The Cheapest Place In The World To Retire In 2012

Jan. 18, 2012, Olango Island, Philippines: Cebu and Olango islands, the Philippines, qualify as two of the cheapest places in the world to retire overseas in 2012.

Dear Live and Invest Overseas Reader,

"As I young adult," writes Philippines Correspondent Victoria Clair, "I often dreamed of the kind of place where I would like to live...and it never involved snow storms. I dreamed of a tropical paradise where the sun was almost always shining, it never got cold, and I could swim in the ocean whenever I liked. I dreamed of breakfasting on tropical fruits and of sipping mango lassies while feasting on curry at a beachside restaurant.

"Now these dreams have come true. I live on Olango Island in the Philippines.

"Olango Island lies 5 kilometers east of Mactan Island, between the islands of Cebu and Bohol. Olango and its neighboring islets have a total land mass area of approximately 10 square kilometers (about 4 square miles). It's a tiny tropical dream offering much to explore in the way of natural delights, from sandy beaches and rocky shorelines to beds of sea grass, forests of mangrove, and reefs of coral.

"I've lived in the Philippines for three years now, mostly in Cebu. I moved to Olango just five months ago. Olango, along with neighboring Mactan Island, is officially part of Cebu. Mactan can be reached from Cebu either by a bridge or by ferry, but to get to Olango you take a 20-minute boat ride across the sea channel.

"The Philippine Islands lie about 800 kilometers (500 miles) off the southeast coast of China, to the northeast of Borneo. More than 7,000 islands, originating from volcanic activity, form the island nation, yet the total land mass is about the same as that of the state of Arizona. Only about 7% of the islands are larger than 1 square mile, and only one-third of them have names. They form three main groups: Luzon, Visayas, and Mindanao.

"Manila, the capital of the Philippines, is the largest city, with a population of more than 10 million in the greater metro area and 1.5 million in the city proper. Cebu, the Philippines' second-largest city, has nearly 1 million residents. As of 2010, the country's total estimated population was just under 100 million.

"This is the tropics, meaning the weather is hot and humid. Cebu, Mactan, and Olango are protected by outlying islands from the fierce typhoon winds that beat on the island of Luzon most years. The rainy season runs from October through December, but it typically rains only an hour or less every day. Otherwise, the sun shines.

"Manila and Cebu draw good numbers of foreign retirees from all over the world but mostly from the United States, England, and Australia, and a few from Germany. Most all are men, from their mid-40s to their mid-60s, either retired and/or are disabled veterans. There are few retired foreign women living in the Philippines; to my knowledge, I am the only one in the Cebu region.

"Most of the single male expats come for two reasons. First, their income stretches much further here, meaning they can enjoy a more comfortable life in the Philippines than they would be able to afford in their home countries. Second, many come to restart their lives with younger Filipinas, perhaps starting second families.

"Again, though, the biggest appeal for this part of the world is the cost of living. It can be extremely, extremely low, as little as about US$600 a month on Olango.

"Of course, you can spend more, and housing costs vary greatly. New high-rise apartments going up in Cebu designed to appeal to Westerners offer all the amenities a foreigner might expect...and come with higher price tags than the 'local' housing options. These one- to three-bedroom apartments, with separate quarters for live-in help, can cost from US$800 to US$1,500 a month.

"Or you could rent a three-bedroom, three-bathroom condo for anywhere from US$250 to US$500 a month. A 'lower-end' apartment like this will not be in the heart of the business district of Cebu and likely will not have hot water. But that's easily overcome with an investment of about US$160 in a water heater.

"Rent on Olango is considerably less expensive than in Cebu or Mactan. My apartment costs just under US$100 a month, and I pay about US$20 a month for electricity.

"Yes, there are drawbacks to living on a tiny island like Olango. Yes, my life is very simple. But I feel blessed, and, all things considered, I love my life here. It is quiet and smog-free. I live right on a lovely, private, sandy beach with yellow, pink, white, and red wildflowers growing everywhere.

"Except for those days when I need to take the boat over to Mactan or Cebu for errands or for visiting with friends over lunch, my days are free and unstructured. Olango Island is my base of tranquility, from which I explore. Here I have time, and the opportunity, to be still for a while and let my dreams come to the surface. It could work for you, too..."

Kathleen Peddicord

Editor's Note: Cebu and Olango islands are the focus of this month's issue of my Overseas Retirement Letter, in subscribers' e-mailboxes today. These islands qualify as one of the cheapest places in the world to retire in 2012. Philippines Correspondent Victoria Clair includes two detailed budgets in her ORL report, one for living on Cebu and another for living on (even more affordable) Olango. Victoria's fully illustrated guide to retirement in the Philippines also address health insurance, medical care, banking, residency visa options, how to find a rental, and how to settle in and make friends.

If you're a subscriber to my Overseas Retirement Letter, Victoria's complete guide should be in your in-box now. If you're not, what in the world are you waiting for? Get on board here now.

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Kathleen Peddicord

Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter.

Her book, How To Retire Overseas—Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Books.

Read more here.

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