For Affordable Retirement, Think Abroad

Q. How much cheaper can it be to retire in a foreign country — and which countries are the most budget-friendly?

A. According to a recent study by International Living, Americans could retire 10 years earlier — and enjoy a higher standard of living — by moving beyond our country’s borders.

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To where? In a comparison of 19 foreign countries, Ecuador is the overall winner, with the lowest cost of living and real estate, reports the 2012 Global Retirement Index. The South American country places second (after Panama) in “special benefits” programs for retirees. Panama offers the pensionado, which provides foreigners with 30 percent discounts on public transportation within the country; tickets for cultural and sporting events, including movies; and 25 percent off restaurant bills. And in Ecuador, folks older than 65 pay lower income tax and get free domestic landline phone service.

Bottom line, says the magazine that has been tracking retirement abroad for 30 years: A budget-watching couple could live well on $800 a month in Ecuador and be pressed to spend more than $1,500 monthly. Other leading overall choices include Panama, Mexico, Malaysia, Colombia and New Zealand.

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Of course, there are barriers such as language, cultural acclimation and distance from family. If you’re considering a move abroad, English-speaking countries such as Belize, Ireland and New Zealand may top your short list. But you can get by in your native tongue in parts of Panama, Ecuador and Mexico, says International Living.

In all 19 countries, health care in the larger cities and capitals is usually on par in quality with that in the United States, according to the survey’s findings — largely pooled from foreign-living retirees — but much less expensive: A visit to a physician (and many trained in the United States) at a modern facility costs about $30 in Panama (at low-income hospitals you’ll pay as little as $5) and only $15 in Nicaragua. Ecuador guarantees access to no-copayment or deductible health care and medication to American retirees for a low fee: A typical 60-year-old male, for example, will probably pay about $70 a month in insurance premiums. International Living has more details.

You may also like: Traveling abroad? Protect yourself from diseases.

Sid Kirchheimer writes about consumer issues for AARP.org.