If you’re looking for a way to retire comfortably on a modest budget, Margit Streifeneder, founder of RetirePedia, thinks you should consider living out your golden years abroad.
Depending on where you choose to live, you’ll find many countries that offer a pleasant climate and a high-quality standard of living at lower costs.
On RetirePedia, Margit examines some of the best places to retire around the globe and offers advice on how to plan for your new life abroad. She recently checked in with us to discuss her site, the advantages and disadvantages of retiring abroad, considerations you should make when picking your new home and more. Read on:
Tell us about RetirePedia.com. When and why did you start your site?
I started RetirePedia in 2009. Since I was a child, I had always dreamed about living in a tropical country. To make this dream a reality, I started researching potential countries to live and eventually retire in. With the Baby Boomer generation reaching retirement age, I figured that there are lots of people out there with the same questions about possible retirement havens.
And because I already have experience as a web publisher, it was a no-brainer to turn my research into a site. Actually, building informative websites that also earn an income is one of my passions. I use an all-in-one system called SBI! that allows me to focus on the content rather than the technicalities of building a website.
How should we go about determining the best place for us to retire to? What criteria should we consider?
First, you need a list of factors to evaluate a country. While there is no “absolute” list that fits every situation, some of the most common criteria are: cost of living, climate, health care, benefits for retirees, safety, infrastructure, real estate, visa requirements, culture and recreational possibilities.
Second, you sort these factors according to your priorities. What’s most important to YOU? Is it the low cost of living, so that you can live comfortably on a limited budget? Perhaps access to affordable and high standard health care tops your list. Or may be you just can’t imagine living without playing golf and going to classical concerts once a week.
Once you are clear about your priorities, you can start researching and comparing various countries and/or cities. One of the problems I had during my research was that it was difficult to find comparable information about the destinations that interested me. On its own, each country sounded great. But I wanted to compare them to find the best option for me. This is one of the reasons why I started RetirePedia.com.
What sort of homework should we do before leaving our jobs and making the move abroad?
In addition to doing lots of online research, you absolutely have to do “field work.” My recommendation is that you narrow your list of countries down to your top three candidates, and then visit each of them. Spend at least one month there, though three months would be better. Try to live like a resident rather than a tourist.
- Where would you do your daily shopping?
- Where would you go for a haircut?
- Where is the nearest hospital and general practitioner? If you have any special health needs, you may want to arrange a visit to a doctor or hospital and discuss your needs with them.
- Are there any expat groups? Get involved with them and ask them about their experiences.
- What are the options for learning the language (assuming you don’t speak it yet)? Attend a language school or find a private tutor to improve your language skills.
- How much money would you need in a typical month? Write down your expenses and compare them with what you’ve read online.
- How do you experience the different culture and mentality of the people? Can you imagine living there permanently? Does it feel like “home” and exciting at the same time?
What are some of the advantages of retiring overseas?
The most compelling advantage for many retirees is the lower cost of living. According to the American Association of Retired People (AARP), nearly two out of three current retirees rely on Social Security for most of their retirement income. However, the average American needs to replace about 70 percent of the amount they earned while working, and Social Security only replaces an average of about 40 percent of that pre-retirement income.
So unless you are prepared to lower your standard of living significantly, or you have some sort of additional income during your retirement years, your best option to live comfortably on a limited retirement income is to move to a country with a lower cost of living.
A less tangible but nonetheless important advantage is that you are embarking on an unforgettable adventure that will keep you young at heart much longer than if you had stayed put!!
What are the disadvantages?
The only real disadvantage that I can see is the distance to family members in your home country. You can’t just pop over on a Sunday to visit your children, grandchildren, parents or siblings. In my case, for example, it is a 20-hour plane-journey if I want to visit my family in Germany.
Definitely take the ease of access, travel time and travel cost into account when researching your retirement locations.
How accessible is retiring abroad for people who have a more limited budget?
Very accessible. Like I said above, the lower cost of living is actually one of the main reasons for retirees to move abroad. On RetirePedia.com, I am using the average Social Security benefit as a benchmark for assessing how affordable a country is.
What are some of the most affordable destinations to retire to (i.e., places you can stretch your budget without living in the slums)?
The most affordable countries where you can live comfortably on a limited retirement budget are, according to my research:
- Nicaragua
- Ecuador
- Panama
- Malaysia
- Uruguay
- Thailand
In each of these countries, you can live well on a monthly budget of $1,200 to $1,400. This list is, of course, by no means exhaustive, and can change over time. But it is a good starting point for your own research.
It looks as if many of your favorite retirement destinations are in Central and South America. What is it about these countries that make them appealing to retirees?
While my selection of countries is somewhat subjective, I believe that Central and South American countries tick many of the boxes that are important for retirees, like pleasant climate, political stability, good health care, attractive retiree benefits and low cost of living.
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