Edd and Cynthia Staton took a leap of faith that paid off. During the Great Recession, they lost their jobs and much of their savings. Realizing they wouldn’t recover, they decided to retire early and start a new life abroad in Cuenca, Ecuador.
Ecuador’s low cost of living and combined Social Security incomes allowed them to experience an upscale lifestyle on a budget of around $2,000 a month. They rent a penthouse apartment, fill it with fresh flowers, and maintain memberships in a yoga studio and gym. They even receive regular massages and eat out several times a week.
Friends of theirs built a high-end, 4,300-square-foot home on 15 acres outside of Cuenca with annual property taxes of just $52. Grocery costs in Cuenca are also low. Spending $100 at a U.S. grocery store fetches only a few bags, whereas it gets you much more in Cuenca.
For example, two large pieces of osso buco cost $4.17, a bouquet of alstroemerias $1.18, and 5 navel oranges just 99 cents. Eating out is equally affordable. Their favorite lunch spot offers a meal including a glass of fresh-squeezed juice, a bowl of soup, a main plate, and a small dessert for $3.50.
Fine dining for two, including wine, averages $60, including tax and tip. Senior benefits in Ecuador are substantial. Those aged 65 and over receive various discounts.
High-speed internet costs only $25 per month, cell phone service is $8, and a 50% discount on flights originating in Ecuador can save hundreds of dollars. Many locations around the globe offer similar savings, enabling other expats to enjoy comfortable, stress-free retirements in Latin America, Europe, and the Far East on budgets covered by Social Security benefits. Moving abroad is an option worth considering for those who feel their retirement savings are inadequate.
More and more Americans are considering retiring overseas, driven by escalating healthcare costs and the general cost of living in the United States.
retiring on a budget abroad
The strong dollar makes even well-developed countries an attractive destination for cash-strapped retirees.
American citizens living abroad can receive Social Security payments, but not in countries where the U.S. government prohibits it. Retiring in tropical places like Costa Rica is feasible for an average American couple living on Social Security. In 2024, a married couple’s average Social Security benefit totals $3,822 a month.
The Costa Rican government offers a visa for international retirees that requires transferring only $1,000 a month to a Costa Rican bank for living expenses. One of the simplest ways to retire without losing Social Security benefits is to move to a U.S. territory such as Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands, or American Samoa. If you prefer to spend part of your retirement overseas, ensure you don’t stay outside the U.S. for more than six months to maintain residency status.
The U.S. does not send Social Security payments to countries like Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, Cuba, and North Korea. However, you can still receive payments in countries like Russia and Iran. It’s crucial to report any changes in circumstances to the Social Security Administration.
When living overseas, the SSA will periodically send questionnaires. Failing to complete and return these can lead to interrupted or lost benefits. High-quality, affordable medical care is available in many countries.
However, Medicare usually doesn’t cover international treatments. If you return to the U.S. for treatment, Medicare Part A can cover hospital insurance. Social Security payments received abroad are subject to U.S. income tax, and up to 85% of benefits may be taxed.
However, tax rates drop based on your annual income. Despite potential double taxation, the lower cost of living and healthcare abroad might still yield savings. Navigating retirement abroad involves understanding Social Security rules, healthcare options, and tax obligations.
By preparing thoroughly, retirees can enjoy their golden years comfortably overseas.
