In this report we help you answer the question, can I retire on $1000 month?
This is Dan of Vagabond Awake, the Youtube Channel for VagabondBuddha.com. I left the United States in 2007 and I have lived in or visited 65 countries in my life. I know a little bit about the cost of living in different parts of the world. I will show you pictures and places I have traveled to over the last 13 years as I discuss this topic. In the end, I will talk about specific places.
So, today I would like to discuss my answer to the question, can I retire on $1000 month? According to US News, the “average Social Security benefit was $1,503 per month in January 2020.” But even if you get the average social security check, will that be enough to retire?
In our last report, we discussed “Whether it is better to retire in SE Asia or Latin America.” Our next reports will compare the cost of living in various countries around the world, so subscribe so you don’t miss out.
Now we will discuss “Can I retire on $1000 Per Month?”
To answer this question we need to understand some of the greatest risks you will face trying to live on $1000 per month overseas so you can think about whether or not you can overcome these risks.
Disclaimer: The average person will not be able to overcome all of the following risks required to successfully live overseas on $1000 month?
The risk factors are many but today I will discuss only: Age, Health, Safety Net, Mobility, Food, Rents, Local Transportation, Language, Family, and Expat Community. I will discuss Food and Rent last so make sure to listen to the end. After discussing the risk factors, I will suggest a few places that are on the cheaper side for living costs.
As we age, we lose strength, mobility, and mental acuity. There comes a time in life when we start to depend more heavily on family and friends. You need to think about your present age and how many years you have before you become dependent on others. You will need to have or to develop a circle of influence to help you. You may need people who come with you from your home country (family) or people you meet in your new country (spouse) that can help you with your daily needs as you age. You need to have or establish those trust relationships while you can still take care of your self. Or you need to have the resources to return to your home country if relationships sour while you are dependent. Some people move to foreign countries because a live-in nurse is thousands of dollars cheaper than an assisted care facility in the USA. But if you are trying to have a live-in nurse on $1000 per month, the care would be very limited if available at all.
The cheapest places to live in the world are not usually in larger cities. Yet, the best medical services are in the larger cities in the world, generally. So if you are worried about emergency medical services or frequent visits to the doctor, you are going to need to be closer to the larger cities. In that case, you will not be able to rent a very nice place to live in the central part of the city. You will need to be further from town staying in an apartment that is less modern because it is designed for local people. The food in restaurants is often higher in larger cities around the world. So you will need to cook a home more if you decide to live near a larger city for health reasons. Finally, healthcare costs and or health insurance is higher in larger cities in general. With higher rents, health care, and restaurants you will have less money for fun like excursions and local travel. Whereas, if you are relatively healthy, you could live further from the city and have more money for fun. Finally, you need to get a health insurance quote for your target country. Just Google “Expat Health Insurance Country Name.” After you know the monthly premium, subtract that from the amount of your social security check. For example, if your health insurance premium is $175 per month, subtract that from your check to know how much you have left to spend on living expenses.
No matter how well you plan, life may surprise you. Things go bad for all of us from time to time. You need to have some money saved for a rainy day. Some people feel safe with just a few credit cards in their wallets. Personally, that has never made me feel safe. I feel better-having savings and credit cards. If all you have is your $1000 social security check and a few credit cards, I wouldn’t feel safe living overseas. I would try to sock some money away first. Maybe you have family or friends that could help you in a jam, but I never borrow from family and friends. So I go the safety net route.
Although there are articles online about places that are more mobile than others, I often see steep curbs on sidewalks and large potholes in the middle of sidewalks in cheap retirement places around the world. So if you are in a wheelchair or you need a walker, you will need assistance to move about many parts of the world.
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It is not unusual for locals to live on less than half of what ex-pats live on in most cheaper countries. Like in the Philippines, the average family earns 313,000 Pesos per year ($6,260), and live on 239,000 ($4780) per year. The average family size in the Philippines is 4.4 people. So the average family of 4 people lives on $398 per month. Yet, ex-pats reading this will say that a single person can’t live on $1000 per month. What does the Philippines’ average family local cost of living have to do with language? You see, if you want to learn how to live cheaply like the locals, you need to learn to talk to the locals. The locals will teach you how to stay under your budget. Not many of the ex-pats will know because their budget is higher. The locals can show you great deals on rents and food markets and what cheap local booze to drink. Many in the Philippines know how to speak English. So you will be able to quickly bring your budget down here by speaking to locals. But in countries where you don’t speak the local language, and they don’t speak yours, you will need to learn how to use Google Translate. So it may take longer to get down to your budget if you can’t speak casually to the locals.
Are you traveling with family or friends? If two or more of you traveling together have income, you can split the rents between you. This will keep your costs lower. Plus, if something goes wrong for one of you, you will have the physical help and presence of someone you trust with you. Maybe you are looking to establish a family in your new country. In that case, your local family members will know how to save money. They have been doing it their whole life presumably. As discussed above, the average local family is likely to know how to support you and themselves for less than a single ex-pat can live on. As usual, take some time to establish trust with your local family. No matter where in the world you relocate, don’t just hand them the keys to the Kingdom and prey they are honest. This is true even in your home country. Don’t create any permanent relationships, don’t put a property in their names, or give away your ATM pin. Just pull cash out as needed and give them cash. Watch how they spend and save for a very long time before you even think about putting yourself in a vulnerable position. Love is blind but that doesn’t mean you have to be.
Many people looking to live overseas look for an area where many ex-pats from their home country are living. For many, this built-in community provides comfort for new ex-pats. However, as you approach the lower end of the budget range for that part of the world, the ex-pats may create some pressure for you to be ‘keeping up with the Jones.’ This could be the neighborhood you decide to rent in, the transportation you decide to use, and the restaurants you decide to eat. Many ex-pats feel uncomfortable eating in local restaurants, riding on public transportation, or having locals living around them. Those are often the locals that will tell you it is impossible to live on $1000 per month, even in countries where whole families live on half as much as single ex-pats. However, don’t completely ignore ex-pats either. If they have been living there a long time and know your budget, they may have many ideas to help you stay on budget.
Food and alcohol are where ex-pat budgets get hammered when they are living overseas. Make sure to read my post, “Why Expats Can’t Live Cheap Overseas.” If they crave the comfort foods from home and start eating in tourist restaurants, their meal budget can easily go way over budget. The way to beat this pattern is to go to the largest local open-air market and buy your fresh fruits, vegetables, and grains there. Stay away from the ex-pat grocery stores. While at the large local open-air markets, eat the local foods in the family restaurants in the market. It is not unusual to find $1 to $2 meals in family restaurants in the local market. Ask the names of your favorite dishes. Ask how they are cooked and what the ingredients are. Learn to cook them at home. You will find Youtube videos teaching you how to cook some. If you learn the foods of the culture you can more easily stay on budget whether you eat them at home or in local restaurants. Whereas, if you eat in the ex-pat restaurants in most countries, you will pay $6 to $12 per meal.
Most new ex-pats rent ex-pat apartments and homes for $400 to $800 per month around the world. Larger cities can even be more. A single person with a $1000 month social security check will not make it paying that much in rent. You need to live more like a local to stay within budget. That means switching to a cheaper neighborhood or a smaller size unit in the same neighborhood. The circumstances will vary per country and per city. The first mistake you will make is trying to find a good rent deal searching in the English language online. Locals that advertise in English are looking for big fish. You need to be a little fish. Ask a local where they go to find a new apartment. Is there a magazine or web page? If you decide to search online, use Google Translate to change your search string into the local language. If you Google with the local language search strings, you will get landlords looking for little fish. Once you find an area you like were locals are living, walk those areas, and look for rental signs in the local language.
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Here are my suggested places to try to live on $1000 per month considering my risk factors above. In SE Asia I suggest looking into Vietnam and the Philippines if you want to try to live on $1000 per month as a single person. In Latin America, I suggest Peru, Ecuador, and Mexico. But you will need to follow my above suggestions if you are to have any chance of living on $1000 per month.
We have over 50+ retire cheap reports all over the world at VagabondBuddha.com. However, you would likely need to move to more rural areas outside those suggested in the retire cheap reports. I recommend looking for rents at about $250 per month outside the central areas in addition to following the ideas in this report. Each of our reports typically has example rent costs which were higher than my now suggested $250 per month goal. So you will have to make the final determination during your exploratory visit which I mention next.
Cost of Living Disclaimer: Our cost of living estimates includes only the cheapest food, rent, and local transportation. It does not include medical insurance or any other expenses. Before moving here, you must do a temporary exploratory site visit to accurately calculate your cost of living here for all costs for your lifestyle and needs. Plus, make sure you have access to significant additional savings in case you face an emergency.
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This is Dan with Vagabond Awake, the Youtube Channel for VagabondBuddha.com. The world is your home. What time will you be home for dinner?