For the best value for money for retirement, top destinations include countries in Southeast Asia and parts of Europe and Latin America, which offer a high quality of life at a fraction of the cost of living in Western countries. Malaysia, Thailand, Portugal, and Mexico consistently rank highly for blending affordability with quality healthcare, safety, and a welcoming atmosphere for expatriates.
Cambodia. With no shortage of dazzling places to explore, Cambodia is a popular destination for Aussies to retire. Not only can you scoop up a bargain-priced property, but you'll love the friendly culture and delicious foods. Australian expats also appreciate the low-cost services they rarely used back home.
£300k in a pension isn't a huge amount to retire on at the fairly young age of 60, but it's possible for certain lifestyles depending on how your pension fund performs while you're retired and how much you need to live on.
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The biggest retirement mistake is often failing to plan adequately, which includes underestimating expenses (especially healthcare), ignoring inflation's impact on purchasing power, not starting savings early enough to benefit from compound interest, and leaving retirement savings in the wrong place (like not converting super to a tax-free pension), leading to running out of money or living a constrained lifestyle. A lack of a clear budget, not understanding investment options, and neglecting lifestyle/purpose planning also rank high.
A comfortable retirement will look different for everyone. While 7 figures in superannuation may sound great, the reality is most people heading into retirement won't have anywhere near that amount. Australians aged between 60-64 have an average super balance of $401,600 for men and $300,300 for women1.
Key Takeaways. Retiring early is a great goal, and you may be able to do it on just $750,000 if you have a plan and can keep a handle on your spending. Healthcare is a major expense for early retirees, as most won't be eligible for Medicare before age 65.
Understanding Australia's Reciprocal Health Care Agreement
The full amount of age pension that a person is eligible for is payable while overseas for 26 weeks. However, once overseas for longer than 26 weeks, the amount of age pension payable to a person is dependent upon the person's length of residency in Australia.
Hobart, Tasmania, is widely recognized as the cheapest major city, but smaller regional towns in Queensland and South Australia can offer even lower living costs.
In other words, it won't cost boomers their life savings to retire in the sunshine in these hot spots.
Here are some of the top destinations where Australians are choosing to retire to:
While exact real-time figures vary, recent analyses suggest hundreds of thousands of Australians hold over $1 million in superannuation, though it's a minority, with estimates from around 2021 pointing to over 400,000 people, a number that has grown significantly due to investment returns, though many still don't reach this milestone. About 2.5% of the population held >$1 million in super as of mid-2021 (around 417,000 people), with forecasts indicating a larger number, while projections suggest over 10% of women and 15% of men retiring by 2060 could reach this goal, and recent studies highlight that a large majority (around 94%) of retirees don't hit $1 million.
$500,000 in Australian retirement can last anywhere from 10-15 years for high spending ($40k-$50k/yr) to 20+ years if supplemented by the Age Pension and lower spending ($30k/yr), depending heavily on your age, lifestyle, investment returns (3-7% p.a. for 10-20 years), and if you qualify for the Age Pension. Expect 10-13 years at $50k/year or 17-20 years at $30k/year if you're 60, but combining it with the Age Pension at 65+ significantly extends its life, potentially covering expenses until 90-95.
If you have superannuation in Australia, even from temporary work, that account remains when you move overseas.
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The golden rule of saving 15% of your pre-tax income for retirement serves as a starting point, but individual circumstances and factors must also be considered.
Believe it or not, data from the 2022 Survey of Consumer Finances indicates that only 9% of American households have managed to save $500,000 or more for their retirement. This means less than one in ten families have achieved this financial goal.
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Thailand: Tropical Living with Modern Infrastructure
Thailand remains Southeast Asia's most popular expat destination for good reason. Popular cities like Chiang Mai and Bangkok offer vibrant lifestyles, with average monthly living costs of $800.