Is There a Low-Cost Retirement Paradise?

A common theme in discussions about retirement in a foreign country is that a life in a warm, sunny retirement paradise can be experienced at low cost. This belief applies in particular to retirement destinations such as Mexico, Belize, Panama, and Costa Rica. According to some folks who have tried it, this belief is only half-true.

Based on facts reported in an article from Scott Burns, a low cost retirement life is available in some foreign destinations. This is not the case if you expect to transition a complete U.S. lifestyle to your foreign retirement residence. That plan could cost you more, not less.

In his first article on Belize, Scott had this to say about the fantasy of a low-cost retirement in a foreign paradise:

If you have such fantasies— and many struggling Americans near retirement do— let me share a lesson I learned while living on Mallorca long ago. You can live a luxurious lifestyle in a poorer country for far less than the same lifestyle would cost in America. But you’ll be hard pressed to live a low-cost lifestyle in a poor country without adopting the poor living standard of the poor country.

The reason that it may not be possible to live a frugal lifestyle in a foreign country for less than in the U.S. is that we have a highly efficient and competitive system for distributing goods and services. (This assumes that you can live near a Walmart and big box home center!)  Most foreign countries lack this system. Therefore, non-luxury goods and services will cost more there than they would here.

This reality is confirmed in Burns’ second article, in which he interviewed some experienced expat early retirees. This is what they had do say about low cost retirement living in a foreign country:

A lot depends on your lifestyle. If you try to bring your (U.S.) lifestyle here, it will be very expensive,” Akaisha said. “We try to buy local products rather than imported brand products. A lot of would-be expats like the idea that it’s just like living in the states, but less expensive. It isn’t (if you try to live that way).

Living in another country, both observed, requires adaptation and flexibility. Part of that adaptation is a willingness to live in a genuinely removed area. They, for instance, prefer places like Caleta de Campo, a tiny village south of Manzanillo on the Pacific coast.

Source: Finding a Low-Cost Paradise

All of this makes sense to me. I’m more inclined to seek out a desirable lifestyle here in the states, taking advantage of our country’s built-in economic advantages. There is plenty of cultural and geographic diversity available here. If you find a location that you can afford on a middle class retirement income, it would be difficult to beat achieve that lifestyle overseas at a lower cost. On the other hand, if you are looking for a high end lifestyle with a beach house and servants, that may be more affordable elsewhere.

What’s wrong with making your own paradise, right here?


  1. Jan says

    I remember around 1970 when Mexico confiscated all of the “farms” owned by “foreign nationals”. Although we have lived in four different countries, that lesson ( all of the ex pat friends of my parents moving back to the states with nothing) lead us to buy and plan our retirement in the US. I know they are part of the Free Trade Agreement now—but that can change in an instant.
    Few countries actually believe that the land should belong to anyone except a citizen.
    We live in Kansas by a beautiful lake. It is a wonderful place to retire!

  2. marcopolo says

    I lived abroad for 15 years, half on my own dime and the other half with the US goverment.

    As much as I had the income and the luxury, I worked all the time when I worked at the US Embassy.

    When I was younger and more adventurous, I bought an old farmhouse in the SW of France, learned French fluently, girlfriend helped, ahd had a wonderful life. Now, I gave up alot of things in the States, most of which I did not need in the first place. In this country, our cars are too BIG, our plates of food are enormous, and the TV is king, and our toys dominate our lives. I also lived in Latin America. As much as I love the US, I am planning on going back overseas! I am fortunate I speak five languages fluently!

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