A Comparison of Living Costs in 20 Popular Countries
Are you considering retiring abroad? For many people, it’s a chance to turn a lifelong travel dream into reality by settling in a favorite country abroad. For others, it’s a strategic decision to make their retirement savings stretch further and support a more comfortable lifestyle. In this article, we explore how long $1 million USD in retirement savings could last across 20 of the most popular countries for Americans retiring overseas.
How We Calculated the Cost of Retiring Abroad
This article compares the cost of living abroad in 20 popular countries for retirees with $1 million in retirement income. This is the amount of money you need to live comfortably.
It includes your housing, food, transport, and average living expenses. When the cost of living is lower, $1 million for retirement will support you for longer.
To provide the most accurate cost-of-living index for these countries in 2023, calculations here were based on the following:
$1 million USD in retirement savings, a sum often recommended to fund an affluent retirement
At least two locations in each country, a major city, and a smaller city or town
The 2023 cost of living is sourced from Numbeo, the world’s highest cost of living database, and is based on two people renting a three-bedroom home outside a city center.
How long can $1 million USD last when retiring internationally? The range spans 14 to 60 years. What’s more, changing from a major city to a smaller city or town in the same country can extend your retirement by two to 10 years.
The “how long” calculations accounted for a 5% inflation a year. Note that increasing the inflation rate to 7% reduced the average retirement years by 2 years in costly countries and 5 years in more affordable countries.
Retirement Costs in English-Speaking Countries
Many American retirees want to combine travel with convenience by retiring in a different English-speaking country. However, these countries have a high cost of living.
Read the costs for each country to learn how locations outside of major cities can make the most of your retirement budget.
United Kingdom
In the United Kingdom, the cost of living in London, a world capital of culture, is also high. Individuals who decide to retire in the United Kingdom can extend their retirement funds by choosing to live outside London.
London: $63,460 annually: 14 years of retirement
Southampton: $37,200 annually: 22 years of retirement
Edinburgh: $38,230 annually: 21 years of retirement
Peaceful, well-mannered Canada is increasingly popular as a retirement destination for Americans.
The cost of living in Canada, especially in its large cities, Vancouver, Toronto, and Montreal, is far higher than in its provincial towns and centers.
Vancouver: $57,120 annually: 15 years of retirement
Saskatoon: $28,272 annually: 28 years of retirement
The promise of sunshine, beaches, and the laid-back Australian lifestyle is tempting. Australia’s retirement visa program is on hold as of 2023: you may be able to enter if you have family connections.
Ireland’s D-Reside retirement visa makes it an accessible option for affluent retirees. Yet living there is expensive. You will also need to pay for private health insurance in Ireland as an expat.
Europe’s culture and convenience beckon many retirees. Europe is known to be an expensive place to live, but many places there are surprisingly affordable.
Inflation or legislation can change how long your retirement savings will last in Europe, so choose wisely.
The cost of living in Germany can vary significantly from one city to another. Large cities are often easier to live in for expats who may not speak much German.
Yet investing in learning the German language opens up many picturesque, quiet places.
Italy is the second-most-popular destination in Europe for Americans seeking a European retirement. But the cost of living in Italy can be high if you are renting.
Americans who purchase a property in Italy to live in often want to renovate it extensively – another cost.
Thanks to Portugal’s Golden Visa and D7 visa, Portugal is the most popular place in Europe for Americans seeking to retire. Below is an overview of the cost of living in Portugal for retirees.
Lisbon: $33,600 annually: 25 years of retirement
Portimão: $34,420 annually: 24 years of retirement
Spain has long been a favorite retirement destination for Europeans. Outside of large cities, the cost of living in Spain is very reasonable for a European country.
Madrid: $35,050 annually: 24 years of retirement
Alicante: $21,510 annually: 36 years of retirement
Many international retirees expect their savings to go further in Central or South America. For some countries and cities, they are correct. In other countries, the cost of living may be surprisingly high.
Panama
Panama’s Pensionado visa makes it easy to retire in Panama if you have a monthly retirement income of over $1,000 USD.
Panama’s currency, the balboa, is closely tied to the U.S. dollar, and many consumer goods are U.S.A. imports. This contributes to Panama’s high cost of living in Central America.
Panama City: $38,350 annually: 22 years of retirement
Bouquete: $36,200 annually: 24 years of retirement
Stable, beautiful Costa Rica is an established destination for international retirees. Its beachfront towns, such as Playa del Coco, are favorites among expats.
Playa del Coco: $31,600 annually: 26 years of retirement
San José: $27,400 annually: 30 years of retirement
Mexico is the number-one destination for Americans looking to retire abroad. Here are the calculations for three of the best places for expats in Mexico.
San Miguel de Allende: $29,340 annually: 28 years of retirement
Mexico City: $25,120 annually: 30 years of retirement
Many people choose to move to Brazil thanks to its warm climate and affordable cost of living. While expats are drawn to the fabled city of Rio de Janeiro, Brazilians themselves favor São Paulo, Brazil’s largest city.
Retirees with medical considerations may prefer São Paulo for its well-rated Brazilian hospitals and health care.
São Paulo: $22,980 annually: 34 years of retirement
Rio de Janeiro: $14,400 annually: 47 years of retirement
Colombia
The very reasonable cost of living in Colombia is attracting more global retirees to the country. Even the stunning Caribbean beach town of Cartagena is affordable.
Cartagena: $17,000 annually: 43 years of retirement
Medellín: $14,700 annually: 48 years of retirement
Asian nations offer some of the lowest costs of living for retirees. For many Americans, retiring in Asia is a return to their heritage.
For others, it brings challenges around language, distance, and time zones – considerations to balance against retirement costs.
Thailand
Thailand is a global destination, famous for its beauty and amenities. The cost of living in Thailand remains affordable for two retirees with $1 million USD.
More Americans are looking at retiring in the Philippines thanks to the country’s Special Resident Retiree’s Visa (SRRV). This has modest financial requirements and is available for people aged 50 and over.
Manila: $23,350 annually: 33 years of retirement
Quezon City: $21,400 annually: 35 years of retirement
Vietnam
Retiring in Vietnam is appealing for many reasons, including the low cost of living. However, non-Vietnamese retirees must frequently renew their visas, and immigrants cite travel to visa offices and visa renewal fees as significant additional expenses.
Ho Chi Minh City: $19,400 annually: 38 years of retirement
Hanoi: $17,300 annually: 42 years of retirement
Malaysia
The affordable cost of living in Malaysia is a major draw for many expats. Moreover, the Malaysia My Second Home (MM2H) visa is available for people aged 50 and over, with easy renewal options.
Kuala Lumpur: $19,180 annually: 38 years of retirement
Some places, like Pune and Jaipur, are becoming known amongst American and European retirees.
Mumbai: $17,500 annually: 42 years of retirement
Pune: $11,850 annually: 55 years of retirement
Jaipur: $10,500 annually: 60 years of retirement
Tips to Maximize Your Retirement Savings
Retiring overseas comes with expenses above the simple cost of living, which you need to factor into your relocation budget. Additional costs for expat retirees can include:
Consider how to include these expenses in your budget. Depending on your desired standard of living, you can budget $ 2,500 to $10,000 extra each year for these expenses.
One way to extend your retirement savings is to choose an affordable place to live in your chosen country. You may move there directly if you are familiar with the country.
Or, when you first arrive, base yourself temporarily in a larger city, for three to six months, and invest in exploring other places. Then, relocate and make a more affordable venue your home.
Finally, make decisions around overseas retirement based on what matters to you. Is your family in your home country important to you? If so, retiring somewhere in a very different time zone, accessed by a long, expensive flight, may not be your best choice.
Are you planning to travel and explore from your new international base? Choose a place with a lower cost of living so that you have a budget for travel and fun.
With thought and care, you can retire in any country and live well on $1 million USD. Enjoy planning your dream retirement.
Emily Cotlier is an experienced communications consultant and business analyst, senior analyst at New Zealand’s Parliamentary Counsel Office, specializing in visas, immigration, international relocation, and managing finance, insurance, and real estate.
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