International Comparisons: Cost of Living Overseas

Comparing the cost of living overseas among different countries is one approach to selecting a potential overseas retirement destination. The cost of living overseas varies significantly from one country to the next and it is useful to conduct an international comparison of the cost of living overseas. Retirees on a modest pension may be able to improve their standard of living by retiring abroad and taking up expatriate living in a country with a low cost of living overseas.

The potential expatriate should keep in mind however, that most international comparisons of the cost of living overseas are focused on major cities around the world. There are usually many articles that list the 10 most expensive cities to  live in. However, if you are planning to retire abroad it will be more useful to consider the cost of living overseas in a broader context. A country to country comparison of the cost of living overseas is likely to be more useful than the more limited city to city comparisons of the cost of living overseas.

One way to get a handle on the cost of living overseas is to make international comparisons of per capita incomes when adjusted for purchasing power. An examination of per capita incomes provides an insight into the amount of individual wealth available in a country for the cost of living. By making a purchasing power adjustment, it then becomes possible to  level out differences in the purchasing power of foreign currencies so that it is easier to make country to country comparisons in the cost of living overseas.

As an example, let’s say that in country A, an income of $10 will purchase 1 widget. If an income of $10 will purchase 2 widgets in country B, then that $10 has more purchasing power in country B. If the actual per capita income of countries A and B is $10, the per capita income of both countries when adjusted for purchasing power changes to $10 for country A and $20 for country B.

If you are planning to retire abroad, a useful first step is to compare the cost of living overseas at the national level for different countries. The next useful step would be to take a close look at in-country variations in the cost of living overseas. Within each country, the cost of living overseas usually varies significantly between rural and urban lifestyles, from one region to another, and from one neighborhood to the next.

I. Cost of Living Overseas: Highly Developed Countries With the Highest Per Capita Incomes

The cost of living overseas will tend to be greatest in those countries with the highest per capita incomes. These are usually highly developed countries with 1) a diverse and well-developed economy (e.g. USA), or 2) a small state with a highly developed urban economy (e.g. Singapore), or a country that is a major oil producer (e.g. Kuwait). The cost of living overseas in these countries will tend to be the high simply because people in these countries have more income to spend for their basic costs of living.

Eight countries fall in this highest cost of living overseas category (more than $40,000):

• Luxembourg: $64,000
• Kuwait: $50,000
• Norway: $53,000
• Brunei: $50,000
• Singapore: $49,000
• USA: $46,000
• Hong Kong (China): $44,000
• Switzerland: $44,000

II. Cost of Living Overseas: Highly Developed Countries With Moderately High Per Capita Incomes

These countries are all developed countries with well developed economies and a good infrastructure in place for decent expatriate living when you retire abroad. Although their costs of living overseas are slightly lower than in the USA, in some instances, the major urban centers in these countries may actually have a higher cost of living overseas figure than a comparable US city. So, you will have to do additional research to evaluate in-country cost of living overseas variations. For example, Tokyo, Japan is now rated as the most expensive city in which to live despite the fact that Japan’s national per capita income is about $10,000 lower than the USA.

Seventeen countries (mostly from Europe, North America, or Japan) fall in this cost of living overseas category ($30,000 – $40,000):

• Netherlands: $39,000
• Austria: $38,000
• Ireland: $37,000
• Sweden: $37,000
• Denmark: $36,000
• Canada: $35,000
• Belgium: $35,000
• Japan: $35,000
• Finland: $35,000
• Bahrain: $34,000
• Iceland: $34,000
• United Kingdom: $34,000
• France: $34,000
• Australia: $33,000
• Greece: $32,000
• Spain: $31,000
• Italy: $30,000

III. Cost of Living Overseas: Relatively Developed Countries With Moderately Low Per Capita Incomes ($20,000 – $30,000)

This third group of countries are developed with a modern infrastructure in place, but at the national level, they possess relatively low per capita incomes and a low cost of living overseas. If your choice of expatriate living is a developed country on a budget, the countries in this cost of living overseas category may be your best bet.

Thirteen countries fall in this cost of living overseas category:

• Slovenia: $27,000
• Cyprus: $26,000
• New Zealand: $26,000
• Israel: $26,000
• South Korea: $25,000
• Saudi Arabia: $23,000
• Trinidad and Tobago: $22,000
• Czech Republic: $22,000
• Equatorial Guinea: $21,000
• Malta: $21,000
• Portugal: $21,000
• Oman: $20,000
• Estonia: $20,000

IV. Cost of Living Overseas: Less Developed Countries With Moderately Low Per Capita Incomes ($15,000 – $20,000)

Countries in this category are less developed countries. Despite a lower cost of living overseas value, these countries do have a fairly modern industrial infrastructure in place. Many of these countries were former members of the old Soviet bloc of nations during the Cold War Era. Because of their close proximity to the more developed Western Europe, these countries are also a convenient option for a retirement retire abroad. More likely than not, the economies of these countries will continue to develop and catch up with Western Europe.

Eleven countries fall within this cost of living overseas category:

• Slovakia: $19,000
• Antigua and Barbuda: $18,000
• Hungary: $17,000
• Lithuania: $17,000
• Latvia: $17,000
• Barbados: $16,000
• Russia: $16,000
• Poland: $15,000
• Croatia: $15,000
• Libya: $15,000
• Seychelles: $15,000

V. Cost of Living Overseas: Developing Countries With Moderately Low Per Capita Incomes ($10,000 – $15,000)

These are developing countries that still have a lot of work to perform to build their economic infrastructures. The capital cities of most of these countries are fairly modern by today’s standards and can provide an expatriate living abroad with a reasonably good standard of living. However, the cost of living oversea in urban areas will usually be on the high side, while rural costs of living overseas remain relatively low. Many of the countries in this cost of living overseas category are Latin American countries along with a handful of Eastern European and African nations.

Twenty-two countries fall within this cost of living overseas category:

• Malaysia: $14,000
• Saint Kitts and Nevis: $13,000
• Gabon: $13,000
• Argentina: $13,000
• Chile: $13,000
• Mexico: $13,000
• Botswana: $12,000
• Turkey: $12,000
• Venezuela: $12,000
• Mauritius: $11,000
• Bulgaria: $11,000
• Uruguay: $11,000
• Romania: $11,000
• Iran: $11,000
• Belarus: $11,000
• Costa Rica: $11,000
• Panama: $11,000
• Montenegro: $10,000
• Serbia: $10,000
• Lebanon: $10,000
• Kazakhstan: $10,000
• South Africa: $10,000

VI. Cost of Living Overseas: Developing Countries With Low Per Capita Incomes ($5,000 – $10,000)

These are developing countries that are still developing their national economies and have a relatively low cost of living overseas. The major cities in these countries tend to be relatively modern with access to amenities for expatriate living and seems quite modern by anyone’s standards. However, on average these are still countries with a relatively underdeveloped rural countryside with a large percent of the population living in poverty. Countries in this category are predominantly from Latin America, Asia, Africa, the Caribbean, and Eastern Europe. On average, the cost of living overseas in these countries will tend to be affordable for many American expatriates living abroad.

Thirty countries fall within this cost of living overseas category:

• Brazil: $9,000
• Macedonia: $9,000
• Thailand: $8,000
• Bosnia and Herzegovina: $8,000
• Algeria: $8,000
• Suriname: $8,000
• Dominica: $7,000
• Peru: $7,000
• St. Vincent: $7,000
• Tunisia: $7,000
• Ecuador: $7,000
• Grenada: $7,000
• Ukraine: $7,000
• Colombia: $7,000
• Albania: $7,000
• Dominican Republic: $6,000
• Azerbaijan: $6,000
• Jamaica: $6,000
• Belize: $6,000
• Armenia: $6,000
• El Salvador: $6,000
• Egypt: $5,000
• China: $5,000
• Jordan: $5,000
• Namibia: $5,000
• Maldives: $5,000
• Bhutan: $5,000
• Swaziland: $5,000
• Georgia: $5,000
• Guatemala: $5,000

VII. Cost of Living Overseas: Developing Countries With Very Low Per Capita Incomes ($2,500 – $5,000)

These are developing countries with relatively high levels of poverty which tends to bring the average income figures down. Although the cost of living overseas is quite low, the major urban centers for some of these countries will be quite modern with a decent infrastructure for expatriate living. In other instances, this is not the case and the vast majority of the population lives in poverty with an inadequate infrastructure for most American retirees. It is recommended that you evaluate each of these countries more carefully by looking at their internal economies for a better picture of what their cost of living overseas means.

Twenty-two countries fall within this cost of living overseas category:

• Angola: $4,000
• Paraguay: $4,000
• Fiji: $4,000
• Syria: $4,000
• Sri Lanka: $4,000
• Bolivia: $4,000
• Morocco: $4,000
• Samoa: $4,000
• Philippines: $4,000
• Tonga: $4,000
• Honduras: $4,000
• Indonesia: $4,000
• Vanuatu: $3,000
• Micronesia: $3,000
• Mongolia: $3,000
• Moldova: $3,000
• Guyana: $3,000
• Republic of the Congo: $3,000
• India: $3,000
• Pakistan: $3,000
• Vietnam: $3,000
• Nicaragua: $3,000

VIII. Cost of Living Overseas: Developing Countries with the Lowest Per Capita Incomes (less than $2,500)

These countries probably would make decent retirement destinations for only the hardiest and most adventurous of retirees. Although the cost of living overseas is quite low, the infrastructure in these countries are not well developed and access to modern amenities may be limited. Several factors may underlie why these are very poor countries. In many instances, these may be relatively isolated countries outside of the modern world economy or are countries that have undergone major political upheaval in recent years. The majority of these countries are located in Africa.

Forty-three countries fall within this cost of living overseas category:

• Uzbekistan: $2,000
• Djibouti: $2,000
• Yemen: $2,000
• Cameroon: $2,000
• Mauritania: $2,000
• Kyrgyzstan: $2,000
• Laos: $2,000
• Lesotho: $2,000
• Sudan: $2,000
• Papua New Guinea: $2,000
• Nigeria: $2,000
• Tajikstan: $2,000
• Cambodia: $2,000
• Senegal: $2,000
• Cote d’Ivoire: $2,000
• Kenya: $2,000
• Bangladesh: $1,000
• Ghana: $1,000
• Benin: $1,000
• Chad: $1,000
• Zambia: $1,000
• Tanzania: $1,000
• Haiti: $1,000
• The Gambia: $1,000
• Burkina Faso: $1,000
• Guinea: $1,000
• Mali: $1,000
• Nepal: $1,000
• Madagascar: $1,000
• Uganda: $1,000
• Rwanda: $1,000
• Togo: $1,000
• Ethiopia: $1,000
• Malawi: $1,000
• Central African Republic: $1,000
• Mozambique: $1,000
• Sierra Leone: $1,000
• Niger: $1,000
• Guinea-Bissau: < $500
• Zimbabwe: < $500
• Burundi: < $500
• Congo: < $500
• Liberia: < $500

Countries of the world have been broken down into several categories based upon their level of economic development and their per capita incomes. This data provides a reasonable estimate of the cost of living overseas for country to country comparisons. However, it needs to be remembered that per capita data are averages. One should look at each individual country and examine the variations in the cost of living overseas that occurs within each country. 

(photo by Mokra)

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