Retire in Chile: 10 Things To Know in 2024

Chile, nestled along the western edge of South America, has a captivating and diverse environment for retirees seeking a peaceful yet dynamic lifestyle. Chile maintains a gross domestic product growth rate of around 5% and has consistently ranked as one of the most economically developed countries in the region. 

Additionally, Chile's pension system is well-regarded, ensuring financial stability for retirees, and the healthcare system is recognized for its efficiency and accessibility. Due to this, Chile has seen an increase in life expectancy, reaching around 80 years. 

The country's population (19,629,590 people) is relatively small compared to its landmass, providing retirees with both the benefits of peaceful, spacious living and the opportunity to engage with a welcoming local community. Chile's diverse geography and climate offer retirees a range of lifestyle options, from the bustling urban experience in Santiago to the serene coastal or mountainous regions. ‍

‍Low Cost of Living

The overall cost of living in Chile is moderate, with variations depending on the region. Santiago, the capital and largest city, tends to have a higher cost of living compared to smaller towns and rural areas. According to Numbeo, a widely used cost of living database, the estimated monthly living expenses for a single person in Santiago range from USD 800 to USD 1,200, excluding rent. Rent for a one-bedroom apartment in the city center can cost approximately USD 500 to USD 800 per month, while outside the city center, it may be slightly more affordable. 

Chile's average cost of living (USD 1,021) is 58% less than that of the United States (USD 2,434). Chile was ranked 76th among the world's most expensive countries, while the United States was ranked 6th. In Chile, the average after-tax salary is sufficient to cover living expenses for 0.7 months, compared to 2 months in the United States.

Fast and Easy Visa Application Process

Foreign retirees can apply for a Retirement Visa in Colombia to get legal residency. There is also the potential to apply for Chilean citizenship in 5 years. 

The Retirement Visa initiative in Chile allows individuals with a reliable pension or passive income to reside in the country for a duration of up to 2 years. To qualify for the Retirement/Rentista (Leasers) Visa, applicants undergo a relatively uncomplicated process that centers on establishing a sustainable income source. The key requisites encompass showcasing a recurring passive income, which may derive from pensions in the applicant's home country, rental income from owned real estate properties, or earnings from financial investments such as annuities, dividends, and royalties.

Applicants must also demonstrate asset sufficiency to support themselves and any accompanying family members throughout their stay in Chile. Although there is no official income level requirement, it is recommended that applicants possess a reasonable and sustainable income. While not obligatory, illustrating a recurring monthly income within the range of USD 1,000 to USD 1,500 for the principal applicant and an additional USD 600 for each dependent (spouse, children, or parents) is advisable.

Accessible Healthcare and Medicine

The country boasts modern hospitals, well-trained medical professionals, and a comprehensive network of clinics. Expatriates can enroll in the public healthcare system or opt for private health insurance, providing a range of choices based on individual preferences and needs. The public healthcare system, known as FONASA, is available to residents and offers affordable services. Private health insurance (“Instituciones de Salud Previsional,” or ISAPRE), on the other hand, provides additional benefits such as shorter waiting times and access to a broader range of medical facilities. Overall, retirees in Chile can benefit from a healthcare system that combines accessibility, quality, and choice. Whether you choose FONASA or ISAPRE, you should expect to pay around 7% of your monthly income or pension.

Moreover, the pharmaceutical sector in Chile is robust, ensuring access to a variety of medications. The World Health Organization (WHO) has recognized Chile's healthcare system for its efficiency and effectiveness, further highlighting the country's commitment to providing quality medical services.

Affordable Housing

As you embark on your retirement plans in Chile, housing considerations will play a pivotal role in your decision-making process. While Santiago is a popular choice among American retirees, exploring smaller cities or the countryside may offer more affordable housing options. Notably, both residents and non-residents have the opportunity to purchase property in Chile. This grants flexibility for those looking to establish a new home in the country.

The average cost of an apartment in Santiago is approximately USD 1,800 per square meter, making it one of the most expensive cities in the country. However, when compared to real estate prices in major U.S. cities like New York, where homes cost around USD 16,000 per square meter, the Chilean market may still present a more affordable option. The home-buying process in Chile differs somewhat from that in the United States, involving various fees such as lawyer fees (1%), stamp duty (0,2-0,3%), notary fees (0,1%), and VAT (19%) on the first sale of new constructions. Foreigners can also secure mortgages from Chilean banks, although a minimum down payment of at least 10% of the purchase price is typically required.

Favorable Tax Regime

For tax purposes, residence is acquired by remaining in the country for 6 consecutive months in one calendar year or more than 6 months, whether consecutive or not, in 2 consecutive calendar years. Chilean residents are subject to progressive taxation that can reach up to 45%. It's important to note that as a U.S. resident, you are obligated to file taxes in the United States annually, declaring any foreign income and reporting foreign bank accounts. However, several provisions, such as the foreign earned income exclusion, the foreign tax credit, and the foreign housing exclusion, can be utilized to mitigate your U.S. taxable income. 

In addition, Chile offers a unique tax incentive for retirees known as the "Renta Vitalicia" program. This program allows retirees to receive a fixed income stream for life in exchange for a lump-sum payment (at least USD 125,000), and the income received is subject to a reduced tax rate. You have to be at least 55 years old. 

Collaborating with a tax expert familiar with both U.S. and Chilean tax laws is advisable for accurate tax planning and to explore potential deductions or credits available to retirees.

High Security Standards

Chile is often considered one of the safest countries in South America, with relatively low crime rates compared to its neighboring nations. Santiago, the capital, and other major cities are known for their modern infrastructure and effective law enforcement, creating a safe environment for residents. According to the Global Peace Index 2023, Chile ranks 58th out of 163 countries, indicating a moderate level of peacefulness. The index takes into account various factors, such as levels of violence, crime, and political stability. Chile's score reflects its commitment to maintaining a peaceful and secure society. 

Comfortable Climate

Chile has a diverse and varied climate, providing retirees with a range of options depending on their preferred weather conditions. The country stretches from the arid Atacama Desert in the north, one of the driest places on Earth, to the sub-Antarctic climate of its southern regions. Central Chile, where the capital Santiago is located, experiences a Mediterranean climate with warm, dry summers and mild, wet winters. This central region is a popular choice for retirees due to its comfortable climate, which offers the best of both worlds without extreme temperatures.

According to climate data, Santiago has an average annual temperature of around 57°F (14°C), with summer temperatures ranging from 50–86°F (10–30°C) and winter temperatures averaging between 36 and 57°F (2–14°C).

Diverse Nature

The country offers  a stunning array of geographical features, from the vast Atacama Desert in the north to the pristine lakes and glaciers of Patagonia in the south. The Andes Mountains, which run along the eastern border, provide ample opportunities for hiking, skiing, and other outdoor activities. On top of that, Chile is home to a rich biodiversity, including unique flora and fauna. This makes it a paradise for nature enthusiasts. The Torres del Paine National Park, with its towering peaks and crystal-clear lakes, and the Valle de la Luna in the Atacama Desert, known for its otherworldly landscapes, are just a few examples of the natural wonders retirees can explore.

With regard to environmental indices, Chile ranks relatively well in terms of environmental sustainability. The Environmental Performance Index (EPI) 2022 ranks Chile 65th out of 180 countries, highlighting the country's commitment to preserving its natural beauty and implementing environmentally friendly policies. 

Rich Culture

There is a blend of indigenous influences, European traditions, and a modern flair that creates a unique cultural identity. The arts, literature, and music play a significant role in Chilean culture, with the country producing renowned poets like Pablo Neruda and musicians like Violeta Parra. Santiago, the capital, is a hub for cultural events, featuring theaters, museums, and art galleries that showcase the nation's artistic heritage. Additionally, traditional festivals and celebrations, such as the lively Fiestas Patrias, provide retirees with the opportunity to engage with the local community and experience the warmth and hospitality of Chilean culture.

Chile ranks relatively high in terms of cultural influence and appeal. The Anholt-Ipsos Nation Brands Index, which measures a country's reputation in terms of governance, tourism, culture, people, and more, consistently places Chile in a favorable position. In 2023, it is the 41st.

Endless Travel Opportunities

Retirees can easily hit the road to experience the scenic beauty of the Andes, visit the famous wine regions like the Colchagua Valley, or explore the picturesque coastal cities. Moreover, Chile's strategic location in South America provides easy access to other countries. Retirees can take advantage of the well-developed transportation infrastructure to visit neighboring destinations such as Argentina, Peru, and Brazil, each offering its own unique cultural and natural wonders. In terms of travel infrastructure, Chile is well-equipped with an extensive network of airports, highways, and public transportation. 

Furthermore, retirees with a Chilean passport have visa-free access to over 170 countries all over the world. Chile is an ideal destination for retirees seeking enriching and hassle-free travel experiences.

Final Thoughts

In conclusion, retiring in Chile offers an enticing mix of a low cost of living, excellent healthcare, and diverse natural scenery, along with the added benefit of close proximity to other Latin American countries for easy travel and exploration. This combination makes Chile a highly appealing destination for a comfortable and adventurous retirement. Golden Harbors and its reliable partner network can provide invaluable assistance in every aspect of this journey. From handling legal formalities to settling into a new lifestyle. For more information, please feel free to contact us.