For those of us nearing a well-deserved retirement, a question of how to afford a better lifestyle in retirement without breaking the bank is vital. No wonder many are researching the cheapest countries to retire abroad where our income will stretch further.
However, when exploring various cheapest countries to retire to, it is important to find the right balance between “cheap” and “quality” to make sure that your retirement years are blessed not just with stunning views and climate, but also with decent healthcare, infrastructure and other valuable gifts of civilisation.
Bear all these in mind when researching your preferred country choice – it will help you to narrow down your options.
Until very recently Cuba wasn’t even considered a suitable holiday destination, let alone a suitable place to retire abroad.
However, with the easing of America’s aggressive position on this tiny Caribbean country and the increase in its positive profile internationally, a handful of intrepid expatriates have now decided to call Cuba home.
What they have found is a relatively peaceful country where integration is perfectly possible as long as you speak Spanish, and where the cost of living really is incredibly affordable.
Rent is 51% cheaper in Cuba than in the UK and 61% cheaper than in the USA. Eating out will cost you 54% less if you are a Brit and 50% less if you are a US citizen. Groceries are 17% cheaper than in the UK and 31% cheaper than in the US.
The income tax rate varies from 10% on up to $6,000 USD to 50% on over $60,000.
Healthcare in Cuba is universally free – and the country has one of the highest doctor-to-patient ratios in the world.
Yes, facilities can be poor and supplies limited at times, but life expectancy in the country is on a par with that in America and so medical needs should not be a factor against Cuba as a retirement destination abroad. Besides, paid hospitals and clinics for foreigners and tourists are very well equipped and prices can be up to 80% lower than in the US for various medical procedures.
According to Eurostat, Bulgaria enjoys the lowest prices for goods and services across all EU member states; and although it is now seeing some producer price inflation, the nature of the economic situation across Europe and particularly within the eurozone means that prices are remaining restricted in Bulgaria.
There are pros and cons to living in Bulgaria in retirement.
The country is accused of limiting its own development by the excessive amounts of red tape and bureaucracy in place that have restricted investment to date.
Whilst this can be seen as negative for those who want to advance their living standards and see improved levels of employment in Bulgaria, it is not such a bad thing for would-be retirees attracted to Bulgaria by its still low prices.
The cost of living outside the main towns and cities is cheap by most people’s standards, with real estate still available for rent and to purchase at acceptable levels as long as you avoid the summer or winter resorts.
Even if you choose to live in Sofia, Bulgaria’s capital, you will be pleasantly surprised by how affordable day-to-day expenses are.
Living In Bulgaria – a detailed guide to moving and settling down in Bulgaria.
You may have a fairly fixed preconception about Malaysia, most people do – too exotic, too foreign, too tropical, too expensive, too far away?
However, the one thing about Malaysia that is universally true is that you have to see it to believe it. And to see it you have to visit, travel and stay for an extended period of time – only then can you get anywhere close to seeing the many sides of this incredible destination.
It is a vibrant, beautiful, peaceful, exotic, tropical, accessible and relatively affordable country to live in.
You have the fast pace of life in the cities like Kuala Lumpur and you have the tourist-dominated resorts such as Langkawi – great to visit, but not ideal to retire to if you want affordable peace!
So, step off the beaten track and what will you find? A people who learn to speak English at school from a very young age – well-educated people who have access to superior medical facilities in urban areas, and who can live on very little and very limited budgets the further away from urbanisation you move.
You will find stunning tropical beaches that you will previously only have ever dreamed of, incredible flora and fauna, a rich cultural heritage, cheap property and a growing number of expatriates lured not only by the lifestyle but by the tax incentives of Malaysia My Second Home Programme – you will perhaps find your paradise on earth. And you won’t know until you visit!
You can live like a millionaire on a millionaire’s lavish salary in Panama – or you can enjoy a comfortable, modest and decent standard of living on a modest amount of money in Panama.
Therefore, Panama is proof that ‘cheap’ is a relative term, but that you can ‘afford’ to live in Panama no matter how relative the concept of cheap is for you!
Panama City is an embodiment of a cheap luxury lifestyle.
You can enjoy your own apartment with a sea view and all amenities that a modern apartment complex can offer (including gyms, pools and bars), you can hire a maid, a chef and a driver, and rent a beach home to escape to at the weekends, – you can have it all and more for as little as £4,000 a month.
If you move away from the high rise, glitz and glamour of Panama city and get into the heart of the country, discover where real estate is more affordable because there is less employment, you will find your money goes far in Panama.
What’s more, because of this nation’s exceptional strategic importance, it is heavily watched and protected by the likes of the US who have massive reliance upon the Panama Canal.
This will likely prevent anything in the way of serious political or economic upheaval in the future, making your cost of living and affordability far more stable, and far less likely to be undermined by heavy inflation or strong currency fluctuations ‘in-country.’
Also in this country’s favour are their benefits for retirees such as discounts on entertainment and even doctor’s visits.
Belize can be of interest to you because it offers the Qualified Retired Persons Programme that can allow qualifying individuals to live tax-free in Belize. Naturally, without the erosion of taxation on your income, you will have up to 50% more to play with!
If you are 45 or older and your minimum monthly income is equivalent to $2,000.00, – that’s all you need to participate in the programme. You can also include your spouse and dependents in your application.
The downside of the programme is that the years spent in the country as a Qualified Retired Person will not count towards the years required to apply for a permanent residence.
Also, you cannot seek employment, but business investments are actively encouraged.
On the plus side apart from tax-free living retirees under this program can import their personal effects without paying import duties.
Belize, like Panama, is well protected externally, this time by the UK. What’s more, English is the business language in Belize and the locals are welcoming of Britons. Move away from the main tourist hangouts and the most built-up areas and you will discover how far your tax-free income can take you.
Turkey is a volatile choice because it’s a country that’s seemingly divided in its thinking. On the one hand, you have those pushing hard to position the nation for EU accession, and these people are happy to see the cost of living and the price of everything in their country rise.
On the other hand, you have Turkey how it is today – a country, where people live like kings or peasants with massive room for movement in between the two camps. There is huge poverty in Turkey – and incredible wealth.
As an expat, you will likely be attracted to the most popular coastal destinations in Turkey – but step away from them and off the beaten track and you will find a place for you according to your level of affordability.
Retiring to Turkey offers quite a lot: low cost of living, an opportunity to buy inexpensive property, and good quality cheap private healthcare. Beware of political volatility that could undermine the stability of the nation’s current economic position. Consider all pros and cons of living in Turkey before making your decision.
7. The Philippines
The Philippines is another country that offers a retired person’s incentive programme, the ‘Special Resident Retiree’s Visa’.
The perks of the programme are substantial – it entitles the holder to multiple-entry privileges with the right to stay permanently in the Philippines.
You can earn your pension and annuity income tax-free under this programme and come and go to and from the country as often as you like. You can also import your belongings tax-free.
The main appeal of this year-round tropical country is a very low cost of living, of course. You will find that everything is cheaper in the Philippines – property, food, entertainment, domestic help, labour costs, electricity, etc.
The Philippines can offer a good standard of living, and the country’s healthcare is excellent. What’s more, the benefit of this programme is that it’s open to you from the age of 35 and still allows you to work in the nation (if you want to).
If you are retiring to the Philippines with a pension in your pocket, to qualify for the programme you need to be 50 + years old, a deposit equivalent to $10,000 into a Filipino bank and have a pension income of $800 a month for a single applicant and $1000 for a couple (which is just under £650 and £800 respectively).
What do you get for this? A tropical paradise with pristine beaches, cheap living and friendly smiling people. Eating out, travelling around, having domestic help of all kinds and never watching your money. Quite a lot for very little.
Argentina is a shining star among the contestant of “the cheapest countries to retire” competition.
This country is a perfect blend of good climate, affordability and sophistication. It combines stunning landscapes and scenery with refined architecture of its cities and towns, and its art, music and literature can satisfy most demanding connoisseurs.
For most things, the cost of living in Argentina is far cheaper than in the UK or in the USA.
Exceptions may be rent in the most stylish quarters of the most popular cities. However, if you compare like for like you should be comparing renting such properties with renting similar in Knightsbridge or Manhattan, you will see Argentina is so much cheaper.
Food and excellent drink (in the form of some stunning red wines) are much more affordable, and if you move outside the tourist traps and speak the local lingo, your money will go far further because you will be taken more seriously.
This stunning country offers expats low tax rates, high quality of living, and great natural surroundings. Its location makes it a convenient base for travelling around Europe with many destinations in easy reach.
If you are wondering how expensive it is to live in Montenegro, you are in for a pleasant surprise. Overall, it’s around 50% cheaper to live in Montenegro than in the UK or the USA. Besides, the country’s low tax rates are very attractive: income tax is only 9%, capital gains tax is 9%, and the corporate tax rate is also 9%.
As the country is being ‘discovered’ at an alarming rate, property prices in popular destinations are going up. However, they are still lower than in well-known European retirement hot spots.
A 3-bed house with sea views in Bar coastal area can be bought for around €160,000. While a 2-bed apartment in Budva in a modern complex will cost around €185,000. If you go to less discovered areas or wish to do a bit of DIY, you can find some amazing bargains there.
10. North Cyprus
North Cyprus is one of the best value-for-money retirement destinations in the Mediterranean. It’s safe, it’s beautiful, it has stunning beaches, hot summers, great mountains, golf clubs and all the things necessary to enjoy a relaxed retirement.
Yes, it’s a small country and the choice of where to live in North Cyprus might not be huge. However, if you are after a quieter and more peaceful lifestyle, this country is definitely worth your attention.
Property prices are surprisingly cheap. You can buy an amazing 3-bedroom villa with a garden, swimming pool and a great sea view for about £130,000 ($181,000).
Rent is also very inexpensive, as is healthcare, especially if you come from the USA.
And the best thing about living in North Cyprus is that there is no income tax on a pension income, so as a retiree you can enjoy your pension free of tax.
For more details about living in North Cyprus read the North Cyprus section of our Living In Cyprus guide.
Looking for a green and welcoming country with an unspoiled land and relaxed life of fresh air and open spaces? Consider Paraguay.
Paraguay is a very inexpensive country. To live a good life here requires far less money than the equivalent would in North America or Europe.
Property is cheap. A sum of $100,000 (£72,000) can get you a decent albeit small townhouse in the towns outside of the capital. The basic weekly grocery bill can come up to $40 for one person.
You can find a detailed breakdown of the cost of living and other useful information in our Living In Paraguay guide.
Your biggest expense after rent will probably be your health cover. As an expat, you will probably choose to pay for private health insurance in Paraguay, but it will be much cheaper than in the USA.
Paraguay is perfect if you are looking for a slower pace of life much closer to nature, wishing to escape the frantic pace of the modern world.
12. Costa Rica
Costa Rica is definitely not the cheapest country to retire in Central America, and yet if you come from North America or UK, you will find it very affordable.
A retired couple can live relatively comfortably on $2000 a month in a mid-range apartment or house.
Anything between $2,000 and $4000 a month can buy you a really comfortable life in Costa Rica when you don’t have to worry about your AC unit being on when you want it.
And it gets even better, foreign retirees living in Costa Rica pay no income tax on their foreign income. So you can enjoy your retirement income without sharing it with the Costa Rican government.
Even if you are budget conscious you can find things to entertain yourself with for a very affordable price. Try national parks. There are over 20 of them in the country with entrance fees ranging from free to just shy of $20 per person.
Mexico is another very affordable country for expat retirees. Housing, utilities, going out and daily expenses are lower than in the U.S.A or UK. Healthcare is muchcheaper than in the U.S.A and of a high standard.
Plus, If you come from Europe or North America, you will find that the exchange rate to the Mexican peso can be rather beneficial to your pocket, and your money stretches further than back home.
Depending on the chosen location you could live comfortably on $1,500 per month (roughly £1,000), this could cover all the basics such as rent, food, internet, and general living costs. You can live even for less in cheaper locations.
However, you can also find exclusive and expensive places where you can have every opportunity to splash out on a luxury lifestyle if that’s what you want.
Retiring to Mexico is a great option if you appreciate the low cost of living, good climate, and something different from the norm.
Cheap countries to retire to – summary
There are affordable countries out there, and there are nations that go out of their way to attract retirees with their tax-free incentive programmes, thus making them the cheapest countries to retire to perhaps.
But because ‘cheap’ is a relative term, you need to calculate your budget and then find a country where you can get the right balance between cost of living and standard of living so that you can be happy and comfortable in retirement abroad.
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