Depending on your lifestyle and location, you may need up to $600k to retire comfortably. However, only 14% of Americans in their 40s and 50s have more than half a million put away. During the COVID-19 pandemic, around 9% have withdrawn from their savings just to get by.
Whether you’re on track to save what you need or not, retiring abroad is a handsome option. In fact, if you had half a million in other countries, you could enjoy a fuller retirement in a more affordable country. Retirement is an opportunity to learn new things, gain new experiences and meet new people. And many places are much cheaper to live in retirement than the U.S.
We determined how much a 64-year-old would need to maintain the same quality of life around the world, with the following assumptions: you go out once a week, get coffee once a week, don’t smoke, drink moderately, you don’t take taxis or rideshares and you have two vacations, among other controls.
The result is a series of maps of the most affordable places to comfortably retire around the world. Here, we’ll look at just the results for some of the countries in South America.
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Methodology & sources
Our calculations are based on the average American retirement age of 64 years and the average American life expectancy of 78.4 years. Calculations of monthly living costs were completed in USD using Numbeo based on the following assumptions:
- Members of your household = 1
- Eating lunch or dinner in restaurants = 15%, Choosing inexpensive restaurants = 70%
- Drinking coffee outside your home = moderate
- Going out = once per week
- Smoking = no,
- Alcoholic beverages = moderate
- At home, we are eating = Western
- Driving car = moderate,
- Taking taxi = no
- Public transport = 2 round trips weekly
- Sports memberships = all household members
- Vacation and travel = two per year
- Buying clothes and shoes = moderate
- Rent = Apartment (1 bedroom) in city center
- No children
Monthly living costs were collated for 124 countries, then multiplied by 176.4 = 14 years and 8.4 months between retirement age and life expectancy. To allow for a more comfortable retirement, the figures were further revised up by 20%.
Since Numbeo data is fully user-generated, it’s skewed towards capitals and big cities, which might account for the cost-of-living estimates in certain countries appearing inflated. Note that Numbeo cost estimator doesn’t include insurance, health-related expenses and doesn’t account for income tax in different countries.
Cost-of-living figures on Numbeo are updated regularly and may not fully correspond to the figures in the dataset, which were accurate at the time of data collection (November 2020).
Life expectancy – Center for Disease Control and Prevention
Typical retirement age – The Balance
Living costs – Numbeo Cost of Living Estimator
South America provides many more affordable retirement options than its northern counterpart. Even the most expensive country, Uruguay, is nearly half the cost of the U.S.
Brazil and Colombia are neck-and-neck to be the cheapest retirement destinations in South America. But if you’re planning on owning a car, it could end up cheaper for you in Brazil, while taxis are slightly cheaper in Colombia.
Here’s how much it costs to retire in the following South American countries, from most to least expensive…
Retirement Costs: $351,480
Retirement Costs: $321,286
Retirement Costs: $312,457
Retirement Costs: $311,206
Retirement Costs: $296,785
Retirement Costs: $282,989
Retirement Costs: $252,850
Retirement Costs: $226,332
Retirement Costs: $216, 877
Retirement Costs: $219,493
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