This American retired in Ecuador at 49 – here's how others can do it too, according to experts
Lee Harrison never thought he'd retire at the age of 49 – 13 years earlier than when he had planned. He definitely didn't expect that he'd be retired in Ecuador of all places. But at 70, he's happier than ever with his decision, he said.
"My father worked until he was 62, which I thought was great and my idea of early retirement at the time," he told USA TODAY.
In his late 40s, Harrison was working in New York as a writer, and his wife, Julie, was a project manager at an energy company. While he didn't have a lot of savings, he worked at a company that offered an early retirement package with a pension when you hit 50, he said.
On a visit to his in-laws in Arizona, Harrison was browsing in a bookstore and came across a book about moving to Costa Rica, where the cost of living is lower than in the U.S. and the weather is ideal.
A lightbulb went off. What if the couple retired overseas and was able to live out an adventure?
After evaluating multiple countries, including Spain, Costa Rica and Mexico, they settled on Ecuador.
"It could be that I retire at 49 and stay happily retired for the rest of my life, which would be the case so far," he said. "Or if it's a total failure and I hate Ecuador, then I'll just end up back at my desk in New York again."
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How do you begin the process of retiring abroad?
Thirty years ago, retiring in another country was a fringe idea, according to Kathleen Peddicord, an expert in retiring abroad and the founder of Live and Invest Overseas. "It was way beyond anyone's imagining at the time," she said.
Most people retired in the town they lived in or somewhere sunnier, like Florida or Arizona.
Now, it's a much more accessible and potentially advantageous idea for middle-class Americans.
In 2022, there were 443,546 retired Americans receiving Social Security benefits while living abroad, according to the Social Security Administration. That's nearly double the amount from 1999 when 219,504 retired workers received Social Security benefits while living in a foreign country.
The internet has made it "easier to research and find connections and resources to make yourself feel more comfortable," said Peddicord, a Baltimore native who now lives with her family in Paris. Before everything went online, for example, you had to pay your bills by mailing in a check, even from overseas.
At the same time, today's retirees are more traveled than past generations, are living longer and want to make sure they have enough money to carry them through. In 2021, the median income for Americans 65 and up totaled $47,620, yet for the year, all Americans spent about $66,928 on average on costs like food and transportation – a 9.1% increase from 2020.
Others are simply seeking adventure. "Every day is filled with the unexpected," compared to retiring where you've already lived, Peddicord said.
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"Some people will think it's crazy, some people will be terrified. For those who aren't scared of the idea, pursue it and break it down step by step," she said.
That's what Harrison did. Over the next three years, he and his wife looked at cost of living, weather, and access to health care in different countries. The main factor for them was finances.
"Could I stretch what we would get for selling our house and pensions? Could I stretch out that basically forever?" he said.
Finally, they picked Ecuador's third-largest city, Cuenca – after driving around the majority of the country in a rental car.
"It was like being in a different world," he said, referring to the cobblestone streets and old European architecture – its city center is listed as a UNESCO World Heritage Site. The city is charming and safe, with springtime weather year-round. There are bakeries, outdoor cafes and views of the mountains.
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It was an affordable place for the Harrisons to live, plus the country uses the U.S. dollar as its currency, so they didn't have to go through complicated money conversions or pay attention to the currency rate. "The places we had lived weren't particularly cheap – like Vermont or New York," he said. At the time, about 20 years ago, they were able to live on a few hundred a month in Cuenca. Currently, a single person can live in Cuenca for approximately $507 a month.
"You can go to Mississippi or Arkansas with a low cost of living, but it's not the same as living somewhere like Ecuador," he added.
To get started, Harrison found a real estate agent and also reached out to the U.S. Embassy to find an English-speaking attorney to figure out how to apply for residency. The couple sold their belongings and house in Vermont and made the move in 2001. They didn't know anyone who lived in Ecuador but were quick to teach themselves Spanish and meet others.
Pricing locals out
To move to most countries, you often have to show proof of sufficient funds to live there or regular monthly income (like from your pension or social security, for example), which vary by country. For example, Peddicord said you need $1,000 a month to qualify for residency in Panama, and it's even less in Colombia. "You either qualify or you don't," she said.
For many Americans, these qualifications are much more affordable than most retire-friendly, warm-weather places in the United States, like Florida. One popular expat destination, Mexico, has about 1.6 million U.S. citizens living within its borders, according to the State Department.
The high number of expats going to these countries hasn't gone without some criticism from locals. With the American dollar going farther in Mexico and other places, expats are automatically given more purchasing power, driving up living costs and gentrification.
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Educator and host for the podcast Spanish and Go, May Larios García – who is from Manzanillo, Colima – said that "gentrification is certainly a growing concern" in the country.
"It is important for retired expats to be aware of the potential impact of their presence on local communities," she said. "To mitigate this impact, retired expats can try to integrate into local communities in a respectful and mindful manner." Larios García recommends learning the host language and renting from locals instead of buying property.
Joel Cerna was born and raised in Guadalajara and moved to Puerto Vallarta for about 20 years for work. Puerto Vallarta has recently exploded as a popular tourist and expat destination for Canadians and Americans. He said that the influx of expats brings both good and bad, like new job opportunities and investing more money into the local economy but also "the gentrification of certain areas and the displacement of lower-income residents." Overall, he thinks the benefits outweigh the cons.
How to embrace the new lifestyle
Loving the adventure, the couple has explored more of Latin America, also living in Uruguay, Colombia and Mexico.
Harrison admitted that adjusting to his new life meant a change in "priorities and lifestyle." In the U.S., Harrison had a boat, snowmobiles and a car he only drove on Sundays. When living in Medellín, Colombia, it was easier to forgo a car completely. He said he enjoys having fewer possessions. He's also smitten with the slower pace of life, such as restaurants encouraging diners to take their time and how dinner can end up lasting for hours.
"My biggest motivator was not having to work," Harrison said, adding that he probably lives more comfortably than his parents, who worked their whole lives, did. "There's a lot to be gained."
Below are some tips to get started on retiring abroad by Peddicord and Harrison:
Figure out what matters to you, whether that's being by the ocean or being able to afford property. Harrison also warns people not to get caught up in decision paralysis. "One of the trickier parts is not over-evaluating." Peddicord recommended asking yourself, "What do you want your life to include?"
Create a nest egg so you can cover the security deposit, government fees, plane tickets and other costs that help you get started.
Think about the exchange rate. A place may be affordable now, but over time if the exchange rate changes, that could make you "very vulnerable," Peddicord said. Belize, Panama and Ecuador are countries that use the U.S. dollar, so you don't need to worry about those fluctuations.
If you're nervous to give up everything for a life abroad, "it can be as much or as little as you want," Peddicord said. You can spend a few months in a new country on a tourist visa and rent out your house back home to see how you fare.
Hire an attorney to help with the government process. "Don't be cheap on something that if there's a serious mistake if done wrong could cost you a lot of money," Harrison said, adding that getting a good lawyer "is part of the deal" of safely moving abroad.
This article originally appeared on USA TODAY: Retirement planning abroad: How to save money and retire early