Can you Retire on $500 per month?

Lifestyle design is all about changing the way we live so that we can fulfill our passions and experience life now. We should all be striving for early retirement from lousy jobs. My wife and I have a one year plan to quit our jobs and move to a new country. We are not retiring from work, we still want to continue working on interesting projects and possible doing some longer term volunteering, but we do want to retire from our current career of owning an English school in Japan.

bali garden Can you Retire on $500 per month?

Retire Cheap in Places like Bali

Too many people still believe that retirement is for the 65 and older crowd who have worked and saved their whole lives and still have trouble making ends meet. How much money do you really need to retire? What if you could retire now, for as little as $500 per month? Of course, that means cutting back on most luxuries and living a relatively simple life but it does seem possible in lower income countries like The Philippines, Cambodia, Thailand, and Indonesia.

If you could live on $500 per month ($6,000 per year) and you made 6% annually from safe investments, you would only need to have $100,000 saved to retire. ($100,000 X 6 % = $6,000 per year) Alternatively, if you could make $500 per month from passive income like rental income from your house, or some internet business, then you could effectively retire now.

Ken Baylis on EscapeArtist.com, wrote two comprehensive posts (Retiring on $500 per month Part 1, Part 2) on living costs in several Asian countries. Here is the Breakdown.


Approximate expenses for apartment living on the cheap in Cambodia.

Rent: $90
Electric: $15
Water: $10
Cable: $35
Groceries: $130
Transport: $30
Miscellaneous  – Visa Insurance etc. $75
Total monthly expenses – $310

Approximate expenses for apartment living on the cheap in the Philippines.

Rent: P7,500
Electric: P1,300
Water: P120
Cable: P850
Groceries: P5,000
Taxis: P3,000
Miscellaneous  Visa, Insurance etc. P2,500
Total monthly expenses P20,270 – $431

(Here is another post with a $500 budget for The Philippines.)

From my experiences in Bali and Thailand, I know that living within these means is quite possible. Guest houses and inexpensive, but nice accommodations can definitely be found for less than $10 per night, particularly in off seasons. Long term stays generally get a bit of a discount but expect prices to substantially increase in the peak season starting at about Christmas.

The sample living costs that Ken Baylis offers are missing some other considerable expenses. Airfare is the biggest cost. If you plan on traveling extensively like my wife and I plan to do, then travel costs will greatly inflate your budget. This can be offset by traveling to local countries by bus or other cheap transportation, but for most JetSetCitizens, expect to add another $3000 to $5000 per person per year for air travel. That will increase your monthly budget by $300 or $400 per month.

Medical Care
Another key concern, for the older of us anyway, is health care. We all need to have decent access to medical care should we need it. Many credit cards offer coverage for vacations but there may be some difficulties getting reimbursed if you are a perpetual traveler. It is probably advisable to have some sort of international health care which can cost anywhere from $20 to $100 or more per month depending on the type of coverage. Global Insurance offers rates of $169 per year while World Nomads comes in at the higher end of the scale at $961 per year. Do your research and find an insurance provider with the coverage you need and also make sure it is a company that will pay out if the time comes.

The good news is that many countries like Thailand, Costa Rica, Hungary, and India have great, inexpensive medical care with English speaking doctors and dentists. Even if you need major procedures, you are probably better off then trying to go through the cash strapped medical system in your own country. Just make sure you have a substantial chunk of money readily available in case something serious happens.

Traveling Costs for Real People
Another key factor is luxury. It is hard to always save and scrimp. Cheap locations off the beaten path are great for a month or two, but most of us need to go to a big city and indulge in a nice dinner, a bottle of wine, purchase a new camera or clothes, etc. Of course, most of us need decent computers with reliable internet access. It is likely that you will want to take lessons, go sight-seeing, learn a craft or study a language, etc. Everything costs money.

$500 is definitely possible, but unless you are a real hermit, your expenses will be more. Talking to people in Asia, Central America and South America some numbers I commonly hear are $1000 to get by, $2000 to live comfortably and $4000 to live like a king.

Accommodations
$100 per month accommodation is certainly possible in many countries around the world, but it might be at the lower end for the preferences of some travelers. A more comfortable range would be from $300 to $700. For $700 you can often find a beautiful house, sometimes with a swimming pool, in lower income countries. Here are a couple of examples;

(2013 Update) My wife and I stayed a central apartment in  Chang Mai, Thailand for about $200 per month. It was small, but clean and in a great location. For long term stays, it’s possible to rent entire houses for $200 – $300 per month. I’ve also seen apartments for as low as $100 per month, but these are typically more suited as student accommodation.
Condos in Cebu, Philippines many in gated communities, sometimes with swimming pools for $300+

Food
Food can be found very cheaply in many countries, even if eating out. However, $5 per day as Ken Baylis suggests might be a little too low for my tastes. Even in an inexpensive tourist oriented restaurant, eating out with some drinks can cost you more than $15 for one meal. Of course, it is not necessary to do this every day but many of the more expensive and trendier restaurants and bars are great places to connect with other foreigners.

Most of us will have a difficult time eating local food all the time. We all get cravings for various cheeses, breads, meats, or sauces. One trip to an international food store can often blow your budget for months. Based on my tastes and preferences I would say a more comfortable food budget would be closer to $500 to per month for eating out and groceries.

Internet
It is becoming increasingly common to find wi-fi Internet access even in more remote tourist enclaves. You may be able to scavenge free access if you are lucky, but for those of us building internet businesses, reliable and fast Internet connections are necessary. Don’t expect much in poorer countries. You will likely pay full western rates for a quarter of the speed if you are lucky. Expect to pay  $50 to $80 for Internet access if you can get it.  For those of us who will live more nomadic lives, buying your own long-term Internet connection is not an option. However, expect to pay similar amounts visiting internet cafes if your guest house or accommodations don’t have Internet included.

Real Costs of Retiring for Jet Set Citizens

Rent: $300 to $700
Utilities: $80
Internet: $60
Groceries: $200
Eating / Drinking Out: $300
Airfare (on a monthly basis) $300
Health Insurance: $80
Visas, translators, legal: $50
Total monthly expenses – $1370 – $1770

If traveling with another person or family members some of these costs can be shared, like rent, utilities, and internet connections. Other expenses will be per person. My wife and I expect a budget of about $2000 per month. This might be as little as $1000 in countries like Thailand but will shoot up to $3000 when we go to Europe or return to Japan.

Costs of Retiring For Two
Rent: $300 to $700
Utilities: $80
Internet: $60
Groceries: $300
Eating / Drinking Out: $400
Airfare (on a monthly basis) $600
Health Insurance: $160
Visas, translators, legal: $50
Total monthly expenses – $1950 – $2350

For $2000 per month you could have a very comfortable life in a tropical country with great food and a fantastic lifestyle. $1000 per month is very doable for those willing to sacrifice material comforts and give up western ideas of consumption. $500 is the low end of the scale. Possible for shorter term travel, but unless you are capable of living a very ascetic lifestyle, it is not practical for indefinite travel. Don’t get me wrong, I strongly encourage everyone to greatly reduce their environmental footprint on the world by living simpler lives. Living on $500 is still possible but it requires a disconnection from the rest of the world. It certainly would be hard to blog about it on $500 per month.

Live for Free
Another option is volunteer programs. There are a wide variety of volunteer opportunities around the world that cover all your living expenses so it is possible to live on next to nothing and do meaningful work to enrich the lives of disadvantaged people. Volunteer for a year or two and let your savings earn you a safe return on investment. You will then have more savings to begin your early retirement. Who knows, you may even find that volunteering brings you the spiritual satisfaction that you were looking for in life.

Here are a couple of links to get you started;

Volunteer Abroad
Projects Abroad

Do You Really Want to Retire?
Of course, the point is not to retire at all.  Lifestyle design is about liberating yourself from work you hate so that you can focus on your passion and really contribute something of value to the world. Your passion may be expressed through art, volunteering or starting a business. Go ahead and retire from your soul-sucking, dead-end job but you will go crazy living in a tropical paradise for the rest of your life. Retire now so that you can begin your life’s work.

Update
April 2012 – Live in Thailand on $500
The Cheapest Places to Live in the World. $500 per month?- OpenTravel.com

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My name is John Bardos. My wife and I gave up our business, house and possessions in Japan to search for more meaning and fulfillment in our lives. We've discovered that a satisfying life is about rich experiences, quality relationships and meaningful contribution, NOT consumption.

71 Responses to Can you Retire on $500 per month?

  1. Dan says:

    I was relieved when I got to your real costs section. Because I’ve been to Cambodia and spent a bit of time there and in locals homes I know what you’ll get for $90mth while you can definitely do it within those prices the idea of retiring like that is pretty much downright unrealistic for most westerners even if you are used to living in a hippy commune. Your $300 rent is far more realistic.

    On $500mth in Phnom Penh you would be in the middle class, Cambodian middle class, which for many westerners would still be considered poverty.

    Nice article but, good to see a level headed look at the topic.

  2. [...] as John Bardos over at jetsetcitizen.com recently pointed out, you don’t necessarily have to be rich to retire. Especially not if you’re willing to retire abroad (and where else would a vagabond [...]

  3. Neil says:

    The problem with depending on investment income for retiring – particularly a long retirement – is inflation and variation. This year it would be a real struggle to get 6% on you $100,000 – without risking your capital – so suddenly your already ascetic $500 per month is only $167 since 2% is about the best you can get. And since you can’t grow your investment income (again, unless you are willing to get involved with riskier investments), you are not able to deal with increased costs thanks to inflation. And if you’re retiring at 30, inflation is going to add up to a lot before you get around to kicking it in 60 or 70 years.

    Passive income such as renting a home or running an internet business has its own set of risks, but is definitely the better bet for someone who’s considering such an early retirement.

    • John says:

      Hi Neil,

      Thanks for the comment.

      You are correct in pointing out the effects of inflation on those numbers I provided. I was trying to keep the calculations simple just to show that people might not need as much as they think they do to retire. However, over longer periods of time, an average inflation adjusted return of 6% on low risk investments is not unreasonable.

      One interesting note is that with the appreciation of the yen and the US dollar, your money can go much further in countries with devalued currencies. The Japanese yen in particular has appreciated more than 30% since last year on most currencies. I am lucky to be earning my money in Japan, now.

  4. Ken says:

    Following up on Neil’s point, I’ve often heard that 4% of the current balance is a safe withdrawal rate (at least historically prior to the latest drop). The 6% number is probably too high. Also, had you had $100K in 2007 giving you $4K in income it would have dropped to less than $60K today permitting a $2400 income this year – obviously inadequate.

    Note that the 4% withdrawal assumes you’re invested in stocks which have averaged about 10% annually (again prior to the latest drop). You have to cover inflation plus your withdrawal and account for market drops. $100K probably isn’t enough without additional strategies for income generation and / or social security, etc.

    A final note, remember you’re talking about the ‘developing’ world – as they develop they will start costing more to live in. Italy, Greece and Spain were super cheap 40 years ago. So you need to think strategically in that regard as well. Those 8% annual growth rates in China, etc. mean you’ll need investments that keep pace or your $100K will do you about as much good as they would back in the US today.

    Otherwise, I suppose you could consider moving to North Korea in your elder years :-(

    • John says:

      Thanks for the comment Ken.

      I think people tend to over-estimate the amount needed to effectively retire and generally give up before they get started. With some other online income strategies and some frugal living, earlier retirement is certainly feasible for many people.

      Investing your life savings and quitting work are serious issues so I don’t expect people to take those decisions lightly. However, I also think that the last year was an aberration. Sure stocks are down 40% and if you we unfortunate enough to start your retirement in the middle of 2007 your assets would have taken a huge beating. That of course assumes you bought at the highest point and sold at the lowest point.

      I think in a couple of more years, most of the losses will be recouped. The S&P returned an average annual rate of 10.40% over the last 20 years. If you invested your money in January of this year you would already be up more than 20% from the lowest point last year. Dividend payments would also probably add a couple of percent per year to those numbers.

      With regards to currencies, the yen and US dollar have appreciated substantially over the last 6 months. If you have your savings in one of those currencies, this is a great time to buy property or invest in foreign countries. Your money still buys 20 or 30% more.

      About the “safe withdrawal” rate you mentioned, if you withdraw less of your money that means you are leaving more principal behind to earn more interest. My understanding of what you are saying is that you are adding safety by taking out less then you could. The remaining balance would grow at a faster rate because you are earning interest on the interest.

      I do agree that $100,000 is not enough to retire with only risk-free assets. But supplemented with some other online income, different short-term jobs or businesses and maybe the continued asset appreciation and mortgage reduction of a house you own, it might not be as far-fetched as some people think.

      My wife and I are certainly going to try with not much more in savings. We still plan on working on other business ideas and we are only 40 so we can still work again in the case of some real financial set backs, but we are going to give it a try. 11 more months to go!

  5. Actually it is easily possible to generate 4%-5% annually if you buy some dividend growth stocks such as some of the companies part of the Dividend Aristocrats index. These companies have increased their dividends for more than a quarter of a century. Dividend increases are typically higher than inflation, thus creating an inflation proof source of income for you.
    A portfolio with a 75% dividend stock/ $25 fixed income allocation would outlast you provided that your retirement is about 30 years.

    Btw I just found your blog, and I am loving it! (ironically Mc’Donalds is another dividend stock to consider)

  6. [...] also prove to be a good investment rather than just an accommodation expense. My previous articles, Retire on $500 per Month and Rent for Less than $10 per Day rely on stable low priced rental properties around the world. [...]

  7. pbhj says:

    $2000 is about £1200 GBP currently. My family of 4 live on less than that. Clearly we don’t have much luxury, but if that’s your per person total then I’d consider you’d be able to live in a modest flat with a degree of luxury in the UK.

    • John says:

      Thanks for the comment.
      Yes, $2000 is a decent amount of money. I use that figure just to be safe. In all likelihood we should be able to live for $1000 per month. We have before in Bali, Thailand and Hungary so i definitely know it is possible. I just want to have a budget that will also allow for regular airtravel and a more comfortable life.

      Also, it is an average figure. Living in Paris, New York, London or Tokyo will probably cost closer to $3000 per month. I would like the average to be less than $2000.

  8. chris says:

    You know in college I lived off 500$ a month in Minnesota just fine(2 years ago, no debt, 500$ a month fixed income) … 250$ a month apartment (actually very nice 3 bedroom apt btw, there was cheaper also) when shared with 2 other renters. If its with family or something you can easily split up the costs of living in plenty of places in the united states and still live the \western\ life style. I had a cell phone, internet and went to the bars fairly often. My diet may suffered a little but I am sure you can be creative with it.
    I grew up in northern Wisconsin too where the cost of living was even lower then in college.

  9. Harish says:

    I lived in Houston TX in 1997-98 at $600-700 a month

    1 bedroom apt $350 cable included(Nice apt community by a reputed mgmt company) with swimming pool
    video library etc.
    Gas – $50 (it was around $1/gallon at that time)
    Groceries – $100
    utilities – $30 (Hosuton is the energy hub and subsidized by state)
    entertainment – (restaurants ,movies etc) $70- $170
    Do you know there are many $3 haircuts shops around in Houston.
    Also there are so many restaurants there that you always find good meal specials.
    I used to eatout a lot.
    I believe living costs are still around the same except for Gas.

  10. [...] Can you Retire on $500 per month? (tags: backpacking travel living) [...]

  11. Nick says:

    I spent just under a month in Cambodia last year on about $500US. This was travelling around and staying in reasonable hotels, not going out of my way to stick to budget. The biggest expenses are almost always transport, not accommodation and food. If you’re staying in one spot for a long time, you can get your expenses down to $5-10 per day.

    Another thing to take into account if you’re price shopping destinations is the ongoing political circumstances. The Airport shutdown at Bangkok last year was in many ways a good thing for the tourists and expats that were over there. I was getting hotels/guesthouse rooms for 1/3 the normal rate, and scored a great deal on an apartment in Sukhumvit. Whenever there’s something that scares off the package deal tourists, have a careful look, check out whether it’s dangerous or not (in this case it wasn’t) and considering going. You’ll get everything on offer, at a really low cost, without being surrounded by tourists.

    • John says:

      Hi Nick,

      Thanks for the comment. What was Cambodia like? I haven’t been there yet. Is that a good place to stay for extended periods of time?

  12. [...] Here is the blog post that Jun refers to in the interview: Can you Retire for $500 per Month [...]

  13. And it is not just SE Asia where one can live large on little. We have been living large & doing extensive travel on 4 continents with Europe as our base so far…..all on a budget 25K total costs for a family of three. We find travel over land & deep immersion, MUCH more satisfying travel and very rarely take a plane. We saw 29 countries & 4 continents with just one long flight over 2 1/2 years. If we cross seas, we usually take a cargo ship…a fantastic & luxurious way to travel!

    We like a lot of luxury…some 5 star hotel stays, top restaurants in Prague, France, Italy, Spain etc, expensive piano lessons across continents for our child, 3 lap tops–2 that are macs, nice clothes from France & Italy for our child, large new modern home with a pool & fast cable internet for the winter in southern Spain, dolphin swims, theme parks & lots of museums,groceries delivered, lots of dental work done etc etc.

    It could be done for much less than we do it. Everyone thinks Asia, but we were paying less for lots more luxury in Spain than a fellow RTW family did in SE Asia. We are frugal types so we do not splurge constantly and put thought into our budget, but we would not want to live a life without luxury. On the other hand, I find it hard to believe that some people spend over 100K/year to see and experience much less than we have. I’ve seen families pay 5 or 10K just for a week or two of vacation and think what a waste of money.

    In this economy, I think one needs to really watch currencies. We are really glad that we mostly got out of the dollar in 2005 as the fundamentals do not look good for it. I would also be very careful of stocks and bonds in this economy as the major economic shift going on will continue for years. Many of the major problems have not even begun yet.

    I couldn’t agree more that people tend to over-estimate the amount needed to effectively retire. One can retire and still build one’s nest egg if one makes wise choices. The Terhorts retired at 35 over 25 years ago and wrote a classic book about it.

    You actually can live & travel the world on nothing ( people have done this, including my brother), but if you want comfort in your life, a great education for your child/ren and more security for your future to add to your free life, you’ll probably want to spend more. Even in the US, most retirees live on 25/30K a year, so it makes sense that one can live well on that amount or less in cheaper places.

    • John says:

      Thanks for the comment!

      Yes, I agree that Europe can be inexpensive as well, particularly if you stay out of the larger cities. I have family in Hungary so I try to visit there regularly. A drink in a bar in Budapest will cost $3 to $6. In the country side, it is possible to find a drink for about a $1. That price differential is similar for rent and meals as well.

      However, I still feel that countries like Bali, Thailand and the Philippines offer lower prices for comparable services.

  14. Kay says:

    How is the cost of living in Greece as compared with Spain?

  15. John – A fantastic, thought provoking post! May I ask you how old you are, or a range, since I’m new here? I’m in my early 30′s, and my goal is to be free from my 7-7pm (!) job by 42. The target age was 40 but since the recession, I thought it best to work a couple more years.

    I’ve planted my online income seed this year with Financial Samurai, and I have to imagine that in 8 years of consistent networking and writing, I should be able to generate a decent online income and travel the world forever.

    I like your thoughts, and I wrote a post called “Knowing When To Walk Away – Financial Planning For An Unknown Future” on Wise Bread. Essentially, I ask readers to walk away from your job after a certain age, and not after a certain level of income accumulation.

    I lived in Osaka, Kobe for a couple years and loved my time in Japan!

    Best,

    Sam
    .-= Financial Samurai´s last blog ..The Katana: Nobody Really Cares More About You Than You 11/22 =-.

  16. John says:

    Hello Sam,

    Thanks for the comments.

    I just turned 40 last week. I am certainly not rich but have managed to save enough to ‘almost’ semi-retire if my wife and I live cheaply. I am definitely going to continue to work on projects I enjoy and that still means work, but I am not going to be tied to set hours or a set location any longer.

    10 years is plenty of time to phase out of any job, particularly if you plan to continue earning money online.

  17. Great post. I recently traveled through South America and lived in Buenos Aires for over 2 months. It is definitely possible to live very cheaply in many places outside the US where the dollar is strong. Leveraging the strong dollar I managed to live very well on less than $1,000 while in Argentina. Very good blog btw, I’ll make sure to subscribe!

  18. John says:

    Hi Rick,

    Thanks for the comment. BA is high on my list for travel destinations. Hopefully, we can make it there towards the end of 2011. It is great to hear about your cost of living experiences there.

  19. Jessica says:

    Hey John,

    I have been offered a job in Cambodia and it seems the cost of living there is pretty low. I have stayed in India so it seems its a bit similar. Thanx for your information.

  20. jeff says:

    Great post! I got turned on to lifestyle design reading the four hour work week and it makes so much sense. When you break down the money trail by month it illustrates just how easy it is to do. Thanks for another example of how it can be accomplished.

  21. Great article. I’m going to bookmark this one. My husband turns 65 next month and is pretty much retired on Social Security and a small pension. I’m 52 and have always been a home-based entrepreneur and writer – not the best combination for stock piling cash. We’re looking at the possibilities to re-design our life and be able to make money from my laptop. My aim is to make my life an excellent adventure. We don’t have huge monthly overhead now – my husband’s retirement would cover the mortgage and the expenses necessary to have a home to come back to – he doesn’t want to go for more than about six weeks at a time. That means its on me to figure out the cash flow needed to make the journey.

    Denise Michaels Excellent Adventure
    http://www.DeniseMichaels.com

  22. Dougster77 says:

    Great information on retirement option on less money. Conventional wisdom says you need millions to retire however you have proven that is not the case.

  23. Lots of interesting info here, though I would have added some places like Bali, Lake Toba, Lake Atitlan Guatemala, and a few others. I have visited over 120 countries and wrote a book last year that includes 6 tropical paradises where you can live for under $500 a month. If you’re interested in checking it out, here’s the website:
    http://www.amazon.com/How-Average-Lived-Adventurous-Life/dp/1438912803
    Incidentally, I’ve found that traveling is more than just enjoyment. It also improved my stock picking immensely. I was way ahead of the curve and got into Infosys, an Indian software company, as soon as they listed on the NASDAQ. No one believed in Indian software engineers back then, but I had visited a software development park near Hyderabad and had seen the fire in the eye of some of those young people. I knew that as soon as the internet gave them a level playing field with the rest of the world, they’d start kicking ass. When Infosys first listed on the NASDAQ, I threw everything I had into the stock, and it made me buckets of money. In the same manner I struggled for years with any kind of transaction with the State Bank of India. When I first saw the clean ATM machines of ICICI Bank and talked to a few of my Indian friends, I knew they were the future. I could give you a bunch of other examples, but you get the idea.
    St. Augustine once said, “The world is a book, and those who don’t travel read only one page.”

  24. I really liked an idea of Volunteering abroad,but its not free at all, I checked out some of them and on average it costs $1500 to volunteer,perhaps you might find free ones as well, would appreciate if you gave links to those programs. In general the idea of retiring is great, especially if you have a passive income. You can start up some other projects to increase the amount of income per month.

    • John says:

      Hi Dave,
      Yes, I agree. Most volunteer programs cost a lot of money and I have heard mixed reviews about many as well. HoboNora and Kirsty Henderson are two people I have interviewed that have a lot of volunteering experience. You might want to search for them and check out their sites. (Or their interviews on JetSetCitizen)

  25. Ok. Thanks, will check it out!

  26. Neale says:

    Great info here in the post a d the comments. I have been semi retired for the last year here in Phuket yours and others estimations of the cost of living are spot on, Phuket is considered to be the most expensive pace in Thailand but it also has the best of the west, $500 pm here would be hard $1000 is ok and about were I fall each month I don’t want for a lot at this level living in western accommodation eating western food daily “self prepared” I can participate in all Phuket has to offer at this level in moderation. I will say though living at this level here only comes after 6 months or so of learning the in’s and outs here along with some basic Thai. $2-3000 a month would give you a similar standard of living to what one would expect in say ft lauderdale Florida if you earned 6 figures yes it would include a beautiful house with pool a maid a nice car and anything else you want to add to the list.

    • John says:

      Thanks for the comment Neale,

      I spent about a month around Koh Samui on the other side of Thailand and found it to be really cheap. $1000 / month in off season would probably still give you a decent living.

      I have an uncle that lives in Chang Mai with rent of about $300 per month.

    • Neale says:

      Well three months on and I feel the need to update my post I’m now basing out of Chiang Rai and the $500 a month number is fairly easy to do here. A small studio here in a brand new building nice area goes for about $100 per month it’s easy to eat for less than a dollar I have been living here for way less than $500 pm without wanting for anything. I can add though this comes after 12 months of learning all the in and outs here in Thailand, which did cost a lot more than $500 per month.

      • John says:

        Hi Neale,

        Thanks for the update. $500 per month is a tough budget to maintain. I am glad to hear that you can do it. My uncle is based out of Chang Mai and he says he easily lives for less than $1000 but he has Corporate health insurance from his old company in Canada. Travel costs also probably add several hundred dollars a month to his expenses as well.

        • Neale says:

          I agree those things we tend to forget If I was to factor in a trip home each year + health insurance I would be around $700 even though I don’t want for nothing I do have to continuously be aware of what I’m spending otherwise I would be spending a lot more.

          • John says:

            My wife and I can sometimes get our expenses down to $1000 per month depending on where we are. So $500 per person, is certainly not impossible. However, travel costs, insurance, medical expenses and general entertainment can quickly inflate those numbers.

            I recommend trying to live as cheap as you can, but always have a year or so of back up income in case of emergencies.

  27. Johnny says:

    We three people(my family) lived , 15 years ago for $800/month in our first year in US.Of course we lived a modest life but we survived. Today is much harder than 15 years ago. With a lot of experience and a college degree education, it is almost impossible to get a job.
    I am thinking of retirement but with only less than $700/month, when I`ll be qualified for collecting SS, it is difficult to imagine how someone can survive on that. . Bills in US are so high that if you do not have at least $3000/month, I can not see how a family can make a living with less than $3000/month.To live decently a family needs more than $3000/month in net income.
    Probably $4000-$5000/month in net income would be appropriate.
    In those country above mentioned for making a living on $500/month there is a drawback:they do not have a developed health care system needed for people over a certain age. Fortunately, I do not take any drugs.

  28. Dave says:

    Wondering if it would be possible to retire to Spain on $3000 month? I would like to retire someplace that is clothing optional friendly, and Spain really seems to fit the bill.

  29. Martin says:

    Right now in 2011 if you put your dollars in a Vietnam bank for one year they will pay you 14% interest. Granted over the last 5 yrs inflation has been at 5% but still that’s a 9% return which ain’t bad from a bank.

  30. td says:

    US$500/month is not much. US$2,000 would offer a much better quality of life.

  31. graham says:

    lots of fascinating stuff here.i retired 5 years ago at 57 just in time for the gfc.i have lost 20 percent of my lumpsum invested with a financial advisor(should have taken control of it like i suggested initially).anyway,since then,it has taken a number of years to really figure out what is a reasonable income in retirement.i am lucky in that i own my own home and have rented a room at 7000 dollars extra income a year the last 2 years.i have been getting a private pension of 25000 since i retired.(i realise what a bonus this is)and i draw money out of my lump sum.i am a divorced father of three and have always been very frugal(no choice)and apart from my earlier mortgages have never got into debt preferring to save first then buy something.i have been spending 2-4 months a year in thailand(not bangkok or phuket which are expensive)and find if you get a hotel room or condo for a month you can save more than half for accommodation.i can get a hotel room for 10 dollars a night in offsaeson-no one seems to mention high season which is approx nov-mar in thailand and is almost twice as expensive.
    girlfriends have been known to call me a tightarse but i would not want to live on less than 35000 dollars in retirement if you want to feel like you can do things when you want.i live on 400 dollars a week in tahiland-wouldn’t want to do it on any less than that.that gives me a 3star hotel with pool on the coast,a motorbike,and eating out with the occasional bottle of red(anything western in asia is expensive!)
    other things to consider-a friend of mine in this hotel-an english pensioner-has seen his pension reduce from 60 baht to 47 baht per pound and he doesnt get the inflation increases he would have got if he was living in the uk-basically a 25 percent reduction in his pension and not a damned thing he can do about it.just another thing to trip you up!
    in summary,whilst the idea of early retirement is appealing to many people,if you leave work early it will drastically reduce your final pension and if you live overseas you are hostage to the exchange rate.also,asia is getting dearer-you may have to look at alternatives in the future.i’m so glad i’m old!

    • John says:

      Thanks for taking the time to comment Graham.

      I agree that more money is definitely better. :-) As a couple, my wife and I can have a pretty decent lifestyle on $2000 per month in most countries around the world. Often it is only around $1000 per month. We do make some sacrifices, but I don’t feel we are giving up much. We have found that most of the things we used to spend money on were unnecessary, unhealthy, or both. It is very liberating to cut back consumption and live a simple lifestyle.

      Sure it would be nice to have three or four thousand dollars of disposable income every month, but then we would also have to work to earn that much money. Instead we have the time and freedom to volunteer and work on projects we enjoy. We are still young, and will certainly earn an income again, but it will be because we enjoy the work, not because we need the money.

  32. graham says:

    i might add that $400 a week is as a single person who doesn’t frequent bars or the girls-double that if you are a young person intending to go out every night.

  33. brian says:

    I think $2000 is reasonale. Some people say you can “live” in UK on that amount. That is true. But the $2000 was inclusive of a travel allowance ammortised over 12months.

    The $500 is achievable if you find somewhere cheap and just settle. But adding in health insurance and airline tickets is a fairer approach and what retirement is really about. Also upgrading accomodation from ultra tight budget to middle-upper range is more befitting in retirement.

    I’ve lived in Philippines on and off and $1000 is heaps for a rural area if you exclude visa fees and visa runs out of country. But I’m sure you want to visit family in your home country every now and then not just a cheap ticket to Hong Kong.

    • John says:

      Thanks Brian,

      The biggest expenses are travel and medical insurance. If you’re willing to stay put, $500 is possible like you say, but I agree that most people are not willing to sacrifice that much.

      Actually, over the last year our living expenses are averaging closer to $1500 for the two of us, largely because of less flights and free medical insurance in Canada. Under $1000, or $500 per person, would be a little tight, but it’s not impossible if you stay in one place and are frugal.

  34. Thomas says:

    Hey John, I found this guy on You Tube and thought of you and the website,,…http://www.youtube.com/watch?v=jOGDVqjHnQ8&feature=endscreen&NR=1 I hope you don’t mind,..Just intrigued by the idea and its possibilities ..=)

  35. charlene charles says:

    Please tell what countries that I could live on $700 from your John.

    Thanking you in Advance.

    • John says:

      Hi Charlene,

      As I was saying in that article, it really depends on the lifestyle your willing to live. My grandmother lives on about $700 per month in Canada, so I would say it’s possible almost anywhere. There are plenty of inexpensive small towns in Canada and America where you can buy a house very cheaply.

      Thailand and the Philippines are two of the cheapest countries to live. I have the most experience in Thailand though. I think $700 is definitely possible in a city like Chiang Mai if you can keep your costs to a minimum. I know people that have $100 per month apartments. My uncle rents a $200 per month house. That still leaves a lot of money for food, utilities, health care and other expenses.

  36. Nice post. This is an eye opener for those who are stuck with their jobs where they can really have other options if only they will take up the challenge of being an entrepreneur.

    Thanks.

  37. mike I says:

    Very interesting. I currently live in the UK on about 500 per month (about 700 US Dollars?) though I own my own house so I don’t have any rental costs. If I gave up my job and leased this house I could get 500 per month for it (550, really, but I’d put 50 aside for potential expenses every month, on behalf of my tenants. I think I could probably live on (typing it into google ;) what works out as just under 25,000 baht per month…
    It’s certainly made me think!

    • John says:

      Thanks for the comment Mike.

      Owning a house definitely helps. My grandmother also lives on close to $500 per month in Canada, so it’s possible even in richer countries. (Although, not in major cities.)

      25,000 baht is definitely livable in Chiang Mai, Thailand. Although, it’s nice to have more money to do more travelling, eat at nicer restaurants, etc.

  38. Ram Iyer says:

    My father worked for Govt of India and receives a pension of Rs.15,000 or $250. He saves about half of it. He owns his house and lives in a village. when I retire I will live in my ancestral house, I will receive atleast $2600 (between me and my wife) in Canada Pension and OAS.

  39. Ronnie Paulson says:

    It is very, very cheap to live in rural India (villages) and small town India. In villages, you can rent for even US$ 50 per month but you do have to be able to be comfortable with a few things such as erratic electricity, bugs and crawlers here and there, and generally a lack of infrastructure. You can have a full on western toilet, and if you want, keep everything spic and span in your premises. You must know (and actually like) to cook for yourself. It can be very easy life but it is not possible for foreigners to own. But at this price, who cares!

  40. Kamal says:

    As pointed out by some India’s smaller towns are very very affordable – and $500 a month is more than enough for a very decent living. For example, in 2008/2009 I made a trip to mountains in India and for a few days stayed in a small popular hill station Manali for a few days. Rent was Rs 200 a day ($3-4, currently Rs 60+ an US dollar is the rate) in a popular with western tourists guest house which included a clean room and a western style bathroom with hot water. I heard about a few tourists in a nearby guest house who were living long-term and had negotiated down rent to half or less. More expensive guest houses in the Old Manali a favorite hangout of foreigners had rates Rs 500 or below ($10). Food was cheap too costing about Rs 50 a meal or so. I used bus for long-distance transportation to lakes and monasteries and towns and the rate was about one rupee per kilometer (about $3 / 100 miles). I asked locals at Leh, a popular town, about the monthly apartment rents and was quoted US $20-50 a month. I needed some medicines for upset stomach and the price was negligible. Recently I checked prescription drug prices in India on internet and it seems to be very cheap.

    Still there was a lack of tourists from the USA. What could be the reason? I thought of

    1. Plane fare was high – $1000-$1500 each round trip, $700-$1000 each one way.
    2. Meat prices were high – India is predominantly a vegetarian country and vegetarian food is very cheap but meat prices can be as high as in the USA. And people from the USA in general need lots of meat. Besides food can be spicy which may not suit many westerners.
    3. Unavailability of local girls/women – India is a very conservative country and this can be a big issue with many foreigners who intent to live for long time though large expat communities can help them.
    4. India not being marketed well – Everybody knows about Ecuador and Thailand but India is hardly discussed. This is in a way good for us because prices remain low.
    5. Visa issues – Being of Indian origin I don’t have such issues but it can be a deal breaker for many foreign tourists.
    6. Lack of party opportunities – While big cities offer this but are expensive and crowded and dirty, smaller towns are very quiet.
    7. Other factors – Hygiene, rudeness, ….

    I am going to India next year for at least a few months and plan on spending less than $1000 a month, more likely $500 or so a month.

    • John says:

      Thanks Kamal.

      I appreciate all the details you’ve provided.

      Goa’s been popular for foreigners for many years, so I’d think that there’d be a decent expat community there. Have you spent any time in Goa?

      • Kamal says:

        John,

        I haven’t been to Goa but plan to spend some time there next year. It seems to be popular among expats but my inclination is towards peaceful hilly places.

        Like you I lived in Japan (from 1989-1995) in Kamakura, but didn’t enjoy it since most of the time was spent suing my former employer Mitsubishi for racial discrimination. But that was long time ago. :)

  41. Melissa says:

    My husband and I are very interested in moving to Bali. We have been looking online at property for sale. Are there any pointers or good information that you could provide for us? I have heard that there are alot of scams out there when it comes to buying property.

    • John says:

      Hi Melissa,

      There are definitely a lot of scams. Also, different countries have different rules for foreigners. I haven’t looked into Bali for several years, but in Thailand foreigners are only allowed to buy property on leased land, like condominiums. Also, in most cases, rental prices for long-term leases can be very cheap so that it doesn’t make much sense to buy. Why spend a $100,000 or more to buy a property when you can often rent for $200 to $500 per month?

      The advice I give to everyone is, travel to the country and live there for several months before you make any long-term plans. Your ideas might change after experiencing the country.

  42. David says:

    Hi John,

    This is an excellent forum. Thank you for a very informative and enlightening discussion. Recently I have given thought to the possibility of retiring to India. I have two questions for you and your readers: I do wonder if on my social security of USD 2500.00 per month I can retire in comfort in a decent section of a major cosmopolitan city like New Delhi with air conditioning? Second, while the discussion above has mainly centered on the cost side (a key consideration) I would like your and your readers’ input on the best places to retire in India that are least humid and have mild temperatures. Finally, does India allow expats to work or opoen a business there? I am originally from India but became a US citizen when I was very young.Thanks.

  43. Ashish Mukherjee says:

    In India 70 KM from Delhi an excellent retirement resort with all facilities is available I have a flat there and planing to shift there in 20016.As I generally go there to live for a short period of 10 to 15 days,I have found that With Rs 19000 PM I can have moderate decent living there with world class facilities.

  44. Mikun Michael says:

    As of March 15th I’ve lived 1 year in Chiangmai, Thailand. I average about 25,000 baht ($770) a month. I have a nice condo, eat good healthy food, rent a motorcycle, drink beer and often pay for girlfriend expenses when we go out. If I were a couple with dual income, this would be silly cheap.
    I will add that I haven’t and I won’t eat western food. I only eat thai style food from the street or small shops (occasionally pay up for good high quality thai food). I have pretty much come to the point now that I make about 75% of my own meals from fresh food bought at the market and made with healthier oil and ingredients. I don’t eat much meat anymore either… too many delicious fruits and vegetable available.
    I want to see Bali, Malyasia, Spain Eastern Europe and maybe on to South America.

  45. Jane Mccarter says:

    Your comments regarding life’s experiences and extensive travel were great. I especially valued your comments questioning the dollar, stocks and bonds as confident income streams/investment vehicles for this adventure. I am unclear how you are invested then to ensure a income stream you can rely upon. I am in search of that investment path to ensure adequate funding for this life change. Any suggestions or recommendations? Specifically…how do you do this?

    • John says:

      Hi Jane,

      Thanks for the comment. Sorry, but I’m not really qualified to give any investment advice. I don’t think anyone is actually. Investing is always risky so make sure you know exactly what you are getting into.

  46. pao says:

    I bet my idea beat yours: I have a relative live in Laos, I bought the Land for $1000. I plan to build a $2500 home on it.

    Living expensive=0
    Electricity= $10
    Food =$100
    Transportation=folding bike + bus($50)
    Medical= as need it in Thai Land, I am 37
    Internet= $50

    Total= $210 Per month

  47. fred says:

    HiJohn
    Like your site.Do you live in these countries on a tourist visa?

  48. Terry Tarbeck says:

    Hi John. Great site! Good info. I’m moving to Cebu soon because of a much lower cost of living. What you said about renting is spot on. I can rent a nice house in a gated subdivision with a great pool for about 500. I could never do that in Florida. Why buy? Food is cheap, transportation is cheap, internet/cable/satellite are cheap! I love the Philippines! Thanks.

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