4 Expenses You Can Cut by Retiring Overseas

You can spend much less on necessities abroad, which frees up funds for recreation.


The costs of housing and transportation are typically the two biggest parts of any budget along with taxes and health insurance. For some people these four items can account for 80 percent or more of your overall monthly spending.

But there are ways to reduce that part of your budget significantly. Instead of spending the majority of your monthly income on necessities, you may be able to get that amount down to less than 50 percent by retiring in another country. Here are four costs you will be able to significantly cut by retiring abroad.

[See 5 Things About Retirement You May Not Have Considered.]

Reduce your housing costs. In some appealing, safe, and welcoming places, including Medellin, Colombia; Las Tablas, Panama; Chiang Mai, Thailand; and Languedoc, France, your housing expenses can be $500 per month or less. In these and other regions you could find a comfortable rental for as little as $300 per month.

Control transportation expenses. In many places around the world your transportation expenses could be negligible, such as the cost of metro tokens or occasional bus rides. In some places, you could live without a car altogether. Medellin is a great city for walking, and it boasts a clean, efficient, and super-cheap metro. And in Panama, low-cost buses are a great way to get around the country.

[See 10 Tips for Retirement Overseas.]

Trim health insurance bills. In-country health insurance can cost $100 a month or less in some places, depending primarily on your age. And in some countries around the world, medical care can be so affordable that it can make sense to go without health insurance. A doctor’s visit might cost $20 in some countries, for example. Not everyone is comfortable going without insurance, but in places where health costs are very low this can be a reasonable strategy.

Cut your tax burden. Depending on where you relocate, your overall annual tax bills can be reduced dramatically or even eliminated altogether. Panama and Belize, for example, are two countries that offer significant tax advantages to foreign pensioners who retire there. And residing overseas eliminates any U.S. state or city taxes you’re now paying.

If you can reduce you housing, transportation, insurance, and tax costs, your monthly budget has been turned on its head. Now, rather than making up the majority of your living expenses, these big-ticket items are controlled, leaving you with more money for the things that matter.

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It’s a matter of shifting your spending perspective to focus less on the expenses that you’ve spent your entire life until now trying to cover and more on the expenditures you’ve likely been sacrificing and doing without for a long time. I'd argue that it’s these day-to-day indulgences—dinners out, parties with friends, ice cream cones, gifts, and travel—that make life better. If you restructure your budget by relocating overseas, you will have plenty of money left over for what’s really important.

Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter. Her book, How To Retire Overseas—Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Books.