AARP Ranks the Top 5 Places to Retire Abroad

If you’re planning to retire soon -- or you’re just in the mood to dream -- and you’ve toyed with the idea of retiring outside the U.S., you’re not alone.

The number of U.S. citizens choosing to retire overseas has been steadily increasing, lured by exotic locales, healthier climates and a lower cost of living. How many Americans retire overseas? The Social Security Administration sent benefits to just over 509,000 Americans living outside the U.S. in 2008, that’s up from 441,693 in 2005.

Each year, AARP magazine ranks the top places for Americans to retire overseas, taking into consideration climate, the expat community, the cost of living, housing, quality of healthcare, and access to the U.S. and culture and leisure. (If you think Central American countries will dominate the list, you're in for a surprise.)

Here are AARP’s top picks for retirees this year.

No. 1. Puerto Vallarta, Mexico

The magazine’s travel editors call Mexico’s Puerto Vallarta “the undisputed number one destination for American retirees.” With its rich Indian and Spanish culture, lavish beaches and affordable real-estate, Puerto Vallarta offers the low-cost, laid back lifestyle retirees seek to find in a community.

The region’s climate is ideal for many retirees: The average daily high temperature is 86 °F (30 °C), and the average daily low is 70 °F (21 °C). The rainy season lasts from mid-June through mid-October with August experiencing the most significant precipitation.

Another benefit to retiring in Puerto Vallarta is its strong expat community, which the magazine estimates at 50,000 American retirees. And because Mexico is our immediate neighbor to the South, travel to and from the U.S. is a breeze.

No. 2. Languedoc-Roussillon, France

France's Languedoc-Roussillon region is wine country -- the area is one of the largest producers of wine in the world. Languedoc-Roussillon is just three hours from Paris via high-speed train, and the area is a destination for the outdoor crowd with picturesque hills and beach along its Mediterranean seashore.

Cost of living isn’t exactly cheap, but a comfortably frugal life can be had for $30,000 a year. For renters, a modest apartment in Montpellier starts at $1,200 to $1,500 a month, according to the magazine. To buy, mid-price houses start at $250,000.

A big selling point for this country is its healthcare — the French healthcare system has been named the best in the world by the World Health Organization.

No. 3. Boquete, Panama

Boquete Panama is nearly ideal for American retirees due to a wealth of retiree benefits, including 20 percent to 50 percent discounts on air, bus, and train fares, movies, concerts, restaurants, hospital bills, and medical consultations. This mountain town is an hour’s flight from Panama City, and it boasts everything from a golf course to high-end gated communities. Because it’s so American-friendly, many have migrated there — the U.S. expat community is estimated to be in the thousands.

Besides traditional retirement amenities, Boquete is very affordable. A retiree can live comfortably on $20,000 a year, according to the magazine. Domestic and garden help is about $15 a day. A night out for dinner? Just $30 for two. Homes start at about $175,000, but you’ll pay $250,000 and up for a larger home in a gated community.

No. 4. Cascais, Portugal

Surprised to find Portugal on the list of top retirement destinations? Don’t be. Cascais combines the best of many European locales — plentiful golf courses, beaches, castles, festivals, ancient ruins and trendy cafés. Best of all, it’s affordable: A comfortable life can be had on $25,000 a year, the magazine says, and nice homes go for $250,000 and up.

The weather is warm and slightly humid during the summer, and comfortable throughout the winter. The average daily high temperature is 85 °F (29.4 °C), and the average daily high in winter is 46 °F (7.6 °C). Its healthcare system is good, with nearby access to well-regarded British Hospital in Lisbon.

No. 5. Le Marche, Italy

Le Marche borders the Adriatic Sea, in a picturesque setting that includes vineyards, snow-capped mountains and coastal beaches. The town is far more affordable than the better-known destinations of Tuscany and Urbino — expats can live comfortably on $20,000 to $25,000 a year, according to the magazine. Houses on the coast start at $300,000, though you’ll pay half that amount for a home further inland.

Healthcare is generally good, the magazine says, though the top local hospital is in Ancona -- within an hour’s drive of Le Marche.

These five destinations were named tops by AARP, but you can learn more others that just barely missed the list here. And if you’re interested in living abroad in retirement, this article from Kiplinger.com has some excellent information and additional resources.