Editors' pick: Originally published May 4, 2016.Relying on nothing but Social Security certainly isn't a sound retirement plan. but many retirees would like it to play a larger role in their day-to-day expenses, which makes sense. The more bills you can pay with the Social Security check, the more you can free up your retirement savings for enjoying life and exploring new passions. Cutting back and budgeting could certainly help, but for the adventurous, there's another option: moving overseas.
In many countries the costs of living are so small that a Social Security check is more than enough to retire on in style. Payments might average only $1,335 per month, but in places where an apartment only costs $300 and a night out is $5, that can be more than enough. The idea isn't even that unusual.
"Some people nearing retirement age are looking at a fixed income," said Dan Prescher, senior editor of the magazine International Living. "You pick the right destination, and you can effectively double the value of your nest egg. And there are beautiful countries you can move to."
To help with that decision International Living has recently published a guide for expat retirees, but you want to be careful. Although retirement abroad can be a great money saving tactic, it's also an enormous lifestyle decision. The world is littered with what Prescher called "economic refugees," expats stuck in a foreign land not because they want to be there but because they can't afford to go home. Don't let that happen to you; if you go, do so for the adventure and the thrill of new cultures.
One issue that expat retirees have to be sensitive of is medical care. Calling it a "critical issue," Prescher noted that it's particularly a concern for anyone looking to "get away from it all."
"As you might imagine," he said, "around most of the world the health care is excellent in the major metropolitan areas, but as you get farther and farther afield it can fall off pretty quickly."
"Most," however, is the critical qualifier. For all but a few countries on our list, including Panama and Thailand, urban access to medicine meets first world standards. While that bungalow on the beach might be remote, the hospitals in Bangkok are second to none. Yet it's worth noting that for every country on this list transportation will move more slowly, so expats with particular health concerns should probably consider staying closer to the cities.
Out in the villages that ambulance may take a while to arrive, if it comes at all.
Then there are the places that struggle to deliver quality care at all. Two countries on this list stand out for this: Cambodia, due to its ongoing development, and Indonesia, due to the nation's archipelago geography. Colombia, too, suffers from criticisms of its health care system, although to a much lesser degree.
These are places ill suited for older retirees or those with particular needs. In all countries on this list a patient can reach good doctors eventually, but a short flight will not meet suit those who anticipate particular or chronic health care concerns.
Finally, expatriates of all ages must always consider health insurance, and this is true too of retirees. Preserving Medicare benefits as an expat is complicated and not always possible; Part D, for example, is only available for those who reside in the United States. In fact, as the Office of Health and Human Services has explained, "[i]n most situations, Medicare won't pay for health care or supplies you get outside the U.S." As a result, in virtually all cases a retiree should arrange for private insurance such as GeoBlue or Cigna.
When enrolling in private insurance, be aware of two concerns in particular. First, make sure that the plan allows for coverage inside the United States, so that your medical care is neither exposed nor complicated when you return to visit friends and family. Second, make sure that your plan does not have a maximum period of eligibility or renewal, so that you only have to shop around once.
With the caveat that you should be sure to make sure you have proper health coverage and care access especially as you get up there in age, here are ten countries you can retire to where that Social Security check will last for miles and let you get the most out of your nest egg.
While Cambodia didn't make IL's Top 10 retirement destinations, it nevertheless comes highly recommended and certainly makes ours.
Cambodia has its rough spots. With un-potable tap water, weak health care and more expensive air links, this country isn't for those who want to retire to sun, sand and the occasional round of golf with the boys. For the younger and healthier, though, this could be the perfect opportunity to have that adventure you've always dreamed of.
For starters, it's cheap. That $1,335 per month will cover all of your needs and then some. It also boasts a burgeoning expat scene, the world's largest religious monument and the beach town of Sihanoukville for those who want to let their hair down (or at least watch other people do so). Expats who want to give back will find a ready berth in one of the countries hundreds of NGOs, providing ample opportunity for the second-act careers that many retirees have embraced, and while Phnom Penh's infrastructure may prove wanting, Bangkok's top-of-the-line hospitals and global hub are a very short flight away.
To the southeast of Cambodia is Malaysia, a country split into the Malay Peninsula and a portion of the island of Borneo. Expats seeking to maximize their Social Security should head for the island of Penang rather than the cosmopolitan, yet somewhat more expensive, Kuala Lumpur. There they will find a clash of cultures that rivals anywhere in the world, a riot of colonial, Indian, Chinese, Malay and Muslim influence that makes this such a fascinating country, not to mention one of the best food scenes anywhere.
Malaysia, along with Penang's famous food gardens, is the destination for those who want to eat well in their retirement. It's also a relatively recent arrival on the American expat scene. Explaining its recent addition to International Living's own list, Prescher said that "for a lot of retirees, the thought of Southeast Asia is kind of daunting. It's easier to think of South America or Mexico... [But] Malaysia is making it because it's becoming more and more familiar with expats. The Australians have been going there for years, and expats are there now."
Not many people know much about Nicaragua.
The largest country in Central America, it hasn't yet broken into the major tourist or expat trails. Expect it to start showing up soon in "off the beaten track" recommendations thanks to its stunning Pacific coastline and languid beaches, but for the time being, retirees who want to get away from it all could hardly do worse than here.
Also, thanks to the dearth of foreigners, real estate remains cheap here. While that Social Security check probably won't cover the cost of an estate, retirees who want to break into their nest egg should be able to set themselves up with a nice home for a fraction of what it would cost not just in the United States but in many other budget destinations.
Just bring a map for when people back home ask where you've moved.
Island buffs rejoice, there's a retirement destination with virtually endless coastline and it's waiting for you.
Like Cambodia, Indonesia is a retirement option for those in good health. Its vast network of islands means that unless you've moved to one of the big cities, the nearest hospital will probably be a little far away. Yet in exchange for that trade-off is island living like nowhere else in the world.
The country that boasts Bali and the Gili Islands, Indonesia is a vacation hotspot, which has given it the reputation of having some of the most expensive hotels in Southeast Asia. Don't be fooled. For those who want to move to one of its 17,000 islands, the cost of actually living rather than visiting is more than cheap enough for that Social Security check. A few hundred dollars will buy you a nice one-bedroom apartment, and a single buck will get you a plate of noodles with a view of the ocean.
This is the choice for an adventurer who also keeps a good book in his back pocket for long evenings spent listening to surf.
South and Central America are enormously popular for retiree expats -- and for good reason. There are many inexpensive countries to choose from, and the proximity to America means that family and friends are never that far away. Newly freed from its long (and, for a time, warranted) safety concerns, Colombia has become a go-to destination.
There are any number of reasons to retire to Colombia, but perhaps the most unique is the Andes Mountains. This country, at the tip of South America, boasts both peaks and coastline... as well as one of the lowest costs of living in the entire continent. Just as importantly, it has become an increasingly popular destination for expat communities. That, according to expat and author of the website Reach Financial Independence Pauline Paquin, can be a big deal.
Paquin, who lives in Guatemala, called the lack of a local community the worst part about her own move abroad (an experience she otherwise raves about.)
"There are only a handful of expats where I live, so it can get a bit lonely sometimes," she said. "Most people in my village did not finish middle school, and while welcoming, we don't hang out on weekends or anything."
It's not a problem in Colombia.
Thailand comes with a note of caution. The tremors from its recent instability still haven't completely faded away and notes of authoritarianism still color its political conversation, most notably in the stiff prison sentences handed down for lèse-majesté.
That said, this is one of the most vibrant, exciting, colorful cultures in the world. From the white sand beaches in the south to the mountainous hot springs up north, retiring to Thailand offers a lot, and for pennies on the dollar compared to the U.S. Even in major cities like Bangkok and Chiang Mai, where expat communities flourish and ensure you'll always have plenty of company, a night out can cost less than $5.
It's those expat scenes, Prescher says, that have also kept many Americans away from Thailand for a long time.
"For years and years, Chiang Mai was the place where U.S. and Australian old men went to find young women," he said. "I don't know how many retired couples would move there looking forward to a visit from their grandkids."
But thanks to the internet, that perception has started to change, replaced by one of a cosmopolitan nation with great food, medicine and transportation to rival anything in the States and one of the most bustling foreign communities in Southeast Asia.
Move to Costa Rica if you love nature.
Bracketed by the Pacific Ocean and the Caribbean Sea, Costa Rica is, in a word, beautiful. With long, green hills that give way to mountains, and that seemingly endless sea, there's a reason this country has seen a boom in eco-tourism. It is a gorgeous destination... and for what Uncle Sam sends every month, you could live here.
Dubbed the happiest nation on Earth, this is a country that has so much going for it, there's not a lot more to say. It does lack some of the bustling cities that other countries can boast, San Jose will never compete with Bangkok for example, but for those who want to enjoy green things, that's probably an added benefit.
Mexico has a lot to recommend it, but first and foremost is this: it is close.
An often under-appreciated aspect of retirement planning is the importance of location. While that adventure to the South Pacific may sound alluring, at the same time there's the question of family and friends. By retirement age, few of us want to simply zip off and in doing so risk missing birthdays, graduations, weddings and all of the other milestones that put together the pieces of a life.
"This is a personal consideration of mine," Prescher said. "Our kids just had their first child, so we've got a grandbaby in Phoenix that we want to be close to. This, for me, puts Mexico on top of the chart because it's so easy to get back and forth from."
Those who move to Mexico City or Oaxaca can board a plane and be home in just a few hours, a far cry from the 24 hour (multi-thousand dollar) journey it would take from Asia. Indeed, this is why the South Asian countries clustered at the bottom of this list. Add to that the country's sterling beaches, gorgeous colonial towns and inspirational food, and there's good reason to retire here and make the most out of every cent of that Social Security check.
Prescher himself lives in Ecuador, and loves it. So do a lot of people.
Like Nicaragua, Ecuador is a country not on many Americans' radars. Tucked between Colombia and Peru, this land of perpetual springtime is one of the best, most affordable destinations for a retiree on a budget. Want one good reason? Start with the weather. With a prime location near the equator yet high enough above sea level, Ecuador averages mid-70s during the day most of the year round.
Expat communities thrive in both the capital city of Quito and the town of Cuenca and Ecuador boasts beautiful mountains, a relatively quiet tourist sector and well developed amenities such as transportation and health care. For those who want to travel in their retirement, it is also well positioned for touring the rest of South America, starting with the citadel of Machu Picchu to the south.
With apartments that can cost only a few hundred dollars per month, Ecuador is an outstanding choice for that budget retirement.
Panama just kind of has it all, it's as simple as that.
Location? Check. Not far from the United States, Panama City's airport is one of the continent's major hubs and an easy point of departure to anywhere. The city itself is a bustling, modern metropolis, with the options for art, culture and dining that come with that.
Health and amenities? Check. A well developed, modern country, Panama offers pretty much any of the services you could find back home, whether it's WiFi in the living room or capable doctors nearby.
Beauty and a sense of adventure? Check and check. This lush, jungle country offers gorgeous scenery and your choice of two coastlines. Heck, why choose? Just swap oceans every time your lease runs out.
Cost of living? Check. Panama isn't just affordable. Thanks to the government's Pensionado program, anyone who comes in with a pension of at least $1,000 per month gets a whole series of government benefits (including residency) designed to make life easier and cheaper.
There are a lot of reasons to move to a lot of different countries. If you can't choose, though, choose Panama.