Do you have $600k put aside for your retirement? If you’re depending on your savings to keep you in your present lifestyle when you quit work, that’s how much you might need. Just14% of Americans in their 40s and 50shave more than half a mil put away – and if you’re in a similar position, you could enjoy a fuller retirement in a more affordable country.
There are many good reasons your retirement fund could be low. Sadly, the lockdown has forced nearlyone-third of Americansto slam the breaks on their retirement savings. In fact, around 9% have withdrawn from their savings just to get by. Even if your savings remain untouched, you might have underestimated what you’ll need to get by orlack the incometo save comfortably.
Whether you’re on track to save what you need or not, retiring abroad is a handsome option. Retirement is an opportunity to learn new things, gain new experiences and meet new people. And many places are much cheaper to live in retirement than the US.
For our latest study, we figured out that to retire at the average age in America (64) with the average life expectancy (78.7) you’d need around $601,489 in the bank. We applied the same calculations toevery country on Earthto see how much a 64 year old would need to maintain the same quality of life: going out once a week, takeout coffee once a week, no smoking, moderate drinking, no taxis or rideshares and two vacations, among other controls.
The result is a series of maps of the most affordable places to comfortably retire around the world.
- Themost expensivecountry in the world to retire isBermuda, where you would need$1,065,697.
- Pakistanis thecheapest countryto retire. You would need$182,018to maintain our example lifestyle there.
- Fourteen years of retirement in the US would cost$601,489.63according to our metric:$40,917.66 per yearor$2,841.50 per month.
- We found125 countrieswhere retirement ischeaperthan in the US and only13 that are more expensive.
Bermuda is the most expensive country for retirement
Depending on who you ask,Hong KongandSwitzerlandare touted as the most expensive places to live. We found them to be the third and fourth priciest for retirement. Bermuda prices are targeted at those with lives of leisure. Restaurants in Bermuda are twice as expensive as in the US, and the capital, Hamilton, is known as theworld’s most expensive city.
And the most affordable country? Pakistan is cheap across the scale. Only on utilities does the Asian country cost more than other cheaper destinations – twice the cost of utilities in India, but less than half the cost in the States. A Pakistani retirement would cost you $182,018.34, which is $10,318.50/year or $859.88/month.
In the United States, we calculated a base cost of $601,490, making it the second-costliest in North America, beaten only by Bermuda. Canada is significantly cheaper at $496,118 – a saving of $12k a year between the ages of 64 and 78.
Mexico is the cheapest place in North America, at the cost of $257,078. This is nearly a quarter of the cost of retiring in Bermuda. But if you’re hooked on the idea of retiring to paradise, the Bahamas is an option at $568,202 – $8k/year cheaper than the US.
South America provides many more affordable retirement options than the north of the continent. Even the most expensive country, Uruguay, is nearly half the cost of the US. You would need savings of $351,480 to land here.
Brazil and Colombia are neck-and-neck to be the cheapest retirement destinations in South America:
$216,877 and $215,493 respectively. If you’re planning on owning a car, it could end up cheaper for you in Brazil, while taxis are slightly cheaper in Colombia.
The financial centers of Switzerland and Luxembourg are known as pricey places to be. Both offer ‘fairytale-like’ landscapes and histories that appeal to letteredAmerican Europhiles! However, since their $842,790 and $758,601 price tags eclipse the cost of an American retirement, you can probably find somewhere more affordable to your tastes by venturing east.
East, for example, is Georgia, a beautiful country with a rich culture and history and a retirement cost of $215,911 – just over one-third of the US price. Georgia is the cheapest retirement destination in Europe, followed by its neighbors Russia and Ukraine.
Middle East and Central Asia
Israel is the most expensive part of this region for retirement, and a little more expensive than the US at $632,745. Owning a car here will cost you twice what it costs in the States, but if you can do without a car, then Israel starts to become an option.
Central Asia is home to some of the cheapest places to retire: the ‘Stans(Kyrgyzstan, Kazakhstan, Uzbekistan) each come in below a quarter-mil, with Kyrgyzstan ($191,216) being the third-cheapest country in the world for retirement.
Rest of Asia and Oceania
Only three countries in this region are costlier for retirement than the US. Singapore and Hong Kong are the second and third most expensive in the world. The other pricey destination in this region is Macau, which, like Hong Kong, is a Chinese Special Administrative Region with its own economic system. A retirement in Macau costs just $120/month more than in the US.
This region is also home to the cheapest destinations in our study: Pakistan ($182,018) and
India ($184,519). Theaverage cost of living in Pakistanis 69.74% lower than the US, and the average rent is 89.26% lower. However, India has proved anattractive destination for expat retireesin recent years due to the sights, beaches and community.
It would be cheaper to retire to any country in Africa than to stay in the US. Africa’s most expensive destination for retirees is Ethiopia, at $458,986.Tourism is on the risein Ethiopia, and recent economic and social reforms have encouraged the diaspora and foreigners alike to consider here.
Three of the five cheapest destinations on the continent are in North Africa. Algeria, Egypt and Tunisia each cost a little shy of a quarter-million dollars. The cheapest on the continent is Uganda, at $213,498. ButSouth Africa is a more popular retirement destinationand still costs just $304,282 – almost half the price of an American retirement.
Retiring Abroad: A Win-Win Situation?
Many Americans are struggling to save enough for their retirement, and current economic conditions aren’t helping.
The rather blunt solution provided byOlivia S. Mitchell, executive director of Wharton’s Pension Research Council at the University of Pennsylvania, is to keep working. Even continuing part-time work until you’re 70 – at which point Social Security benefits jump 76% – can make things more manageable. If you’re sick of your job, consider retraining. This will helpkeep your mind nimbleand your brain and body healthy as you approach your vulnerable later years.
But travel is another way to stay sharp and inspired – and it sure beats working for a living. If you have a few years or decades to go until you hang up your work overalls, why not startresearchingsome of the more affordable retirement destinations in our study?
METHODOLOGY & SOURCES
Our calculations are based on the average American retirement age of 64 years and the average American life expectancy of 78.4 years. Calculations of monthly living costs were completed in USD using Numbeo based on the following assumptions:
- Members of your household = 1
- Eating lunch or dinner in restaurants = 15%, Choosing inexpensive restaurants = 70%
- Drinking coffee outside your home = moderate
- Going out = once per week
- Smoking = no, Alcoholic beverages = moderate
- At home, we are eating = Western
- Driving car = moderate, Taking taxi = no
- Public transport = 2 round trips weekly
- Sports memberships = all household members
- Vacation and travel = two per year
- Buying clothes and shoes = moderate
- Rent = Apartment (1 bedroom) in city center
- No children
Monthly living costs were collated for 124 countries, then multiplied by 176.4 = 14 years and 8.4 months between retirement age and life expectancy. To allow for a more comfortable retirement, the figures were further revised up by 20%.
Since Numbeo data is fully user-generated, it’s skewed towards capitals and big cities, which might account for the cost-of-living estimates in certain countries appearing inflated. Note that Numbeo cost estimator doesn’t include insurance, health-related expenses and doesn’t account for income tax in different countries.
Cost-of-living figures on Numbeo are updated regularly and may not fully correspond to the figures in the dataset, which were accurate at the time of data collection (November 2020).
This article first appeared on NetCredit.
Climate, environment, and costs vary throughout the country, but the overall cost of living is about 38 per cent lower than in the United States, and housing is 72 per cent lower on average making it one of the cheapest countries to retire in, based on June 2022 data.
You can certainly retire comfortably at age 65 on a $1.5 million, but your ability to do so relies on how you want to live in retirement, how much you plan to spend, when you plan to claim Social Security and how your portfolio is structured.Where is the best place to retire with $1 million dollars? ›
1. Mississippi. World Population Review ranks Mississippi as the state with the lowest cost of living for 2022. A million dollars will likely provide you with a comfortable lifestyle for most, if not all, of your retired years.What is the number 1 place to retire in the world? ›
Aside from the financial benefits, Costa Rica offers a sunny, tropical climate with gorgeous scenery. In addition, quality of life is superb, and many people can afford to live on $1,500 a month (excluding rent payments).Can I collect Social Security if I live in another country? ›
If you are a U.S. citizen, you may receive your Social Security payments outside the U.S. as long as you are eligible for them.Can I retire at 62 with $400,000 in 401k? ›
Can I Retire At 62 with $400,000 in a 401(k)? Yes, you can retire at 62 with four hundred thousand dollars. At age 62, an annuity will provide a guaranteed level income of $25,400 annually starting immediately for the rest of the insured's lifetime.What percentage of retirees have a million dollars? ›
In fact, statistically, around 10% of retirees have $1 million or more in savings. The majority of retirees, however, have far less saved. If you're looking to be in the minority but aren't sure how to get started on that savings goal, consider working with a financial advisor.What age can you retire with $3 million? ›
At age 60, a person can retire on 3 million dollars generating $183,000 a year for the rest of their life starting immediately. At age 65, a person can retire on 3 million dollars generating $201,900 a year for the rest of their life starting immediately.Where can I retire comfortably on Social Security? ›
Alaska, Florida, Nevada, South Dakota, Texas, Washington state and Wyoming don't tax any income at all. And on top of not taxing Social Security benefits, Oregon and Delaware have no sales tax.
- Savings accounts are a safe place to keep your money because all deposits made by consumers are guaranteed by the FDIC for bank accounts or the NCUA for credit union accounts.
- Deposit insurance for savings accounts covers $250,000 per depositor, per institution, and per account ownership category.
Retirees with $2 million can enjoy a comfortable retirement, especially with interest added. Retiring early can cut into that savings due to early withdrawal penalties and delayed Social Security. With the right combination of budgeting and interest, a retiree can make early retirement work.What is the easiest country for Americans to retire to? ›
In order of top to bottom, the following top 10 countries to retire abroad include Portugal, Mexico, Panama, Ecuador, Costa Rica, Spain, Greece, France, Italy, and Thailand.What are the 3 states that don't tax retirement income? ›
Fortunately, there are some states that don't charge taxes on retirement income of any kind: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming.Where do most Americans retire? ›
To be sure, Florida remains a highly desirable state for retirees, with a total of nine areas ranking in the top 25 places to retire, according to U.S. News and World report. More than two-thirds (68%) of the top 25 metro areas to retire are either in Florida or Pennsylvania.What is the cheapest and safest country to live in? ›
- Costa Rica.
In order of top to bottom, the following top 10 countries to retire abroad include Portugal, Mexico, Panama, Ecuador, Costa Rica, Spain, Greece, France, Italy, and Thailand.What is the best country to retire on Social Security? ›
- Panama. ...
- Costa Rica. ...
- Mexico. ...
- Portugal. ...
- Colombia. ...
- Ecuador. ...
- Malta. ...