For many people, retirement is an opportunity to start fresh and live the life they've always dreamed about. It's a time to begin a new chapter and start a new adventure. For some, that may mean pursuing a new hobby or spending more time doing the things they enjoy. For others, it means packing their bags and moving to a new country.
Nearly 700,000 Americans receive their Social Security checks overseas, according to the Social Security Administration (SSA), so if you're thinking about retiring abroad, you're in good company.
Besides providing the chance to start anew and try something different, retiring abroad offers a host of other benefits including being exposed to a new culture, paying far less for healthcare, and even enjoying a lower cost of living. In fact, according to expatriate resource Expatistan, the U.S. ranks as the 17th most expensive country out of the 106 countries on the list -- and there are dozens of countries that offer a more affordable lifestyle without having to sacrifice quality of life.
Is retiring abroad the right choice for you?
For some, starting your golden years in a new place can be the thrill of a lifetime and what they've waited for all their working years. For others, just the thought is downright horrifying. Retiring abroad isn't for everyone, and there are advantages and drawbacks to choosing to spend your retirement in a foreign land.
Consider the costs of flying back to the U.S. every time you want to visit friends and family. Can you cope with not seeing your loved ones for holidays and birthdays outside of Skype or FaceTime? The effects of social isolation can be devastating, particularly if you're part of a close-knit community that you'll be leaving behind. It may also prove to be a challenge as you grow older and find it more difficult to get around. You may have children or grandchildren who can help take care of you in the U.S., but if you move abroad then leaning on loved ones as you age may not be an option.
That said, retiring to a new country can be a wise financial decision that provides you with a much better quality of life -- particularly if your savings aren't as robust as you'd hoped.
Nearly half of married couples rely on Social Security benefits for at least 50% of their income in retirement, according to the SSA. And when the average Social Security check is just $1,300 per month, it's not always easy to get by in most U.S. cities. But in many other countries, that Social Security check can go a lot further and provides more bang for your buck. So if you're thinking about retiring abroad, these cities offer an excellent quality of life for less than $1,500 per month.
1. Buenos Aires, Argentina
Buenos Aires is often referred to as the "Paris of South America," and for good reason. With a distinct culture, world-renowned museums, and a mouthwatering restaurant scene, this city truly has something for everyone.
On top of that, it's also affordable. The average 900-square-foot furnished apartment in a more expensive area of town costs roughly $600 per month, according to Expatistan. Utilities run you about another $100 per month, and groceries are similar in cost to what you'll find in the U.S.
Healthcare is more affordable in Argentina than in the U.S. -- even after you factor in Medicare coverage. Under Argentina's public healthcare system, emergency care and doctor visits are free to everyone -- including expats -- though you may experience long wait times, because many hospitals and doctor's offices are understaffed. If you go the private healthcare route, you'll likely experience shorter wait times, but costs vary by provider and city.
2. Georgetown, Malaysia
One of the prime benefits for Americans retiring to Malaysia is that English is widely spoken, making the transition much easier. Learning a new tongue in your old age is easier said than done, and if you don't develop a fluency, it can lead to feelings of isolation and frustration in retirement. This Asian country also boasts a warm climate and beautiful beaches, so it's perfect for retirees looking for a tropical getaway.
The country boasts an exceptionally affordable cost of living. A furnished 900-square-foot apartment in an expensive urban area typically costs between $500 and $600 per month, according to Expatistan, and if you're willing to settle down in a more rural town, you could even pay less than $300 per month for housing.
Malaysia also offers some of the highest-quality healthcare in the world. While healthcare facilities in rural areas can be hit or miss, hospitals and doctor's offices in the more populated cities offer high-quality care with highly skilled staff, and most doctors speak English. Being able to effectively communicate with your healthcare provider in a foreign country is a huge benefit for retirees. Malaysia offers both public and private healthcare, and while expats have access to the public system, there's also the option of buying private health insurance.
3. Puerto Vallarta, Mexico
If you're looking to retire abroad while staying relatively close to home, Mexico is a fantastic option. You'll need to do some research to make sure you choose the right city as some towns have higher crime rates than others, but one promising choice is the tropical destination of Puerto Vallarta.
The city is a popular tourist destination, so it's also very retiree-friendly with plenty of restaurants, shops, theaters, and, of course, miles of sandy beaches. While housing can be more expensive than other Mexican cities, it's still more affordable compared to many U.S. cities -- the average furnished 900-square-foot apartment in an expensive area of the city costs just under $1,000 per month, according to Expatistan. However, there are less pricey options, and if you choose to move to a less expensive part of town, you could pay just $500 per month for a furnished apartment.
You'll also find quality healthcare in Puerto Vallarta at an affordable price. Once you become a resident of Mexico, you are eligible to participate in the country's public healthcare system. You can also buy private insurance, and while costs vary widely depending on the city and hospital, it's usually more affordable than U.S. plans.
Choosing the right retirement destination
Of course, these are not the only options if you're looking to retire abroad -- there are dozens of fantastic cities around the world that would make fabulous retirement destinations. But the most important part is to do your research before making the leap.
Before you pack up all your belongings and buy your dream condo in a new country, visit your prospective retirement city for several weeks to make sure you can see yourself living there for the next few decades. Seek out other expats in the city and ask them about their experiences. Join online groups and forums to get an inside look at how other retirees are living, then decide whether you would enjoy that type of lifestyle.
It's a big world out there, and if you're the type of jet-setter who is ready for a new adventure in retirement, moving abroad may be one of the best decisions you'll ever make. Just be sure you've prepared and put some thought into your decision so that you can truly live the retirement life you've always dreamed of.
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