Long-term Investing

Expat elders: Where Americans are retiring abroad

Living better for less, outside the U.S.

Kali9 | E+ | Getty Images

Feeling the economic pinch at home in the U.S., more older Americans are retiring abroad, hoping to live out their golden years at a lower cost in foreign countries both near and far. CNBC takes a look at a handful of the most popular retirement destinations outside U.S. borders—and some fallback options when things don't work out overseas.

By Kenneth Kiesnoski, Special to CNBC.com
Posted: Nov. 20, 2013

Mexico

Beach house view from Guerrero, Mexico
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Millions of Americans get acquainted with our immediate southern neighbor each year on annual vacations, so it's no wonder so many of us end up eventually deciding to retire in Mexico. Proximity and ease of access—along with appealing culture, cuisine and cost—make the country an obvious choice. Areas long popular with Americans busy enjoying their golden years include artist mecca San Miguel de Allende, colonial city Merida and vacation tried-and-trues such as Mazatlan and Puerto Vallarta.

Costa Rica

Costa Rica, Papagayo Bay, Ocotal
Jennifer Broadus | Photolibrary | Getty Images

Yes, it's cheaper than the U.S., and yes, officials woo foreign retirees with advantageous residency and investment regimes, but living in Costa Rica is really all about pura vida—which translates as "pure life," or excellent quality of life. The country offers not only a high standard of living but safety, stability and some of the world's most scenic and biologically diverse landscapes.

Panama

A poolside view overlooking the newer side of the Panama City skyline.
Matthew Micah Wright | Lonely Planet Images | Getty Images

Graced with a low cost of living and a beautiful climate—rated third best in the world by International Living magazine—Panama is increasingly attractive to U.S. retirees. Its cosmopolitan capital, Panama City, is not only a Central American travel hub but also home to scores of luxury condominium and gated community developments. Outside the urban sprawl, highlands spots such as Boquete offer residents year-round springlike conditions.

The country woos retirees with its "Pensionado Program" visa scheme, which offers a national ID card and discounts of up to 50 percent on everything from medications to movie tickets. All that's needed is either $1,000 in lifetime monthly income from a guaranteed source, such as an annuity or pension, or a $750-per-month income plus a $100,000 investment in local real estate.

Ecuador

Houses in Guayaquil, Guayas province, Ecuador
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This South American country was named best place to retire abroad by International Living in its Global Retirement Index 2013 study. Contributing to its first-place finish was the affordability of, and ease of acquiring, real estate. Residency is not required, legal loopholes and headaches are few, the scenery's stunning and the locals welcoming—despite regular anti-Washington rhetoric from President Rafael Correa. A 900-square-foot third-floor apartment with mountain views in capital city Quito can be had for $37,500, according to the study, while a three-bed, three-bath condo on the beach runs just about $90,000.

Florida

A golf course community in Naples, Florida.
Jeremy Sterk | E+ | Getty Images

Of course, retirees put off by culture shock, foreign bureaucracy, onerous cross-border tax obligations or simple homesickness can always return to more familiar ground in Florida, Arizona and other lower-cost Sunbelt retirement mainstays in the U.S. As certified financial planner Nick Hodges, founder of NCH Tax & Wealth Advisors, told CNBC, "If you want to live cheaply, go visit the South in the U.S., where they speak English and you can shop at Wal-Mart."