Europe are used to. But you learn to flow with it."

When doing your research, seek out negative as well as positive reports to get a complete picture of the life for expats in Ecuador.

The Bottom Line

Ecuador offers retirees lush scenery, beautiful weather and low cost of living. There are World Heritage sites, rainforests, miles of beaches and English-speaking expat communities to enjoy them with. If you’re not on a budget, you can upgrade your lifestyle. If you are, you can stretch your dollar much further. To enjoy retiring in Ecuador, you’ll need patience and a sense of adventure to overcome the culture shock and frustrations that can accompany life in a different and developing nation where you perhaps don't speak the language. But plenty of American expats will attest that retiring in Ecuador is one of the best decisions they've ever made.