Moving Abroad: A Savvy Strategy to Retire Early With Less

Article after report after study bemoans the sorry state of retirement savings in the U.S. And the recommendations for solving the problem are equally grim. Drastically cut back your present lifestyle and future expectations…work until you’re 70…save at least $1,000,000. Lost in this barrage of negativity is the overlooked and under-reported idea that you could possibly retire right now with the money you have. How? By moving abroad.

moving abroad

Moving Abroad to a Lower Cost of Living

That’s what we did almost a decade ago when we retired early and relocated to Cuenca, Ecuador. At first, we lived off of our savings, and since have enjoyed an upscale lifestyle on a Social Security budget.

In addition, if you are willing to consider this “outside the box” strategy, your timeline to beginning retirement could come much quicker than expected too!

Early retirement happens both intentionally and unintentionally. Let’s take a look at how relocating outside U.S. borders can serve either scenario.

moving abroad

You Planned for it

So, you’ve lived within your means and saved diligently for years to accumulate a substantial nest egg. Maybe not the $1,000,000-plus the financial experts recommend, but more than the $84,821 the average American has managed to stash away.

For purposes of example, we’ll say you’re a couple who’s done four times better than that and has a joint retirement account of $350,000. Given that, how long will it last?

The Bureau of Labor Statistics says the average annual cost of living in the United States is $20,194 per person. That number is somewhat misleading as it is based on a household of 2.5 people, and we know that living alone is more than half the cost of a couple.

So, two people without any other source of income would blow through their entire savings in about nine years. Yikes!

Compare to Other Countries

Comparatively, look at the same couple in one of many affordable countries—Costa Rica, Panama, or our home country of Ecuador. Their monthly budget could comfortably be around the same as the BLS cost of living ($20,194 ÷ 12 = about $1700) for a single person in the U.S.

moving abroad

So now we’ve doubled how long that $350,000 would last to 18 years. But let’s go farther, and put those savings to work with some local government-insured CDs. We know what you’re thinking… ”Yeah, right.” Who can blame you when the average one-year CD rate in the States is a dismal 0.64%.

The Rest of the World Doesn’t March to that Beat

However, the rest of the world doesn’t march to the beat of what’s happening in the U.S. As of this writing CD rates in Costa Rica are 7.8% per annum. In Panama, 8.25% (9% if you invest offshore) and Ecuador, 9.5%.

Accordingly, invest you’re $350K in Panama, and your CD throws off almost $29,000 in interest each year, or $2400 per month. With a monthly budget of less than $2000, you get to choose:  Live largely, start ticking off that travel destination bucket list or reinvest the difference. Whatever the decision, your nest egg remains intact. Shweet!

moving abroad

Retirement Was Forced on You

So, you planned to work at least until full retirement age or maybe even as long as possible. But it didn’t turn out that way. Maybe health problems caused you to leave the workforce earlier than expected. Or you found yourself unexpectedly downsized.

If so, you’re not alone. Over half of older Americans are pushed out of longtime jobs prematurely, and only one in ten ever earns as much before the employment setback.

This situation can be devastating, especially when combined with the insufficient savings that plague so many Baby Boomers.

To clarify, moving abroad can be your salvation. It certainly was for us. We are casualties of the Economic Recession of 2008. Close to retirement, our careers vanished, our beautiful home lost two-thirds of its value almost overnight, and our investments were in free fall.

So, after months with no jobs and shrinking savings, we decided to take the assets we had left and, as mentioned earlier, relocate to Ecuador. Undoubtedly, leaving that financial train wreck behind turned out to be one of the best decisions we’ve ever made. The stress, the worry, the fear are all distant memories.

We’re not the only ones to take this leap of faith. The Social Security Administration reports that over 700,000 American retirees receive their monthly benefits in foreign financial institutions. Perhaps, even more, have their check direct-deposited in a stateside bank account. In addition, the numbers moving abroad are growing every year.

So, instead of staring down the barrel of a substandard third age or the humiliation of being forced to move in with their grown children, these folks chose to take gutsy action to rescue their retirement. Their reward, like ours, is a life exceeding their dreams. 

Beyond the Numbers

We’ve established that retiring abroad to a lower cost of living is financially beneficial for people both with and without substantial savings. But life is not a spreadsheet, so money alone shouldn’t be the sole motivation for deciding to become an expat.

There are many countries where your money will go farther, but not all are places that you might want to live. For instance, the top three in a recent study by GoBankingRates are India, Morocco, and Turkey—destinations probably in the “nice place to visit but…” for most Americans. 

Fortunately, you can choose from dozens of great locations around the globe with established expat communities. Places where, in addition to a lower budget, an important quality of life factors like proximity to family and friends, ideal climate, and excellent health care are readily available.

Lake Chapala, Mexico, home to more North American expats (upwards of 25,000) than any other place on the planet, is an inexpensive 2 ½ hour flight to Houston. Residents there enjoy year-round springlike weather as do those in Medellin, Columbia; Cuenca, Ecuador; Boquete, Panama; and Algarve, Portugal.

Surprisingly, many Americans are shocked to discover there is world-class health care in many countries that’s incredibly affordable. Countries with modern hospitals and clinics, state-of-the-art equipment and English-speaking doctors.

How affordable? For example, we are members of Ecuador’s national health care system. Our 100% coverage with no deductibles and no restrictions for age or pre-existing conditions has a premium of $81 per month. And that’s for both of us!

Costs for services, procedures, and medications are so low that many expats choose to simply pay out of pocket as the need arises. And they can finally afford neglected care like extensive dental work.

Bottom Line

Unquestionably, retiring and moving abroad is a great option for those who want to retire early or who have been prematurely displaced from the workforce. Doing so allows three seemingly impossible things to happen:

  1. Your cost of living is lowered.
  2. Your quality of life is up-leveled.
  3. Your nest egg can remain intact or even continue to grow.

Don’t be part of the 60% who don’t think they’ll ever retire. Be proactive. Be bold. Be an expat!

Moving abroad

Need more reasons to move abroad? Check out Retire Early on Less Money Now It’s Easy and Exciting

Ed and Cynthia

This article was contributed by guest bloggers Edd and Cynthia Staton.

Edd and Cynthia Staton are creators of Retirement Reimagined!, a revolutionary Master Course for Baby Boomers facing an uncertain future. Recognized as experts on expat living, they have appeared on network television and written hundreds of articles for international magazines and other media outlets. As featured speakers at large global events, they have shared their expertise on moving and retiring abroad with thousands of attendees. Each volume of Edd and Cynthia’s trilogy of books, Mission: Rescue Your Retirement is an Amazon Best Seller. The collection hit #1 in 10 categories as diverse as comedy, personal finance, retirement planning, self-help, and travel.

Visit them at

20 thoughts on “Moving Abroad: A Savvy Strategy to Retire Early With Less”

  1. I’m pretty familiar with CD rates in both Costa Rica and Panama… haven’t seen anything even close to what you quoted in this article.
    Can you please post links to banks/credit unions in both countries offering these rates?

  2. Thanks Keith,
    This is a credit union in Ecuador. I’m not too familiar with banking in Ecuador but given these attractive rates might have to do some due diligence.
    Do you have information on Panamanian or Costa Rican banks offering comparable rates?

    1. Thanks Saadatrent. We will write about living in many of the Asian countries in the future. We know many are great values and lovely to live in.

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