How Much Does it Cost to Live Abroad in Retirement?

Fixed income budgets of retirees may offer more abroad

Home in a foreign location.
It may cost less than you think to move abroad in retirement. Yves Grau/Getty Images

How much does it cost to live or retire abroad? The short answer is, “As much as you want.”

You can spend as much or as little as you like to live anywhere on the planet…it depends completely on your lifestyle. And determining the lifestyle you actually want is the starting point for making a realistic budget for living abroad.

If money is no object, then you can obviously live any lifestyle you want anywhere in the world.

Dock your yacht on the French Riviera and bring on the champagne and caviar.

However, for many U.S. retirees on pensions or fixed incomes, part of the motivation for retiring abroad is often to live in a place where the amenities, conveniences, and services are comparable to back home but at a much more affordable cost.

Budget Locations and Choices

As far as budgeting goes, that at least implies a baseline of reasonable access to healthy food, reliable utilities, adequate healthcare, and engaging entertainment and community activities.

You can already see how subjective such a budget can be. What constitutes “healthy” food, “reliable” utilities, “adequate” healthcare will be different for different people.

And the same bottle of cooking gas or pound of potatoes or visit to the doctor’s office will have a different price in Panama City, Panama; or Merida, Mexico; or Placencia, Belize; or Cuenca, Ecuador.

So there is no such thing as one sample budget that fits everyone’s lifestyle in every possible destination. But there are excellent annual indexes that compare the relative costs of living in the most popular countries for expat retirement. And there are sample budgets for particular lifestyles in particular locations.

Here is one such budget, taken from the 2014 edition of The International Living Guide to Retiring Overseas on a Budget. It is a sample monthly budget for two people living in the popular expat destination of Cotacachi, Ecuador.

  • Homeowners’ Association dues — $100
  • Electricity — $25
  • Gas — $5
  • Water and trash collection — $2
  • Transportation (bus/taxi) — $5
  • Landline phone and Internet — $55
  • Cell phone — $10
  • Satellite TV — $45
  • Medications — $80
  • Groceries/alcohol — $675
  • Dining out — $250
  • Housecleaning — $45
  • Misc. (clothes, flowers, treats) — $100

Monthly Total — $1,375

Note the lifestyle choices of this couple… They own their condo, so no rent is included, but monthly HOA fees are. They don’t own a car because public transportation is adequate for their needs around town. And because they live near the equator in the mountains of Ecuador, they literally have no heating or air-conditioning costs since the weather is comfortable all year round.

Healthcare Cost Factor 

Note, though, that this budget does not include a healthcare plan or monthly medical or medication costs. Once again, that’s something each individual will need to factor in based on their own comfort levels. Some expats choose to forego health coverage when they live overseas.

The lower cost of healthcare in Latin America and Asia, especially, makes it affordable to pay out of pocket.

Some countries offer foreign residents the option to join a national health program. In Costa Rica, for example, a couple might pay $250 a month to join the Caja national health system. In Ecuador, a couple can join the IESS Social Security system for $81 a month.

Private insurance plans, too, are typically far more affordable overseas than in the U.S. A couple can often find a comprehensive policy for $250 a month.

Do Your Research

Your choices…and your budget…will depend on the lifestyle you choose. But you can see how you can enjoy a comfortable lifestyle overseas without much sacrifice of those things you feel are essential to your health and happiness.

Again, there are excellent indexes for researching those cost difference between countries and lifestyles.

But what it really comes down to is what you specifically require to live the life you want and how much those things will cost in any specific location. Hundreds of thousands of U.S. expats have found that it’s possible to live a very affordable life in some welcoming and attractive spots around the world… and with some research and homework, you can, too.

This article comes to us courtesy of InternationalLiving.com, the world’s leading authority on how to live, work, invest, travel, and retire better overseas.