Best places to retire

International living has released its Annual Global Retirement Index for 2021 for the world’s best retirement countries. If you are nearing pensionable age and want to retire overseas, or you are looking for a destination where the cost of living is lower and you can get more ‘bank for your retirement buck’, then this article is for you.

Table of contents

  1. Introduction
  2. Things to consider when considering retiring abroad
  3. Cost of living
    1. Spain
    2. Portugal
    3. Malta
    4. France
    5. Costa Rica
    6. Panama
    7. Malaysia
    8. Vietnam
    9. Cost of living comparisons
  4. Healthcare
    1. Spain
    2. Portugal
    3. Malta
    4. France
    5. Costa Rica
    6. Panama
    7. Malaysia
    8. Vietnam
  5. Taxation
  6. Conclusion

1.Introduction

The survey not only informs you of the countries with the lowest cost of living to retire in, but also the countries offering the best healthcare and quality of life at a reasonable price.  Categories considered include, housing, benefits, climate, how you will fit into a new culture, healthcare, and cost of living. South America, Asia and parts of Europe dominated the top ten.

For the first time in many years, Spain has fallen off the top ten list and was replaced by Malta. It is still a very popular retirement place for UK expatriates and I’m sure will make it back onto the list very soon.

We cover the main countries on three continents. In Europe we look at Spain, France, Portugal, and Malta, in South America at Costa Rica and Panama, and in Asia we look at Malaysia and Vietnam.

*To make things easier and standardised, all costs have been converted into Euro.


2. Things to consider before retiring in another country

  • Research, research, and more research. Do your homework. You need to know what it is like living there and how much it will cost.
  • Take a vacation to your prospective new country to see if you would fit into its culture and way of life. Do they have all your creature comforts and favourite products like back home? Theatres, entertainment, sports, activities etc.
  • Is there good healthcare? Getting older means more healthcare needs. Is the healthcare system affordable, or would you need to take out private health insurance?
  • What is the visa application/residency process for moving to this country?
  • Will your pensions be payable into a local bank account?
  • Can you move your pension overseas?
  • Look at the tax implications of living in another country other than your home country.
  • Budget. Make a thorough budget of your expected monthly living expenses to see if it is financially viable to relocate. Remember to factor in airfare costs for visits to family back home.

3. Cost of Living


3.1 Spain

Spain has fantastic year-round sunny weather, large English expat communities in beach areas, affordable food, one of the lowest cost of livings in Europe, one of the best healthcare systems in the world (WHO) and is LGBT tolerant.

Spain has been one of the popular retirement destinations for UK citizens for many years. Endless days of sunshine brings with it a temperate Mediterranean climate with hot summers and very mild winters.

A monthly budget of around €1500 will have you living a comfortable lifestyle and still have spare to eat out regularly. Food is relatively cheap (especially if you buy at local markets) Public transport is readily available everywhere so a car is not a necessity, unless you plan on travelling around a lot.


3.2 Portugal

Portugal has time and time again topped the retirement destination list as the best place to retire in. It isone of the cheapest countries in Europe with a fantastic climate, friendly people, rich culture, one of the best quality healthcare offerings globally, high safety rating and affordable cost of living.

This small country has something for everyone, from sun drenched white beaches to ancient castles, and cities dripping in culture and good food.

English is taught in most schools, which makes it easier for English expats to navigate the system. People are warm, friendly, and welcoming. Summers are hot and dry, and winters are mild in the southern half of the country. A budget of around €1500 a month will see you experiencing a comfortable life. Living in cities will push that budget up as rentals cost more in the cities.


3.3 Malta

A newcomer to the top ten list, Malta offers a hot Mediterranean climate with long sunny days and mild winters. It is a small island dripping in rich culture, ancient history, and relaxed living. It offers old world charm with first world standards. Boasting one of the best healthcare systems in Europe, Malta offers a high standard of medical care to the elderly and everyday man on the street. The cost of accommodation is on the rise as construction of high-rise apartment blocks are popping up.

Food is relatively cheap. There are many markets where you can get fresh local produce at bargain prices. Being an island, imported goods are more expensive, but with there being such a big variety of grocery stores around, you can choose if you want to sample local produce or pay more for imported goods.

A big bonus is that there is an extensive bus network all over the island and a car is not needed. A month bus pass costs only €26 for unlimited travel. Malta is one of the few European countries where English is dual to Maltese. It is also a central location to travel all over southern Europe and the Middle East and North Africa.


3.4 France

France invokes romantic visions of the countryside covered in lavender fields and vineyards, cityscapes of magnificent architecture, and cuisine that is some of the best in the world. A relaxed lifestyle is expected, with so many open spaces and places to have an afternoon picnic.

Whilst more expensive than its Spanish and Portuguese neighbours, an affordable retirement can still be had. A budget of €1650 can deliver a comfortable retirement. The price jumps when you move closer to cities as accommodation prices rise.

There are huge advantages to healthcare in France as well as prices are set by government.


3.5 Costa Rica

Topping the list this year is Costa Rica.It has atropical climate,low-cost of living, safe environment, is LGBT friendly and has bargain real estate.

The population is well-educated, and all citizens and legal residents have access to medical care.

A budget of €1600 will give you a comfortable retirement lifestyle. It’s the quality of life that attracts many US citizens wanting to retire. Life is good on this island. There is a relaxed atmosphere, many international communities and it’s easy to make friends. Combine that with good food, a rich culture, and a warm climate, and you have the winning formula for an idyllic retirement. The pace of life is much slower, and it allows you to focus on relationships and enjoying life.

The outdoor lifestyle encourages more physical activities that will improve wellbeing and ultimately, less ailments as you get older. Access to fresh local produce and food also encourages healthier eating habits.


3.6 Panama

Panama stays in the top ten list for a reason. The Panama Canal makes it one of the richest countries in the region. It isclose to the US, has a warm sunny climate outside of the hurricane belt, low tax burden, US dollar currency and a large English-speaking population with excellent doctors.

It is a central hub for travel to the US and South America. There is a modern infrastructure with intercity transport, a well paved road network, and excellent telecommunications and internet. Expat retiree requirements are very easy and only requires a minimum monthly income of €800. A retiree resident then has access to many discounts like 25% off utilities, 50% off movie tickets, 20% off medication and 25% off meals at restaurants etc.

Panama isn’t the cheapest in the Caribbean, but with so many benefits and discounts, it’s hard to resist. A budget of around €2000 will afford you a comfortable apartment in Panama City and lots to spare for eating out and seeing the sights. It is a surprisingly cosmopolitan city and offers activities for all interests.


3.7 Malaysia

Vibrant buzzing cities, ancient rainforests and idyllic beaches is what makes Malaysia so attractive. It has a tropical climate with loads of sunshine and English is the unofficial first language.

A budget of just over €2000 a month will afford you a very good lifestyle in a modern high rise with all the amenities. Malaysian law is based on the British system and all road signs are in English and Malay. If you don’t need the lavish apartment, then your budget could drop to below €1500 a month.

Healthcare is world class, and service is next to none. There are also tons of grocery stores selling everything you need, including Tesco’s for the UK expats. There are many modern shopping malls and it will feel like home. But if you really want to save costs then shop at local supermarkets and eat local cuisine.


3.8 Vietnam

Vietnam was the fastest growing economy in 2020. With its pristine beaches, wild mountains in the north and pine forests of the central highlands, it has something for everyone. The people are friendly and welcoming, English is widely spoken, and food is cheap. It is considerably cheaper than Western countries and about 5-25% cheaper than the rest of Asia. There is a huge surge in development as is evident from the high-rise apartment blocks, gated communities and new hospitals and schools.

The most expensive cities are Ho Chi Min City and Hanoi and even here, a couple can enjoy a middle-class lifestyle for around €1100 a month. Living outside of the major cities could reduce expenses to around €750. You could afford a house with a sea view, dine out every day and still have money to spare. On the top end, a budget of around €3000 a month will have you living in 5-star luxury in a modern villa and dining at the best establishments and go on regular cruises and travel extensively.


3.9 Cost of living comparisons

Average prices are for a couple per month
Country2 bedroom apartmentUtilities (including internet)GroceriesPrivate Healthcare
Spain€600€130€300€50-200
Portugal€560€140€370€40-100
Malta€700€200€400€88
France€660€114€500€80
Costa Rica€577€74€329€100
Panama€750€123€370€120
Malaysia€740€110€180€60
Vietnam€570€72€100€57

4. Healthcare


4.1 Spain

The healthcare system in Spain is ranked among the best in Europe. It is available for anyone residing and working in Spain who contribute towards social security. Pensioners who are residents, can register for health benefits even if they did not contribute towards social security. There are small co-payments that are required for example with prescriptions. Most providers offer public and private services.

For those not covered by state insurance or the EHIC card, private health insurance will have to be taken out. Private healthcare offers a wider variety of services and quicker treatment. Most expats prefer to take out private insurance. Private health cover costs anything from €50-200 a month depending on the plan chosen.


4.2 Portugal

Healthcare in Portugal is one of the best in Europe and has improved drastically over the last few years. Universal health cover is available to all residents and is free for over 65’s. There is a small fee that is paid for visits to doctors and medical centres. Holders of EHIC certificates will be covered as if they were residents.

Most expats take out private health insurance as it is relatively cheap in Portugal. Costs are about €40-100 a month for a couple.


4.3 Malta

Malta is considered a popular medical tourist destination and boasts high quality healthcare. It is ranked 5th by the WHO from over 100 countries worldwide. Residents contributing to Social security enjoy free public healthcare or choose private facilities and doctors. Expats that don’t have an EHIC certificate take out private health insurance. Services are relatively cheap and a doctor’s visit at a pharmacy costs around €15. Private healthcare costs around €80 a month for a couple.


4.4 France

French Healthcare is considered some of the best in the world. It is accessible by everyone living in France. Since 2016, a new healthcare system (PUMA) was introduced for foreigners living in France, which entitles them to healthcare after 3 months of residence. Retirees from within the EU can access the French healthcare system by completing the S1 social security form in their home country.

Private healthcare costs around €80 a month for a couple.


4.5 Costa Rica

Costa Rica offers medical access to all citizens and legal residents. There are two systems, the government universal healthcare system known as Caja and the private system. Expats can access both.  Costs are significantly lower than in Europe and the US.  Retirees in Costa Rica can join the CCSS and receive treatment (anything from check-ups to prescription drugs to surgeries) Residents pay a % of their income towards this service.

Private health insurance costs around €100 a month for a couple.


4.6 Panama

Like most Central American countries, Panama has dual healthcare systems offering private and public healthcare. Citizens and residents can access the public system via their social security contributions, but most expats use the private medical system as it is faster and more up to standard with western healthcare.  

Private healthcare costs around €120 per month for a couple.


4.7 Malaysia

Malaysia excels with its service in the healthcare arena. Many in the region come to Malaysia for its affordable high-quality healthcare. All doctors speak English as most were trained in US, UK, or Australia.

A doctor’s visit costs between €12-32 and an overnight stay in a private room costs around €32. This is at a not for profit hospital of which there are many excellent choices. Many hospitals offer health screening packages at around €60 that includes a check-up, chest x-ray, ECG, blood tests, abdomen ultrasound and a vision test.

Private health insurance is so affordable at €60 a month for a couple. Most expats take out private insurance to cover major health issues and pay for the smaller day to day health checks.


4.8 Vietnam

There has been a huge increase in healthcare standards in Vietnam over the last few years. Most Vietnamese would have gone to neighbouring Bangkok, Kuala Lumpur, or Singapore for major medical treatment. New hospitals have been built in smaller towns and many are internationally accredited.

Medical care differs vastly throughout the country depending on its location. A consultation is available for as little as €4 at a public hospital. Most towns will be able to cover basic medical needs.

Vietnam is a major medical tourist hub for dentistry.

Most expats living in Vietnam don’t feel the need to take out expensive private medical insurance because healthcare is so cheap. They usually opt for a hospital plan that will cover major medical conditions, emergencies, and evacuations if they live far from major cities.


5. Taxation

Depending on the country, income from a foreign pension is not usually taxed, as these are taxed at source. Only income earned in the country is taxed. Taxation depends if the country you retire in has double taxation treaties with your resident country. Any income received at source, is taxed by the country it comes from and you cannot be taxed on it again in your retirement country.

This is country specific and you would need to consult a tax expert on these matters before retiring abroad. This is an important aspect to consider when moving abroad as taxation may severely cripple your income as you could be taxed by both your home country and your new resident country.

*It is important that you consult with a tax adviser regarding taxation in the country you retire in, as each person’s financial portfolio and income differs.


6. Conclusion

Retiring to your dream destination is within reach as there are so many affordable retirement options. Regardless of which country you choose, it is important that you do your homework beforehand and consult with your financial adviser to identify any taxation issues and financial challenges.

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