This article takes a look at 24 countries where you can retire on just social security in 2024. If you wish to skip our detailed analysis on unveiling the social security conundrum, you may go to 10 Countries Where You Can Retire on Just Social Security in 2024.
Unveiling the Social Security Conundrum and Global Alternatives
2024 is here, and it looks like it isn’t the retirement fiesta that social security beneficiaries were hoping it to be. The hefty Cost of Living Adjustments (COLAs) from 2022 and 2023 are finally taking a snooze, leaving retirees with a meager 3.2% adjustment for this year. This means that, on average, recipients are witnessing an increase of $54 only. BlackRock, Inc. (NYSE:BLK) notes that even though this COLA largely seems “underwhelming”, it is still higher than the average increase of 2.5% in the 30 past years. Moreover, since the COLA is tied to the Bureau of Labor Statistics Consumer Price Index and consumer prices have eased, the smaller adjustment seems rather justified. So, the question lingering in the air is this: if inflation is tapering off and retirees have a bit more to splurge, why isn’t that extra cash translating into a noticeable ease on their pockets?
According to the Senior Citizens League, most of the items seniors spend their money on seem to be consistently outpacing COLAs. Healthcare appears to be the biggest concern for retirees, eating away a significant chunk, if not all of their retirement incomes. The Centers for Medicare & Medicaid Services (CMS), for example, has raised the standard monthly premium for Medicare Part B enrollees to $174.70 this year, an increase of 6% from 2023. Moreover, deductibles for Medicare Part B beneficiaries have risen to $240 in 2024 from $226 in 2023. Due to the higher Medicare Part B premiums, many retirees may not be getting their full COLA as they are automatically deducted from their social security checks.
While this may be true for seniors relying on their social security checks, Rob Williams from The Charles Schwab Corporation (NYSE:SCHW) believes that this permanent COLA increase may help the average retiree capitalize on some gains.
“Social Security benefits generally do keep up with inflation, though there is a lag… At the same time, the average retiree’s expenses generally shrink over time, which can complement those higher benefits.”
-Rob Williams, managing director for financial planning, retirement income, and wealth management at the The Charles Schwab Corporation (NYSE:SCHW) Center for Financial Research.
Though we might not entirely buy into the idea of expenses shrinking with age, given that growing older often brings a host of health concerns, the possibility of increased benefits may not be entirely unfounded. So how exactly will the COLA help the average retiree in the long run? Well, according to The Charles Schwab Corporation (NYSE:SCHW), if inflation rates continue to ease in the coming months, retirees will get to keep the higher benefits.
Nevertheless, solely relying on Social Security in retirement is no easy feat, which is why individuals must start saving for this period of their lives early on. There are many strategies that individuals can adopt to save for retirement. As such, employers play an active role in determining how much an individual can save for their future. According to research by asset manager BlackRock, Inc. (NYSE:BLK) and 401(k) provider Human Interest, individuals who have access to automated, employer-based retirement savings tools contribute an average of 7.4% of their salaries. This is in stark contrast to workers who don’t have such tools and contribute a meager 0.9% annually. The study by BlackRock, Inc. (NYSE:BLK) further discloses that the average worker using their employer’s retirement plan will have accumulated $710,900 for their retirement as opposed to their counterparts with no plans, resulting in a saving of $86,500 only. Similarly, employer matches also help significantly raise the amount of money being accumulated in a retirement savings account, something individuals with no employer plans are deprived of.
For many of these retirees who were deprived of employer retirement accounts, and yet many others who have simply failed to save for such an important phase of their lives, living on social security income is their only hope. According to the Social Security Administration (SSA), the average monthly retirement benefit is $1,781.63, not a huge sum for someone in the USA. According to the Motley Fool, the average cost of living in the USA is $2,317, creating a noticeable $536 gap that can pose a significant challenge for seniors trying to make ends meet each month. On the other hand, there are many places to retire on $1,000 a month outside the USA, an option many potential retirees are considering for their golden years.
Methodology
To compile the list of countries where you can retire on just social security in 2024, we have used our previous lists of best places to retire around the world, the cheapest and safest countries to retire to, and the cheapest English-speaking countries to retire to. Next, we filtered out the countries that had a cost of living higher than the average social security check, i.e.: $1,781 (rounded off to $1,800). Countries were subsequently ranked in descending order based on their cost of living, arranging them from the highest to the lowest expenses. Please note that the cost of living figures can vary based on individual lifestyles and choices, and the provided values are averages. These figures have been taken from numerous sources such as International Living, Insider Monkey, and Expat Exchange, to name a few.
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Here is the list of 24 countries where you can retire on just social security in 2024:
24. Ghana
Monthly Cost of Living (Single Person): $1,800
Besides the warm climate and friendly people, Ghana is also revered for its affordable lifestyle. Business Insider Africa has deemed it as one of the up-and-coming destinations for expats. However, there are some issues that retirees need to get accustomed to such as electricity problems and the country’s rental systems.
23. Chile
Monthly Cost of Living (Single Person): $1,780
Chile is one of the cheapest and safest countries to retire to. It is also one of the countries where you can retire on just social security in 2024, based on its cost of living which is estimated to be around $1,780. Potential retirees can choose their retirement visa to spend a year and get it renewed to stay longer. Individuals can stretch their income even further by choosing cheap places to retire in Chile such as Valdivia, Chillán, and Concepción.
22. Italy
Monthly Cost of Living (Single Person): $1,750
Revered for its warm climate, high quality of life, and beautiful art and culture, Italy is a nice country to retire to. A retired US citizen can choose to live in the country through the Italian Elective Residence Visa. This visa allows entry into the country for 1 year and is renewed every two years. Italy is also known for having one of the best healthcare in Europe, with residents and legal foreigners (including retirees) being covered by Italy’s National Health Service.
21. Portugal
Monthly Cost of Living (Single Person): $1,750
While Portugal’s residency policies may not be as favorable, and the surge in foreign residents has significantly impacted property prices, it remains an affordable option for the average retiree. Property prices remain 30% less in the country as compared to the United States.
20. Costa Rica
Monthly Cost of Living (Single Person): $1,750
Retirees in Costa Rica get to experience one of the highest standards of living in the entire Central America, as reported by the BBC. The country is undoubtedly one of the best places to retire around the world, boasting stunning natural landscapes, a friendly atmosphere, as well as thriving expat communities. According to CRIE, more than 120,000 expats live in the country today.
19. Mauritius
Monthly Cost of Living (Single Person): $1,744
Home to beautiful beaches and year-round weather, Mauritius has also made it to our list of countries where you can retire on just social security in 2024. According to Numbeo, its cost of living is 44% lower than the US average.
18. Panama
Monthly Cost of Living (Single Person): $1,724
Individuals can retire to the beautiful Panama through the Pensionado Visa, provided they have a verifiable minimum monthly income of $1,000. The country offers a sunny climate, beautiful landscapes, and a relaxed pace of life.
17. Indonesia
Monthly Cost of Living (Single Person): $1,650
Indonesia, one of the best expat retirement countries, is home to more than 350,000 expatriates from around the world. Individuals choose to live here because of its affordable cost of living, friendly locals, and beautiful landscapes.
16. Dominican Republic
Monthly Cost of Living (Single Person): $1,650
Dominican Republic is one of the cheapest countries for retirement where it is possible to retire on just social security. Individuals can retire here through the Pensionado Visa on a minimum monthly income of $1,500.
15. Mongolia
Monthly Cost of Living (Single Person): $1,645
Unique in its tradition and culture, Mongolia is another wonderful place to spend one’s retirement. Permanent residency can be obtained using naturalization by living in the country for at least 3 years. Though a bit challenging to move, it is one of the best countries to retire in Asia.
14. Mexico
Monthly Cost of Living (Single Person): $1,600
Mexico is one of the most popular overseas retirement destinations for expats. As of 2020, William Russel reported that Ecuador was home to 1.1 million expatriates, with 700,000 of them being Americans.
13. Albania
Monthly Cost of Living (Single Person): $1,600
One of the most affordable countries to retire to is Albania. The cost of living here is $1,600 a month for an individual retiree. Expatra rates it amongst the best countries to retire in the world.
12. Thailand
Monthly Cost of Living (Single Person): $1,500
Many places in Thailand, such as Koh Samui, are amongst the best places in the world to retire on social security. Other idyllic places to retire in Thailand include Pattaya, Pai, and Hua Hin, to name a few.
11. Montenegro
Monthly Cost of Living (Single Person): $1,500
Living in the beautiful Balkan country of Montenegro is possible by obtaining a Montenegro residence permit. Even though the country is overall affordable for a retiree coming in from the USA, the coastal region tends to be expensive as compared to its continental counterpart.
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Disclosure: none. 24 Countries Where You Can Retire on Just Social Security in 2024 is originally published on Insider Monkey.