7 Most Affordable Countries to Retire in South America — More Budget-Friendly Than You Expected

Planning to retire but concerned about stretching your U.S. retirement savings? Living abroad in South America could be your answer. Beyond just affordability, the cheapest country to live in South America options offer what many retirees seek: tropical climates, stunning natural landscapes, lower crime rates, better healthcare access, and most importantly, a fraction of North American living costs. The region has become increasingly popular as American retirees discover that financial comfort during retirement isn’t reserved for the wealthy.

Why South America Is Emerging as the Affordable Retirement Destination

Historically, Mexico captured most expat attention, but South America’s cheapest retirement destinations now offer compelling advantages. According to real estate professionals who’ve invested across multiple continents, “Throughout these regions, goods and services are priced substantially lower than in the United States, enabling residents to maintain a comfortable lifestyle on significantly reduced monthly budgets.”

The healthcare consideration often concerns retirees. While Medicare transfers abroad require careful navigation, South America’s solution is elegant: private health insurance policies cost a fraction of U.S. premiums while delivering comparable care quality. Monthly insurance premiums for retirees often run between $50-$200 depending on coverage — a stark contrast to American healthcare expenses.

The Cheapest Countries in South America, Ranked by Affordability

We analyzed seven nations across South America and Central America by examining housing costs, utilities, food expenses, healthcare, and overall living expenses for moderate lifestyles. Countries with concerning health statistics were excluded. Here’s what we found — starting from the most expensive on this budget-friendly list down to the absolute cheapest country to live in South America.

7. Ecuador — Where $750 Monthly Covers Your Housing

Average Monthly Housing: $750
Life Expectancy: 77.90 years

Ecuador’s name comes from its equatorial position on South America’s northwest coast, a geography that rewards residents with consistent warm weather. Oil discoveries have fueled healthcare and educational advancement. Retirees can access government health insurance (IESS) for approximately $95 monthly — just $10 more than singles pay. The overall cost advantage: retiring here runs about three times cheaper than the United States.

6. Peru — Ancient Heritage Meets Modern Affordability

Average Monthly Housing: $672
Life Expectancy: 77.65 years

Peru delivers dramatic diversity within its borders: Andean peaks, Amazon rainforest, Pacific coastlines, and archaeological wonders like Machu Picchu. Living outside Lima offers extraordinary value — roughly $700 in monthly rent allows you to maintain a comfortable lifestyle on $1,500-$2,000 total spending. Housing costs in Peru average 76.8% lower than comparable U.S. rentals, making it genuinely affordable for retirees seeking South America’s cheapest living options.

5. Brazil — Vibrant Culture on a Retiree’s Budget

Average Monthly Housing: $661
Life Expectancy: 76.38 years

Rio de Janeiro’s reputation as a premier South American destination attracts visitors year-round, particularly during Carnival season. Beyond tourism, the country offers sun-soaked beaches, warm hospitality, rich cultural traditions, and access to the Amazon ecosystem. What makes it retirement-worthy: Brazil’s overall cost structure runs 3.15 times less expensive than America, delivering excellent value for budget-conscious retirees.

4. Nicaragua — Central America’s Most Economical Option

Average Monthly Housing: $625
Life Expectancy: 75.43 years

Nicaragua achieves the region’s remarkable affordability metrics — 3.61 times cheaper to live in than the United States. However, transparency requires mentioning that Nicaragua faces economic challenges including poverty and unemployment. Despite these considerations, a retired couple can establish a comfortable life here starting at $1,500 monthly (including housing). Home purchases average around $100,000, providing another budget-friendly option for those seeking property ownership.

3. Argentina — Quality Living in South America’s Wealthiest Nation

Average Monthly Housing: $576
Life Expectancy: 77.32 years

Argentina distinguishes itself through superior living quality compared to other South American destinations. The country’s economy benefits from agricultural abundance, industrial development, and robust service industries. For retirees, the numbers tell a compelling story: rent runs 81.8% lower than America, yet residents enjoy higher quality infrastructure and services than many cheaper alternatives in the region.

2. Paraguay — The Hidden Gem for Savvy Retirees

Average Monthly Housing: $555
Life Expectancy: 74.70 years

Paraguay rounds out our list as another South American powerhouse, boasting a resilient economy and significant income streams. The country exports beef, corn, and soybeans while supplying hydroelectric power to neighboring nations. For American retirees specifically, Paraguay offers a unique incentive: those earning retirement income from the U.S. enjoy exemption from income taxation. Combined with affordable healthcare, economical household expenses, and genuine natural beauty, Paraguay appeals strongly to financially-conscious retirees.

1. Colombia — The Cheapest Country to Live in South America

Average Monthly Housing: $548
Life Expectancy: 78.04 years

Colombia earns the title as South America’s most affordable retirement destination, though costs vary significantly by region. Upscale neighborhoods in Medellin command premium prices, but budget-conscious retirees discover extraordinary value elsewhere. Bogota offers remarkable rent — one-bedroom apartments average $394.50 monthly, while two-bedroom homes cost approximately $586.50. Couples typically maintain comfortable lifestyles on $1,000-$2,000 monthly total spending. Even electricity costs seem almost unbelievable: roughly $32 monthly for a household.

Making Your South America Retirement Decision

Choosing the cheapest country to live in South America involves weighing more than raw numbers. Consider healthcare quality, English speaker prevalence, personal security, cultural fit, and climate preferences. While all seven destinations deliver exceptional affordability compared to North American living, your ideal retirement depends on individual priorities.

The good news? In every case, your retirement dollars stretch substantially further than they would domestically, allowing you to focus on enjoying life rather than managing financial stress. South America’s combination of low costs, tropical beauty, and increasingly welcoming communities toward foreign retirees makes it an increasingly logical choice for those seeking to maximize their retirement years without compromising their lifestyle.