February 16, 2021 — Last week on this Blog we posed the question, “How Much Is Enough for Retirement“. So when we came across this new study on the cheapest and most expensive places to retire from NetCredit, it seemed like the perfect follow-up.
As most retirees in the US or UK are figuring out, retiring in their own country means they are going to need over half a million dollars in the bank to do it comfortably. If that sounds unreasonable, then retiring abroad might be the next best option. NetCredit’s new study crunched the numbers to find out what it would cost to retire comfortably in (almost) every country around the world.
– The most expensive country in the world to retire is Bermuda, where you would need $1,065,697.
– Pakistan is the cheapest country to retire. You would need $182,018 to maintain the example lifestyle there.
– Fourteen years of retirement in the US would cost $601,489.63 according to the NetCredit metric: $40,917.66 per year or $2,841.50 per month.
– It found 125 countries where retirement is cheaper than in the US and only 13 that are more expensive.
The most expensive countries in the world for retirement are the usual suspects – countries known for the high cost of living. Overall in the world, the most expensive country is Bermuda, followed by two Asian economic powerhouses – Singapore and Hong Kong. Switzerland is the most expensive European country to retire in (4th overall), requiring an estimated pot of $842,000.
Elsewhere, Mexico ($257,000) followed by El Salvador are the most inexpensive places to retire in the North America. In South America, Columbia is the cheapest at $215,493 and Uruguay the most expensive at $351,480. Israel is the most expensive country for retirement in the Middle East – it would cost you $632,000 there.
NetCredit’s calculations are based on the average American retirement age of 64 years and the average American life expectancy of 78.4 years. Calculations of monthly living costs were completed in USD using Numbeo based on the following assumptions:
- Members of your household = 1
- Eating lunch or dinner in restaurants = 15%, Choosing inexpensive restaurants = 70%
- Drinking coffee outside your home = moderate
- Going out = once per week
- Smoking = no, Alcoholic beverages = moderate
- At home, we are eating = Western
- Driving car = moderate, Taking taxi = no
- Public transport = 2 round trips weekly
- Sports memberships = all household members
- Vacation and travel = two per year
- Buying clothes and shoes = moderate
- Rent = Apartment (1 bedroom) in city center
- No children
For adventurous people who are facing a shortfall in their retirement savings, retiring abroad might be a good idea. A country like Mexico or somewhere in South America might provide a great lifestyle on a combination of Social Security and modest savings. But on the other hand, retiring abroad only for money is usually a terrible idea. Knowing the language, wanting to engage with the local culture, and being adventurous are much better harbingers of success for an expat retirement. Please feel free to share your Comments below.