Does retiring overseas really save you money

In My Humble Opinion
1

I keep seeing articles on internet news sites about ‘retire overseas for $1500 a month or less’, talking about various middle income countries you can retire in (Argentina, Mexico, Thailand, Guam, etc).

The biggest cost saver seems to be rent, you can get a decent apartment for $400 a month or so in these areas. But you can get a good (not luxury) apartment for $500/month in the midwest (or a small condo or house can be had for 60k or less, putting the final price with maintenance and taxes at about $500/month). A bus pass in the US is $30-80 a month, and generally even less if you are a senior citizen. Utilities are about the same no matter where you live, $100-200/month.

In the US you can eat cheap too, if anything you’d assume some staples are cheaper here since the market is bigger and our infrastructure is better. Dinner out can be as cheap as $5-10 a person if you know where to shop.

I don’t see where the savings come from if transportation, rent, food, utilities are about the same no matter where you live. Outside of health care or if you are hiring personal help (nursing assistant, maid, driver, etc). Our health care system is an overpriced mess, but unless you need a lot of health care I don’t think the savings will be much. A lot of medicare recipients don’t use very much care until the end of their lives.

Point is (I don’t know what other message board to post this in, is there a message board devoted to retiring overseas), I don’t see the appeal from a financial POV. Plus you have to factor in travel back to the US to visit family. Anyone done it or know anyone who has done it?

I wonder if most people in their 30s spend as much time planning their retirement as I do. I want to be able to afford both boats and hoes.

2

Absolutely some countries are cheaper than others, are you kidding me?

When I lived in China as a Peace Corps volunteer, I had around $120 a month to spend after rent and utilities. With this money, I ate out at good restaurants for every meal, drank all the beer I could manage, travelled to interesting parts of China on the weekends, got a weekly massage and a bi-weekly manicure (and occasional spa treatments), took thrice weekly private language lessons, shopped frequently at local boutiques, and belonged to an upscale yoga studio where I’d go to daily classes. It’s easy to live large when beer is twenty cents a bottle and massages are a buck a pop. When I got back to the states and realized that a lousy hamburger from Denny’s might set me back $7.00, my eyes just about popped out of my head. That could pay for meals out for a week in China!

I wouldn’t specifically recommend China as a retirement destination, but I think part of the point of retiring abroad is not necessarily that it’s absolutely cheaper, but that luxuries are much more affordable. $400 a month may get you a reasonable apartment off the freeway in the midwest, but in some countries, it will get you a beachside hacienda, a tropical mini-ranch, or a chic condo in the city center. $300 a month may keep you in pork chops and pasta in the US, but in some countries that will buy you fresh seafood, juicy steaks, and piles of tropical fruit (and maybe even a maid to cook it.)

A lot of things that are pricey luxuries in the States are quite affordable abroad: Things like household staff, beachfront property, restaurant meals, and personal care services can be affordable to even lower middle class people abroad. There are places where labor is so cheap that even the servants have servants (I know, for example, a professional chauffeur who has a chauffeur!).

That said, if you want to live just like an American in a middle income country, you’ll easily go broke. Things like new consumer electronics, meals at Western restaurants, brand-name clothing, and even air-conditioning can be mind-bogglingly expensive. We had Starbucks all over China, but I could only afford to go there maybe once every other month as a special treat, as a cup of coffee could easily cost more than a few meals. iPhone cost some obscene sum. We had an “American” shop stocked with Lucky Charms and frozen lasagna, and all I could do was window shop because I could spend my entire salary in ten minutes there.

So if you live like a well-off local, you’ll probably live a quite nice life in a middle-income country at about what it’d cost to scrape by in the US. But if you want to live in an expat bubble, that will be far more expensive. It’s all about your priorities. I think for a lot of people, just the draw of sunny weather is enough to lure them even if they aren’t saving money.

3

Only problem I can see : if you retire, say, today, there’s no guarantee that local price will stay that low. In fact, I’m pretty sure that they’ll rise a lot in the decades to come.

If I had to do that, I’d buy (at current low prices) rather than rent precisely for this reason.

4

A lot depends on how many of your western habits you bring with you. If you move to Thailand and still go to Sizzler two or three times a month, shop at supermarkets that import western brands, etc, you won’t see much of a difference in your cost of living.

But if you can live like the locals most of the time, you’ll see a serious drop in your cost of living. My daily lunch is usually around $1.25, compared to six or eight dollars back in the states.

And there might be some luxuries overseas that are more affordable than they are in the west. Two examples that come to mind right away: here in Thailand, massages are $6 per hour and live-in housekeepers can be had for $200-$250 per month.

5

Being healthy helps. I don’t think that Medicare will cover you overseas (but please correct me if I’m incorrect).

6

And that’s a problem why? People travel to places like Thailand and Costa Rica just to have medical procedures done well and cheaply. They are also popular retirement spots.

My own experience with Costa Rican medicine was overwhelmingly positive. My husband got bonked on the head by surfboard in Costa Rica. We saw a doctor at the emergency clinc, on a sunday. She answered his questions, took his vitals, did a neuro exam and physical exam, gave a shot of anti-inflammatories, wrote a prescription for painkillers ($4) and cleared him to fly on our already-scheduled flight that day. She spoke perfect English, by the way, and wrote down the chemical names of the drugs she gave him so I could tell our doctor. all in all, we spent 30mins - 1 hr with her undivided attention. Total cost: $60. (the median emergency room visit for an injury in the US is about $1100).

True, we would have had to travel (approx 2 hours) to a city for a CT scan, but that would be true if you were in a rural or semi-rural area of the US as well.

7

Those who would sacrifice freedom for a smaller rent bill deserve neither".

Now, there are a few places with about as much freedom as the USA, and also places with safely from civil unrest. They are not much cheaper.

Yes, a number of Central American nations are currently quite safe and free. Note that word “currently”.

In America, if you are on a limited budget, there are massive food resources if you take the time & energy to scope them out and research them.

8

I know a number of people who have retired to Quintana Roo, MX, where I vacation in the winter. Many of them are entrepeneurs who are running businesses there or from their homes and are still pre-retirement age. They live very well.

We also have at least one member here on the boards living there -Bleach Bottle Blonde. Hope I got that right. Sorry, if I didn’t.

My last vacation trip to the doctor cost me about two dollars American. Transportation is cheap and reliable. Food is fresh and inexpensive. Clothing is also inexpensive. Rent in a non-tourist area is cheap and some of the local environments are lovely.

But I adjust my habits to those of the locals. Don’t bother with peanut butter, for instance. A jar there was marked about $9.00 American this winter.

If you do business there it stands to reason you will be living in a tourist area and there many of the services are similar to American prices.

I’m thinking the initial expenses of making the transition and learning the ropes would be the largest investment.

Yes, there are ex-pat forums available. I think some can be found on the Lonely Planet site.

9

In Thailand, many goods are about the same price as in U.S.A. But labor-intensive products and services can be much cheaper: restaurants, hotels, healthcare (or health insurance), car repairs, massage. House-building is also labor-intensive so Thailand might be an opportunity to build a dream home. (Unfortunately, the prices of materials – steel, concrete, and especially hardwood – have soared in recent decades.)

Key questions are: Will you enjoy your new country? Do you intend to live in an American enclave or “with the natives”? Will you miss hands-on contact with American culture? (Septimus is a social misfit who often gets along better with Thais than Americans, so change was easy for me. :wink: )

10

Yes, it saves you money, and your standard of living is quite likely to be higher. You can afford to have a cleaning person and the weather will be much warmer (which older people seem to enjoy).

I have to say, the US retirement envisioned by the OP sounds unbearably grim: waiting for the bus in a Midwestern winter storm so you can purchase some Value Menu items at McDonalds.

Obviously, you don’t have any guarantees about future civic unrest or cost of living, but you’re only needing 15 or 20 years at most. Most retirement-friendly countries are still going to be stable and cheap (although not as cheap) in 2030.

11

Also note that not everyone, not even among retirees, are nesters. Some people are perfectly fine with the idea that they may have to move eventually if there is civil unrest or major economic changes. Even if you have to do it a few times, heck, it’s still more settled than life in an RV. Some people may even like the idea of spending their twilight years sampling a nice selection of the various tropical paradises the world has to offer. Peace Corps gets plenty of retirees, and thats pretty much always a two year gig.

It’s all about what you like. Some people find living in another culture an exhilarating challenge, while others find it pointlessly frustrating and just wish they could go back home. I wouldn’t recommend retiring abroad if the only appeal is saving money. But if they idea of going abroad is appealing to you anyway, saving money is a nice bonus.

12

A hijack, but aren’t peanuts grown almost everywhere? And peanut butter is basically just smashed up peanuts and salt.

13

True, but there isn’t much demand for it in many places, so companies choose not to build manufacturing plants there. The result is that peanut butter must be imported at a much higher price to the consumer.

Dairy products are not popular here, and most are imported from New Zealand or Australia. Even things that you might consider to be very basic components of cooking, such as sour cream or cottage cheese can be quite hard to find. I often make my own sour cream from regular cream and a yogurt culture, but even regular heavy cream is imported from NZ and is quite expensive.

14

The average income in the US is around $48k, Estonia’s, Puerto Rico’s, Malaysia’s and Mexico’s are around $15k, Morocco’s and Vietnam’s are $5k. It must be cheaper to live there?

Also with a good internet connection you can keep in contact with anyone, watch any tv or movies you like and read any publications. If you have a good network of other expats you won’t need to feel cut off and all of those other retirees will, at some point, have to deal with some sort of emergency so will be able to provide a good knowledge base for each other.

15

It’s gonna take a huge-ass boat if you want to do any serious gardening.

16

Yes, but most Americans aren’t willing to live like a Moroccan or a Vietnamese does for five thousand a year. And also, the people living in these countries for these small amounts may be living in a house they inherited, whereas you’ll need to buy or rent something.

17

You don’t even have to sacrifice freedom. I have several friends who retired from teaching in the mid-90s and moved to Sointula, BC. Granted, the exchange rate has nullified their advantage of late, but the American dollar usually tracks above the Canadian dollar, so they get more bang for their buck. Not to the degree you would get in Bangkok, but then again, you aren’t living in Southeast Asia either.

18

And nor would I like to live on $5k/year, but I would suggest moving if you had at least twice the local average salary and a lump sum, likely from the sale of property, to buy a comfortable residence and also supplement your income.

I worked with some Egyptians and they each had several properties back home, bought with their overseas earnings (higher than they’d get in Egypt). Then again the political situation there looks too risky at the moment. Vietnam has good transport links to a wonderful part of the world, is sympathetic to English speakers and has an established expat population. The same goes for the Philippines.

But I’m getting off track, the OP was asking whether a life on foreign lands would be cheaper than back home. The potential is great but it would depend on your choices out there. It’s easy to buy a very cheap meal in many countries but who wants to live off rice and bones every day? If you lived like a wealthy local you could still reduce your budget greatly, compared to what you’d pay in the west. Having the choice of spending between $1 and $50 per meal would make budgeting much more flexible.

19

I don’t know.

I do know that nearly the whole of the Yucatan peninsula is formed from limestone or something similar - dead ocean reef. Perhaps they don’t grow there.

I also know that they can grow sweet potatoes, corn and squash so there is soil.

Maybe it’s a preference. I’ve heard that some cultures don’t like peanut butter.

20

Yes, no doubt, but a American will save very little when living in BC, you might as well move to Idaho or any cheaper state.