Retire In Colombia On $1000 Dollars Per Month

If I told you that you could retire in one of the most biodiverse countries on the planet, a place where the sun (almost) always shines, where the people are friendly, where the health care is first class, and the cost of living is a fraction of what you are paying in the North America or Europe… Would you believe me?

Baby boomers all over the world are retiring at record speed. In the US alone, it’s estimated that 10.000 people retire every day. That’s around 300.000 new retirees every month.

For this exercise, let’s use the US as an example because the data is easily available.

According to this article, 1 in 3 American retirees have absolutely no savings, and half of them have less than $10.000 USD in savings which will have to last them for what is an additional 30 years of expected lifetime. Experts advice that in order to retire comfortably in the United States, your nest egg should include about $1 million dollars in assets.

The average retiree will receive around $1400 USD from Social Security, and many people are still dealing with a mortgage on their house by the time they reach retirement. And even if you don’t, the average monthly house ownership cost is still around $1200 USD.

I’ve seen the consequences from being short on retirement funds first-hand. My own grandmother, uncles and aunts are all retired in the US and all of them are struggling financially.

They have no excess in the budget to travel, frequent restaurants, play golf, buy a new car, pay for good medical care, etc. That’s no fun after working your butt off for 45 years. And my family lives in small town America. I can only imagine what people in similar situations in New York, Chicago, Washington and San Francisco and similar places are going through.

I doubt that baby boomers in the US are the only ones looking at a dire retirement. In many places around the world people have not been saving sufficiently to ensure that they can maintain a good life without downsizing considerably once they retire.

The good news is that there are other options as to where you can retire if you are willing to broaden your horizon a bit…

An alternative retirement… in Colombia

Colombia is one of the few places in the world where you can enjoy a great lifestyle on a small budget when you reach retirement age.

I know that most of the mainstream media only broadcast bad news from this country. As is usually the case, the reality of living in Colombia is a very different story. I’ve been here for 6 years now and I’m truly happy about my choice and if you need some referrals, I’d be happy to put in your touch with other expats (young or retired) that have already made the move.

Let’s try to list some of the many benefits to living in this beautiful country:

• Friendly and welcoming culture.
• Live in a vibrant, cosmopolitan city or in the beautiful Colombian countryside. Or by a lake in the mountains or among palm trees on the beach.
• Cheap short flights to North America with JetBlue, VivaAir, Spirit Airlines, etc. Also to neighboring countries such as Panama, Ecuador, and Peru.
• Affordable health care with no premium for seniors. The standard health insurance (EPS) costs 12.5% of your declared income. I’ve written a separate post on health insurance which you can read here. And even if you want to pay for health insurance, you can still get a consultation with a general doctor or specialist for around $30-40 USD – usually same or next day. Many doctors do house calls as well.
• Hot, warm or cool climate all year depending on the region you choose.
• Fresh, locally produced fruits and veggies with a growing organic movement.
• Amazing diversity in geography, nature, flora and fauna.
• Countless places to visit for weekend trips.
• Growing expat community.
• Tons of festivals all over the country. Cali alone has 16 festivals each year.
• No age stigma.
• Cheap generic Viagra. Medicine in general is a lot cheaper here.
• Have a full-time maid for around $350 USD per month. If you need a nurse, it will cost about $1000 USD to have one full-time at your house.
• Cheap and plenty restaurants with cuisine from all over the world.
• Everything can get delivered to your door: Supermarket, restaurants, pharmacies, etc.
• Senior discounts at cinemas, for public transportation, museums, etc.
• Many of Latin America’s best hospitals with bilingual doctors are in Colombia, including 2 in Cali – Fundación Valle del Lili and Imbanaco.
• Fantastic purchasing power with the current dollar exchange rate close to 10-year high.

But can you actually live on $1000 USD per month in Colombia?

Let’s try to break down a budget to give you an idea about how far your $1000 USD per month will get you.

• Rent a 2-bed / 2-bath, 60 m2 (645 sqft) apartment in a nice gated community with a balcony, pool, elevator, playground, 24-hour security in a nice middle-class neighborhood for $800.000 COP / $235 USD per month.
• Water, electricity, gas, TV and internet for about $60 USD per month.
• Medical insurance will be 12.5% or $125 USD.
• Local transportation in bus, Uber, taxi, etc. $50 USD unless you just enjoy walking around.
• Groceries for one person $150 USD per month.

The above mentioned expenses are what I would consider the most important items for most people and they add up to $620 USD per month. Living like this you would still have $380 USD per month (more than the Colombian minimum wage) to have fun including taking Spanish classes, learning salsa, visiting restaurants, going to the movies, travel around, or even have a full-time maid employed.

Today, I had a two-course lunch with a lemonade at La Rustica for for $15.000 COP. That’s less than $5 USD!

So I think you get the idea. This is by no means unrealistic.

Another important thing to note is that you can still earn around 6% interest on a savings account here meaning that your heard-earning retirement saving will not be losing value due to inflation if you decide to bring it in and park it here.

The above is just an example based on one person with no savings receiving $1000 per month from his or her pension. Remember if you come with your spouse and both of you receive about $1000 per month, then you can increase your lifestyle even further or save money every month.

Can you get a visa to live full time in Colombia?

The answer is YES!

Colombia is one of the countries where it is surprisingly “easy” to obtain a visa to live full time as a retiree.

Take “easy” with a grain of salt, because although there’s only ONE requirement that you need to comply with, there are still some important paperwork that must be handled correctly in order for the Colombian Migration Authority to approve your application.

The one requirement to comply with is that you have a pension or social security that pays you at least 3 times the Colombian minimum wage per month. For 2019, the minimum wage in Colombia is $828.116 Colombian Pesos (COP) or $242 USD at today’s exchange rate of $3426 COP to the USD.

So, if you can demonstrate that you receive $726 USD* on a monthly basis, you’re qualifying for a Colombian retirement visa. That’s hard to beat when comparing to other options anywhere else in the world.

*(Please note that the exchange rate fluctuates, but if you’re receiving around $1000 USD per month you will be fine).

Upon approval you will get a 1-3 year migrant visa, which is renewable, and after living in Colombia for 5 years, you can become a resident.

While it sounds easy, I do recommend that you get professional help with your visa application. There are several visa agencies that can do the process for you. Personally, I recommend that you work with Jessy from Cali Capital. She is very professional, speaks perfect English and responds super fast. Jessy will help you with all documents plus official translations, etc. She has only 5-star reviews on Google and she will make sure you avoid the trip to Migration in Bogota during the process which can be quite a hassle.

The whole process from beginning the visa application to getting it approved can take as little as 2 weeks. By comparison, the same process in Denmark where I come from takes 9 months.

What about taxes?

If live here full-time but make less than $46 million COP in retirement income (numbers from 2019) or about $13.500 USD at today’s exchange rate, you will not have to declare taxes in Colombia Also, please note that there’s a double taxation agreement between the US and Colombia meaning that even if you make more and pay taxes in the US on that retirement income, you will most likely never have to pay a dime in Colombia.

If you ever need help with expat taxes, I suggest that you reach out to the Online Taxman. They specialize in US expat taxes, are based out of Colombia and offer a free consultation to get you started.

Remember, most obstacles and challenges exist only in our mind. As Henry Ford famously put it: “Whether you think you can or you think you can’t, you are right”.

I hope this post was helpful and please feel free to share. If you have any additional questions about retiring in Colombia, then please leave a comment below and I’ll be happy to elaborate.

(Photo by Luis Quintero from Pexels)