What it costs to retire in 12 great places

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Puerto Vallarta, Mexico
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6. Puerto Vallarta, Mexico
Monthly budget: $2,000
Monthly rent: $700
Mexico is a big place with a bad reputation. The reputation isn't altogether undeserved, as drug cartels do control parts of this country, but not all of it. And some of the most appealing regions for both living and investing sit outside the war zones. Mexico offers two long coasts, mountain towns and colonial cities, plus Mayan ruins, jungle, rain forest, rivers and lakes. It's also the most accessible "overseas" haven from the United States. You could drive back and forth if you wanted.
For all these reasons, Mexico is home to the biggest established populations of American expats in the world, making it a great choice if you seek adventure with the comforts of home. Mexico is no longer a super-cheap option, but it is my top pick for enjoying a luxury coastal lifestyle on a budget in Puerto Vallarta. Puerto Vallarta is more expensive than other places where you might consider living or retiring overseas, but in Puerto Vallarta that's not the point. This isn't developing-world living. This stretch of Mexico's Pacific coastline has already been developed to a high level.
Life here can be not only comfortable, but easy and fully appointed, with world-class golf courses, marinas, restaurants and shopping. This is a lifestyle that is available only on a limited basis worldwide, and is truly (not metaphorically) comparable to the best you could enjoy in southern California if you could afford it. Here you can afford it even on an average budget.

Choosing where to reinvent your life in retirement overseas is a thoroughly personal decision. You should retire in another country because you feel at home there and enjoy the way of life on offer. Bottom line, your heart should lead the way.

However, your head should have a say, too, of course. While you may listen to your gut feeling about the best place for you to retire overseas, you should also look at more practical factors when considering your options.

For many people, cost is key, including both the cost of living and the cost of real estate. Whether you intend to purchase a home in your new location overseas or rent one, this housing expense will be a significant part of your overall budget and should be considered separate from other monthly costs.

Scanning the world map in 2014, 12 places stand out as top-notch retirement options. Each place is different, but all of them offer tremendously appealing lifestyles for the cost. To help you filter these choices, you need three pieces of critical data about each city--the cost of living minus housing, the typical cost of renting and the average cost per square meter to purchase property.

The budget figure in each case includes utilities (gas, electricity, phone, cable television and Internet), groceries and entertainment. I'd call this a starter budget. These are typically your basic costs in addition to housing. You could, of course, add costs, depending on your lifestyle and priorities. Maybe you'd like to have help around the house. In many places around the world, household help can be a bargain, making full- or part-time help with the daily chores a big potential benefit of retiring overseas. The cost could be $150 (in Nicaragua, for example) to $300 per month.

The utilities figure for each budget is straightforward. The cost for groceries and entertainment is more variable. If you shop at local markets and stick to a basic local diet, your monthly groceries bill could be low. But if you shop at U.S. style grocery stores (which exist in every place on the list below) and want to eat like you ate back home (including prime rib, Entenmann's and French wine), your monthly food bill could be two, three or four times what locals pay.

Entertainment costs also depend on your preferences. The budgets below include amounts for eating out once a week, going to the movies a couple of times a month or perhaps taking one in-country trip per month to explore your new home. You could, if you wanted to and your budget allowed, eat out four nights a week and take international vacations twice a year.

None of these budgets includes the costs of owning a car, because each of these locations is a place where you could live comfortably without one.

On top of the overall cost of living in each of these places you'll have the cost of housing. I recommend renting first to give yourself a chance to get to know your new home and determine if it is, in fact, the right place for you. So, for each of the 12 top retirement havens on my list I include an average cost for renting a two-bedroom, one-bath residence in a neighborhood that would be appealing and appropriate for a retiree.

After you've been in residence for a while, you may decide you like the place well enough for the long-term commitment of investing in a home of your own. Buying a piece of real estate in another country can also offer the potential for return from capital appreciation over time and from cash flow if you decide to rent the place out when you're not using it yourself.

To help you compare and contrast the opportunities on offer in each of the 12 top havens on my list, I include an average cost per square meter for the purchase of property. Breaking down a location's property market to an average cost per square meter for a particular kind of property is the only reliable way to compare that location's property market with the property market anywhere else.

Here's how much it costs to retire in 12 great retirement spots:

In the Americas:

Ambergris Caye, Belize

-- Monthly budget: $1,035

-- Rent per month: $1,000

-- Price per square meter to purchase: $1,500

Coronado, Panama

-- Monthly budget: $1,240

-- Rent per month: $1,200

-- Price per square meter to purchase: $1,900

Cuenca, Ecuador

-- Monthly budget: $710

-- Rent per month: $300

-- Price per square meter to purchase: $1,300

Granada, Nicaragua

-- Monthly budget: $555

-- Rent per month: $500

-- Price per square meter to purchase: $510

Medellin, Colombia

-- Monthly budget: $1,030

-- Rent per month: $850

-- Price per square meter to purchase: $1,050

Puerto Vallarta, Mexico

-- Monthly budget: $1,060

-- Rent per month: $850

-- Price per square meter to purchase: $2,500

In Europe:

Algarve, Portugal

-- Monthly budget: $885

-- Rent per month: $1,500

-- Price per square meter to purchase: $1,500

Barcelona, Spain

-- Monthly budget: $640

-- Rent per month: $1,085

-- Price per square meter to purchase: $5,500

Pau, France

-- Monthly budget: $645

-- Rent per month: $1,285

-- Price per square meter to purchase: $1,200

In Asia:

Chiang Mai, Thailand

-- Monthly budget: $520

-- Rent per month: $400

-- Price per square meter to purchase an apartment: $1,100 (foreigners can't own houses)

Dumaguete, Philippines

-- Monthly budget: $560

-- Rent per month: $350

-- Price per square meter to purchase: $400

Nha Trang, Vietnam

-- Monthly budget: $380

-- Rent per month: $300

-- Price per square meter to purchase: Foreigners can't own real estate.

Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 28 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring and investing overseas in her free e-letter. Her newest book, "How To Buy Real Estate Overseas", published by Wiley & Sons, is the culmination of decades of personal experience living and investing around the world.



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