Updated for 2012: The 5 Best Places for US Citizens to Retire on a Budget

For many US citizens home is where the heart is and, when a commonly-cited statistic concerns the fact that of the 308 million-plus citizens in the United States, a massive 70% don’t have passports. And there’s nothing wrong with that, for many, there really is no place like home.

Unfortunately for many, however, the US starts to lose its shine when it comes to one’s long-awaited retirement years. The cost of living in America and high healthcare costs entail that many people cannot entertain the idea of early retirement and those that do wait until they reach retirement age find that they live a somewhat frugal existence trying to make ends meet.

To this end, we have compiled a list of countries that offer low costs of living that may be attractive enough to coax retirees out of the US into new territory overseas.


Mexico is extremely close to the US, which makes visiting friends and family back home incredibly easy. The cost of living in Mexico is extremely low and one recent survey revealed that almost half of the U.S. expats living on the Pacific Coast reported living “comfortably” on less than $1,000 a month.

Many people worry that Mexico is an unsafe place to live and that there are high levels of crime in the country. While some of the cities bordering the US are relatively dangerous it is worth remembering that Mexico is a large country and in reality the majority of the country is safe, especially the resort and tourist areas.

Climate: Spring-like climate throughout the year.

Cost of healthcare: Approximately $300 USD per year for very comprehensive coverage.

Visa required: The rules governing visas for living in Mexico changed earlier this year. You can find a great article describing the changes here. The minimum income requirements are around $1,250 for a single person and $1,500 for a couple.


Americans who have an income that exceeds $1000 USD per month can qualify for Panama’s pensionado program, which offers a large number of benefits to retirees that include reduced-price healthcare services and prescriptions.

While the cost of living in Panama isn’t quite as low as that on offer in some of it’s Central American neighbors, retirees can live quite comfortably on approximately $20,000 a year. Domestic and garden help is available from about $15 daily and dining out for two would set you back approximately $30 for two people.

Panama City has the best infrastructure and offers a comfortable and convenient lifestyle for retirees who opt for retirement in this area of the world.

Climate: Panama is temperate with two distinct seasons: wet and dry.

Cost of healthcare: Health insurance and health care are inexpensive in Panama and health care is good.

Visa required: Pensionado program. All overseas documents to be presented to the authorities in Panama must be authenticated by a notary. Applicants must draw a minimum pension of $750 and invest at least $100,000 in property in Panama, or you must have a pension of at least $1,000 per month (no real estate requirement). Applicants many pool their pension with their spouse’s in order to meet the minimum pension requirements.


Equador is one of the cheapest places to live in the world and offers retirees an opportunity to live a very comfortable life on a relatively low budget and it is quite feasible that you could live here for as little as $800 USD per month. Labor is extremely cheap and retirees can enjoy the benefits of a maid or gardener for as little as $10-$12 a day.

Climate: It is tropical along coastal areas and in areas near the Amazonian jungle, but cooler inland at higher elevations.

Cost of healthcare: Most expats select a hospital and then arrange medical insurance through that hospital. The costs are relatively low when compared with the US. In Cuenca’s Hospital Universitario del Rio, for example, a private insurance policy costs as little approximately $85 a month for a 61-year-old.

Visa required: Expats that can provide documented proof that that have an income of at least $800 per month, plus $100 more per month for a spouse or dependent, are eligible for a retirement or pensioner visa.


Uruguay is very popular as a retirement destination. The cost of living in this area of the world is quite similar to that of Mexico and retirees can expect to enjoy a good standard of living from just $1000 USD a month, while $2500 will afford you the best.

Many people consider Uruguay to be a South-American Europe and with 88% of the population being from European descent it is no real surprise.

Uruguay has the lowest crime rates in Latin America and it is politically and economically stable.

Climate: Relatively moderate throughout the year.

Healthcare costs: Low income foreigners and nationals are entitled to free medical care in public hospitals, but this is not recommended. The majority of retirees purchase insurance from a local hospital at the cost of $50 to $75 a month, and this covers their care. The presence of existing health problems will impact your premiums but expatriates report that even with their existing health problems their insurance does not exceed $2000 USD per year.

Visa required: In the past any foreign visitor could apply for a residency visa providing that they meet a number of requirements related to areas such as owning a property, having a bank account with adequate funds and a proof of income of around $600 USD per month. However, the income requirement is no longer quite so clear cut and applications are judged by a number of different factors. At present the government have specified that applicatants must be able to prove that they can financially support themselves, although they haven’t explictly detailed the income levels that this requires. If you’re a US citizen you’ll need to get a criminal background check through Interpol and the FBI. Citizens of other countries can provide a police good conduct letter. You’ll also need a certified copy of your birth certificate and a health certificate.


Nicaragua’s popularity as a retirement destination is at an all-time high for one significant reason: its extremely low cost of living. US expatriates can live comfortably here on their social security with the annual cost of living estimated at around $18,000 USD.

Many retirees are drawn to Nicaragua because of its amazing scenery and countryside and there are areas to suit all tastes from a tropical life by the ocean through to a lakeside cabin in the mountains.

Climate: There are two distinct seasons—rainy (May-November) and dry (November-April). It is generally warm all year round.

Healthcare costs: Healthcare is good but basic.

Visa requirements: In 2010 Nicaragua launched a new program that makes it easier for US citizens to retire in Nicaragua: foreign retiree residency program. The first option is called the “Pensionado” program. To apply for it, you must be 45 years or older and prove a steady monthly income of at least $600 (plus $150 for each dependent family member). The second option, the “Rentista” status, is for people with private incomes. Again, the minimum age is 45 years. The minimum income amount is $750 per month (plus $150 for each dependent), and the income can come from investments, revenues, stocks, rents, retirement plans, etc.

Have you retired to any of these destinations? Leave a comment and let us know what life in these countries is really like.

Author: ExpatInfoDesk