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by Kathleen Peddicord
Friday, July 2, 2010

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One of the most motivating reasons to retire overseas is the cost of living. Living in another country can cost considerably less.

[See America's Best Affordable Places to Retire.]

Almost anywhere in the world your monthly expenses are largely what you make them. Individuals can decide, for example, whether to rent or own a home. If you don't buy a house you don't have the accompanying carrying costs to worry about, such as repairs, maintenance, and homeowner's insurance. You can also decide whether to purchase a car or not. Going without a vehicle means you don't have to pay to fix it when it breaks down, fuel it, or insure it.

Consumers make choices about whether to run air conditioning 24 hours a day or only in your bedroom at night. And you decide whether to shop for groceries at the American-style grocery store or the local farmer's market. Individuals choose whether to hire help around the house and where and how often you dine out.

Another fundamental choice retirees abroad must make is how local to go. If you're willing to purchase local goods your budget can be seriously controlled. Going native doesn't mean living uncomfortably. Your lifestyle, in fact, could be enhanced and improved in many ways. Retiring overseas is all about embracing the new and the different.

[See 5 Places to Retire On Social Security Alone.]

Just how affordable could your new local life overseas be? As little as $850 a month or less. Cuenca, Ecuador is one of the world's most affordable places to live well. Here's how your Cuenca retirement budget could look:

--Rent: $200

--Utilities and Internet: $120

--Groceries: $240

--Transportation: $40

--Health Insurance: $50

--Entertainment: $200

Think of this as a starter budget. For a total of $850 a month, including a comfortable entertainment allowance, you could live a comfortable and interesting life in a part of the world that boasts spring-like weather year-round.

Build your budget out from there. You can rent an apartment in Cuenca for as little as $200 a month. But if you want a bigger or more modern place to live you could spend two or three times as much. If you want full-time help around the house, it will probably cost about $200 a month. If you want to keep a car, add another $150 a month or so for the associated costs. Do you like to eat out three or four nights a week? Cuenca boasts many good and international-standard restaurants.

This beautiful colonial city with a thriving theater and arts community is not the cheapest place to live in Ecuador. You could live on less in other parts of the country. But Cuenca is the cheapest place to live well, not only in Ecuador, but anywhere in the world.

[See 7 Affordable Places to Retire Abroad.]

With just over 400,000 people, Cuenca is small enough so that you always see someone you know when walking around town. Yet it's not so remote that you can't find the services you need. The colonial architecture, Andean markets, and heritage of the city make you really feel like you're really experiencing another country with a rich culture that provides loads of different ways to spend your time. Public transportation is great, both within the city and between cities. Retirees won't need to invest in a car if they don't want to. The expatriate community is large enough so that you can find English-speaking company when you want it.

Cuenca is perhaps the top choice in the world right now for living well in retirement on a super-modest budget. Other affordable places to retire abroad include Leon, Nicaragua, Las Tablas, Panama, and Chiang Mai, Thailand.

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.

Columbus, Ohio

MARK GIBSON–MIRA

Situated along the winding shores of the Scioto River, Columbus has made a name for itself as the state's capital, home of the Ohio State University Buckeyes, and the headquarters of major corporations like Nationwide Mutual Insurance and Bob Evans Farms.