Do you have less money saved for retirement than you’d hoped? Is your pension or Social Security check too small for you to live out your retirement years comfortably in the United States? Or maybe you have saved enough, but want to do something more exotic than strolling the back nine in your newfound free time.
In Ecuador, your money will stretch further – perhaps even allowing you to afford things that would be considered luxuries in the United States – and you can spend your days strolling cobblestone streets while admiring Spanish colonial churches and views of the Andes. If you can handle the inconveniences, cultural differences and potential dangers of living in a developing country, Ecuador might be an ideal retirement destination for you. Here’s an overview of what you need to know about retiring there.
Why Retirees Love Ecuador
Ecuador is a small country, similar in size to Arizona, located on the northwest coast of South America. It has a slower pace of life than the United States, which you can enjoy while relaxing on its Pacific coast beaches, hiking in the Andes mountains and valleys, or exploring the Amazon rainforests and Galapagos Islands.
Year-round, residents enjoy 12 hours of daylight and 12 hours of darkness because of the country’s location on the equator.
Seniors 65 and older, including foreigners, enjoy numerous discounts in Ecuador. They get 50% off on public transit, airfare, electricity, water, phone service, and cultural and sporting event tickets. They’re also eligible for refunds of a significant portion of the 12% sales tax. U.S. expat retirees won’t have to pay Ecuadorian taxes on Social Security income, and property taxes are low and often discounted for those 65 and older. Ecuador’s official currency is the U.S. dollar so American expats don’t even have to worry about fluctuating exchange rates.
Mild climates mean low heating and cooling costs, and you can buy organic produce for a fraction of what you’d pay for conventional produce in the United States. In general, prices are so much lower that you’ll probably be able to afford to hire a maid; you may even be able to afford a vacation home in addition to your primary residence. Depending on whom you ask, the cost of living in Ecuador might be $12,000, $18,000 or $24,000 per year. Any of these prices are a steal compared with living in the United States or Western Europe.
Obtaining residency can be a frustrating and bureaucratic process, a problem certainly not unique to Ecuador. You should research and prepare carefully before moving, then take the remaining steps immediately upon arriving in Ecuador to make sure you meet all the deadlines.
To obtain permanent resident status, retirees often apply for a pensioner visa. As of 2017, rules state that you’ll need to show a minimum income of at least $800 per month from a stable source to obtain a pensioner 9-I visa, (plus $100 per month for each dependent) or if you plan to live off an annuity or trust, the equivalent of five years worth of the monthly minimum, or at least $48,000. Another option is to invest $25,000 in local real estate, such as a home you’ll live in, or in a bank CD or other approved financial instrument to get a pensioner 9-II visa. (For a description of other kinds of less common visas available, see International Living’s list here.)
You’ll also need a police report from your home country and, if you’re married, a copy of your marriage certificate. Your visa application documents must be authenticated by the U.S. Secretary of State, then translated into Spanish after you get to Ecuador.
You can always pay for private health care, but if you become a legal resident of Ecuador, you can take advantage of public health insurance. The government allows people to join regardless of age or health, and recently streamlined the process by making it possible to sign up online. As of summer 2017, premiums are just $66 a month for the first person and an additional $13 to extend coverage to the person’s spouse. For that low, low price, you’ll get free doctor’s visits, free emergency care and free or less expensive prescriptions.
The country has been upgrading and expanding its healthcare system in recent years, but supply hasn’t quite caught up with the increased demand under the new system so you might experience waiting lists or shortages. In addition, because Ecuador is a developing country, you can’t expect access to high quality or lifesaving healthcare in every part of the country. Bigger cities tend to have better options. What’s more, if you aren’t fluent in Spanish, you could have trouble communicating your needs.
The big cities have numerous hospitals, specialists and U.S. trained doctors. If you don’t participate in the government system, you can purchase private health insurance if you qualify. Outside the public system, healthcare can cost 10% to 25% of what you’d pay in the United States, and medications can cost as little as 30% to 40% of what you’d pay in the United States. You can also hire…