Best countries to retire in comfort on a budget

These issues leave many retirement-age Americans looking at their retirement savings and seeing $500,000 or less on the bottom line. Instead of working well beyond retirement age and sacrificing some of their best work-free years sitting at a desk, travel can be the answer. There are many destinations around the world where retirees can live well on $500,000 in retirement savings and Social Security.

Here are 15 places where $500,000 in your retirement account is plenty.

First, the Methods to Our Madness

Many variables are at play, so let’s set up the ground rules. First, all numbers assume a withdrawal rate of 3.5 percent per year from the retiree’s savings, which amounts to $1,458 per month. Sure, the 4-percent rule is great, but today’s low interest rates do not support it. The last thing you want to do is run out of retirement savings in your 70s or 80s.

We also assume the retiree has worked enough quarters and contributed enough to Social Security to earn at least $1,413 per month in Social Security income, which is the average at the time we put together these numbers.

Finally, we limited all international destinations to ones that a retiree could move to with relative ease. For example, ones with easy-to-obtain retiree-friendly visas or affordable permanent resident visa options.

To determine which countries fit the budget best, we used the cost-of-living aggregator Numbeo to determine the cost to rent a one- to three-bedroom apartment in and outside the city center.

With the boring rules out of the way, let’s dive into the fun part.

Indonesia

Renting a nice three-bedroom apartment in Jakarta costs less than $600 per month.

Renting a nice three-bedroom apartment in Jakarta costs less than $600 per month.

I have an unhealthy obsession with Indonesia and wear it like a badge of honor. This is where my wife is from, and we have plans to move there soon to start our super-aggressive retirement savings plan. But I digress.

Indonesia is not only one of the cheapest countries in the world to live in; it’s also one of the fastest-growing economies in Asia. Living on $2,871 per month is 855 percent more than the average Indonesian worker makes, so your money will stretch further than ever possible in the U.S.

Renting a nice three-bedroom apartment in a big city, like Jakarta, costs less than $600 per month. If you’re willing to move outside the city, rent plummets to just north of $300 per month. This would leave you between $2,271 and $2,571 per month to cover utilities, food and some fun stuff.

Retirees can get a one-year retirement visa to Indonesia with relative ease, and they can renew it up to five times. After four years, retirees can apply for a KITAP, which is a permanent-residency status that can be renewed every five years.

To get the retirement visa you must be at least 55 years old, earn at least $18,000 a year in retirement income, sign a lease on a rental property and have an employment contract with at least one household staff, which is typically a maid, nanny or chef. Because you likely can only meet the last two requirements while in Indonesia, you may need to come on a tourist visa first to secure a place and staff, then apply for the retirement visa.

Malaysia

An apartment in a big city like Kuala Lumpur costs $364 to $657 per month.

An apartment in a big city like Kuala Lumpur costs $364 to $657 per month.

Touching Indonesia’s northern border is Malaysia, which is just a bit more expensive than Indonesia but still quite livable with $500,000 in retirement savings.

With your $2,871-per-month retirement income, you would make 346 percent more than the average worker in Malaysia. And with an apartment in a big city costing $364 to $657 per month, you’ll have tons of money left over for utilities, fun stuff and travel. Moving outside the big city drops the rent costs to $233 to $401 per month.

Getting a Malaysian retirement visa is a straightforward process. You must be at least 50 years old and have $33,000 available to deposit into a Malaysian bank account ($50,000 for a married couple) and submit the required application. If you don’t have that liquid cash sitting around, Retire in Asia says Malaysian officials often waive this requirement as long as you have a fixed retirement income of at least $2,300 ($3,300 for married couples) per month.

Thailand

In a bustling Thailand city like Bangkok, an apartment rents for $431 to $1,286 per month.

In a bustling Thailand city like Bangkok, an apartment rents for $431 to $1,286 per month.

Thailand not only has some of the best food in the world, but it also offers a great spot for retirees to relax on tighter savings.

Your monthly retirement income will put you at a 486 percent advantage over the average Thai worker and set you up with a comfortable life. In its bustling cities, Thailand’s rent is a little higher at $431 to $1,286 per month for an apartment, but setting up a space just outside the city drops these costs to $251 to $635 per month. That will leave you tons of cash to pay utilities and enjoy all the pad thai you can eat.

Getting a retirement visa in Thailand is just as easy as in Malaysia. Any 50-year-old with at least 65,000 Baht ($1,979) in monthly retirement income or the ability to transfer 800,000 Baht ($24,357) into a Thai bank account is eligible for the visa.

Ecuador

City living in Ecuador is not overly expensive. An apartment rental ranges from $375 to $613 per month.

City living in Ecuador is not overly expensive. An apartment rental ranges from $375 to $613 per month.

Prefer to stay somewhere in the Americas? Ecuador may be a great option to stretch that $500,000.

With your monthly income, you would earn 572 percent more than the average worker in Ecuador. City living in Ecuador is not overly expensive, as an apartment will range from $375 to $613 per month. If you’re willing to head out of the city, you can land a nice place for $280 to $470 per month. That leaves $2,258 to $2,591 per month to pay utilities and check out some of this country’s amazing sites.

Ecuador also has some of the most foreigner-friendly visas in the world. Retirees can qualify for the straight retirement visa with $800 per month in retirement income plus an extra $100 per month per dependent. You can also opt for an investor visa by buying land or a home in Ecuador valued at a minimum of $25,000.

Mexico

Housing in Mexican cities like Mexico City runs $288 to $590 per month.

Housing in Mexican cities like Mexico City runs $288 to $590 per month.

You can even leave the country to save serious cash but remain close to home by retiring in Mexico.

With a monthly retirement income of $2,871, you will bring home 613 percent more than the average Mexican worker, which will give you tons of flexibility in retirement. Housing in Mexican cities runs $288 to $590 per month. Living outside the city will save you even more cash as the average rent dips to $190 to $402 per month. This leaves to $2,281 to $2,681 per month to live on. Plus, being closer to the U.S. means trips back to the States to visit family will be cheaper.

There are two visa options for retirees in Mexico. If you’re uncertain Mexico is the right place for you, the temporary resident visa is likely the best option. This visa is good for up to four years, and you must show a minimum retirement income of $1,553 per month per person or 12 months or bank statements that show an average balance of $25,880.

If you know Mexico is the place for your retirement, skip straight to the permanent resident visa. This visa requires you to show a 12-month average bank account balance of $103,523 or at least $2,588 in monthly income for the past six months.

Belize

Rent remains affordable in Belize City, with prices ranging from $237 to $527 per month.

Rent remains affordable in Belize City, with prices ranging from $237 to $527 per month.

While Belize is not quite as inexpensive as others on this list, your salary will still nearly triple the average income and stretch very far. Making Belize even more attractive is its proximity to the U.S. and English being the official language.

While property prices have risen in Belize as expatriates continue to flood its borders, rent remains affordable at $237 to $527 per month within the city and $183 to $389 outside the city. This leaves loads of cash to handle other expenses.

While Belize has a retirement visa option, Belize.com states its process is cumbersome and pricey. Instead, it recommends snagging a monthly tourist card that runs $25 per month first six months and $50 per month thereafter.

After hanging out on the beaches of Belize for a year, you can apply for permanent residency with a $1,000-per-person application fee. The process requires just the application, the fee, an HIV screening, a police report showing no criminal activity and two personal recommendations from people who’ve known you for at least a year.

After five years on the permanent residency visa, you can apply for citizenship.

Nicaragua

Living in a Nicaraguan city will set you back between $285 and $533 per month in rent.

Living in a Nicaraguan city will set you back between $285 and $533 per month in rent.

Central America’s hidden retirement gem is Nicaragua. This small country not only has incredible cost-of-living advantages, but it also has a friendly retirement visa program and tax incentives for retiring there.

Your monthly Social Security and investment disbursements will give you nearly 10 times the income of the average Nicaraguan worker. Living in the city will set you back between $285 and $533 per month in rent, but going outside the city slices these costs to $199 to $364 per month. This leaves you plenty of free money to enjoy your retirement and still fly back home to see family.

U.S. citizens do not need a visa to enter and stay in Nicaragua for up to 90 days, and those who want to retire there have it easy, too. If you are at least 45 years old, can prove at least $600 per month in retirement income and have no criminal record, you qualify for a retiree visa.

On top of an easygoing retirement visa process, Nicaragua has great tax benefits for retirees. These include no income tax on out-of-country earnings, duty-free import of $20,000 in personal goods, tax-free importation of one vehicle worth up to $25,000 and no sales tax on up to $50,000 of goods purchased to build a business.

Brazil

Brazil's cities, like Sao Paulo, are popular destinations for retirees, thanks to low property costs and tax benefits.

Brazil’s cities, like Sao Paulo, are popular destinations for retirees, thanks to low property costs and tax benefits.

Brazil is a popular destination for retirees thanks to its low property costs and tax benefits.

With the average Brazilian earning just $453 per month, your retirement benefits give you a 633 percent advantage in income.

Depending on where you live, rent can range from $225 to $647 per month, leaving you with gobs of cash to spend.  

Getting a retirement visa to live in Brazil is not too difficult either. Anyone over 60 with a pension or annuity that nets them at least 6,000 Brazilian Real ($1,535) per month qualifies for this visa. That also covers two dependents — every additional dependent requires another 2,000 Real ($512).

One of the best parts of this visa is you become a resident immediately, meaning you can import your personal effects and household items duty free.

Peru

Peru isn't the cheapest location on our list. Rental space in big cities can be $700 per month or higher.

Peru isn’t the cheapest location on our list. Rental space in big cities can be $700 per month or higher.

Peru not only has some of the most gorgeous ancient architecture in the world, but it also has amazing geographical landscapes and a favorable cost of living for retirees. Retirees also have the added benefit of a visa just for them that includes special tax benefits and the ability to become a full citizen in just a few years.

The Peruvian rentista visa is the option for retirees as it requires a monthly retirement income of just $1,000, plus $500 for each dependent or spouse. With the income in order, you just need to fill out a few pieces of paperwork, have your documents translated and certified, and wait about four months for approval.

Peru may not be the cheapest location on our list, as rental space in big cities can be $700 per month or higher. Moving outside the cities and taking in all Peru’s amazing natural landscape has to offer can slice this to just less than $500 per month. Plus, you can live on the rentista visa and not pay any import tax on personal items, except a car, or pay income tax on your retirement income. And in two years, you can convert your visa into citizenship if you decide you want to get back to work in this beautiful country.

Cambodia

A city-based apartment in Phnom Penh tops out around $550 per month.

A city-based apartment in Phnom Penh tops out around $550 per month.

Cambodia has a beneficial cost of living relative to the U.S. and a very simple immigration process that allows U.S. citizens to enter the country easily. Recently, Cambodia took its immigration-friendly process one step further by introducing a new option for retirees.

Cambodia makes its mark with an amazing climate and sites to see. Plus, its cost of living is significantly lower than the U.S., with a city-based apartment topping out around $550 per month. Living outside the city pushes this cap down to just shy of $400 per month. That leaves tons of cash in your account to enjoy everything Cambodia offers.

The new retirement visa option also makes life simple. The process begins by entering the country on a standard E class visa, then after 30 days, you can convert it to the ER visa that allows you to stay in the country indefinitely with regular visa renewals. You must be at least 55 years old and retired, and have proof of financial stability.

The Philippines

Renting an apartment in the bigger cities like Manila will set you back up to $530 per month.

Renting an apartment in the bigger cities like Manila will set you back up to $530 per month.

The Philippines remains a great option for some retirees due to its climate, amazing scenery and low cost of living. Plus, its retirement visa is straightforward and has plenty of added benefits.

In the Philippines, your retirement income will be nearly 10 times the average income for a local worker, so you know it will go a long way. Renting an apartment in the bigger cities will set you back up to $530 per month, while a place outside the city will run just south of $300. This leaves plenty of extra cash to enjoy the sites and amazing food, and to travel to other Asian destinations.

The Special Resident Retiree’s Visa is straightforward for retirees, plus there are options for younger retirees and those without pensions. Those with pensions simply need to prove they make $800 per month in retirement income or $1,000 per month for couples. They also need to deposit $10,000 in a local bank. Those without pensions have requirements by age. Retirees aged 35 to 49 must make a $50,000 deposit, while those 50 and older need to make a $20,000 deposit.

Nepal

Renting a spot in Nepal costs pennies on the dollar relative to the U.S. A rental home inside a city like Kathmandu runs up to $272 per month.

Renting a spot in Nepal costs pennies on the dollar relative to the U.S. A rental home inside a city like Kathmandu runs up to $272 per month.

Nepal offers an extremely low cost of living, making it an ideal retirement spot for the budget-minded retiree, but its retirement visa — or lack thereof — makes things a little trickier.

Renting a spot in Nepal costs pennies on the dollar relative to the U.S., as a rental home inside a city runs up to $272 per month and outside the city runs up to $163 per month. This leaves nearly all your retirement income free to do as you please throughout the country or to travel outside the country and enjoy all of Asia.  

The issue with Nepal is there is no dedicated retirement visa, but there is a residential visa that hits the mark with a few extra requirements. To qualify for this visa, you must be at least 60 years old or prove you are retired, plan to live your life in Nepal without doing any type of business, have an income of at least $20,000 per year and prove you spend at least $20,000 every year in Nepal when you renew the visa each year.

Montenegro

Montenegro rental property will run you up to $525 per month in a city and up to $375 outside of a city.

Montenegro rental property will run you up to $525 per month in a city and up to $375 outside of a city.

The Balkan country of Montenegro is an extremely cheap place to live. Montenegro rental property will run you up to $525 per month in a city and up to $375 outside of a city. Expats living in this country also tout its low food costs and 9 percent flat income tax. This leaves you with plenty of cash to explore this historic country or hop all around Europe.

While there is no official retirement visa option in Montenegro, there are two simple ways to get a residency visa.

The first way to gain residency is to buy a home in Montenegro. Just hop a flight into the country — U.S. citizens can stay for 90 days without a visa — buy a home and apply for residency. The second is to start a business in the country. Keep in mind, you do not need run the business, so you can stay retired, but you have to hire an accountant and pay a minimum fee. These should cost you around $1,500 per year.

Spain

The cost of living across Spain is higher than many of the Asian and Northern European destinations we mention, but in cities like Valencia it's still low by European standards.

The cost of living across Spain is higher than many of the Asian and Northern European destinations we mention, but in cities like Valencia it’s still low by European standards.

Spain is not the cheapest place on our list, but if you handle your retirement income properly, you can live comfortably in this gorgeous country.

The cost of living across Spain is higher than many of the Asian and Northern European destinations we mention, but it is still low by European standards. Renting a home in Spain’s bustling cities will run you up to $1,108 per month, but you can trim this to as little as $515 per month in Spain’s countryside.

The best part about Spain is its retiree-friendly visa with no stringent requirements. You need to prove you can support yourself on your retirement income, secure a home in Spain and get full-coverage health insurance.

Dominican Republic

An apartment in the city center of Santo Domingo runs up to $670 per month.

An apartment in the city center of Santo Domingo runs up to $670 per month.

With over 1,000 miles of coastline, few destinations are better for beach-loving retirees than the Dominican Republic. Plus, its retiree visa process is straightforward and has few requirements.

The cost of living in the DR is quite favorable for a budget-minded retiree as an apartment in the city center runs up to $670 per month, and a spot outside the city will run up to $360 a month. This leaves you plenty of cash to enjoy the nightlife or take in the outdoor activities the Caribbean islands offer.

Moving to the DR as a retiree requires you to earn at least $1,500 per month in retirement income. With that requirement met, simply head to the nearest DR embassy in the U.S. and apply for the visa. After you provide all the required documentation, the embassy will stamp your passport residency visa, and you have 90 days to report to the Migration Department in the DR to upgrade to a temporary residence you can renew every year.

Source: work and money

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