The Cheapest Places to Retire: Five Towns Where You Can Live Better For Less

Santa Fe, Panama

At home, prices are rising. It costs more to put gas in the car, buy groceries, and pay for health insurance. At the same time, retirement savings eroded in the market downturn.

If you’re looking overseas for a low-cost alternative to an uncertain retirement at home, there’s good news. You can find it in places that offer not just “cheap” living, but a whole basketful of benefits, too—places where a mild spring-like climate is yours all year round…beaches are of powder-white sand…snow-capped mountains soar above colonial towns…and your costs could be as low as $1,000 a month.

In our annual Global Retirement Index (published every January), we rank and rate the best retirement havens in the world. You can stretch your dollars in any of them and live better than you can back home—for less. But the five here offer an outstanding bang for your buck: Ecuador, Panama, Malaysia, Nicaragua, and Mexico.

We asked our editors and in-country correspondents to pinpoint within each nation a specific community to recommend—places that have lots to offer retirees and can be enjoyed on a budget of $1,000 to $2,000 a month.

Editor’s Note: We’ve arranged a way for you to get a free copy of a new report: 7 Great Retirement Towns You’ve Never Heard of…Where You Can Live Better for Less. The report tells you about seven beautiful and welcoming places where you can create the retirement of your dreams for $1,415 a month…or even less. Find out how to pick up your copy here.Find out how to pick up your copy here.

1. Santa Fe, Panama: From $1,000 a Month

“Buenas,” he says, nodding his head as he rides past. Leathery tan on a face framed by a worn cowboy hat, he’s the very picture of a Marlboro Man. Except he’s Panamanian.

I’m sitting in an ancient Lada Niva—a Russian 4×4 made for rugged terrain. We’ve stopped so our cowboy (and his herd of cows) can pass safely. It’s a chance to take in the view…

In the distance I can see the national park, where hiking trails crisscross hills lush with rainforest. In the treetops above me, I’ve seen monkeys and toucans and several species of birds I can’t name. This is Santa Fe de Veraguas, Panama—a tiny mountain hideaway about 200 miles west of Panama City.

It’s the kind of place where $6 will get you a sack of fruit and vegetables…and two chicken breasts for dinner. Where the town’s one Internet café charges 60 cents an hour and your monthly water bill is rarely over $3. Where home rentals can be as little as $400 a month and any significant crimes take place on TV.

Living on just $1,000 a month is easy in Santa Fe, Panama for expats Mitzi and Bill Martain.

A couple on a budget could live on $1,000 a month in Santa Fe, easy. Expat residents Mitzi and Bill Martain agree. They retired here 10 years ago to live the good life for less. “This was a place where we could live on social security, comfortably and happy,” says Mitzi.

Santa Fe may boast less English speakers than other, more popular parts of Panama…but the low cost of living is a function of this. You can hire help…cleaning ladies or even builders…for $15 a day. Utilities are low, too. A typical electric bill is maybe $20 a month, Internet is as little as $15, and cable starts at about $20. Trash pickup is just $2 a month, and gas for cooking will cost you even less.

Mitzi and Bill are clear about one thing: While the cost of living is great, it’s not the only reason they’re living in Santa Fe. “We chose to be here primarily because of the people,” says Mitzi. “Panamanian people are so wonderful, and will do anything and everything to help you out when they see you’re trying to adapt and find your way. We respect and admire them, and we try to earn their respect and admiration, too. It’s important to us…especially here in Santa Fe, where there aren’t many expats. It’s mostly local.”

Mitzi is the picture of contentment, shelling peas on her tidy, sun washed porch as she shares her story (and her fresh brewed coffee). The property, says Mitzi, is the land where nearly anything grows. She and Bill grow heirloom vegetables and tropical fruit. The property is run through by the Santa Maria River, and there are plenty of cats and dogs, and wildlife, too.
“We are so grateful for this location. We have waterfalls nearby and everything from birds to deer—and we’re surrounded by flowers. This is home.”

From its rural, rugged mountain-scape…to the mild sunny days and cool evenings…to the welcoming locals and the small expat community, Santa Fe truly does have it all.—Jessica Ramesch.

Editor’s Note: We’ve arranged a way for you to get a free copy of a new report: 7 Great Retirement Towns You’ve Never Heard of…Where You Can Live Better for Less. The report tells you about seven beautiful and welcoming places where you can create the retirement of your dreams for $1,415 a month…or even less. Find out how to pick up your copy here.Find out how to pick up your copy here.

2. Granada and San Juan del Sur, Nicaragua: From $1,000 a Month

Nicaragua offers the lowest cost of living in Central America, and there are so many great places to retire in the country, including the historic colonial city of Granada and the picturesque seaside village of San Juan del Sur.

In Granada, you’ll be lured by ancient pastel-painted, colonial-era buildings with terracotta tile roofs that spill along the north shore of Lake Nicaragua, the largest lake in Central America. Views of the nearby Mombacho Volcano add to the postcard-ready image.

With terracotta tile roofs and colorful horse-drawn carriages, Granada, Nicaragua also has a low cost of living.

Granada is known, too, for its colorful horse-drawn carriages that clip-clop their way atop cobblestone streets, toting neck-craning tourists and locals alike. The latter go about their daily business with the languid, carefree aura that comes from living in the tropics.

In the enclosed courtyards of the city’s colonial homes—some of which have been converted to boutique hotels and cherished homes, Nicaragua’s famous rocking chairs—made of rich tropical hardwoods and wicker—beckon.

Many are occupied these days by North American retirees—but only for brief moments. They’ve not come to rock away their golden years, but for the active and adventuresome retirement that Nicaragua offers. It helps, say retirees here, that the cost of living is so low. It’s easy to live on just $1,000 a month, they say, especially if you own your own home.

Donna Tabor, a retired single in Granada who has lived there since 1996 and owns her home not far from the lake, says her expenses each month rarely top $1,000—including gas and maintenance for her truck.

Further south along the coast—not far from the border with Costa Rica—charming San Juan del Sur beckons to those with a penchant for seaside living.

The culture and the sense of community here, says Renda Hewitt who retired to San Juan del Sur with her husband, Ralph, in 2003, reminds her of what it was like growing up in rural Texas back in the 1940s. Children are taught to be respectful and well mannered, she says, and they don’t have to worry about their safety, because everyone in town is looking out for one another.

Ralph, a lifelong sailor, loves the town for its perfect crescent-moon bay, its soft golden sands, its sparkling blue water and (for him) near-perfect weather—85 to 95 degrees year round with a cool easterly breeze and few bugs.

Over the last 12 years, Ralph and Renda have built a condo project, a small hotel (which they still run), a couple of houses, and—most rewarding of all—they devote lots of time to community projects.

It’s a wonderful fringe benefit, says Renda, that their monthly expenses in Nicaragua are low.

“Include everything…groceries and going out to restaurants…my weekly shopping trips to Rivas (a nearby town)…and our monthly shopping trips to Managua and hotels and restaurants there…and even gas for the car…all we spend is $1,000.”

They both laugh and Ralph says again for emphasis: “Our monthly expenses are just $1,000…. a thousand dollars. We actually have money left over each month from our Social Security…so every October we take a cruise.”—Suzan Haskins.

Editor’s Note: We’ve arranged a way for you to get a free copy of a new report: 7 Great Retirement Towns You’ve Never Heard of…Where You Can Live Better for Less. The report tells you about seven beautiful and welcoming places where you can create the retirement of your dreams for $1,415 a month…or even less. Find out how to pick up your copy here.Find out how to pick up your copy here.

3. Campeche, Mexico: From $1,400 a Month

Just 100 miles south of Mérida on Mexico’s Yucatán Peninsula, Campeche has long been under the radar for expats. But that is changing fast as visitors discover the charms of this city, considered one of the safest in Mexico.

Campeche is one of Mexico’s few World-Heritage cities to sit by the sea—it’s right on the Gulf of Mexico. A three-mile-long malecón (boardwalk), with running and cycling paths, mini-park spaces, and workout equipment, runs beside the water. Just a few blocks inland lie the city’s World-Heritage neighborhoods and historic center, with their rows of attractive candy-colored, Spanish-colonial facades.

If you’re looking to retire to a stunning city by the sea, Campeche, Mexico, might be for you. © eddygaleotti – iStock

The historic center (just eight blocks square) and the three historic neighborhoods are walkable, and it’s possible to live in these areas without a car. Campeche has a small-town or even village feel—remarkable in a city of almost 300,000.

The government—both state and national—has made improvements in the area over the last few years. The highway to Mérida is now four lanes, reducing driving time to less than 1.5 hours. A new shopping mall just off the malecón is anchored by the high-end Liverpool department store. It also has a Cineplex, restaurants, and a range of stores. Campeche already has a Walmart Super Center, a Sam’s Club, and numerous large supermarkets, plus a large traditional market just outside the historic center. In addition, more of the historic center has been made pedestrian-only, with art and sculpture exhibits decorating public spaces and outside dining available.

“The weather is good, the people are friendly, and there are fresher fruits and vegetables year-round here than you get back home,” says expat Daniel Record, of life in Campeche.

Day-to-day expenses are relatively low. You can buy a week’s worth of fruits and vegetables at the market for as little as $8. A sandwich or tacos from one of the many small loncherías (lunch joints) will cost you $2 to $3, while a seafood plate at a sit-down restaurant may run $12 or $15.

You can rent a small local house for as little as $400 a month. Comfortable modern homes, with two or three bedrooms, rent unfurnished for $500 and up. These same homes sell from $150,000.

Colonial properties, which most expats want, cost more. Unrenovated colonials for sale start at about $80,000—most cost more. Relatively few renovated colonials are on the market, but you can get small ones starting at around $100,000. Likewise, only a handful of furnished, renovated colonials are available. Colonial rentals in the centro and historic neighborhoods generally rent for $800 and up. Modern rentals, and colonials outside the center can start as low as $300 a month. More colonial rentals are desperately needed; it’s a business opportunity looking for an entrepreneur…—Glynna Prentice.

Editor’s Note: We’ve arranged a way for you to get a free copy of a new report: 7 Great Retirement Towns You’ve Never Heard of…Where You Can Live Better for Less. The report tells you about seven beautiful and welcoming places where you can create the retirement of your dreams for $1,415 a month…or even less. Find out how to pick up your copy here.Find out how to pick up your copy here.

4. Vilcabamba, Ecuador: From $1,485 a Month

Johnny Lovewisdom, a quirky spiritual seeker, first put Vilcabamba, Ecuador on the gringo map in the 1960s. He advocated (among other beliefs) breatharianism—that one can live on air and sunshine alone. (He died in 2000…some say of malnutrition.)This is a lakeside community where the weather is heavenly year-round. With average highs in the 70’s, it’s perfect for an active lifestyle.

Vilcabamba is beautiful and one of the worlds lowest priced retirement havens .

While clean air and constant sunshine are abundant in this lush valley in southern Ecuador, so is fresh, organic food. The healthy lifestyle is just one reason expats are drawn to Vilcabamba today.

Many residents live to be 100 years old or more. That may be thanks to clean water, clean, stress-free living, or the near-perfect climate. Just shy of the equator and at an elevation of 5,000 feet, temperatures average between 65 and 81 F, day in and day out. Estimates put the number of permanent foreign residents at about 150 and part-timers at perhaps another 100.

Although it takes some doing to get to Vilcabamba, it’s a small price to pay. Literally. Vilcabamba is among the lowest-priced retirement havens in the world.

Here is a sample monthly budget for a couple in Vilcabamba:

Housing (rental of a furnished two-bedroom apartment or home): $375

Utilities (including phone, water/electricity, internet, and DirecTV): $155

Maid (once a week): $60

Groceries (not including alcohol): $400

Maintenance and fuel for one car: $140

Misc. (personal items, etc.): $75

Entertainment (two people dining out six times per month, with drinks, dessert, tip): $200

IESS (social security) healthcare: $80

Monthly Total: $1,485—Suzan Haskins.

Editor’s Note: We’ve arranged a way for you to get a free copy of a new report: 7 Great Retirement Towns You’ve Never Heard of…Where You Can Live Better for Less. The report tells you about seven beautiful and welcoming places where you can create the retirement of your dreams for $1,415 a month…or even less. Find out how to pick up your copy here.Find out how to pick up your copy here.

5. Penang, Malaysia: From $2,000 a Month

My wife and I first came to Penang, Malaysia for a vacation in 2008 and after two weeks, which we extended to three, decided that it was the perfect place for us to live. From the region’s best street food to smart restaurants, bars, shopping malls, and movie theaters, it had everything that we needed and more.

George Town, Penang’s capital, is a UNESCO-listed city and dates from 1786. Most of the buildings in town were built between 1820 and 1900, and it’s these historic streets that are the main attraction for visitors to the island. Some of the colonial mansions on Penang Hill were built even earlier. We loved its history, but also its deserted white-sand beaches, pristine jungle trails, constant sunshine, and affordability.

Luxury apartments are cheap, medical care is world-class, and the street food is excellent…it’s Penang, Malaysia.

There is a lively street culture anchored in religious festivals, a recently opened performing arts center at Straits Quay Marina, and events like the Penang World Music Festival and the annual George Town Festival (a month of performances) that have become a must-see event in Asia.

Our apartment is a short distance from the local market, where we can buy vegetables, fruits, bread, meat, seafood, and all manner of goods. An entire bagful of fresh fruit, including mangoes, bananas, apples, oranges, and pineapples, costs just $6.

High-speed internet is reliable and costs $30 a month, and the premier cable TV package for $40 includes favorites like HBO, CNN, numerous sports and movie channels and the BBC.

We live in a spacious 2,100-square-foot apartment with four bedrooms and three bathrooms. We also have a covered carport, swimming pool, and well-equipped gym. The apartment is fully air-conditioned and fitted with ceiling fans, and costs $900 a month. We have a maid who comes one day a week and costs just $56 a month.

Penang is known internationally for its good medical care, which is downright cheap. Six world-class hospitals are situated within George Town. All the medical staff speak perfect English. You don’t need to make an appointment to see a specialist and seeing one can cost as little as $12.

Originally from San Francisco, Ivan Peters has been living in Penang for just over a year. He noticed that three moles on his back had changed color, and he decided to have them removed. The initial consultation by a world-class plastic surgeon cost him $12, and the moles were removed five minutes later. The total cost came to $22. In the U.S. he estimates that that it would have cost closer to $1,000.

Penang is an exciting place to live and we have no regrets about moving here. Well, just one…that we didn’t do it years ago. Where else could you eat out seven nights a week, sampling any cuisine you want, and still live for under $2,000 a month?—Keith Hockton

Editor’s Note: As you can see, there are still places where you can afford to kick back and enjoy life in your “golden years”…where you don’t have to be wealthy to do it. Jackie Flynn’s research team have put together a special report that will help you discover great communities where you could embrace the retirement of your dreams…and likely do it for less than it’s costing you to live where you are now. Go here to secure a free copy.