Can Latin America Save Your Retirement?

If you're not exactly loving the idea of fixing your retirement shortfall by extending your working years by a few years, setting your sights on Latin America could be your next best strategy.

I am not suggesting you back up the truck and chase after the
iShares MSCI Brazil ETF that gained more than 124 percent last year. Rather, how about a major change of venue? Retire to a country with a lower cost of living and you may just be one valid passport removed from solving your retirement fix. What looks like an insufficient nest egg for maintaining your standard of living in the U.S. can be plenty to retire-and retire on schedule-in a less expensive country.

International Living's 2009 survey of nest-egg friendly ex-pat retirement hot spots has a heavy Latin America flavor. The top three picks:

• Cuenca, Ecuador: a UNESCO World Heritage Site. Less than $50,000 buys you a home, or you can rent a comfy condo for $300, or a deluxe two-bedroom for $500.
• Merida, Mexico an already-popular ex-pat destination where $100,000 can get you into a comfy Colonial-style home.
• Coronado, Panama Beachfront property still available for about $200,000.

International Living's list of retirement havens takes other criteria into consideration-culture, climate, availability of basic services-but cost of living is clearly a driving factor. I figured that out when I checked where Ecuador and Mexico rate on the same publication's 2010 Quality of Life ranking of 194 countries. Neither country cracked the top 30. (France took the top spot in that survey, followed by Australia and Switzerland. Fab places all, though not necessarily wallet-friendly.)

A Decent Launch Point for Further Investigation One of the embedded problems with Best of Lists is the underlying assumptions and data. For example, International Living's retirement survey measures health care affordability, but not the quality of that health care. Seems to me that's a big consideration for retirees. But the list is a great idea generator. If you're intrigued by the ex-pat life, now's the time to use vacations to scope out areas that interest you; and take the time to also scope out the quality of services that matter most to you.

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