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How to retire overseas for less

By Judy Martel · Bankrate.com
Wednesday, July 23, 2014
Posted: 6 am ET

Worried your retirement dollar won't go far enough? These days, more retirees are deciding to pick up stakes and move to a less expensive locale where they can live well for a fraction of the cost.

Moderate weather, cheaper living in Ecuador

Dan Prescher and Suzan Haskins

Dan Prescher and Suzan Haskins

In 2001, Dan Prescher and his wife Suzan Haskins closed their marketing business in Omaha, Neb., and moved to Ecuador to work as senior editors at InternationalLiving.com. They've witnessed the increased popularity of U.S. citizens retiring abroad and have recently authored an advice book for expats, "The International Living Guide to Retiring Overseas on a Budget."

"Suzan always wanted to travel and have an adventure," says Prescher. "We were at the point where we wanted to try something new."

When International Living offered positions in Latin America, the decision was easy. "It was a good time to make a move," says Haskins. "Our parents were healthy and our children were grown or in college. And if you've ever been in Omaha in the winter, you know what it's like."

Although the couple has lived in four countries since then, they chose to become legal residents of Ecuador. In 2010, they purchased a condo in Cotacachi, a town nestled in the Andes mountains outside Quito. They spent $52,000 on the condo and say that because they don't have a mortgage or rental costs, they can live well for $1,500 to $2,000 a month.

Cheap is great, but make sure you enjoy the culture

A lower cost of living might allow you more financial freedom, but if you don't like the expat lifestyle, the extra money isn't going to make up for it. Retirees need to be certain they fully understand what they're getting into before they pick up stakes, say Haskins and Prescher.

"You really have to profile yourself and know what you want," says Haskins. "After so many Omaha winters of shoveling, we thought we wanted a beach." Although they do enjoy a temperate climate in Cotacachi, it's not on the coast and they discovered it didn't matter after all.

Prescher recommends as much practice as possible – trying out a location by spending lots of time there before making a commitment. The Internet also provides plenty of opportunities to do research on particular regions, gain insight from other expats and find short-term rentals. But it's critical to actually spend time there yourself to gain firsthand knowledge.

Most expats are already well-traveled and have a healthy sense of adventure. For that reason, it's easy to meet like-minded people, says Prescher. "Your social life expands exponentially."

Have budget, will travel

Prescher says one of the biggest financial mistakes he sees from expats is that they underestimate the budget. After they've calculated the monthly expenses of living in a new location, they fail to take into account the extras, such as real estate fees, cost of a visa, expenses of setting up a household and first and last month's rent. Many also fail to plan for unexpected emergencies.

Health care costs -- a huge concern for many retirees -- are generally much cheaper abroad and a relief to the budget. "You can get premium care in almost every major city and 80 percent of the time it's better in one way or another than in the U.S.," says Prescher.

The main advice they give expats is to be flexible and have a cash cushion. "Budgets can change anywhere in the world and you need to stay light on your feet financially."

Wonder how much income you'll have in retirement? Use Bankrate's calculator to help you plan.

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10 Comments
al cantlon
August 09, 2014 at 10:13 pm

The ten best would be 10 states that O'Bama has never been in ! The ten worst would be states that supplied O"Bama the most votes in the presidential elections !

GAYLE
August 09, 2014 at 7:44 pm

HELLO EVERYONE- GO TO THE TOP RIGHT OF THIS PAGE AND TYPE '10 BEST STATES TO RETIRE' IN THE SEARCH BAR AND HIT 'ENTER' CLICK ON THE SUBJECT LISTED.

Gene
August 09, 2014 at 6:13 pm

Where are the 10 best states? No wonder Prescher left town!!!

Janina
August 09, 2014 at 4:09 pm

Really? What are the 10 BEST states?

Audrey
August 09, 2014 at 9:24 am

I was able to view both the 10 best and the 10 worst states to retire in when I clicked on the "10 worst states". Interesting information!

Dan Zee
August 09, 2014 at 9:10 am

I wanted to read about the 10 best states for retirement and this pops up. I hope they gets this rectified so I can read about the top 10 states. Hello Charter, please fix it!

susan
August 09, 2014 at 8:01 am

I only clicked on this link because the title said 10 great states for retirement. I do not want to live in another country, so why not just say that instead

Ronald H, Lively
July 27, 2014 at 7:39 pm

In Cuencca Ecuador 4Yrs happy new family retired from Delta live on less than 2000 a month with teenagers in good private school.

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