I guess everyone’s aware of the population pyramid across Europe. Luckily I was aware about the fact and the consequences early in my career, which motivated me to maximize the profits rather than just enjoy so called middle-class lifestyle. However I’m surprised how quickly it’s progressing. At this moment a lot of retirees in Europe have to live on ~1k EUR and are struggling, and that’s not even the peak of the pyramid. I believe this level of income is still fine in the Eastern parts provided you own your place, live rent-free, but buying a house with a plot of land is not particularly cheap even in Eastern EU.
I am 50 and have no prospects for a comfortable retirement pension. Well, if I’d managed to work till 65 in Switzerland then yes, the combined 1st and 2nd pillars would let me retire even in Switzerland, but that’s very unlikely (and I’m not pessimist), therefore I’m looking for plan B. I’m looking for a place where I could afford buying/renting a place to live, ideally with some garden, to minimize the recurring costs, spending up to 1k on top of that when I move there. I know that in many countries I can’t even buy anything outright, but there are reasonable solutions, like long-time rent contracts. To set up home while you can still afford it is one thing, second is to prepare for the move, learn the basics of the local language before you’re too old to do so. Therefore I’m doing the research now.
Cheap countries are not the destination for work immigrants, but once you put income aside, it’s getting interesting. I think the most important factors to look at are:
clean environment, not meaning super tidy or picturesque, but just not polluted
no crime
good healthcare
no extreme weather
I put healthcare on 3rd position as you can’t have everything. Cheap countries like that just don’t exist.
Which place on earth could fit the plan? (I’m still early in my research)
If you care about taxes then Bulgaria might be an interesting choice. 5% taxes on Dividends and no taxes on pension income[1]. The average citizen makes less than EUR 1000 month, so it should be enough. Capital gains from regulated stock exchanges are also not taxed.
If you invest heavily into US dividend stocks, you pay a 10% witholding tax and then again 5%, which comes to 14.5% in total taxes on US dividends.
You may be surprised, I think, what’s cheap/hellhole to a Swiss (ie, more or less everything) can well be paradise to someone from a very deprived country. I know Greece and Serbia quite well, both have tons of work immigrants. That said, other than land being very cheap in some places in Serbia, it’s becoming more expensive by the minute, especially Belgrade. 1k CHF/month could give a person a pretty decent life for the time being. Crime is very low outside of Belgrade unless one goes looking for it (then they may end up in sausages, for real).
Greece is very expensive for its salaries/taxes, to the point where 2k EUR/month is needed for decent living, and housing has become moronic in Athens, though prices go down very fast the further away one gets from Athens. Serious violent crime is thankfully very rare (though blatant gangster crime in broad daylight has been going on for a while), but petty theft is extremely common. No tax on UCITS ETF capital gains or dividends. Several government plans to entice returners and foreign retirees with very reduced taxation in place.
Both have decent and free healthcare but it’s very stretched and running on the goodwill of the healthcare staff and patient families chipping in. Doctor bribing to get things done is extremely common. Frankly healthcare is my #1 concern around returning to Greece.
Both have extreme weather (both have very hot summers, Serbia has very cold winters).
Both countries have nice environments, and in both countries people dump their trash everywhere
I’m a nomad jumping from place to place, IMO every corner gets familiar in 2-3 years. However I agree, moving somewhere at retirement age might be very difficult. In particular I’m worried that my ability and motivation to learn local language would deteriorate, so I’ll live in my bubble at best. That’s why I’m thinking about cheap location I could move anywhere from tomorrow to 5 years from now.
I guess what’s rather difficult for most people is to retire in a place with no family nor close social network around, but that’s where I am, so nothing to loose.
At this moment not yet. In the future who knows as Portugal is getting very expensive. As I wrote, if the odds align so that I’ll keep my job (or find a next job) until retirement age then no worries, I would be able to retire comfortably in Switzerland or move wherever I’d fancy. In the meantime I’m drafting plan B in case I’ll be laid off, replaced by AI
Thanks for the details about Eastern Europe, in particular Bulgaria, I didn’t expect finding detailed official web in English (though, I only skimmed through it, will study it later)
Rural Ireland and rural UK would be cool, but really not sure with the stated budget or plans to buy real estate - but on the plus side you have the language.
Baltics may be liveable, but you are looking at horrid weather, partial depopulation, private healthcare (if you want things done) and the current neighboring political situation. Business friendly though, I’m told.
I would add a vote for rural Italy, depending very much on the region the public healthcare could be on par with Switzerland.
Food, nature, weather, friendliness and quality of life in general probably needs no advertising
Cons: quite heavy taxes, unless there is some form of avoiding them (forum, pitch in), you need a car (pro&con), probably should learn some of the language (it could be a plus for socializing), ageing population. Again depending on the areas, there was some “return to the countryside” trend during and after Covid and some influx of young people back to certain areas.
If you have a private insurance things will get done, well and generally quickly.
Not so sure if you don’t have private insurance, very likely it depends on where you are.
Pitching in then: it should be possible for retirees to apply for residence and get taxed at 7% flat rate on your non-italian income for the next 10 years iirc.
Of course there are restrictions: you must move in the south (no, Rome region is NOT south) and in a town with <20k inhabitants.
I think there was also a catch that the flat tax was 7% but no less than 10kEUR (?)
This was true a few years ago when I was toying with the idea, as far as I understand this is still true but perhaps the exact details (7%, 10y) might have changed.
Italian governments are very creative with taxes though, so you might end up being taxed on something else
This type of things completely escaped my radar, it’s interesting.
I love this conversation. I expected everyone would say Thailand
Actually when retiring in Eastern Europe, the Swiss health insurance will apply to me, although I’ve heard the premiums are much lower. I wonder if Swiss premiums cover also private services in such case. This could be a good deal.
I was expecting Malta and Cyprus as suggestions, but then again, I know literally nothing about this topic. And I don’t think I’ll ever move there.
Famous last words.
My bliss augmented suggestions within the mentioned – I should say: listed – constraints would have been: Guernsey and the Bahamas?
Ok, ok, your topic title rules out the second set of suggestions, but maybe those mediterranean islands still fit the bill?
The government is clearly creative, e.g. CIT of 20% [1], or paying 50% less taxes after moving back to Italy [2], and so on. Just don’t forget that they can retroactively tax you if they find something down the road to fuck you over…
I would nominate rural spain. Just beware of the wealth tax - you must own your house there, fully paid off. If that was the case, you can in my view life quite well with 1k…
I will second this statement. You can find few villages with little connection in France and 1h30-2h drive for any airport or train station, very affordable.
You can find old houses in France or Italy for less than 50k with land but everything to renovate.
The side of the coin will be negative demographics in these villages and the need to drive 30 minutes to the first supermarket.
The piece of life will be very slow but with Internet you could get entertain.
Good food, no stress, exercices, access to health care are ingredients for long and healthy retirement.
However you should maximise having an happy life, lots of joy and surrounded by friends and close family.
Not sure if meets your criteria but Georgia is a great place. Amazing people, better food and still quite affordable. Language can be a barrier as Georgian is quite difficult to learn.
If you first buy your own home, you can live very comfortably on CHF 1K in many countries. If not, 1K is a tight stretch because rents for good-standard housing tend to be disproportionately high in countries that otherwise have low living costs.
For example, my old man bought a home in Hungary and retired there. Since he doesn’t have to pay rent, he lives an excellent lifestyle just on his AHV pension (he doesn’t have a large AHV pension because he only worked in Switzerland for a relatively short length of time. It’s around 1K after deducting the mandatory Swiss health insurance). He can afford to eat well, own a car, and spend a lot of his time traveling (including to far-away destinations) just from his Swiss AHV pension, without having to touch his other pensions or savings. His GF is Hungarian, and he has some friends there from the distant past.
All in all, it’s a sweet little setup. But if he were to rent the same home, he would pay almost CHF 1000 per month for it (he spend around 80K on buying and renovating it). I noticed the same pattern in many African countries, where monthly rents were often as high as 1-2% of the property price because of low supply of quality housing.
Language can be learned, and in most places you’ll find at least some compatriots or other folks who can speak your language.
My wife is from Latvia and I have a good friend from Lithuania. Both are quickly getting more expat-friendly, but also more expensive. 1k might be fine for now, but you can’t really count on this still being the case even in 5 years. And no, the local stock market and fixed interest instruments won’t provide a hedge against it. Maybe real estate, but I don’t know much about that topic.
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