15 Cheapest Countries for Retirement

Ghazal Ahmed
Updated 10 min read

In This Article:

In this article, we will explore the 15 cheapest countries for retirement. You can skip our detailed analysis and go directly to 5 Cheapest Countries for Retirement.

The Costs of Living in Retirement

On average, a comfortable retirement in the USA costs an estimated $1 million. With Americans spending $50,220 annually post-retirement, 25% have already begun delaying their retirement plans. A 40-year high inflation, rising interest rates, and pandemic-led supply-chain disruptions are all notable factors causing this delay. CNBC notes that one million dollars in a retirement account two years ago are worth $120,000 less when accounted for inflation today. As a result, 77% of people have no real retirement savings despite moderately saving for their golden years.

For those counting on Social Security to survive, funds are guaranteed through 2035 only. With payroll taxes covering only 78% of benefits and an expected 78 million retirees by then, benefits could be cut by as much as 24.9%. S&P 500, which tracks companies like Amazon.com, Inc (NASDAQ:AMZN), Welltower Inc. (NYSE:WELL), and Amgen Inc. (NASDAQ:AMGN) etc. has shed more than 12% in the past year. This shedding, in addition to decreasing consumer confidence has resulted in 21% of individuals putting away less for retirement altogether, notes BMO Real Financial Progress Index. Furthermore, Consumer Price Index data reported by the U.S. Bureau of Labor Statistics has shown an annual gain of 6.4% through the year. As a result, 64% of Americans are now living paycheck to paycheck, and more numbers are taking a dip into their retirement savings.

In terms of retirement costs, the most significant expenditure that retirees face is that of housing. Making up 35% of annual expenditures, it includes mortgage or rent, property taxes, insurance, maintenance, and repairs. Utilities are excluded. The Consumer Expenditure Survey notes that housing expenditure amounts to $17,472 on average, rising by 5.6% in 2021. The second highest expenditure encountered by retirees is transportation. Including vehicles, insurance, and gas, this expense adds up to $7,492 per year. Food expenses cost $6,599 annually, and utilities cost $3,810. Health care ranks third in the list with $6,833 spent per year. The bulk of this healthcare spending goes to health insurance companies.

With typical Medicare beneficiaries spending 25% of social security on out-of-pocket healthcare expenditures, the need for adequate funds is increasing tenfold. It is reported that the sickest seniors have to dedicate more than 90% of their social security funds to healthcare costs. With an estimated 70% of older adults requiring long-term service and support before they die, severe economic hardships are underway.

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