By Richard Eisenberg, January 2, 2017, NextAvenue.com
There’s a new best country in the world to retire, according to the experts at International Living (IL), an authority on global retirement and relocation opportunities. In its Annual Global Retirement Index, Mexico — one of the most popular countries among U.S. expats — has edged out last year’s No. 1, Panama.
But truth be told, Mexico (which was ranked No. 3 in 2016), Panama and Ecuador are within a hair of each other in the new International Living rankings. “There’s just a tenth of a percentage point difference in their total rankings,” said Dan Prescher, an International Living senior editor who lives with is wife Suzan Haskins in Cotacachi, Ecuador.
Retiring Abroad Is Growing in Popularity
If you’re intrigued because you’re considering joining the expat community, you’re in good company.
According to a recent AP story by Maria Zamudio, the number of Americans retiring outside the U.S. grew 17 percent between 2010 and 2015. Currently, about 400,000 American retirees live abroad. And, Zamudio noted, that number is “expected to increase over the next 10 years as more baby boomers retire.”
The big news in the past year regarding retiring around the world was the strength of the dollar. It has made living in some countries incredibly cost effective.
— Dan Prescher, International Living
Where the International Living Top 10 Countries Are
Six of IL’s Top 10 places in this year’s ranking are nearby, in Latin America — either in North America (No. 1 Mexico), Central America (No. 2 Panama, No. 4 Costa Rica and No. 8 Nicaragua) or South America (No. 3 Ecuador and No. 5 Colombia). Just three are in Europe (No. 7 Spain, No. 9 Portugal and a new addition to the winners’ list, No. 10 Malta); just one is in Asia (No. 6 Malaysia). Thailand, No. 7 in last year’s rankings, fell out of the Top 10. (See the slideshow below for specifics about each of the 10 countries atop International Living’s 2017 list.)
Incidentally, communities in Mexico, Colombia, Spain, Nicaragua and Portugal are also in the just-released Top 10 Best Places to Live Overseas in 2017 from Live and Invest Overseas.
Most of International Living Top 10 countries this year “have been heavyweight contenders in our Index for some time,” said Eoin Bassett, IL’s editorial director, who is based in No. 21 Ireland. This year, IL turned its sights on 24 countries, adding Bolivia to its list (No. 18, by the way).
Where the Buys Are
“The big news for U.S. citizens in the past year regarding retiring around the world was the strength of the dollar. It has made living in some countries, especially Latin America, incredibly cost effective,” said Prescher. “The exchange rate was outrageous in our favor. The Mexican peso today is 20 to 1 against the U.S. dollar, which has made Mexico an incredible deal.”
Expats in Mexico told IL that they live well there on as little as $1,200 a month. “My rent is $575 a month for a two-bedroom apartment with a great modern bathroom and nice kitchen,” San Francisco native turned Puerto Vallarta resident Jack Bramy told International Living.
How International Living Ranks Countries for Retirement
To compile its 2017 ranking, International Living’s editors, correspondents, contributors and contacts around the world crunched data and personal insights for 10 categories (from Cost of Living to Visas & Residence to Fitting In to Climate).
Cost of living is a major retirement concern for Americans, according to a recent Transamerica Center for Retirement Studies survey of U.S. workers. Respondents told Transamerica that an affordable cost of living was their most important criteria for where to live in retirement.
So what else made these 10 countries so great this year?
Mexico was best among International Living’s Top 10 for Entertainment & Amenities, but also had impressive scores in every other category.
I asked Prescher why Mexico scored so well for entertainment and amenities. Turns out, he and his wife were visiting the picturesque town of Ajijic, in western Mexico, at the time. “Oh man, there’s nothing like good quality Mexican food and music,” he said. “We’re just 50 minutes from Guadalajara, the second largest city in Mexico and a world-class city like Miami. If you can’t find it or do it in Guadalajara, it’s not worth finding or doing.”
What Made the Winners Win
Runner-up Panama received IL’s best scores for Benefits & Discounts and Visas & Residence. “Panama changed its visa situation a little and it’s now incredibly easy to get a residency visa,” said Prescher.
The country is also well known for its Pensionado program of discounts for retirees there who receive at least $1,000 a month in income. The deals, which Prescher says are “some of the best in Central America and South America,” include 50 percent off entertainment; 30 percent off bus, boat and train fares; 25 percent off airline tickets and 20 percent off doctor’s bills. Prescher also calls health care in Panama City “world-class.”
Ecuador had top scores for Buying and Renting (tied with Nicaragua) and for Climate. “Ecuador has always been one of the most affordable places for real estate in Central America and the strong dollar did nothing but improve that,” said Prescher. And don’t get the ex-Nebraskan started on the unbeatable weather in his now-home country; living near the Equator, he pays nothing for heating or air conditioning.
Costa Rica led the Top 10 for Healthy Lifestyle (tied with Nicaragua); Malaysia for both Fitting In (“it’s a nexus for world cultures,” said Prescher) and Health Care (it’s a popular medical tourism destination); Spain for Infrastructure (great mass transit and Internet) and Nicaragua for Buying & Renting, Cost of Living and Healthy Lifestyle.
Bassett calls Nicaragua “the lowest-cost retirement destination in Central America,” adding that “every year it offers more and more by way of amenities and opportunities.”
Along with Spain and Malta, Bassett noted, Portugal “is an even more appealing destination heading into 2017 with the strength of the dollar against the Euro.”
Advice for Retiring Abroad
Even the International Living folks don’t think you should move to a foreign country for retirement just because it scores well in their (or anyone else’s) ranking, though. Before relocating, said Prescher, “profile yourself ruthlessly about what you really want in a place. Find out what you can and can’t live without.” Then, be certain any locale you’re considering is a match.
And before making a permanent move to a particular place, Prescher added, “try it out for as long as you can. See what it’s like to be there not just on vacation, but long enough to set up Internet access and to open a bank account.”
I’d add one giant caveat about the International Living rankings: The political and economic climate in the U.S. in 2017 could change considerably, which could, in turn, affect the lure of some countries as retirement havens.
As Prescher said presciently: “The presidential situation has changed completely, so everyone will be watching. What we will do with our relationship with Mexico and European countries is anybody’s guess.”
To Your Successful Retirement!
Michael Ginsberg, JD, CFP®