Retire Abroad At 55 Years Old And $150,000 Savings

Retiring early is everyone’s dream but can be untenable in United States due to the skyrocketing living costs and the slowly eroding social security checks and Medicare benefits.  However, through careful planning, retiring abroad cannot only become a financial possibility, but can significantly enhance a person’s life in their golden years.

Deciding which foreign location is most desirable for retirement can include multiple factors such as leisure activities, access to health care, immigration requirements, and budget; however, this article will focus on retirement in Ecuador and how to determine whether it is financially feasible with $150,000 savings.

The reason for choosing Ecuador as the retirement destination is due to its high rankings amongst well known periodicals such as U.S. News and World Report (Peddicord).  Specifically, one well known location for expatriates is Cuenca, Ecuador due to its high altitude climate, world class health services, beautiful scenery, and inexpensive cost of living.  To make that dream into reality however, careful financial planning must be considered starting with consideration of housing prices.

Ecuador has numerous real-estate choices ranging from apartments to spacious ranch homes on several acres of land; however, a conservative choice would be a two bedroom, two bathroom condo with all the amenities for about $80,000.  Additionally, property taxes on this type of property could be as little as $30.00 per year and homeowners association dues would cost approximately $57.00 per month.  As far as location, many expats prefer living close to the downtown area with access to shops, restaurants, and other entertainment.  For those who enjoy the peacefulness and scenery of the outdoors can easily find a ranch on two acres with a three bedroom home for $150,000.

Other expenses include midrange restaurants for about $5.50 a meal with numerous choices within the colonial streets and restaurants of the downtown area of Cuenca.  It’s even possible to have a decent lunch for $2.50 in many locations.  Transportation is relatively easy and cheap as there are many buses and taxis available, and it is not necessary to own a car.  Overall, to live comfortably in Cuenca, Ecuador if you own your property, one should budget $800 a month for living expenses.

Another major expense one must consider is their personal health care.  Health insurance can be purchased for roughly $60 a month, or one may self insure since the average healthcare costs are one tenth of those in United States.  Additionally, nursing home fees are as low as $450 a month to as high as $1000 a month depending on the level of service desired.  This is a significant discount to nursing home costs in United States which can be upwards of $6,250 a month.

Adding up these different expenses based on these conservative estimates, one can determine their annual cost of living to be $10,314 if a property is paid off and an additional $3000 per year on average for healthcare expenses if uninsured. The total annual living expenses using these assumptions therefore are $13,314. Now, let’s run the retirement calculator assuming no social security benefits from the United States, here is an example.

  • Age: 41 years old
  • Retire: 55 years old
  • Withdrawal amount $1109
  • Return on investment: 6%
  • Years of withdrawal: 30 years
  • Inflation: 2%
  • Current savings: $150,000


Savings amount required with inflation: $306,505

Amount needed to save each month in order to reach savings goal: $555.30

If you want to assume you’ll receive social security retirement benefits, than the calculation is a little more complicated.  A U.S. citizen can retire at 62 or 67 years of age; however, at 62 years old the individual would only receive 75% of the benefit as they would at 67 years of age.  In 2012, the average retirement benefit was $1180; this amount would therefore be $885 retiring at the age of 62.  Let’s now run the CNN Money retirement calculator assuming a social security benefit payment at age 62:

  • Age 41 years old
  • Retire 55 years old
  • Life expectancy: 85 years old
  • Annual withdrawal amount $13,314
  • Social Security benefit: age 62 years old
  • Current balance in 401K savings: $150,000
  • Portfolio: balanced


Savings amount required with inflation: $0

Amount needed to save each month $0

In the case of including social security benefits in the calculation, it is possible to retire with $150,000 savings and $80,000 for housing in Cuenca, Ecuador.  However, it is important for the individual to consider what their “real” standard of living might be so as to not run the risk of depleting their savings.  An easy test would be to pay a visit for one month to the beautiful colonial city of Cuenca, Ecuador and determine your real expenditures.  Based on these expenses, adjust your budget accordingly. Of course it is always recommended to create a sufficient additional emergency fund for that rainy day. Through careful planning and conservative budgeting, you can enjoy your 30 year retirement and the beautiful sunsets while perched on the mountainsides of Cuenca, Ecuador.

Read also Women And Retirement Planning: What To Do.

Work Cited

Peddicord, Kathleen. “The 18 Best Places to Retire Overseas.” U.S. News and World Report 19 March, 2012: N. pag. U.S. News and World Report. Web. 1 May, 2013.