Can a single retiree with average Social Security income and minimal savings live comfortably abroad?
4 min read
Living abroad has become an increasingly popular option for retirees. Some are ready for a new adventure, others have grown weary of divisive politics, but most move to another country seeking a lower cost of living.
For solo retirees, the possibility of finding a cheaper place to live is particularly appealing. The current average monthly Social Security check of just over $2,000 doesn’t begin to cover typical living expenses for a single person in the United States. Although the amount varies depending on location, the U.S. Bureau of Labor Statistics reports that the monthly cost exceeds $4,600.
In many cases, savings can’t cover the shortfall. Median savings of $200,000 for those in the 65–74 age bracket fall well short of the more than $1 million recommended by most industry studies.
Read: Retiring with $1.3 million? Here’s what that really means.
But these statistics cloak a grim truth that 58% of older Americans have less than $100,000 saved. And for 36% within that group, the total is $50,000 or less.
So is it possible for a single retiree with average Social Security income and minimal savings to live comfortably abroad? Absolutely.
We recently published an article listing 13 desirable countries around the globe requiring proof of only $1,000 to $2,000 in monthly income to qualify for a residency visa. Also, included in the story are ballpark budget numbers for a comfortable lifestyle.
As a point of reference, we have lived in Cuenca, Ecuador, for the past 15 years, and our current monthly budget is around $2,000, excluding travel. With this modest outlay we enjoy a decidedly upscale lifestyle that would be impossible to replicate in the United States.
Marsha Scarborough moved to Spain in 2017 after losing her retirement nest egg in the Great Recession of 2008. “It was one of the smartest decisions I’ve ever made. I’ve never been happier or felt safer,” she says. “There is almost no violent crime, infrastructure is First World, and affordable healthcare is superior to the States.”
“I have been living in Europe for 10 years and find the quality of life is far better than in the States,” says Frank Ahearn, 62. “There’s low crime, an unhurried pace and an affordable cost of living. The language issue is challenging at times, but nothing beats sipping Pelligrino in south France.”
Financial first steps
Being a single retiree in another country “forces you to be more hands-on with your finances,” says CPA and tax consultant Ashley Akin. “You don’t have a second income to rely on, so you become your own safety net.”
Base your budget on guaranteed income you can count on every month. Make sure to set aside an emergency fund of at least a few months’ expenses for surprises you hadn’t counted on.
Currency fluctuations. In countries like Colombia, Vietnam and South Africa, where national currencies are struggling versus the U.S. dollar, it is tempting to live large and pretend the party will never end. “If your pension or savings are in U.S. dollars, but your bills are in pesos or euros, an unexpected exchange rate shift can suddenly throw your budget off,” warns CPA Kevin Marshall.
Estate planning. Almost 70% of adults don’t have a will, but since “many countries have very different inheritance laws, single retirees abroad without a partner or close family nearby need to be clear about what happens to their assets,” says Marshall. “I’ve seen cases where wills weren’t recognized and assets got tied up for years.”
Healthcare. There is no access to original Medicare beyond U.S. borders (some Medicare Advantage plans provide emergency coverage). Your choices for healthcare are to pay out-of-pocket, obtain private insurance, or enroll in your country’s government-sponsored health system.
Read: Worried about medical emergencies on vacation? How to stay covered if you’re on Medicare.
Additional sources of income. “Multiple income streams are your passport to independence,” says Andrew Gosselin, founder of Business Tutoring. “They shield you from currency shifts or unexpected medical bills without breaking stride.”
When Ashley Rogers of Ecuador at Your Service moved to our hometown of Cuenca in 2010, she needed to find a way to supplement her modest retirement benefits. “I started a concierge service for North Americans looking to move here,” she says. “As I kept getting requests to help find them a place to live, my business gradually shifted to real estate.” Rogers said she was voted best Realtor by the expat community eight years in a row.
Personal considerations
Those who move abroad solely for a lower cost of living often find themselves unhappy.
“The expats who succeed are the ones who treat their relocation not just as a financial decision, but as a new chapter they’ve carefully prepared for,” says Marshall.
Gosselin recommends what he calls the “Three E rule”:
- Engagement. Join language classes and active social groups.
- Environment. Choose scenery that energizes you.
- Ease. Find a place with reliable internet and efficient public transport.
Remember to put money aside for things that nurture your emotional well-being, such as dining out, classes or outings with friends. Investing in your happiness can help sustain you in moments of loneliness.
And don’t feel as if you need to rush into a decision.
“Give yourself a six-month rehearsal before declaring any destination permanent,” advises Gosselin. “Live through local elections, humid nights and festive holidays to see how your spirit handles noise, weather and distance from family. If you still wake up eager to explore after that trial, you are ready to build the next phase of life with confidence and curiosity.”
More Where Should I Retire? columns:
The No. 1 thing the ‘best’ places to retire have in common — and it’s not affordability
