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Where is the best place in the world to enjoy your daily dose of sun and caffeine, while getting most value out of your hard earned retirement savings?
For American expat retirees looking for the ideal retirement destination, there are certainly a lot of factors to consider. Which countries offer a retirement visa, have an environment that's great for a long-term stay, and enable you to access affordable healthcare?
Check out the list below of some of the best countries to retire to, and see which ticks off all the boxes on your list!
Where to retire?
For many retirees, finding a country where they can enjoy their retirement and don't have to spend excessively on living essentials is an attractive prospect, but finding the right place can be a daunting task.
The Annual Global Retirement Index (2018) from French asset management Natixis looks at a range of factors, such as a countries' monetary policies, pension values, government debts, and environmental threats, as well as other elements that can affect retirement security such as health, material wellbeing, quality of life, and financial matters.
The Index's top ten countries for retirement security were mostly located in Europe, with Switzerland taking first place. Other countries included Iceland, Norway, Sweden, New Zealand, Australia, Denmark, Canada, and the Netherlands.
Meanwhile monthly magazine International Living recently published its list of the top ten best places to retire which listed several countries in Asia and South America, including Peru, Colombia, Ecuador, Thailand and Malaysia. Their results were based on factors such as income and cost of living expenses, as well as healthcare, climate and the environment.
The top 10 countries
Here's a look at some of the top ten countries to retire to, and why.
Europe: Spain (10th) and Portugal (7th)
The neighboring countries of Spain and Portugal both rank well. Spain has long been a haven for British pensioners which make up the majority of the English-speaking expats in the country. The sunny weather, delicious food and more relaxed way of life, plus a healthcare system that's ranked among the best in the world provide plenty of incentives to stay.
Portugal also offers a warm and friendly climate and is ranked the fourth safest country in the world, according to the 2018 Global Peace Index. Expats cite the low cost of living and access to great urban amenities as key reasons the country appeals to retirees.
Asia: Thailand (9th) and Malaysia (5th)
On the other side of the world many expat retirees are also discovering the allure of living in Asia, specifically in Thailand and Malaysia. Placing ninth and fifth respectively in International Living's list, both countries are known for their rich culture, amazing food, and the warmth and friendliness of their people towards other nationalities.
The cost of living in both countries is relatively low, meaning your monthly budget will stretch much further than it would in most parts of Europe. Food, transport and utilities are inexpensive, and many people can afford to hire help for domestic chores. Both countries have a public healthcare system in place but many of the hospitals also cater for those covered by private health insurance.
North America: Mexico (3rd)
Mexico's proximity to the United States places it in one of the top spots. Not only is the country familiar to most North Americans, but it's also the most accessible. You can take your pick of where to live, depending on your preference – beaches, mountains, lakes, cities or farmlands.
The exchange rate between Mexican pesos and US dollars can also help to keep the cost of living affordable for American expats. Those over the age of 60 can also enjoy discounts on goods and services once they have obtained their national senior discount card.
Mexico's healthcare system offers incentives for long-term residency, with those who have permanent residency able to access the national healthcare system. One of the national healthcare plans, called the Seguro Popular, is designed for those who are not formally employed and retired expats can choose to enroll in the program.
South America: Peru (8th), Colombia (6th) and Ecuador (4th)
South America is increasingly popular with retirees and for good reason.
Peru's rich history and culture, and emerging culinary scene are enticing more and more expats. While language can sometimes be an issue, there are a growing number of expat communities willing to reach out to new arrivals to help them settle.
Colombia is famous for its great coffee, coastal living areas and cooler mountain enclaves. Many American expats extol the fact that they're able to enjoy a more upscale lifestyle because of the significantly lower cost of living. Colombia's healthcare system is also ranked by the World Health Organization as better than Canada or the United States.
For expat retirees, the country offers a retirement visa valid for three years that only requires an annual income of USD 750 from social security or USD 2,500 from a private pension.
Ecuador exudes the warmth of a small-village but with modern conveniences, and all without the corresponding high price tag. Fourth on the list the country has something for everyone in terms of climate – from fresh sea breezes to bracing mountain winds and warm currents originating from the Amazon. Expats cite the opportunity to own homes at a fraction of the cost in the US, low annual property taxes and the reliability of local transport as part of the country's appeal.
Central America: Costa Rica (2nd) and Panama (1st)
Number two on the list, Costa Rica, offers a temporary retirement residency visa called Pensionado. The requirements to apply are simple including proof of at least USD 1,000 in income per month from social security or a private retirement fund; and living in Costa Rica at least four months per year. While those with this type of visa are not be able to work in the country, they're still allowed to own a business and earn income from it.
Once you have completed a period of at least three years as a temporary resident, you can apply to change your status to permanent residency subject to a fee. You can also become eligible for the public health program even if you have a private health insurance plan. While permanent residency status must be renewed annually, it doesn't expire, and once you have gained it, you may legally work in Costa Rica.
The Republic of Panama takes the number one spot, climbing from third place in 2018. Conveniently close to the US and with the same currency, it's no wonder that more and more American expats are choosing to move to this sunny and welcoming country.
Food is plentiful and cheap, and your money affords you some luxurious comforts especially when it comes to getting a home of your own. Another big appeal is that any income earned in other countries is exempted, which means you can pay little to no income tax at all.
Its retiree program - also named Pensionado – is considered one of the best in the world, and provides numerous discounts and benefits to eligible members (women aged 55 years and above and men aged 60 years and above). These include discounts on airline tickets and utility bills.
Healthcare costs are also significantly lower, with fees ranging between USD 20 - 60 to see a doctor. Many US doctors have found their way to Panama's hospitals, and medical facilities in the cities use the latest technology and equipment. An added advantage that most expats mention is that prescription medication is also much cheaper here than in North America.
Once you have made the choice of where to go, here's a quick run-down of the things you need to consider before making the move.
As most retirees rely on their pensions or social security benefits as well as personal savings, finances are usually the number one concern. Finding out the cost of living in your planned retirement destination is paramount.
Affordability will affect every decision you make once you retire. How far will a monthly budget of USD 1,000 last? Remember to factor in staple food items such as bread, milk, and coffee into your budget, as well as medicines, transport costs, clothing, and occasional entertainment such as movies or dining out.
If you plan to buy or invest in real estate abroad you also need to make sure this fits within your budget. Don't forget to consider property taxes, the costs for building, repairs or renovations, plus any restrictions involved for expats who wish to own property.
If you choose to rent instead of buy, be sure to calculate how much you are willing to spend for a short-term or long-term rental. Location and accessibility is also important. Do you want to rent in the suburbs, or somewhere more relaxing by the sea, or even a mountain town?
You also need to consider visa requirements and other governance arrangements. Is it easy to get a retirement or residence visa in your chosen country? While many countries have opened their doors to retirees and made it easy for them to establish residency, others may not be as welcoming. Some nations such as Thailand require retirees to possess a certain amount of money in the bank to be eligible for a visa, whereas others may require you to report your whereabouts regularly every few years.
Aside from visas, you should also consider how the country performs when it comes to personal freedom and basic rights. Are public services efficient? Is it generally safe to go out at night? Is it easy to set up a bank account and make transactions, or there are a lot of hoops to jump through?
Quality of Life
People often talk about quality of life as one of the most important considerations when retiring abroad. This can mean different things to different people, whether it's having access to a reliable internet connection, being a stones throw from the beach, or not wanting to miss out on the latest English language film, consider what priorities are important for you and whether these are feasible in your retirement country of choice.
It's also important to consider your material wellbeing which the Natixis Retirement Index defines as involving 'opportunity'. Retirement is often seen as a chance to try something new such as engaging in part-time employment or volunteering, so it's important to see if the local area will provide opportunities for more meaningful endeavors. Some countries also offer special benefits for retirees such as discounted public transport fares, so find out whether there are any useful privileges you can enjoy.
Healthcare can be very costly, particularly in the US, and access to affordable healthcare can often be the deciding factor on whether it's feasible to retire abroad.
Firstly it's important to find out about the public health service, and the quality of treatment and services available. Ask yourself whether you can get your regular prescription filled at the local pharmacy, and whether medication costs more or less than in your home country?
If you would prefer to access private medical care you may need to consider what health insurance cover is available, such as an international health insurance plan which is specifically designed for expatriates living abroad.
Lastly the availability of clean air and water, fresh food, and a healthy environment are all major contributors to helping you live a better life.