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Economic crises, weak currencies, and natural disasters have worked to your advantage this year if you’re in the market for a new destination to call home. Ecuador, long one of our favorite picks for overseas living, has finally risen to no. 1 in our ranking after years in the top 5, an honor due in no small part to the calamities—economic, political, and natural—that the country has weathered in the last two years. 

In 1997, the newly elected president turned out to be a crook and was impeached. Then El Nino caused flooding and wiped out bridges and roads. Oil prices dropped, reducing the government income at a time when crises in Asia further weakened investors’ confidence in emerging markets. The local currency—the sucre—has tumbled. 

Bottom line? Property and the cost of living in Ecuador are almost absurdly affordable these days. And though such upheaval would have torn holes in the fragile fabric of many nations, Ecuador’s people have remained peaceful and welcoming. 

Today, you can buy a two-bedroom condominium in the center of Quito’s business district, close to good shopping, gourmet restaurants, and luxury hotels, for under $20,000. A newly built beachfront home at Punta Blanca, a popular resort area in the state of Guayas, is on offer for a negotiable $40,000. Individual beachfront lots not in developments are selling for as little as $3,000. 

Maid service costs under $100 a month, and minimum industrial wages are about the same. Our correspondent on the ground there, Gary Scott, recently bought four paso fino horses to keep on his ranch—for less than $100 each. At the market, you’ll find handmade fisherman sweaters for less than $10 and leather jackets for $70. 

But rock-bottom prices alone do not make an ideal retirement destination. There are plenty of hell-holes the world over where you can buy cheap land and find a 5-cent cup of coffee—but you wouldn’t want to live there. Not so in Ecuador. This country is no backwater…it’s simply undiscovered. Quito, nestled in a mountain valley, is a beautiful, well-preserved colonial city where you can enjoy a gourmet meal in a French restaurant. You can play golf on courses so free of crowds that you don’t have to make tee times. The climate is a comfortable 75-80 degrees Fahrenheit year-round.

The country’s current president, Jamil Mahuad Witt, is a Harvard graduate who has initiated great reform. Under his administration, the government has abolished all income and corporate tax. There are no foreign-exchange controls, so both residents and nonresidents can hold dollar accounts. And, just as important as the money matters, the people of Ecuador are, as Mr. Scott puts it, “the kindest, sweetest, I’ve ever met.” That makes a difference. You don’t want to live in a place where you’ll be at odds with the local population. 

Southern havens
Like Ecuador, Mexico has seen its past political and economic troubles create great investment opportunity in recent years. The economy in this nation, our no. 2 pick, has strengthened of late, and democratic elections have calmed fears of political upheaval. Mexico remains one of the most affordable countries in the world, but property prices in the areas where we’ve always recommended you settle—San Miguel de Allende, the Lake Chapala area, and the Pacific coast near Zihuatanejo—have begun to rise. These days, a two-bedroom home in colonial San Miguel costs at least $85,000. But, as I said earlier, there’s more to a good location than pricing alone. And though property prices have inched up over the years, the cost of living remains very affordable. 

The quality of health care here is superior—many physicians and dentists are trained in the States—and it’s much less expensive than across the border. Pharmaceuticals are cheap, too. In addition, Mexico is easily accessible for northerners who want to be close to home. The climate is comfortable, and the sun shines nearly 365 days a year. You’ll still hear stories in the news about kidnappings and worse, but the truth is, prudent foreigners are seldom the victims of such attacks. And though there are pockets of rebels still active here and there, they do not pose a serious threat in most of the country. The consensus among resident expatriates is nearly unanimous: They feel safer in Mexico than in the States. 

Thousands of English-speaking retirees already call Mexico home. If you want to escape to an undiscovered haven—this isn’t it. But if you’re looking for a safe, comfortable retreat where you can enjoy socializing with English-speaking neighbors, live well for less, and be a couple of hours from home, this may be your best bet.

In Honduras, it was not an economic crisis but a natural disaster that created opportunity for investors this year. Hurricane Mitch did Honduras no favors: Much of the mainland’s infrastructure was destroyed when mudslides washed out bridges and roads and heavy rains flooded towns. The Bay Island of Guanaja was all but deforested. But Roatan and Utila, two other islands off the coast, were hardly hit by the storm and remain as pristine as ever—with white-sand beaches, coconut palms, and warm, tropical waters. 

Nevertheless, tourists have stayed away, put off by news of devastation. One source on the ground there estimates that the number of tourists has dropped by a full 90 percent from last year. The falloff has strained the local economy, and property owners strapped for cash are selling their properties for as much as 50 percent off. You can buy a furnished two-bedroom home, a minute’s walk from the water, for $73,000. The Bay Islands are English-speaking, and Honduras has in place the same kind of incentive program to attract foreign retirees as Costa Rica had in the 1980s. You can gain residency under the program in as little as three weeks. 

Unsung destinations 
You may be surprised at Canada’s high ranking. There’s an explanation: the weak Canadian dollar. We calculate our tables by converting local costs for real estate and other goods and services to U.S. dollars. In Canada, those dollars will buy you about 50 percent more than they would in the States. It makes such summer havens as Nova Scotia particularly enticing. There, a beautiful Victorian-era home with bay windows and a landscaped yard sells for $56,000. Nearly six acres on the water overlooking the Lunenburg harbor will run you $52,140—that’s under $9,000 an acre. 

Nicaragua has reappeared at the top of this year’s list. And it’s not simply because the Pacific-coast real-estate buys are so good (though they are). As in Honduras, foreign retirees resident in Nicaragua pay no income tax on out-of-country earnings and import household goods and a vehicle duty-free. Two years ago, this country wasn’t ready for full-time retirees. Now the place is booming. There are shopping centers in Managua, as well as fast-food chains. Entrepreneurs will find this place a gold mine. Nicaragua has developed something few of its neighbors have been able to successfully foster: a middle class. Made up of people who fled the Sandinistas during the country’s civil war, these thousands of people—educated and affluent—are now returning home and are eager for the goods and services they grew accustomed to in the United States. Yet, despite the economic growth, the beaches are still untouched—it’s what California’s coast must have been like a hundred years ago—and lots are selling today for as little as $22,000.

Malta’s score is not extraordinary in any one category, but it’s strong across the board. Prices are not the cheapest in Europe. A historic home in town sells for about $88,000. Yet most of the populace here speaks English, so it’s a comfortable place to settle. The British legal system makes buying property fairly straightforward, and you can actually get a mortgage here—not something that’s easy to do in most foreign jurisdictions. Resident retirees are entitled to certain benefits, including the tax-free importation of personal goods. But you can opt for less-permanent status by extending your standard three-month tourist visa by an additional three to six months—apparently a good number of foreigners do this year after year and never bother with permanent residency at all. 

Panama, like Nicaragua, has in place an attractive set of benefits for retirees. Not only that, but it boasts some of the most affordable Caribbean beachfront in the region in Bocas del Toro, where a half-acre lot sells for $20,000. Understand, however, that it’s still early here. Bocas is like Honduras’ Bay Islands were eight years ago. Developers are just starting to sniff around. And there are but a handful of expatriates living here. You’ll find a hospital, a school, a bank, and shops; phones and electricity are in place. But if you’re looking for lots of creature comforts, this part of Panama probably isn’t for you. Up in the mountains, however, in Boquete, there are a number of American retirees who have settled happily on small farms. And in Casco Viejo, the elegant, old part of Panama City, the government will offer you tax incentives to buy and renovate an old building. 

Belize has been one of our favorite retirement havens for years now and remains so despite ever-increasing real-estate costs. Property on the popular Ambergris Cay will run you close to $200,000 for a furnished beachfront home these days, but there are more affordable locales. Placencia, along the southern shore, is one of them. Lots there are listed for around $40,000. Furthermore, Belize has made great efforts to establish itself as a serious offshore banking haven—and has. It is home to the world’s most user-friendly trust. And new legislation passed this year expands the offshore services offered here. A new “retiree” law just went into effect as well. In keeping with the offshore legislation, it’s arguably the most flexible of such laws in any country on our survey. It allows you various tax benefits but doesn’t demand you become a resident. 
The only former Communist nation to make our top 10 is Hungary, one of the Continent’s most affordable countries. Budapest is a cosmopolitan capital with great art and marvelous music. The shopping is good, and medical care is both accessible and cheap. (You can get your teeth cleaned for $22.) Locals report that you can live like a king for $1,000 a month. 

Ireland marks the other end of the spectrum. Properties are outrageously expensive. But, nevertheless, this country still holds great appeal for retirees. It offers good benefits—including everything from discounted transportation to free medical care. And Ireland remains a smart back-door to the EU. If your heritage is Irish, you may well be eligible for citizenship there, which will allow you much greater mobility within Europe. The weather isn’t tropical, to be sure…but, then, you won’t find a properly poured Guinness in those southern climes. Choosing a retirement haven is a matter of personal taste, after all. 
 

What does “retire” mean?
We continue to call this our annual “retirement” survey…mostly because old habits die hard and we can’t think of a better word to replace “retirement.” But we don’t want to imply that these destinations are ideal only if you’re of a certain age and ready to leave a lifetime of work behind you. 

The truth is, these countries—Ecuador, Mexico, Honduras, and the rest—have a tremendous amount to offer to “retirees” of any age. If you’re looking for a place to reinvent yourself—a place to own a retreat you can enjoy a month or two a year, a place where you can watch your investments grow tax-free or tax-deferred, or a place outside the United States where you can put down new roots and open a business—if you’re interested in doing any of those things, you’ll find that these counties offer the best choices. 

International Living readers are taking advantage of just such opportunities all over the world. The Jamesons, a couple in their early forties, left Pennsylvania last year to settle in Ambergris Cay, Belize, where they are running the local newspaper. The Vejars from California have bought several properties in Nicaragua, which they are renovating and plan to rent out. The Pinkertons left Ohio a year ago to build a home and settle in Honduras’ Bay Islands, where they enjoy a sea view year-round. The Van Hemerts traded life in rainy Washington for a lakeside home in Ajijic, Mexico, where the sun shines nearly every day, year-round. Kathleen Peddicord, our publisher, left Baltimore, Maryland, with her family earlier this year and relocated International Living to Waterford, Ireland, taking advantage of an affordable labor market, tax incentives, and, well, the urge for a change. The list goes on. 

My point is: Consider this survey of the world’s top retirement havens a tool to help you make smart decisions about where you should launch your next adventure…that doesn’t mean you must retire. 
--Jennifer Stevens

Special benefits for retirees
 In the countries in our Index profiles, foreign property owners are granted the same property rights as locals, with a couple exceptions: Mexico and Greece, where foreigners can’t own property within a certain distance of the ocean or international borders.

Property taxes in all these countries are all at around 1 to 3 percent, though Argentina’s is higher, closer to 6 percent. If you’re moving to any of these countries, you’ll find programs in place, under which you can import your belongings tax-free. However, you may want to do as our publisher advises and save yourself great hassle and shipping expense by leaving it all home and starting over. 

Certain counties offer additional special benefits: In Spain and Ireland you can vote in local elections, and in Ireland, qualified retirees are granted free healthcare benefits, free transportation, a fuel allowance, and significant discounts on hotel and electricity bills. Panama, too, offers particularly attractive incentives: the right to import a car tax-free every two years; medical, hotel, and restaurant discounts; a 1 percent mortgage discount; and no property tax if Panama is your only residence.