Retire Abroad Cost Calculator
Example: Monthly living cost abroad: 2200 $ · Monthly healthcare cost: 400 $ · Monthly pension / social security: 1800 $ · Safe withdrawal rate: 4 %
| Monthly income gap | $800 |
| Total annual cost abroad | $31,200 |
| Portfolio needed | $240,000 |
Worked example
Imagine living costs of $2,200 a month plus $400 for healthcare, or $2,600 total. If a pension covers $1,800, the gap your savings must fund is $800 a month, which is $9,600 a year. At a 4% safe withdrawal rate you would need a portfolio of about $240,000 to generate that gap indefinitely. If the destination were cheaper and the gap fell to $500 a month, the required portfolio would drop to $150,000.
Frequently asked questions
What is a safe withdrawal rate?
It is the percentage of a portfolio you can withdraw each year with a high chance of never running out over a long retirement. The classic figure is around 4%, though some retirees use 3 to 3.5% to be conservative, especially for a very long horizon. A lower rate requires a larger portfolio.
Why break out healthcare separately?
Healthcare is often the most variable and misjudged cost of retiring abroad. Some countries offer inexpensive public or private options for residents; others require robust international coverage. Separating it forces an honest estimate rather than burying it in general living costs.
Does this account for currency and inflation risk?
It gives a snapshot in today's dollars. Living on income earned in one currency while spending in another exposes you to exchange-rate swings, and local inflation can erode a fixed pension. Build in a margin and revisit the numbers periodically.
What if my pension already covers everything?
Then the monthly gap is zero and no additional portfolio is strictly required to cover ongoing costs. Even so, keeping a reserve for emergencies, travel home, and currency swings is prudent when your income sits abroad.