Retire overseas on $1,200 a month
It's possible to live in luxury on a pauper's budget -- if you're willing to leave the US. Here are 5 places a Social Security check will buy a lifestyle that's at least comfortable.By Liz Pulliam WestonMSN Money
Let's get this out of the way right at the start: Retiring abroad isn't for everyone or even for most people.
But the adventurous can find comfortable, even luxurious, lifestyles in many places that cost them far less than what they would pay at home, said Kathleen Peddicord, the author of "How to Retire Overseas: Everything You Need to Know to Live Well (For Less) Abroad."
We asked Peddicord, who has written about living and retiring overseas for more than 25 years, to pick out five cities where a couple could retire comfortably on the typical U.S. Social Security check of $1,200 a month. Access to good medical care is a must, of course, and all five places on Peddicord's list offer it, as well as very low crime rates and emerging communities of expatriates to help show you the ropes.Live and Invest Overseas group. "The places with the truly established and thriving expat communities are going to be more expensive."
People who are considering retiring abroad need to do their research, because countries vary dramatically in how welcoming they are to foreign nationals who want to become residents. Tax laws vary as well, and most Americans will want to buy health insurance -- either a local plan, which may cost less, or an international plan, which typically offers more-flexible coverage. Peddicord said that in Panama, where her family of four lives, local, or "in country," health plans cost as little as $100 a month but aren't available to people over a certain age (usually early to mid-60s). An international plan with a $3,400 deductible might cost a 60-year-old about $180 a month.
Peddicord's five picks:
Cuenca, EcuadorPeddicord calls Cuenca "the most affordable place you'd want to live in Latin America." There may be cheaper locales, but in her view they're too far removed from the conveniences and amenities of a city.
Cuenca has the colonial charm of cobblestone streets and soaring cathedrals as well as a mild climate and plenty of cultural happenings. Ecuador uses the U.S. dollar as its currency, so you don't have to worry about disadvantageous exchange rates.
Peddicord has a friend who lives there for less than $1,200 a month, including $550 in rent and fees for a 2,600-square-foot apartment with a doorman and underground parking. If you're willing to make do without those amenities, Peddicord said, you could rent a smaller, 600-square-foot "local"-style apartment in an older building for $100 a month.
If you were to buy a home with cash -- say, from the sale of your current home -- you could live comfortably for $700 a month, including utilities, groceries and entertainment, Peddicord said. Hiring full-time household help would add about $200 to the bill.
Chiang Mai, ThailandThousands of expatriate Westerners have discovered the largest city in northern Thailand, where the cost of living is about half that of its better-known (and bigger) rival, Bangkok. Chiang Mai is in a river valley surrounded by mountains, with year-round daytime temperatures in the 80s and 90s.
A comfortable apartment costs about $400 a month, with $150 for utilities (including high-speed Internet, cable TV, telephone and electricity), $100 for groceries, $150 for full-time household help and $150 for entertainment, including eating out (people rave about the food and the variety of restaurants). Foreigners can't own land, although they can own apartments and condos.
Retire overseas on $1,200 a month
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León, NicaraguaLike Chiang Mai, León is its country's second-largest city. Like Cuenca, it boasts a large number of colonial-era homes, buildings and churches.
But it hasn't been discovered by expatriates the way nearby Granada has, Peddicord said, which means the cost of living is still low. She said a budget of $1,200 to $1,400 buys a comfortable lifestyle, including $500 to rent a higher-end home. Utilities, including phone, Internet and TV, cost $70, while your food budget would be about $360 and entertainment budget about $200. Full-time household help costs $180.
Las Tablas, PanamaIf you want oceanfront living, check out Las Tablas, which Peddicord said is a nice little beach town on the Pacific coast of the Azuero Peninsula.
Panama has significant advantages for expats, including the fact that it's a tax haven (even Americans can live there tax-free), the country encourages foreigners to settle there by making it easy to acquire residency, and its infrastructure is well-developed. Those advantages have led to an influx of expats that have helped drive up the cost of living in the nation's biggest city, Panama City, but Las Tablas is still relatively undiscovered.
"There's an emerging community of expats living here, and (Las Tablas has) all services and resources you'd need to live very comfortably," Peddicord said. "Your budget could be as little as $1,000 per month. . . . You can rent a little two-bedroom house within five minutes' walk of the beach for as little as $350 a month."
Utilities average $200 a month and food $300, while $80 is a reasonable entertainment budget. Full-time household help costs $150.
Penang, MalaysiaPeddicord called Malaysia the best option in Asia for full-time retirement living, because it's the only country in Asia that makes it easy for foreign retirees to gain full-time residency.
Income from foreign sources is tax-free, and foreigners are allowed to buy real estate (which isn't a given elsewhere). Malaysia is also determined to become a "first world" country by 2020, which means it's investing in infrastructure, including modern divided highways and convenient airports. Health care is considered good as well, with a thriving trade of "health tourists" who come to save money on surgical procedures and other treatments.
"This country is a melting pot and very international, with good infrastructure and great food," Peddicord said. But Penang is the cheaper of the two big expat centers (the other is Kuala Lumpur). About $1,200 a month "buys a comfortable life here," covering an $800 rental apartment and $100 each for food, utilities and entertainment, Peddicord said. Full-time household help would set you back $130 a month.
Can't imagine retiring outside the United States? Never fear. In an upcoming column I'll highlight five cheap places to retire in the U.S.Liz Pulliam Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "Your Credit Score: Your Money & What's at Stake." Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board and helps middle-class families cope at Building a Brighter Future.
Published June 16, 2010
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