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Won in Translation

Jiab Wasserman  |  October 18, 2018

RETIREMENT IN America can be like plodding through a long, dark tunnel, with seemingly no light at the other end. I found, however, that if one looks sideways, there’s an escape hatch: retiring abroad.

For my husband and me, our search led us to Spain, having heard it had a low cost of living, excellent health care and a good climate. We visited a few times and fell in love, particularly with the city of Granada. The next logical step: determining if we could swing it financially.

I used Numbeo.com to compare the cost of living in the U.S. and abroad. It’s the world’s largest database of user-contributed data about cities and countries, and it provides timely information on general cost of living, housing, health care, traffic, crime and pollution. Numbeo provides six indices: cost of living (excluding rent), rent, cost of living plus rent, groceries, restaurants and local purchasing power.

The overall index is relative to New York City, which is set at 100. If another city has a rent index of 120, it means that city’s rents are an average 20% more expensive than New York’s. Conversely, if a city’s rent index is 70, that means the city’s rents are an average 30% lower than New York’s.

I was particularly interested in the cost of living plus rent index—not counting health care—using our then-resident city of Dallas as a comparison point. The Numbeo indexes showed New York at 100, Dallas at 55 and Granada at 33. Granada was thus 67% cheaper than New York. Even comparing Granada and Dallas was astounding. Consumer prices including rent in Dallas were 67% higher than in Granada, even before factoring in health care.

I dove further into the details and used Numbeo’s cost-of-living estimator for Granada. There are quite a few detailed questions one has to answer, including about one’s household (rent/purchase, members), spending habits (clothes, gym, cars and travel) and entertainment spending (movies, clubbing and alcohol consumption). My results showed that we would spend $2,100 per month living in Granada—and that included the traditional tapas bar hopping.

Next, we had to figure out health care. Spain has one of the best health care systems in the world. It’s ranked No. 7 by the World Health Organization. By comparison, the U.S. comes in at No. 37.  We would have to shop for private insurance for our first year. But after that, we could sign up for public health insurance, which would cost us—wait for it—zero. Thanks to a recent change in Spanish law, all residents receive free health care.

We decided to go with one of the most highly recommended health insurance companies in Spain for expats. The plan is $193 per month for both of us. This is a comprehensive plan, even considered an expensive one, with no copay, no deductible and includes basic dental services. The plan also includes worldwide emergency coverage of up to $14,000. We pay an extra $1.75 a month to increase emergency coverage in the U.S. to just over $35,000.

Putting it all together, using a combination of our actual numbers and Numbeo’s estimates, I calculated that it would cost just over $30,000 per year for us to live comfortably in Granada. Bottom line: The numbers said we could potentially retire immediately, in our early to mid-50s, and live very well.

We didn’t want to spend our healthiest years planning for the future, always saying “someday,” while our lives passed us by. We would have to give up things, like cars and a large house. But we would gain so much more: walks in the mountains, fresh Mediterranean food, siestas.

So we packed our bags and went for it.

Jiab Wasserman recently retired at age 53 from her job as a financial analyst at a large bank. She and her husband, a retired high school teacher, currently live in Granada, Spain, and blog about financial and other aspects of retirement—as well as about relocating to another country—at YourThirdLife.com.

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