Original Article Text From Market Watch:
Retire Here, Not There: Ecuador
As a pilot in the U.S. Air Force, Mike Grimm traveled to 57 countries in his 29 years of service. “I’ve seen how people live all over the world,” he says. When it came time for Mike and his wife, Patty, to retire in 2010, Grimm, by then a teacher and living in Arizona, knew he wanted a low-cost location with good health care, natural beauty, nice weather and plenty of cultural opportunities.
Grimm and his wife opted for Cuenca, the third largest city in Ecuador. “We live on about $1,500 a month,” Mike says. That includes rent for their three-bedroom apartment with river views, utilities, and food (Patty says they eat even better here than in the states, as there’s locally grown produce year round). It also covers travel a few times a year, entertainment and medical care. “We look around and are amazed that we’re in Ecuador,” says Patty. “There are downsides, but we’ve been here three years and love it.”
It is estimated that about 5,000 to 10,000 American expatriates now live in Ecuador, and affordability is one reason why. Most expat couples that MarketWatch talked to say they live on less than $2,000 a month in Ecuador—and sometimes much less.
In most of the country—with the exception of parts of Quito and Guayaquil, the two largest cities—the cost of housing is far below the U.S. average. A new two-bedroom apartment in a good neighborhood in Cuenca can be found for around $80,000 and entire homes aren’t much more; in the beachfront town of Bahia de Caraquez many single-family homes sell for less than $100,000.
Ecuador doesn’t tax Americans’ Social Security income, and property taxes tend to be low (in Cuenca, you might pay just $70 to $120 for the year, Grimm says). And often, homeowners over 65 get discounts on their property taxes.
Not all of Ecuador’s amenities are as advanced as an American might be accustomed to, but expats express satisfaction with their medical care. “The health care here is affordable and good” says 66-year old retiree Georgia de Machuca, who moved to Quito from Chicago about 20 years ago. “I go to the doctor and only pay about $40 to $45 for a visit.” A survey by International Living, a magazine and website devoted to living abroad, concluded that health care in the country costs only 10% to 25% of what it does in the U.S., and larger cities like Quito, Cuenca and Guayaquil have doctors representing pretty much every specialty, many trained in the U.S. and Europe.
“Ecuador is one of the most affordable places in the western hemisphere that has good services and infrastructure,” says Dan Prescher, the special projects editor for InternationalLiving.com, who settled in Ecuador three years ago after traveling extensively through Latin America. “The value for your dollar is incredible.”
It’s especially affordable and friendly to seniors: Residents over 65 (even if they aren’t Ecuadorean) get 50% off cultural and sporting events, electric and water bills, and international airfare, and they often don’t have to stand in line at places like the airport and bank. The country uses the U.S. dollar as currency, cellphones and Wi-Fi access are plentiful, and there are a lot of retiree expat communities. The cultural opportunities in the big cities are world-class. Quito and Cuenca both have a symphony and ballet and attract artists from around the world. And though Ecuador is only about the size of Arizona, it has a varied topography ranging from snow-capped mountain peaks to rain forests to beaches (and flights that can whisk you from one area to another in a couple of hours).
That said, the adjustment to a new life in Ecuador can be difficult. In many corners of the country, little English is spoken. “At first, I was almost scared to open my mouth I knew so little Spanish,” says Patty Grimm. “Things do not happen as quickly or efficiently as they do in the States,” says Gary Kesinger, 48, a retired teacher living in Cotacachi (though he has come to prefer the slower pace of life). The sales tax (which is called a value-added tax) is 12%, though people over 65 can get much of that refunded.
Flights to the U.S., even with the senior discount, can be pricey; and roads in places are rough. As in other countries, Americans aren’t covered by Medicare in Ecuador. And while Americans can buy property in Ecuador holding only a tourist visa, it can be a struggle (read: prepare for paperwork) to get residency status. Some of the smaller, more remote towns in Ecuador have less-than-ideal infrastructure, health care and services, and the larger cities like Quito and Guayaquil can get pricey.
That said, there plenty of appealing and affordable communities for those looking to retire. Here are three.
Tucked away between two volcanoes, the tiny town of Cotacachi (population: roughly 9,000) —about an hour and a half from Quito—has long escaped much settlement by foreigners, and hundreds of years later it’s still relatively undiscovered among non-Ecuadorians. But thanks to a combination of near-ideal weather (temperatures tend to stay between 50 and 70 degrees Fahrenheit due to its elevation), views of the Andes and a low cost of living, that’s all changing. Those who find Asheville, N.C., appealing, but can’t afford it, might want to think about Cotacachi.
When retired teacher Gary Kesinger, 48, decided to check out the town with his wife in 2009, he says, he “couldn’t believe that we could purchase a new apartment for less than $50,000.” Though the cost of living has risen a bit since then, Kesinger estimates that a couple can live “very comfortably” on less than $1,500 per month if they own their home. This includes all the basics, plus money for travel and eating out regularly, he says. “We love taking $5 in change to the market and leaving with nearly more produce than we can carry,” Kesinger says. Prescher, who has lived in Cotacachi for three years, even ditched his car; taxis cost just a few dollars, and you can take a bus to many other Ecuadorean cities.
Residents like that the town is artsy—it’s known for its handcrafted leather goods and local markets—and offers unique immersion into a different culture. Cotacachi is a community hub for the indigenous Quichua people, many of whom still wear their brightly colored traditional garb daily, engage in traditional healing practices, and speak their own language. The Quichua also host festivals, including the Inti Raymi, a celebration of the sun. Plus, you can hike to the top of the Cotacachi Volcano in the Cotacachi Cayapas Ecological Reserve, explore the reserves 750,000 or more acres of protected forests; or walk along one Lake San Pablo, the largest lake in Ecuador, or Lake Cuicocha, which to this day Quichua shamans in the area use for ritual cleansing.
Though it has drinkable tap water and high-speed Internet, Cotacochi is a bit remote (it’s roughly two hours to the international airport in Quito) and life doesn’t move quickly here. There is a medical clinic in Cotacachi, but most people go to the nearby towns of Otavolo or Ibarra for anything other than minor treatment or to Quito for major procedures, says Prescher.
To get to large stores, you’ll need to travel to Ibarra, about 20 minutes away by bus. And you can be sure that a trip to the Sunday market—in which villagers sell everything from fresh flowers and produce to spices and handicrafts—will have its fair share of delays and plenty of chitchat with other locals. But to some expats this is part of the appeal: Kesinger loves “having the time to socialize…without having to worry about schedules and deadlines.”
By the numbers:
Population (estimated): 9,000
Typical temperature: 50-70 degrees F.
Nearest airport with U.S. flights: Quito, roughly 60 miles away
Nearest U.S. consulate: Quito
With its cobblestone streets, colonial-era churches and stately mansions with wrought-iron balconies, the city of Cuenca oozes Old World charm. It’s a Unesco World Heritage site, and some residents argue that it’s the most beautiful city in Ecuador (Quito residents, we hear your protests.) Retirees can pick from an array of historical attractions like the Museo de las Culturas Aborigenes, which houses thousands of Incan artifacts dating as far back as 500 B.C., or the Museo del Banco Central, a massive museum complex with everything from colonial art to exhibits on Ecuadorean currency to botanical gardens. The Ingaprica—the largest Incan ruins in Ecuador—are nearby.
Retirees say they enjoy strolling through this walkable city, grabbing a coffee near the tree-lined Parque Abdon Calderon (the central square), or checking out one of dozens of colonial mansions and tiny churches, some dating back to the 16th and 17th centuries. The festive open air markets, which sell locally made crafts (fun fact: the Panama hat is primarily made in Cuenca) and food, draw residents from surrounding towns, and the flower market off Parque Calderon is a delight for locals and tourists alike. Folks of a more athletic bent can hike in the nearby Cajas National Park—something you can do nearly year round, since the weather ranges from 50 to 75 degrees Fahrenheit. (For an equatorial city, Cuenca can get surprisingly cold at night, sometimes dipping into the 30s.)
Cuenca has plenty of modern conveniences, including 18 hospitals, four universities that attract students from all over the world (Cuenca is sometimes called the “Athens of the Andes”) and a huge shopping mall (Mall del Rio) complete with a Burger King. Retirees appreciate that although Cuenca has these modern conveniences, the pace here is less hectic than in larger cities, says George Arrondo, an Ecuadorean native and spokesperson for the U.S.-based travel company Latin Frontiers, which specializes in Ecuador travel. “It’s the city retirees are most interested in Ecuador,” he says. It doesn’t hurt that Cuenca is affordable: Most retirees can live for well under $2,000 per month, Grimm says. The Grimms pay just $550 in rent for a three-bedroom apartment with river views.
By the numbers:
Population (estimated): 330,000
Typical temperature: 50-75 degrees F.
Nearest airport with U.S. flights: Guayaquil, roughly 100 miles away
Nearest U.S. consulate: Guayaquil
Bahia de Caraquez
With its new condo developments and throngs of tourists during high season, trendy Salinas is jokingly referred to as “Little Miami,” and it tends to get the most attention among Ecuador’s Pacific Ocean communities. But retirees may want to consider Bahia de Caraquez, says de Machuca, the retiree from Chicago: “It’s a small little beach town—very relaxing.” Located at the northern end of the country, roughly four hours from Guayaquil, Bahia, as the locals call it, is a popular vacation spot for wealthier Quito families, and it’s been quickly gaining traction with expats.
Once a major seaport for Ecuador, Bahia de Caraquez saw its harbor suffer from major erosion, sending some of the shipping industry elsewhere. For retirees, this is good news, as Bahia isn’t overrun with pollution or the hubbub of myriad incoming freighters. Instead, in this clean and relatively safe town, you’ll find charming homes with red-tiled roofs and manicured gardens and a smattering of quality restaurants.
In the late 1990s, Bahia was devastated by earthquakes. But residents have rebuilt the town and tried to improve upon it. The town now calls itself an “eco city” and has started recycling and conservation programs (bicycle taxis can now whisk you around town). The town has a hospital, and the roads are getting resurfaced and rebuilt. Residents can now get to Manta, which has an airport with flights to Quito, in about an hour, and a new bridge connects Bahia to San Vicente, another beach town.
There’s plenty of outdoor recreation here, says Arrondo. Of course, there’s the beach (Arrondo notes that Bellaca and Playa del Pajonal beaches are particularly beloved by residents), but residents and visitors also like hiking through the Cerro Seco, a tropical forest that surrounds Bahia, and bird watching in Isla Corazon, a mangrove-shaded island across the bay that’s home to birds like the snowy egret, striated heron and white ibis. Plus, Bahia is within relatively easy driving distance of charming small fishing towns like Canoe, San Clemente, San Vicente and Jamal, and is affordable, with many homes selling for less than $100,000.
By the numbers:
Population (estimated): 30,000
Typical temperature: 70-85 degrees F.
Nearest airport with U.S. flights: Guayaquil, roughly 160 miles away
Nearest U.S. consulate: Guayaquil