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NEW YORK (TheStreet) -- When some people think of retirement, they imagine taking long trips to far-away places. But what if you could spend your retirement not just visiting these destinations, but living in one?

Live and Invest Overseas, an overseas investment, real estate and retirement resource, has published its annual "Retire Overseas Index." The 21 cities in the Index are determined by the following factors: climate, cost of living, English spoken, entertainment, environmental conditions, existing expat community, health care, infrastructure, real estate, residency options, safety and taxes.

There is not one retirement destination that is perfect for everyone, but the Index is meant to help narrow down a retiree's options based on personal preferences, lifestyle and needs.

In the past, cities in South and Central America ranked high in the Index. However, the rise of the U.S. dollar has made European cities more popular for retirees. This year, three of the top five best places to retire are in Europe.

Note: If you're thinking of retiring overseas, know that it will impact your Medicare coverage, and that you will still have to file your federal tax returns.

So, which cities made the list? Click through to find out.

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21. Da Nang, Vietnam

Monthly Cost of Living: $840

A coastal city that was once a French colonial port, Da Nang has recently started flourishing as a travelers' destination. The area's biggest draws are the sandy beaches, Marble Mountains, and Dragon Bridge, as well as local museums and restaurants. With a very affordable cost of living and tons of things to do, the growing city has become popular among expats. 

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20. Cebu, the Philippines

Monthly Cost of Living: $900

Founded in the 16th century by Spaniards, Cebu City is the oldest city in the Philippines and is the capital of the island province of Cebu. The island's spectacular beaches and diving spots in addition to the city's active nightlife make Cebu a popular destination for outsiders. Luckily for expats, the cost of living is low, and English is spoken pretty much everywhere.

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19. Buenos Aires, Argentina

Monthly Cost of Living: $1,330

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The capital and largest city in Argentina, Buenos Aires prides itself on its dual heritage of European and Latin American influence. The city of "Good Airs" boasts historic sites, art exhibits and a night life that never sleeps.

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18. Barcelona, Spain

Monthly Cost of Living: US$1,580

One of the largest cities in Europe, Barcelona is known for its beaches and the recognizable Catalan architecture that lines its streets. The gorgeous beaches, tapas restaurants and great works by Gaudi help to keep life active and beautiful, making Barcelona a popular destination for retirees.

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17. City Beaches (Las Tablas), Panama

Monthly Cost of Living: $2,235

Consisting of beach-side towns and tiny fishing villages, this area of Panama is a popular destination for expats. Activities in the immediate area usually rely on the surrounding beaches, but during Carnival, the area holds outrageous celebrations. Life in Las Tablas is perfect for retirees looking to spend their days relaxing on the beach in the comfort of a small town.

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16. Istanbul, Turkey

Monthly Cost of Living: $1,355

The meeting place of Europe and Asia, Istanbul has maintained prominence as a major destination for millennia. With its magnificent religious architecture and delicious cuisine, it is clear the city has gotten the best of both continents. With low cost of living and an abundance of entertainment, Istanbul is a very popular city for retirement.

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15. Las Terrenas, Dominican Republic

Monthly Cost of Living: $1,670

What started as a small fishing village has turned into a cosmopolitan town with a significant foreign population. Located on the coast, residents and visitors have much to do when it comes to recreation. Retirees can live in houses in the jungle, homes in a resort-like atmosphere by the beach or colonial-style condos in the city of Santo Domingo.

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14. San Miguel de Allende, Mexico

Monthly Cost of Living: $1,460

It may not be a city for retirees on a budget, but this inland cosmopolitan town in the highlands of Mexico has a major American retiree community. With its colonial architecture and cobblestone streets, people are drawn to the sense of nostalgia brought about by San Miguel. While retirees are encouraged to learn Spanish, the large expat community makes it possible to get around the area with English.

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13. Ambergris Caye, Belize

Monthly Cost of Living: $2,069

The largest island in Belize, Ambergris Caye is known for its Mayan ruins and numerous dive and snorkeling spots. San Pedro is the only town on the island, but there are numerous fishing villages scattered throughout. The official language of Belize is English, so retirees from the United States will have no trouble communicating with the locals.

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12. Granada, Nicaragua

Monthly Cost of Living: $1,400

Located on the shores of Lake Nicaragua, Grenada was founded as a Spanish settlement in the sixteenth century. Known for its colonial architecture, the city has become a major tourism hub. The city and its surrounding area has become popular for retirees due to its low cost of living and the affordability of real estate.

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11. George Town, Malaysia

Monthly Cost of Living: $935

The second largest city in Malaysia, George Town consists of different districts with distinct cultural influences. With a Chinatown and a Little India, the city offers those staying within it a wide range of culinary options to choose from. With narrow, bustling streets and British Raj-era architecture alongside skyscrapers, the city has become a unique destination for visitors.

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10. El Valle, Panama

Monthly Cost of Living: $1,530

Although El Valle de Antón is located in a cool, flat caldera of an inactive volcano, retirees shouldn't be worried - the volcano was last believed to have erupted roughly 300,000 years ago. While the area itself does not have much (there is one main road running east to west across town), it is located about 40 minutes from the beautiful Panama beaches. El Valle is also two hours from Panama City, so retirees can enjoy the city without suffering from the heat full-time.

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9. Cuenca, Ecuador

Monthly Cost of Living: $1,210

Cobblestone streets, colonial parks and old-world cathedrals make Cuenca a charming retirement destination. This city, the third largest in Ecuador, is walkable and in close proximity to the Andean countryside. The most popular destinations, especially for retirees on a fixed income, are the city's churches, parks, museums and El Cajas National Park.

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8. Chiang Mai, Thailand

Monthly Cost of Living: $1,095

The largest and most culturally significant city in Northern Thailand, Chiang Mai is located among some of the tallest mountains in the country. History-loving retirees will appreciate living in close proximity to the ancient temples in the area, such as Wat Phrathat Doi Suthep and Wat Chedi Luang, and shoppers aren't likely to grow tired of haggling for unique goods at the Night Bazaar.

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7. Hua Hin, Thailand

Monthly Cost of Living: $975

Originally a quiet fishing village, the Hua Hin district is now a seaside resort on the Gulf of Thailand. Retirees can admire the architecture of Plearn Wan, a vintage village, visit Huay Mongkol Temple, or explore the 11-tiered Pala-U waterfall in Kaeng Krachan National Park. At night, locals and expats alike enjoy eating dinner at the Night Market, which is open from 5 p.m. until midnight.

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6. Medellín, Colombia

Monthly Cost of Living: $1,295

Medellín, with a reputation that has completely changed since the 1970s, is a wonderful retirement destination. Spanish-speaking retirees can enjoy Parque Lleras, a park lined with restaurants and bars, after a day spent on the beach.  A number of museums and parks fill the city, while trips to sights such as the Laguna de Gutape are only a short drive away.

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5. Abruzzo, Italy

Monthly Cost of Living: $1,265

Located in central Italy, Abruzzo offers access to the Apennines Mountains for skiing and winter sports. Through the hills that lead to the beaches of the Adriatic Sea, which are sandy in the North and pebbled in the South, there are numerous cities filled with history and art.

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4. Languedoc, France

Monthly Cost of Living: $1,185

With a mix of natural wonders, historic architecture, and urban settings, retirees in Languedoc don't have to worry about running out of things to do. Visits to the Pyrénées, the Roman ruins in Nîmes or the Catalonian-style city of Perpignan are only the beginning of what the area has to offer. However, be ready to work on your French, as that is the preferred language of the locals.

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3. Cayo, Belize

Monthly Cost of Living: $1,225

Health care and entertainment may be less than average in Cayo, but the recreational options and weather make this city a great option for healthy and fit retirees. The picturesque rain forest is the perfect setting for a simple, local life with just the bare essentials.

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2. Puerto Vallarta, Mexico

Monthly Cost of Living: $1,950

While Puerto Vallarta ranks highly in most of the Index's measures, its high cost of living relative to other cities keeps it from the top spot. This historic city is located right on the water, boasts beautiful views of the mountains and is located just north of beaches surrounded by jungle. In addition to My Lady of Guadalupe Church, the area's main attractions include the municipal market, Plaza de Armas, Los Muertos Pier and Marina Vallarta.

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1. Algarve, Portugal

Monthly Cost of Living: $1,410

For the second year in a row, Algarve has been named the best place in the world to retire. With a low cost of living and low cost of real estate, great weather, an established expat community and new retiree residency program, and endless options for how to meaningfully fill your days and evenings, this may not come as a surprise. Retirees can take advantage of the area's beautiful beaches and caves, go dolphin watching or reef fishing or check out the historic buildings throughout the city. For those looking for a day or weekend trip, Lisbon is less than a three-hour drive away.