Retiring in South America: 7 Hidden Gems That Offer Better Value Than Mexico

Planning to retire but worried your U.S. nest egg won’t stretch far enough? The good news is that retiring in South America has become increasingly popular among American expats—and for good reason. Beyond just affordability, these destinations offer year-round sunshine, vibrant cultures, and often superior healthcare compared to what retirees previously sought in Mexico.

Why South America Over Mexico?

Americans have long been drawn to Mexico for retirement, but neighboring regions in Central and South America are quietly offering something Mexico can’t: a significantly lower cost of living combined with better healthcare infrastructure and lower crime rates in many areas. Benjamin Njila Fields, a real estate investor with properties throughout the Americas, notes that “throughout these regions, goods and services are priced much lower than in the United States, enabling residents to spend significantly less on a monthly basis.”

The biggest concern retirees raise? Transferring Medicare abroad. But Fields points out that private health insurance in Latin America is remarkably affordable and often comparable in quality. Most foreign policies cost a fraction of U.S. premiums while providing comprehensive coverage.

Where to Stretch Your Retirement Dollars: The Rankings

The Andean Route

Colombia tops the list as Latin America’s most affordable retirement destination, with monthly housing averaging just $548. In Bogota, you can rent a one-bedroom for around $394.50. The real surprise? Utilities—a couple pays approximately $32 monthly for electricity. Total monthly expenses typically range from $1,000 to $2,000, making retiring in South America here roughly 3-4 times cheaper than the U.S.

Ecuador offers similar affordability at $750 monthly for housing, with the added benefit of government IESS healthcare available for just $95 per month. Positioned on the equator on South America’s northwest coast, Ecuador has been investing heavily in education and healthcare infrastructure. Life expectancy sits at 77.90 years.

Peru delivers diverse landscapes—from the Amazon to Machu Picchu to coastal plains—with rents averaging 76.8% lower than the U.S. Outside Lima, you’ll find housing for around $700 monthly, supporting a comfortable lifestyle on $1,500-$2,000 per month.

The Southern Cone

Argentina showcases what retirement in South America looks like with more developed infrastructure. Rent runs 81.8% lower than America, averaging $576 monthly, while the country’s strong agriculture, tourism, and service sectors create a vibrant expat community. Life expectancy reaches 77.32 years.

Paraguay provides an interesting tax advantage: retirees earning income from the U.S. pay no local income tax. Average housing costs just $555 monthly, and as a major exporter of beef and hydroelectric power, the country maintains economic stability. Healthcare and household goods remain remarkably affordable for those retiring in South America.

Brazil captures the imagination with Rio’s famous beaches and Carnival culture, plus the Amazon rainforest. Monthly housing averages $661, making it roughly 3.15 times less expensive than the U.S. However, Brazil is slightly pricier than other options on this list.

The Central American Option

Nicaragua rounds out the list as the most affordable Central American choice at $625 monthly for housing—though it’s also the most economically challenged nation here. A retired couple can live comfortably for $1,500 monthly including housing, or purchase a home outright for around $100,000. Life expectancy: 75.43 years.

The Bottom Line on Retiring in South America

Each destination offers distinct advantages for those seeking to stretch retirement income. Whether you prioritize pristine beaches, mountain landscapes, cultural richness, or pure affordability, retiring in South America provides options that simply can’t compete with U.S. cost of living while maintaining reasonable healthcare and modern amenities.