The world’s cheapest places to retire overseas usually include key spots in Latin America and Asia. Countries in Europe aren’t usually at the top of the list of low-cost places to retire. Anyone retiring on a tight budget might strike Europe off the list of affordable locales.
[Read: How to Afford Retirement in Paris.]
But someone of modest means could retire well in certain parts of Europe. It is possible to embrace the best of an old world lifestyle in retirement even if your budget is what might typically be described as ideal for Ecuador. Take a look at the Algarve region of Portugal, which provides a European lifestyle at very affordable prices.
Thanks to daily lunch specials in some restaurants priced as low as 3.50 euro and rents as cheap as 500 euro per month, a couple could retire to the Algarve with a budget of as little as 1,200 euro per month. And thanks to the down-and-out euro, that translates to not much more in dollars.
As with the cost of living anywhere, the cost of living in Portugal’s Algarve is controllable within parameters. Your costs have a lot to do with how “local” you want to go with your lifestyle. The more like a local you live, the lower your cost of living.
To embrace life in the Algarve on a budget, you want to avoid restaurants with menus in multiple languages. These places are targeting the foreign tourist market. If you want authenticity at a low price, look for the “dishes of the day” signs scribbled on blackboards or papers taped near restaurant entrances. Staff in these places won’t speak English, but you can get by with sign language, a phrasebook and a friendly smile.
[Read: 15 Places to Retire in Europe.]
Of course, you could spend more than 3.50 euro on lunch. This coastal region boasts five-star restaurants where you can feast on some of the freshest and best-prepared seafood in the world. And you could spend more than 500 euro per month on rent. As a general guideline, though, you could live in the Algarve on as little as 500 euro per month in addition to whatever you decide to spend on rent. That’s a cost of living you expect to find in parts of Latin American or Asia, but not Europe.
Here’s how a baseline budget for retirement in the Algarve might break down:
— Electricity: 90 euro
— Telephone/cable TV/internet package: 70 euro
— Transportation: 75 euro
— Groceries: 250 euro
You could fill out your budget from there, depending on your financial circumstances. Many of the fun things to do with your time in this part of the world come at no cost, such as walks on the beach or afternoons exploring centuries-old ruins or lively farmer’s markets. And if you can add another 100 euro per month for entertainment, you would enjoy a very rich lifestyle.
Another big advantage of relocating to Portugal for retirement is the sunshine. The Algarve coast boasts more sunny days than anywhere else in Europe and one of the world’s best year-round climates. The climate in this region is temperate year-round, minimizing heating and air conditioning costs.
Portugal is a top choice for retirement on almost any budget. However, if you need to continue to generate an income in retirement, it might be difficult to find a job in Portugal. Business bureaucracy and a shrunken post-2008 economy mean that employment opportunities in Portugal could be difficult to find.
[See: 10 Tips for Finding a Great Place to Retire.]
However, there may be good opportunities to start a business. Entrepreneurs will find that the region’s excellent communications infrastructure, pleasant working environment and cheap and talented labor force, together with a range of European Union and national incentives to encourage startups, make this a preferred location for launching a business.
Another option is to use property to support yourself. You could run a small hotel or a bed and breakfast in the Algarve. Or you could make a living from a small portfolio of rental properties. Property markets across the Algarve remain undervalued, and tourism rentals are in increasing demand.
Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group.
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How to Retire in Europe on a Budget originally appeared on usnews.com
