Personal Finance

How To Retire Overseas For Less

By Judy Martel for

Worried your retirement dollar won't go far enough? These days, more retirees are deciding to pick up stakes and move to a less expensive locale where they can live well for a fraction of the cost.

Moderate weather, cheaper living in Ecuador

In 2001, Dan Prescher and his wife Suzan Haskins closed their marketing business in Omaha, Neb., and moved to Ecuador to work as senior editors at They've witnessed the increased popularity of U.S. citizens retiring abroad and have recently authored an advice book for expats, "The International Living Guide to Retiring Overseas on a Budget."

"Suzan always wanted to travel and have an adventure," says Prescher. "We were at the point where we wanted to try something new."

When International Living offered positions in Latin America, the decision was easy. "It was a good time to make a move," says Haskins. "Our parents were healthy and our children were grown or in college. And if you've ever been in Omaha in the winter, you know what it's like."

Although the couple has lived in four countries since then, they chose to become legal residents of Ecuador. In 2010, they purchased a condo in Cotacachi, a town nestled in the Andes mountains outside Quito. They spent $52,000 on the condo and say that because they don't have a mortgage or rental costs, they can live well for $1,500 to $2,000 a month.

Cheap is great, but make sure you enjoy the culture

A lower cost of living might allow you more financial freedom, but if you don't like the expat lifestyle, the extra money isn't going to make up for it. Retirees need to be certain they fully understand what they're getting into before they pick up stakes, say Haskins and Prescher.

"You really have to profile yourself and know what you want," says Haskins. "After so many Omaha winters of shoveling, we thought we wanted a beach." Although they do enjoy a temperate climate in Cotacachi, it's not on the coast and they discovered it didn't matter after all.

Prescher recommends as much practice as possible – trying out a location by spending lots of time there before making a commitment. The Internet also provides plenty of opportunities to do research on particular regions, gain insight from other expats and find short-term rentals. But it's critical to actually spend time there yourself to gain firsthand knowledge.

Most expats are already well-traveled and have a healthy sense of adventure. For that reason, it's easy to meet like-minded people, says Prescher. "Your social life expands exponentially."

Have budget, will travel

Prescher says one of the biggest financial mistakes he sees from expats is that they underestimate the budget. After they've calculated the monthly expenses of living in a new location, they fail to take into account the extras, such as real estate fees, cost of a visa, expenses of setting up a household and first and last month's rent. Many also fail to plan for unexpected emergencies.

Health care costs -- a huge concern for many retirees -- are generally much cheaper abroad and a relief to the budget. "You can get premium care in almost every major city and 80 percent of the time it's better in one way or another than in the U.S.," says Prescher.

The main advice they give expats is to be flexible and have a cash cushion. "Budgets can change anywhere in the world and you need to stay light on your feet financially."

This article was originally published on

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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