In 2025, the average monthly Social Security benefit for retired workers will increase by 2.5% from $1,920 to $1,968, thanks to the latest cost-of-living adjustment. Even after Social Security is factored into their incomes, a recent Vanguard report suggests that many Americans will still fall short of what they need for retirement.
However, there’s a solution that can change your trajectory. You can retire overseas. In certain countries, goods and services cost much less than in the United States, allowing you to drastically reduce your monthly expenses. This allows more room in your budget for saving or discretionary spending. In some cases, a currency advantage against the U.S. dollar further enhances the savings opportunity.
Retiring to another country doesn’t require compromising on quality of life. Often, the goods and services available are more affordable and of better quality than their U.S. counterparts.
Here are six places overseas where a budget of $2,000 per month allows for a high-quality retirement lifestyle:
— Cádiz, Spain
— Chitré, Panama
— Crete, Greece
— Hua Hin, Thailand
— Mazatlán, Mexico
— Medellín, Colombia
Cádiz, Spain
Spain is a shining example of how affordable certain parts of Europe can be. Cádiz, an ancient port city on the country’s southwestern coast, is one of the most inexpensive places in the country. Cádiz claims to be the oldest city in Western Europe, and you can rent an apartment steeped in this rich history for $700 to $1,000 per month.
Just beyond Cádiz’s historic center, you’ll find long stretches of golden-sand beaches where you can soak up the sun or cool off in the Atlantic waters. The city is on Spain’s Costa de la Luz, or Coast of Light, and it’s famous for its high annual hours of dazzling sunshine.
Andalusía, the region where Cádiz is located, is known for its cuisine. You can enjoy fresh seafood and other local dishes without breaking the bank. A meal for two can cost anywhere from $20 to $40. Quality wine is also available at about $1.50 for a bottle at the grocery store, often for less than the price of water.
Spain has fantastic health care and infrastructure. Expats have reported paying about $65 monthly for local health insurance and access to high-quality medical facilities. Cádiz and the surrounding region are well connected by train, so you could easily forgo the expense of car ownership here.
Here’s an overview of basic expenses for a retired couple in Cádiz:
— Rent: $800
— Utilities: $185
— Cellphone and internet: $50
— Transportation: $60
— Entertainment: $300
— Groceries: $350
— Total: $1,745
[See: The Cheapest Places to Retire Abroad on $1K Per Month]
Chitré, Panama
Chitré is a sweet and simple small town found along Panama’s Azuero Peninsula, a chunk of land that dips down from the country’s south coast into the Pacific Ocean. It has a close-knit community of about 60,000 people, including a small but growing number of expats.
Despite not being a population center, Chitré is full of amenities, including health centers, banks, American-style grocery stores and vast shopping options that make living here convenient. This is unusual for a small town in Panama. Typically, you have to drive for several hours to Panama City or another big town to access such amenities.
Chitré has a warm, inviting community with well-preserved folklore and traditions. Living here is an opportunity to immerse yourself in a culturally authentic environment. It stands out for its clean, well-kept Spanish colonial center and for being safe. The weather is warm and dry year-round, and it’s near some of Panama’s best beaches.
Panama is one of the most tax-friendly countries in the world, only imposing tax on locally sourced income. U.S. retirees could easily live here without a local tax burden.
This country also incentivizes retirees to establish themselves by offering benefits for pensionado visa holders. You need $1,000 per month in pension income to qualify. Once you gain pensionado status, you become eligible for discounts such as 25% off utility bills, 25% off airline tickets, 20% off medical bills and more.
Here’s an overview of basic expenses for a retired couple in Chitré:
— Rent: $800
— Utilities: $140
— Cellphone and internet: $68
— Transportation: $80
— Entertainment: $315
— Groceries: $425
— Total: $1,828
Crete, Greece
The cost of living in Crete corrects the misconception many Americans hold that Europe is financially out of reach. Considering rent to the cost of a monthly grocery bill, Crete has a well-deserved reputation for being affordable — especially compared to other Greek islands.
Crete is massive, offering more lifestyle options than your typical island. This allows for budget flexibility. You can live in a high-demand urban area where your rent will be about $900 per month or in a rural village, which can cost about half that amount.
Crete is one of the birthplaces of the Mediterranean diet, touted for its health benefits. Enjoying the local cuisine can improve your heart health, lower your risk of certain cancers and maintain a healthy weight. Dining out in Crete is an inexpensive indulgence, with meals for two at tavernas costing about $25 to $50 on average.
Living in Greece can also help you save on taxes. It offers a non-domicile tax regime for pensioners, allowing for favorable taxation of pension income. Those who qualify can enjoy a flat tax of 7% on their foreign-sourced income for 15 years.
Here’s an overview of basic expenses for a retired couple in Crete:
— Rent: $900
— Utilities: $200
— Cellphone and internet: $78
— Transportation: $90
— Entertainment: $370
— Groceries: $265
— Total: $1,903
[Read: Where Retirees Can Buy a Home Overseas for Under $100K]
Hua Hin, Thailand
Southeast Asia offers some of the world’s best opportunities to live well on a limited budget. The cost of living is so low that even someone on a modest retirement budget can afford a luxury lifestyle with household help, meals out every night of the week and other indulgences.
Hua Hin is an elegant seaside town nestled along the Gulf of Thailand with miles of sandy beaches. It has long been the preferred vacation destination for the Thai royal family. Perhaps because of this, it has a more relaxed atmosphere relative to places like Phuket and Pattaya, which have reputations for being party towns.
Hua Hin offers plenty to see and do, starting with leisurely strolls on its sandy beaches. It enjoys warm, tropical weather year-round, allowing residents to maximize time spent outdoors. Hiking and cycling in the lush surrounding hillside, practicing water sports and playing rounds at excellent golf courses are just a few of the highlights of Hua Hin’s active lifestyle.
A main source of entertainment for expats in Hua Hin is shopping at open-air markets, where you can buy all kinds of goods and trinkets and eat hearty, healthy meals at market stalls on the cheap. Eating out in Thailand can cost the equivalent of a couple of dollars per person.
Thailand has world-class health care that’s so affordable that you can pay for many treatments out of pocket without breaking the bank. It’s also a tax-friendly country, and taxes are only applied to income if it is remitted to Thailand the same year it was received.
Here’s an overview of basic expenses for a retired couple in Hua Hin:
— Rent: $650
— Utilities: $85
— Cellphone and internet: $40
— Transportation: $70
— Entertainment: $280
— Groceries: $310
— Total: $1,435
Mazatlán, Mexico
There are good reasons why Mexico is home to more U.S. retirees than any other country. It’s easy for Americans to feel at home here, with a familiar culture and many of the same shopping options you find back home. It’s also comforting to know that if you need to return home for any reason, all you need to do is drive across the border or hop on a quick flight.
Mexico has many towns and cities that make great retirement destinations, but Mazatlán stands out as the best option. For one thing, it’s more affordable than comparable resort towns like Puerto Vallarta or Playa del Carmen. About $1,000 per month is enough to rent a well-appointed condo by the beach. Buying real estate is also affordable, at about $200,000 for a condo.
Mazatlán is also more culturally authentic. It’s a real city, home to almost 450,000 people, and although there’s a well-established expat community, Mazatlán isn’t overwhelmed by foreigners. Expats report feeling safe and secure in Mazatlán because of a strong police presence.
This city boasts miles of beaches with swimmable waters. There’s a long boardwalk on the oceanfront known as the Malecón where you can walk, exercise or socialize. Also on the waterfront is Mazatlán’s sizable historic center, a hotbed of cultural activity. This is the place to go for an inexpensive meal, a night of live music, dancing or a show.
Here’s an overview of basic expenses for a retired couple in Mazatlán:
— Rent: $1,000
— Utilities: $90
— Cellphone and internet: $39
— Transportation: $95
— Entertainment: $345
— Groceries: $400
— Total: $1,969
[READ: How to Retire in Canada.]
Medellín, Colombia
Medellín is a prime example of a lifestyle upgrade you can achieve by relocating to a new country. This is one of the best-appointed, livable cities in the world.
Medellín is culturally vibrant, with festivals, shows, concerts and sporting events throughout the year as well as museums, galleries, gastronomy, coffee culture, shopping and more. Many of its entertainment options are free.
Medellín has temperate weather year-round because it sits at an elevation of about 4,900 feet above sea level. The temperature hovers perpetually at about 74 degrees, which is why Medellín is known as the city of eternal spring. This stable, comfortable climate helps residents enjoy outdoor activities. It also keeps utility bills low because you don’t need to heat or cool your home.
Medellín offers high-quality infrastructure, including an excellent public transportation system with a metro service. It’s highly efficient, eliminating the need and expense of car ownership for the city’s residents. It’s also affordable, with the average fare for someone over 60 costing about 60 cents. Medellín also has top-tier medical care that costs about one-third of equivalent care in the U.S.
Enhancing the savings opportunity that Medellín presents is the U.S. dollar to Colombian peso currency exchange. Because the dollar is currently strong against the peso, every dollar you spend goes that much further.
Here’s an overview of basic expenses for a retired couple in Medellín:
— Rent: $850
— Utilities: $75
— Cellphone and internet: $65
— Transportation: $60
— Entertainment: $300
— Groceries: $315
— Total: $1,665
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My Budget Is $2K per Month: Where Can I Retire? originally appeared on usnews.com
