Often when I travel, I daydream about what life would be like living there where the dollar would stretch further than it would in Canada, where the cost of living is much lower. Of course it would be quite amazing to be able to take a break from work for 6 months or for a year to just travel around the world or to live abroad for that period of time, but for many, that’s a pipe dream, there are just too many things going on in life rather than taking a break for six months. If you’re close to retirement and are interested in stretching your hard earned dollars, retiring abroad may be an option for you, though it is certainly something that should be given a lot of thought.
Why Retiring Abroad is So Attractive
There are lot of reasons why retiring abroad is so attractive, and one of the main reasons is weather. Tropical warmth, sun, and less arthritic pain are great reasons why retiring overseas is a great idea. Other reasons include experiencing a different culture, experiencing adventure putting down roots in a different country, meeting other expats and forming a community with them, and of course the idea of a luxurious lifestyle without a luxurious price tag.
Also, there’s no shoveling snow!
Why Your Dollar Stretches
If you have passive income (dividend income or even rental income) your dollar will definitely stretch when you are living abroad in a less developed country compared the United States or Canada. Think about it, if you have $2000 of rental income a month from a paid off rental property, that’s $2000 a month that you can use in the country of choice, where your dollar stretches much more because of the lower cost of living. When your rent cost lest than $500 a month, meals out cost under $1 to $5, your dollar will go much further. You also won’t need to keep up with the Joneses’ because likely the Joneses’ won’t be living near you in a developed country!
With these low costs, you won’t need to save $1,000,000 for retirement or financial freedom because life in that country won’t cost $1,000,000 for 35 years.
Which countries will work well while your dollar stretches? The Simple Dollar has a great list of countries that might work well for retiring abroad. Some of these include Vietnam, Thailand, Belize, Panama, and the Philippines. The cost of living is low and a one to two bedroom apartment rents for under $400 in most cases. A bowl of pho noodles in Vietnam cost around $0.50 to $1.50, and a dish of Pad Thai in Thailand costs $1-2, a stark difference from the $8-14 that these usually cost in North America. The cost of living is certainly low and very manageable for retirement on a budget.
For other locations that are great options for a budget retirement, The Street also has a lis of 21 best places to retire with the approximate cost per month.
How to Make it Work
Research, research, research is so important before you make the jump towards living in another country. International Living is a website that is geared towards people who want to retire abroad and are looking for more information before making that jump.
The Government of Canada also has a website dedicated to Canadians interested in traveling abroad.
Now, to think about the downsides of retiring in a developing country, tne obvious thing to consider before making the move is that North American quality healthcare may not be accessible, however you may be surprised- some countries in South East Asia (namely Thailand) have top notch health care that is probably better than Canada! Another downside to moving abroad is that contact with family may not be as easy (whether this is a good or bad thing is up to you, if you want to avoid being the sandwich generation and having to take care of your aging or elderly parents, a good cop out is to move to another country). It certainly may not be a permanent move (because ultimately we want to be close to family later in life when we are frail or dependent on others for care) it is still a great opportunity for the initial phase of retirement.
Readers, do you know of anyone who has retired in a sunny destination?