In 1991 Billy and Akaisha Kaderli retired at the age of 38. Now, into their 4th decade of this financially independent lifestyle, they invite you to take advantage of their wisdom and experience.

Retire to Chile, South America

A Quick Cultural Guide for Expats

A Snapshot View, Part I

by Retirees Mark and John

Million Dollar view from the deck

When we selected Chile as our retirement destination, we had considered a number of other countries, before making this our final choice. There may be more affordable places to retire, like Chapala, Mexico and places in Thailand or Guatemala, however the stability and the quality of life that we achieve in Chile makes the extra expense worthwhile. 

Country Overview

Chile has a diversity of climates and you can experience a world of travel without crossing a border. Ranging from the Atacama Desert to the North, through the temperate central regions, the picturesque and almost European feeling of upper Patagonia, to the extreme ruggedness of the far South – it is impossible to say you’ve ‘done’ Chile without spending a number of months in the country. The economy is primarily driven by extractive industries, especially copper & gold, and secondary but important industries include agriculture, viticulture, and tourism.

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Politically, Chile has been the textbook success story of moving into a democracy, and recently joined the OECD (Organization for Economic Co-operation and Development). It is a safe country these days, with some of the lowest crime rates in the world.

Real Estate Insights

Our version of early retirement included buying a home. The good news about Chile is that property prices are an excellent deal for the average North American planning to retire, and your investment in real estate is secure. We bought a 2500 sq ft home with a million dollar view overlooking the beach in a small coastal community about one hour from Santiago, for $160,000 USD. 

Property prices have increased somewhat since we bought in 2009, but a turnkey, well-built home in a small coastal community is readily available for around $200,000. The only difference from buying a home in the US or Canada was the legal and closing costs – which were a bit higher than we were accustomed to. One must budget $7 - $8 thousand dollars for this part of the housing transaction.

If you would prefer to rent, our neighbor rents his 3 bed 2 bath beach house for $850 USD a month. And if you don’t need the beach view, prices for non-view homes just a couple of blocks behind our home, are less than $100,000 – in some cases, around the $50k mark.

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Taxes

Taxation in Chile is largely consumption based. There is a well-established Value-Added tax of 19% on everything you purchase. Furthermore, you’ll notice a number of ‘user fee’ or ‘pay as you go’ types of taxes – such as road tolls on the very well-built freeway system. The payoff, however, is that income taxes are next to zero. As a new Chilean resident, you are granted a generous multi-year exemption, and the situation after this grace period is extremely manageable.

Outstanding home for $160k USD

The Health Care Question

Medical care in Chile is world-class.

A robust ‘full service’ insurance coverage for the two of us, costs about $350 US a month. The quality of the care itself is extremely high. A typical Chilean physical exam includes the usual tests, but also an ultrasound of one’s organs, plus a chest X-ray. As Canadians used to Canadian-style medical care, we find the quality of care we receive here in Chile to be superior.

Day-to-day Living

While we live in a relatively rural setting in a town of only 15,000 residents, we have access to all modern conveniences. Chilean produce, fresh fish, meat and poultry are abundant and very reasonably priced. You probably are used to seeing Chilean produce in your local supermarket - rest assured that there is even better and tastier produce available locally!

And if you enjoy wine, then you’re in for a real treat as the rebounding Chilean wine industry is producing remarkably high quality product at very reasonable prices.  Again – the export market for Chilean wine is developing, and a lot of the best bottles aren’t reaching North American shelves! 

We gave you the pros, now here are the cons

Cost of Driving

One downside of living in this country is the cost associated with driving. Chile has a prohibition on the import of used vehicles, so expect to pay a small premium for new & used vehicles when you arrive. The vehicle we purchased here for $18,000 USD would have cost about $15 - $16,000 in Canada/US.

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Chile doesn’t have any oil deposits, so gasoline is more expensive than in North America too. Currently it is about $1.60 a liter as compared to $1.25 a liter in Canada. Spare parts are limited in supply and sell for a premium, so expect to be purchasing parts online and having them shipped.  Recently I had to replace a headlight assembly for my Nissan. From the local dealer, the part was $525, but I was able to find it online for $160, plus $40 shipping.

Earthquakes

For those of you living in California, dealing with the threat of earthquakes is nothing new. The major 2009, 8.8 quake that hit Chile was a disaster. However the homes that were affected were, by and large, not the sorts of homes that would be considered by retirees. Most of the horror stories involved homes built in the tsunami zone, and were not generally built to specification. Our home was basically unaffected in the quake.  We had 6 pictures fall off the wall, and one stone block lift in the driveway.

Chileans understand the earthquake risk, and build accordingly.

Here is a sample budget for one month’s expenses for two adults:

Medical insurance:  $350  - Electricity: $100  - Internet/TV/Phone/Alarm: $125 - Fuel for car:  $300 - Water:  $25

Food:  $1000 - House & car insurance:  $150 - Entertainment:  $300 - Home/vehicle repair & maintenance:  $250

Clothes:  $100 - Propane:  $75

Annual/periodic expenses:   Property tax = $200 a year.  Fees to community association:   $1000.

Based on our experience of living extremely comfortably in Chile, with a superb quality of life, one should budget approximately $3000 a month. We allow ourselves $14,000 a year for travel so our annual retirement outlay is around $50,000.

If these amounts are within your means, then Chile may make sense for you!

Do you have questions about Visas, Banking, Postal Services, Transport, Cost of Living? Read Part II

Mark and John on the beach in Chile

About the Authors

Profile of Mark and John

Mark has extensive experience in leading international tours with a background in retail and sales. In 2005, he ran a local NGO focused on women’s empowerment through small business development in Afghanistan.

John has a public service background for a large government ministry in Canada and found himself in various foreign countries such as East Timor, North Korea and then Afghanistan.

In 2010, they decided to retire to Chile to live simply but without compromising on quality. One of their values was to retain the freedom to travel while having a home base.

We would like to thank both Mark and John for sharing this insight into Chile as a fascinating retirement destination. We have never traveled to Chile, so cannot vouch for the accuracy of this information. However, if you have any questions about retiring to this captivating country, we are happy to pass them on.

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About the Authors

Retire Early Lifestyle appeals to a different kind of person – the person who prizes their independence, values their time, and who doesn’t want to mindlessly follow the crowd.

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