This article takes a look at the 18 cheapest warm places to retire in the world. If you wish to skip our detailed analysis on climate change and retirement, you may go to the 5 Cheapest Warm Places to Retire in the World.

Climate Change and Retirement

An estimated 12,000 Americans succumb to heat waves each year, highlighting the escalating impact of rising temperatures on health. According to Climate Central, a staggering 80% of these fatalities involve individuals aged 60 and above. As the Earth’s temperatures rise and global populations continue to age, these figures are poised to worsen, implying that climate risk is now a major factor that prospective retirees must incorporate into their retirement plans.

Based on the Schroders 2022 U.S. Retirement Survey, it is evident that there is an increasing awareness among individuals regarding these pressing climate issues, as well as a discernible commitment to address and improve their environmental impact. 74% state that they would increase their overall contribution in defined contribution plans if they were offered ESG (Environmental, Social, and Governance) options.

78% of plan participants also believe that socially responsible companies have better financial results over time too. Unfortunately, only 5% of 401 (k) plans offer climate-safe sustainable fund options at the moment. Owing to this growing awareness, the year 2022 saw many shareholders such as those at Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), Comcast Corporation (NASDAQ:CMCSA), and Netflix, Inc. (NASDAQ:NFLX) vote on proposals seeking information on how these companies are protecting employees from climate-related investment risk in their 401(k) retirement plans.

“There has been significant growth in the availability of ESG funds over the past five years, but including them in 401(k) plans has been slower.”

– Georges Dyer, co-founder and executive director of the Crane Institute of Sustainability

Since employees are automatically enrolled in 401(k) plans without weighing in on their options, most of the money Americans have in their plans is likely contributing to deforestation and fossil fuel extraction. It is estimated that $35 trillion is invested in American retirement assets without considering the financial risks that are posed by climate change.

However, many companies are now ceasing their investments in high-carbon industries in hopes of boosting their environmental record and having positive financial gains and fund performance. Big-tech companies such as Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ:AMZN), are also making investments to reach their carbon goals and improve profitability. In March 2023, Amazon.com, Inc. (NASDAQ:AMZN) invested in a project called Genecis, a startup that makes biodegradable plastic through food waste.

GeekWire further reports that Amazon.com, Inc. (NASDAQ:AMZN) has 22 companies that are invested in climate tech and clean energy. On the other hand, Microsoft Corporation (NASDAQ:MSFT) has 25 companies working in the same sectors. By prioritizing sustainability and engaging in responsible business practices, these corporations have a better chance of improving their productivity, margins, as well as investor confidence.

Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), amongst others, are also taking steps to reduce their carbon footprints and switch to renewable energy sources. Apple Inc. (NASDAQ:AAPL) has committed to be carbon neutral by 2030, Amazon plans to do so by 2040, and Microsoft has made similar commitments to be fulfilled by 2030.

Navigating Climate Risks in Retirement Planning: The Changing Landscape of Popular Destinations

Climate change is exerting its influence not just on the world we inhabit but is also significantly shaping the landscape of retirement for individuals. Due to climate change alone, many popular retirement destinations are now at risk of extreme weather events. For instance, Queensland, one of the best places to retire in Australia, could be hit by tropical cyclones with increasing frequency given that climate change continues to worsen. Many coastal communities such as those in Texas are also likely to be hit by climate change in the future. As a result of extreme weather events, people are likely to witness soaring insurance premiums, as well as rising cold and heat.

With the planet getting warmer and the weather becoming more extreme, buying a retirement home and protecting it has become even more challenging than before.

“Climate will have a profound impact on not only where people want to be covered but also their insurability.

– Howard Botts, CoreLogic’s chief scientist

Therefore, when contemplating the perfect retirement spot, factoring in climate risk is increasingly becoming important for potential retirees. Choosing a home that is safe from potential risks and disasters can help save them from expenses and damages. At the same time, affordability emerges as a crucial factor for those seeking to relocate from high-cost living regions. Whether motivated by a desire to escape colder climates or to find a warmer and more budget-friendly haven, our list of the cheapest warm places to retire in the world can help you explore some options.

Methodology

To compile the list of cheapest warm places to retire in the world, we went through our lists of cheapest countries for retirement, places to retire in $1,000 a month, and cheapest and safest countries to retire in. After compiling the list of cheapest countries, we selected the ones having a tropical, subtropical, or Mediterranean climate.

Next, two of the warmest and cheapest places from each country were selected to have a well-rounded selection.  In the final step, we narrowed down the list to feature 18 cheapest places out of the warm destinations. Places have been ranked in a descending order from the highest to the lowest cost of living. The cost of living for each destination includes international healthcare insurance costs of $500 on average.

18. Rhodes, Greece

Average Monthly Cost of Living: $2,600

Average Hours of Sunlight Per Year: 3,075

Coldest Month (January): 37°F (Low) / 50°F (High)

Hottest Month (July): 79°F (Low) / 89°F (High)

Rhodes is one of the best places to retire in Greece. Owing to its Mediterranean climate, beautiful beaches, and well-developed healthcare system, it offers a high quality of life to retirees. The island has more than 3,000 hours of sunshine per year, offering retirees ample time to enjoy under the sun.

17. Central Valley, Costa Rica

Average Monthly Cost of Living: $2,500

Average Hours of Sunlight Per Year: 2,540

Coldest Month (December): 55°F (Low) / 75°F (High)

Hottest Month (March): 66°F (Low) / 84°F (High)

Costa Rica is one of the easiest countries to retire to, with Central Valley standing out as the ultimate choice for expat retirees. The valley experiences a typical tropical climate, characterized by a humid, overcast rainy season and a warm, dry season. Even though the cost of living including international healthcare insurance is $2,500; many expat retirees claim that they live comfortably on budgets below $1,500.

16. Puerto Viejo, Costa Rica

Average Monthly Cost of Living: $2,150

Average Hours of Sunlight Per Year: 2,813

Coldest Month (February): 71°F (Low) / 79°F (High)

Hottest Month (September): 81°F (Low) / 84°F (High)

The picturesque town of Puerto Viejo is home to a welcoming expat community, a relaxed pace of life, and quality healthcare. The tropical paradise is located on the Caribbean coast of Costa Rica, providing access to lots of beautiful beaches, rain forests, and biodiversity.

15. The Algarve, Portugal

Average Monthly Cost of Living: $2,100

Average Hours of Sunlight Per Year: 3,158

Coldest Month (January): 47°F (Low) / 61°F (High)

Hottest Month (July): 68°F (Low) / 83°F (High)

The Algarve, with its stunning coastline, exciting historical towns, and lively cultural attractions, is one of the cheapest warm places to retire in the world. Retirees can retire in the country through the D7 visa and must have international healthcare insurance to live here as an expat retiree (factored in the average cost of living).

14. Valencia, Spain

Average Monthly Cost of Living: $2,013

Average Hours of Sunlight Per Year: 2,696

Coldest Month (January): 44°F (Low) / 60°F (High)

Hottest Month (August): 70°F (Low) / 88°F (High)

Blessed with a subtropical Mediterranean climate, Valencia boasts more than 300 cloudless days a year. The city has a sizable expat community, rich culture, beautiful beaches, and plenty of festivals happening throughout the year. Retirees can spend their golden years in Spain through a Non-Lucrative Residence Permit.

13. Corozal, Belize

Average Monthly Cost of Living: $2,000

Average Hours of Sunlight Per Year: 2,909

Coldest Month (January): 70°F (Low) / 82°F (High)

Hottest Month (April): 76°F (Low) / 91°F (High)

Corozal in Belize is an awesome place to retire under $3,000 a month. Its location along Corozal Bay allows retirees to enjoy the beach, relish the nature reserves, and simply savor the tropical landscape. People can retire to the country through their Qualified Retired Persons (QRP) Program.

12. Panama City, Panama

Average Monthly Cost of Living: $2,000

Average Hours of Sunlight Per Year: 2,239

Coldest Month (January): 46°F (Low) / 63°F (High)

Hottest Month (April): 78°F (Low) / 88°F (High)

Panama City makes it to our list of the cheapest warm places to retire in the world for several reasons. For starters, Panama is an easy and affordable country to retire to, offering numerous discounts and incentives to retirees through its Pensionado Visa. Panama City, in particular, boasts a tropical climate, modern amenities, and several cultural festivities throughout the year.

11. San Miguel de Allende, Mexico

Average Monthly Cost of Living: $1,950

Average Hours of Sunlight Per Year: 2,900

Coldest Month (January): 42°F (Low) / 70°F (High)

Hottest Month (May): 56°F (Low) / 87°F (High)

One of the cheapest warm places to retire in the world is Mexico. San Miguel de Allende, in particular, is a favorite amongst retirees owing to its established expat community, rich cultural scene, and affordable healthcare. The sunny weather remains almost year-round, allowing retirees to bask in the sun and enjoy the outdoors.

10. Santiago, Dominican Republic

Average Monthly Cost of Living: $1,700

Average Hours of Sunlight Per Year: 2,799

Coldest Month (January): 66°F (Low) / 84°F (High)

Hottest Month (September): 73°F (Low) / 90°F (High)

One of the best places to retire in the Caribbean is the Dominican Republic. As of 2022, over 5,217 social security benefits were withdrawn from this country. Within this tropical paradise, Santiago, with its stunning beaches, delightful climate, and breathtaking natural landscapes, stands out as one of the best places to retire in the world for retirees.

9. Lake Chapala, Mexico

Average Monthly Cost of Living: $1,700

Average Hours of Sunlight Per Year: 3,414

Coldest Month (January): 43°F (Low) / 75°F (High)

Hottest Month (April): 60s°F (Low) / 80s°F (High)

Numerous sources claim that Lake Chapala boasts the best weather in the entire continent, and we agree. Owing to the lakes and the mountains, the weather remains warm year-round. Moreover, the city offers retirees an affordable cost of living, numerous cultural activities, outdoor fun, and a picturesque environment to call home.

8. La Serena, Chile

Average Monthly Cost of Living: $1,640

Average Hours of Sunlight Per Year: 2,800

Coldest Month (July): 50°F (Low) / 65°F (High)

Hottest Month (February): 60°F (Low) / 80°F (High)

Chile, which stands as one of the cheapest and safest countries to retire in, is home to the beautiful La Serena. More than just warm weather and sunny skies, La Serene offers retirees an affordable cost of living, beaches, and a myriad of recreational opportunities. The city also has some of the largest shopping centers in the country.

7. Cuenca, Ecuador

Average Monthly Cost of Living: $1,500

Average Hours of Sunlight Per Year: 3,281

Coldest Month (July): 44 °F (Low) / 53°F (High)

Hottest Month (January): 74°F (Low) / 89°F (High)

Cuenca, Ecuador is an affordable place to retire to, with individuals stating living comfortably for as low as $1,000 a month.  The city is hailed as having “eternal spring,” owing to its consistently pleasant climate throughout the year. There is a well-developed healthcare system, an efficient transportation network, and a rich cultural heritage.

6. Da Nang, Vietnam

Average Monthly Cost of Living: $1,500

Average Hours of Sunlight Per Year: 2,200

Coldest Month (January): 67°F (Low) / 76°F (High)

Hottest Month (July): 80°F (Low) / 90°F (High)

One of the cheapest places to retire in Asia, Da Nang in Vietnam is an ideal package for retirees. Blessed with warm and pleasant weather, an affordable cost of living, pristine beaches, majestic mountains, top-notch healthcare facilities, and a thriving expatriate community, this destination is ideal to spend one’s golden years.

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Disclosure: none. 18 Cheapest Warm Places to Retire in the World is originally published on Insider Monkey.