Retire in Colombia: Future Expats Guide 2024

Retirement in Colombia in 2024

Colombia is an attractive destination for retirees seeking a blend of natural beauty, cultural richness, and affordability. Based on the data obtained from International Living, Colombia is one of the top 5 cheapest places in the world to live in 2023. A comfortable retirement lifestyle in Colombia can be maintained on a low budget, with expenses such as healthcare, groceries, and transportation being quite cost-effective. Additionally, Colombia offers a range of climates and scenery, from the tropical beaches of the Caribbean coast to the temperate climates of cities like Medellin, allowing retirees to choose a location that suits their preferences.

The retirement landscape in Colombia is influenced by various socio-economic factors. The country's pension system has been undergoing reforms in recent years to address sustainability concerns and improve coverage. According to data from the World Bank, in 2023, the pension coverage rate in Colombia was around 35% of the population over the age of 60, indicating that a substantial portion of the elderly population has access to pension benefits.

What is the Retirement Age in Colombia?

There are different retirement schemes in Colombia, including the traditional public pension system and a system of private pension funds known as the "Sistema General de Seguridad Social en Pensiones."

The retirement age in Colombia varies depending on the type of pension plan a person is enrolled in. For the contributory pension system, which covers individuals who make regular contributions to the state pension fund, the retirement age is 62 for men and 57 for women. However, there is also a minimum contribution requirement of 1,300 weeks (approximately 25 years) for men and 1,150 weeks (approximately 22 years) for women. When it comes to  private pension funds, individuals can start receiving their pension benefits once they have accumulated a certain amount in their individual savings accounts, typically around age 60.

10 Reasons to Retire in Colombia

Choosing the perfect destination for retirement is a significant decision that encompasses various factors ranging from cost of living to healthcare accessibility. The following are 10 reasons why you should consider Colombia to retire:

Cost of Living

When compared to many other retirement destinations, basic expenses such as housing, transportation, healthcare, and entertainment are significantly lower in Colombia. This enables retirees to live a comfortable lifestyle in Colombia without having second thoughts before spending on anything. In contrast to the United States, the cost of living index in Colombia is more than 60% lower.

Healthcare System

Colombia has made substantial strides in its healthcare system, with metropolitan hubs like Bogotá and Medellín boasting world-class hospitals and clinics. This means retirees can enjoy high-quality medical care, often at a fraction of the cost found in other nations. According to the World Health Organization (WHO), Colombia's healthcare system is ranked 22nd in the world, ahead of many Western countries.

Although Colombia offers several types of medical coverage, only two are available to foreigners. The first is Entidades Promotoras de Salud (EPS), a public healthcare system that is mandatory for all residents, and the second is Medicina Prepagada, a public health insurance program that is offered by a variety of private lenders. To apply for EPS, non-citizens must have a valid resident identification card. With a private Prepagada policy, only a valid passport is required. 

In terms of health insurance cost for retirement in Colombia, many retired expats report paying between $70 and $85 per couple per month for EPS public insurance premiums.

Retirement Social Security

Colombia offers retirees a reliable safety net through its well-established social security system. The country has entered into bilateral agreements with numerous nations, such as Argentina, Chile, Ecuador, Spain, Uruguay., etc., streamlining the process for retirees to receive their pensions or retirement benefits. This international pension portability ensures that retirees can continue to receive their pensions from their home country while residing in Colombia, providing a seamless transition into retirement in this country. 

Housing in Colombia

Obtaining housing is one of the most important aspects of relocating to a new country. Fortunately, the process is very similar to that of the United States and is relatively simple: all you need is a valid passport and sufficient funds.

From urban apartments to serene countryside estates, Colombia offers a diverse range of housing options to suit individual preferences. A home in Colombia costs nearly $110 per square foot in the city center and slightly less than $95 per square foot outside of the city center. 

Foreigners and locals go through the same process when purchasing a home in Colombia. Buying a home can also lead to obtaining a residency permit, so many retirees are opting to buy rather than rent.

Taxation for Retirees

Colombia extends appealing tax incentives to retirees, including exemptions for foreign-sourced pension income. This ensures that retirees can optimize their finances and enjoy their retirement to the fullest.

Expats who stay in Colombia for less than 6 months (183 days) are only taxed on income earned directly in Colombia. They will pay a flat tax of 35% regardless of their income level. Those who live in the country full-time, on the other hand, will be taxed based on their income level, with rates ranging from 0% to 39%.

Cultural Environment

Colombia's rich cultural tapestry, vibrant arts scene, and strong emphasis on family values create an inviting and inclusive atmosphere for retirees. It is a country that welcomes newcomers with open arms and helps to integrate and forge new connections.

Colombia consistently ranks as one of the happiest countries in the world according to the World Happiness Report.

Nature and Climate

Boasting some of the most breathtaking natural landscapes on Earth, Colombia offers a diverse array of climates and environments. From lush rainforests to pristine beaches, retirees can revel in the unparalleled beauty of their surroundings.

Colombia is home to nearly 10% of the world's biodiversity and is one of the most ecologically diverse countries on the planet.

Travel Opportunities

Colombia's strategic location in South America makes it an excellent base for exploring neighboring countries. Additionally, its well-connected airports facilitate easy access to North America and Europe, allowing retirees to embark on new adventures. Retirees can explore the Amazon rainforest in Brazil, visit the ruins of Machu Picchu in Peru, or spend a few days on the Panamanian islands.

Delicious Cuisine

Colombia is renowned for its flavorful cuisine. From the hearty bandeja paisa to the coastal ceviche and the aromatic arepas, Colombian food is a delightful journey for the taste buds. The abundance of fresh fruits and vegetables, along with a rich culinary heritage, ensures that retirees in Colombia have access to a wide range of delicious and affordable meals.

Easy Visa Process

Colombia offers a relatively straightforward visa process for retirees, especially for those who can demonstrate a steady income. The country has specific visa options tailored for retirees, such as a M-11 Visa, which is designed for individuals with a reliable pension or retirement income. This visa allows retirees to live and enjoy their retirement years in Colombia with ease and comfort.

Retiring in Colombia Pros and Cons

Deciding where to spend one's retirement years is a significant life choice, and each location brings its own set of opportunities and considerations. We can outline the following pros and cons of retiring in Colombia: 

Pros:

• Colombia offers a relatively low cost of living compared to many other countries. This means retirement savings can go further, allowing retirees to enjoy a comfortable lifestyle without financial stress.
• Situated near the equator, Colombia enjoys a warm and sunny climate for much of the year. This is especially attractive to retirees seeking to escape colder winters.
• Colombians are renowned for their warmth and hospitality. This friendly atmosphere makes it easy for retirees to form new connections and feel welcome in their new home.
• Colombia has a cultural heritage influenced by indigenous, African, and European traditions. Retirees can delve into a wealth of experiences including exploring museums, art galleries, historical sites, and participating in traditional festivals and events.
• Colombia has a diverse range of landscapes, from beautiful beaches to majestic mountains, lush rainforests, and vast deserts. Hiking, birdwatching, or simply taking in the breathtaking scenery are all options for retirees looking for adventure.
• Colombia boasts modern healthcare facilities staffed by well-trained medical professionals. Additionally, healthcare costs are relatively affordable compared to many other countries.
• Colombia has a history of political instability and violence. Significant progress has been made in recent years, and many areas of the country do not experience elevated levels of crime. This country is safe to live in.

Cons:

• Spanish is the official language of Colombia, and while many Colombians have some proficiency in English, it can still be challenging for retirees who do not speak Spanish to communicate effectively with locals and navigate daily life.
• Colombia is known for bureaucratic inefficiencies and red tape. This can be frustrating for retirees dealing with government agencies, banks, or other institutions.
• While major cities like Bogota and Medellin have modern infrastructure, some rural areas may have limited access to basic services like healthcare and public transportation.
• The hot and humid climate may not be comfortable for everyone. Additionally, some parts of the country are prone to natural disasters like floods and landslides.
• Moving to a new country can be a major adjustment, and retirees may experience culture shock as they adapt to a new way of life, different customs, and unfamiliar surroundings.
• Colombia has made strides in improving its safety situation, but retirees should still exercise caution, particularly in certain areas. It is advisable to research specific neighborhoods and regions for their safety ratings.
• Potential retirees may also have concerns about access to amenities and services such as banking, transportation, and healthcare. Major cities generally offer modern infrastructure, but it is important to consider these factors when choosing a retirement destination in Colombia.

Ultimately, retiring in Colombia can be a rewarding experience, but it is crucial for individuals to weigh the potential advantages and drawbacks based on their own preferences and circumstances.

Retirement in Colombia vs Nicaragua

When considering retirement options, it is important to weigh various factors such as cost of living, healthcare, climate, safety, and residency options. Below, we have put together a comparison of retiring in Colombia and Nicaragua because they are the most popular retirement destinations among our clients.

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Ultimately, the decision between retiring in Colombia or Nicaragua will depend on individual preferences, priorities, and circumstances. You should visit both countries, explore different cities or regions, and consult with locals and expats to make an informed decision.

What Americans Should Know about Retiring in Colombia

When retiring in Colombia, there are several important factors that Americans should be aware of. Here are 5 crucial things to know:

1. Visa Requirements

To retire and spend more than 180 days per year in Colombia, Americans will need to obtain a visa. The most common visa for retirees is a M-11 Visa, which is granted to individuals who receive a fixed monthly income from a pension, Social Security, or other regular sources. 

2. Healthcare and Insurance

Colombia has a well-developed healthcare system, and many private hospitals and clinics offer high-quality care. Health insurance is mandatory for all residents, including expatriates. It is recommended to research and choose a suitable insurance plan to cover your medical needs.

3. Tax Implications

Colombia has a territorial tax system. Once you become a tax resident, after spending more than 183 days in the country, you might be subject to taxes in Colombia. Also, as an American citizen, you are still required to file U.S. taxes on your worldwide income. If you want to forecast your tax burden more precisely, you should consult a tax advisor who is familiar with both US and Colombian tax laws.

4. Proof of Pension

Being a US citizen, you have to provide a Benefit Verification letter from the Social Security Administration (SSA) in order to qualify for a Retirement Visa in Colombia. This letter must show that you receive at least USD 774 every month. 

5. Banking and Finance

For retirees from the USA, navigating banking and finances in Colombia involves a few key considerations. Opening a bank account is feasible with a passport, visa, and proof of address, and it is recommended to maintain a US account for international transactions. Understanding currency exchange rates is crucial, and reputable services or banks should be used for conversions. The friendliest banks for US citizens are BBVA, Banco de Colombia, or Davivienda Bank Colombia. 

Best Places to Retire in Colombia

At present, Colombia is becoming an increasingly popular destination for retirees. There are a lot of retirement communities in Colombia that are specialized housing developments designed to cater to the needs and preferences of older adults, typically aged 55 and above, who are looking for a supportive and comfortable living environment during their retirement years. Here are some of the best places to retire in Colombia:

Retiring in Medellin

Known as the "City of Eternal Spring", Medellín offers a pleasant climate year-round. It has a low cost of living, excellent healthcare, and a range of cultural activities. The neighborhoods of El Poblado and Laureles are popular among expats.
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Retiring in Cartagena

This historic coastal city offers a unique blend of old-world charm and modern amenities. The walled city is a UNESCO World Heritage Site, and the nearby Bocagrande area offers beaches and modern conveniences.

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Retiring in Bogota

The capital city offers a cosmopolitan lifestyle with a mix of modern and historic features. It has excellent healthcare, cultural events, and a wide range of restaurants. Neighborhoods like Usaquén and Chapinero are popular among expats.

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Retiring in Cali

Known for its salsa music and dancing, Cali has a lively atmosphere. The city boasts affordable living costs and a warm climate. The neighborhoods of Granada and San Antonio are favorites among expats.

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Retiring in Santa Marta

Located on the Caribbean coast, Santa Marta offers a tropical climate and stunning beaches. It's also a gateway to the Sierra Nevada mountains. The nearby town of Taganga is a popular spot for expats.

*The exchange rate is COP 3,934.02 per USD 1 at the moment of writing.

How to Retire in Colombia?

Retiring in Colombia involves several steps, including obtaining a Colombian Retirement Visa. The following are the action steps to retire in Colombia:

Step 1. Research and Planning

You should start by researching various cities and regions in Colombia to determine where you would like to retire. Consider factors like climate, cost of living, healthcare facilities, and lifestyle preferences.

Step 2. Meet Visa Requirements

You have to ensure you meet the requirements for a Colombian Retirement Visa (M-11 Visa - Pensionado o Rentista). The primary requirement is having a stable monthly income, such as a pension or Social Security, of at least three times the Colombian minimum wage, which is USD 995.

Step 3. Gather Necessary Documents

You will collect the required documents, which typically include a passport with at least 6 months of validity remaining, visa application form, proof of monthly income, a criminal background check, health insurance coverage in Colombia, etc. 

Step 4. Submit Visa Application

You can apply for a Retirement at the Colombian consulate or embassy in your home country, the Ministry of Foreign Affairs in Colombia, or online. Be prepared for an interview and biometric data collection. You have to pay the state fee of USD 326. 

Step 5. Wait for Approval

The processing time for a Colombian Retirement Visa can vary, but it often takes several weeks.‍

Step 6. Travel to Colombia and Register with Authorities

Once your visa is approved, you can enter Colombia as a retiree. After arriving in Colombia, you must register with the Colombian immigration authorities, known as Migración Colombia, within 15 days of your arrival. They will provide you with a Colombian identification card (Cédula de Extranjería).

Step 7. Settle In and Enjoy Retirement in Colombia

Find accommodation, open a local bank account, and immerse yourself in the Colombian culture and lifestyle.

FAQs about Retiring in Colombia

What is the Retirement Age in Colombia?

The regular retirement age for men in Colombia is 62, and for women, it is 57. The retirement age in Colombia can vary depending on factors such as the type of pension plan (contributory or non-contributory), the specific profession or special regime, and whether a person chooses to retire early with reduced benefits.

How Much Money Do You Need to Retire in Colombia?

According to the law, you must have a monthly pension income in your home country of at least USD 995 per month. However, having a financial safety net for living expenses is advisable as well. This reserve can assist in covering unexpected costs and provide security in case of unforeseen circumstances.

How Much Do You Need to Retire in Colombia?

You need a budget of USD 1500 to USD 2000 per month to retire in Colombia, given that the minimum wage is just over USD 255 per month. You likely need to have a cushion of savings equivalent to at least 6 months of living expenses to ensure a comfortable retirement in Colombia. 

Is Retirement in Colombia Exempt from Tax in the USA?

No, Colombian retirement does not automatically exempt you from tax in the USA. If you are a US citizen, you are generally taxed on all of your worldwide income on your US tax return, which includes your Colombian retirement. There are, however, exceptions and provisions to limit or eliminate U.S. taxation, such as foreign income exclusion and tax credits.

How Can an Expat Rent an Apartment in Colombia with a Retirement Plan?

To rent an apartment in Colombia as an expat with a retirement plan, first secure the necessary visa or residency status, research suitable locations, and establish a budget based on your retirement income. Utilize online real estate platforms or local agencies to search for available apartments, ensuring compliance with legal requirements and providing necessary documentation such as identification and proof of income. Arrange viewings, negotiate lease terms, and carefully review the rental agreement. Pay the security deposit, set up utilities, and consider renter's insurance. Register with local authorities if required, open a local bank account for rent payments, and consider seeking guidance from expat communities for insights and recommendations.

Which Country is Better to Retire in Mexico or Colombia?

Both countries have their own unique advantages and considerations, and what matters most is how well a particular location meets your individual needs and desires. In general, Mexico is preferred by those seeking proximity to the USA, while Colombia is preferred by those looking for an affordable standard of living. If you believe that Colombia aligns better with your retirement goals and preferences, then it could indeed be a better choice for you than Mexico.

What are the Most Popular Retirement Destinations in Latin America?

The most popular retirement destinations in Latin America, apart from Colombia, include:

Brazil

Brazil offers a Temporary Visa for foreign retirees with a demonstrated monthly income of at least USD 2,000. This visa is initially issued for up to 2 years and is renewable. Additionally, applicants must undergo a comprehensive medical examination and present proof of health insurance coverage. After the initial 2-year period, retirees have the option to apply for permanent residency, provided they continue to meet the financial requirements.

Ecuador

Retirees with a pension or other retirement income of at least USD 1,380 per month may be eligible for an Ecuadorian Retirement Visa. This visa is valid for 2 years, but residents must stay in the country for at least 6 months per year to maintain their residency. To qualify for this visa, retirees must also show proof of a clean criminal record and undergo a medical examination. After the initial 2-year period, retirees have the option to apply for permanent residency, provided they continue to meet the financial requirements.

Argentina

Argentina offers a Retirement Visa for older individuals with a pension or guaranteed income of more than USD 950 per month. This visa initially lasts for 1 year. After the initial year, retirees can apply for a permanent visa, allowing them to reside in Argentina indefinitely and apply for citizenship in Argentina after 2 years.