For those of us nearing a well-deserved retirement and planning on an exciting “life after job” experience, 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.
Search the Internet for ‘cheap places to live abroad’ and you will find hundreds of thousands of results returned.
This is because there are ways that you can quantify cheap based on the cost of living abroad compared to living in London or New York for example. What’s more, there are obvious examples of nations where it’s very affordable for accommodation and food for instance.
However, we wanted to be able to present for you some seriously viable considerations for all those seeking an affordable – yet quality – place to retire abroad.
Therefore, driving our decisions below are certain key factors that you need to know about and which we will discuss before we present our recommendations for you.
Inside This Guide:
What You Need to Consider When Looking for Cheap Countries to Live Abroad
According to the latest research, cost of beer in Czech Republic is the lowest in the world (and the beer is arguably the best!), however it’s probably unwise to base your decision to move there on this fact alone. There is a lot to research and plan for before you commit to relocation.
Quite possibly you will have a budget in retirement that you will need to live on each month.
This may have to cover your accommodation and living expenses, a rainy day fund, health care and leisure activities including flights back ‘home’ to visit friends and family.
Therefore, you need to think, in advance of your move, how large, (or otherwise), your budget is going to be, and how you can get the most out of it.
If you have assets in the form of real estate in your current nation, can you turn them in to cash? I.e., can you sell assets to free up funds to buy a home abroad to reduce your monthly outgoings?
Or, perhaps better yet in this economic climate, can you rent that property you own out to bring in an income that could fund your rental payments abroad on a home?
Next up, by retiring overseas you can find a way of minimising the taxation erosion on your income by structuring your investments, pensions etc., offshore or in a low tax country, this way you can make your pension abroad work harder for you. To find out whether it is a viable option for you, you need to get a qualified financial advice.
There are some countries in the world where you can reduce your taxable income to zero if you become a part of that country’s retirement incentive programme. Is this an option you would consider to have more money in your pocket to play with?
It is tempting to retire to a zero tax country. The catch, however, is that most of them are located a long plane ride from the UK. This in itself can add more to the financial demands on you in terms of transportation and accessibility – particularly if you intend keeping close ties with family and friends back home.
There are also countries where the cost of living is incredibly cheap, but they are not necessarily nations you want to retire to for a traditional retirement that we usually associate with a decent and secure standard of living.
So, first thing first, it is necessary to determine how much money you have to work with each month, how far that money has to stretch and whether there are ways and means open to you to save money or make it go far further – from saving tax to investing your money offshore, from moving to a tax free country to continuing to work perhaps part time.
Bear all these in mind when researching your preferred country choice – it will help you to narrow down your options and better understand what it is out there
Here are our suggestions for the eight cheapest countries to retire to. Following each suggestion, we’ll tell you why the nation in question has been chosen.
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.
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.
The climate is excellent for most of the year, the landscape is stunning, culturally and historically Cuba is rich and blessed – but perhaps the one thing not in its favour is the level of poverty suffered by some. Cuba has a lot going for it – but you should take a closer look before you commit.
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 for example, 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.
Bulgaria also has accessibility from the UK in its favour for those retiring Brits who still want to keep in touch with home.
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 the 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 dependants 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 or 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 moving in, you will likely be attracted to the tourism resorts along the southern coastline – 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 it all depending on how relative for you the concept of cheap is…but 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.
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.
International Living once estimated that you can have a comfortable life in the Philippines for equivalent to $800 to $1,200 a month.
The Philippines can offer a good standard of living, and the country’s healthcare is excellent. What’s more, the benefits 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, deposit equivalent to $10,000 into a Filipino bank and have a pension income of $800 a month for a single applicant, and US $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 kind 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 – even with the decline of the pound.
Exceptions may be rent in the most stylish quarters of the most popular cities – however, then again, if you compare like for like you should be comparing renting such properties with renting similar in Knightsbridge or Manhattan…and again, you will see Argentina is soooo 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.
However, at Expatra we have a strong love affair with many aspects of this massive and diverse nation and believe it’s well worth a look if you want somewhere that is relatively affordable to live well.
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 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.
You might find useful:
- The Expat Guide to UK Pensions Abroad – detailed information about your state, workplace and private pensions when you retire abroad; your options, tax implications and opportunities if you transfer your pension pots abroad or leave them in the UK;
- Banking, Saving, & Investments Abroad – a simple guide to your bank accounts and investment options when you become an expat;
- Visit our homepage for a comprehensive range of Retirement Abroad guides.