There are two parts to the retirement funding equation: saving and spending. Regardless of how big your retirement fund, it will go further and last longer if you limit your cost of living. One way to keep a lid on living expenses is to relocate to a more affordable area.
An increasing number of Americans are choosing to spend their retirement overseas. According to a survey from Provision Living, 21.3% of Americans say their dream retirement involves living abroad.
The reasons for retiring abroad are numerous. A chance to see the world, explore new cultures and perhaps most importantly, save money. When choosing a retirement destination, some countries may prove more affordable than others.
If you're interested in the idea of retiring outside the U.S., here are five countries where you can retire on $1,500 per month or less.
Steep volcanoes, vast rainforests, and ancient Mayan sites mark this Central American country south of Mexico. The coasts touch on the Caribbean and the Pacific Ocean, and between the shores, you will find innumerable Spanish colonial towns and cities, like Antigua, where many American retirees settle. While not as developed as its sister expat havens in Central America, like Panama or Costa Rica, Guatemala is an adventurer’s paradise. The country is known for its year-round warm weather and varied outdoor activities, including biking, climbing, and kayaking.
A studio apartment rents for as low as $325 per month , making housing budget-friendly if you don't mind living in a smaller space. Healthcare is also extremely affordable, and the care provided is top quality; a visit to the doctor will cost just $25 on average. Overall, Guatemala is 71% cheaper to live in than the rest of the world and 65% cheaper than other countries in Latin America.
Medicare coverage typically won't cover health care expenses in a foreign country, with the exception of true emergencies. Take time to research private health insurance options before committing to retirement abroad.
Long overshadowed by its neighbors to the south (think Costa Rica and Panama), Nicaragua offers a similar healthy lifestyle, great food, and fantastic beach living for even lower costs. Here, a complete meal with wine will set you back just $7 and furnished studio apartments with water, electricity, and Wi-Fi go for under $300 a month .
With health insurance available for just $500 per year through private hospitals, you won’t have to fret about finding quality doctors or care. Expats in Nicaragua can live a six-figure lifestyle easily on just $1,500 a month.
This South American country spans the Pacific Ocean to the Andes with the terrain as varied as its culture. Peru boasts ancient ruins, rainforests, colonial cities, and miles of immaculate beaches. Housing prices are unbeatable, with furnished apartments coming in at about $430 a month .
Dining out is also affordable, with many restaurants offering meals of fresh, local ingredients for between $3 and $5. Getting around by bus and taxi can be covered easily with $50 a month, and the same amount will get you cell phone and internet service. Healthcare and dental costs are similarly low at between $50 and $100 per month.
Read up on currency conversions when choosing an international destination for retirement. Some countries may offer more bang for you buck, in terms of currency exchange rates, than others.
Located at the northern tip of South America, Colombia is a country of rainforests, towering mountains, and coffee plantations. A couple can live comfortably on just $1,200 a month. City rents range from $240 to just over $700 per month, depending on whether you prefer a studio or full-sized apartment. You can live a pampered life on a small budget: housekeepers are available for hire for around $6 per hour; dinner for two costs less than $30; going to the movies is $6 per person; great haircuts are $6, and monthly gym membership only costs $32.
The landscape includes low-lying plains, mountains, lush rainforests, and a pristine coastline with some of the best beaches in Southeast Asia. With monthly living expenses averaging about $1,200 per month, many expats came to Cambodia for its affordability and stayed for the picturesque landscape and warmth of the local people. You can rent a studio apartment for as little as $400 a month, and basic utilities run less than $100 per month .
Eating out is cheap, with basic dinner out running around $14 for two people, though you'll pay a little more for upscale meals. The low cost of living allows many Americans in Cambodia to live well on just their Social Security checks.
If you're receiving Social Security benefits or other retirement income while living in a foreign country, you're not excluded from paying income tax. Consider talking to a tax professional about the tax implications of retiring overseas.