Uruguay is often on those top 10 lists of places to retire abroad, and for good reason. Unlike many countries in Latin America, Uruguay welcomes American retirees with a big giant bear hug, like the one you might get from your aunt on Christmas Day. Foreigners can easily open bank accounts, get visas, and own property. Plus, there are good beaches. What could possibly go wrong? We went to Uruguay last month to find out. Here’s what you need to know if you’re thinking to retire in Uruguay.
My wife and I have lived and traveled extensively around Latin America, and we’ve always wanted more. We hope to spend a chunk of our retirement in Latin America some day, when the kids are gone. And since so many expats retire in Uruguay, we figured we need to check it out for ourselves. Last month, we visited Uruguay with the kids. We told them it was a beach trip, and that was true. But there was also a hidden agenda (isn’t there always?). We were scouting out our future retirement destination.
From our perspective, there were some things that surprised us about Uruguay. There were some things we really liked, and other things that disappointed us. Understand that we are mostly comparing Uruguay to other places we know in Latin America, especially Bolivia. Here’s what we discovered.
First, what’s awesome:
Retire in Uruguay: What’s Awesome
1. Educated, Friendly, Honest, & Polite People
I thought the best thing about Uruguay, by far, was it’s people. And that’s a hugely important factor whenever you’re looking for a place to live for several years. These people are going to be your neighbors and your friends, so you’d better like them. Uruguayans are highly educated, friendly, honest to a fault, and super polite. Those are all massive pluses in my book. Uruguay is the type of place you take your kids to show them what polite people are really like.
Several times I saw drivers stuck at four-way intersections because each was insisting the other go first. In Uruguay, people don’t cut lines. They wait their turn. And they go out of their way to help each other. It’s a society where everyone seems to be in it together.
All that honesty and politeness is part of the reason that the crime rate is very low in Uruguay- by Latin American standards (though still higher than most places in the U.S.) Uruguay really felt to us like it exists somewhere in between Latin America and the United States.
2. Lots of Green, Open Spaces
Uruguay is full of cows, not people. There are only 3.5 million people in a country that is twice the size of New York state, and half of them are in or near Montevideo. You can drive for hours along the southern coast – the most populated region of the country, and only see a few spotted towns. The interior of the country is even less populated (with people, that is – there are plenty of horses and cows).
And all those open spaces? They’re very green and quite lush! It rains throughout the year in Uruguay. In my book, lots of green, open spaces is a big plus, because I hate crowds, and I love being outdoors.
Southern Uruguay gets much more crowded for a couple of months in the summer, when tourists flock from Argentina and Brazil to the beaches of Uruguay. But, for most of the year, if you hate crowds, then Uruguay is the place to be.
3. Quality Affordable Medical Care
We’re young and healthy now, and we don’t need much health care. But for most retirees, access to quality health care is a top concern. Lack of quality healthcare is the biggest reason why we aren’t too keen to spend our golden years in Bolivia, where my wife grew up. But Uruguay, on the other hand, seems to have achieved that holy grail of retirement: quality medical care at affordable prices
I can’t speak from experience about the health care in Uruguay, because we were only there on a short visit. But we were surprised how many hospitals and clinics we saw in Montevideo. And compared to what we’ve experienced in Bolivian hospitals, the clinics in Uruguay look like they are top notch.
People who are already retired in Uruguay have great things to say about the quality of care. Many of the doctors were trained in the U.S. or Europe. The private hospitals have most of the latest equipment and techniques. And they even do house calls! All for reasonable prices. Go figure.
4. The Infrastructure
Uruguay has really outstanding infrastructure. We found great roads with little traffic, convenient, cheap and comfortable public transportation, and… get this…. you can drink the water straight from the tap! There aren’t too many places in Latin America where you can do that!
Here’s a view of Uruguay’s wide open green spaces and excellent highways:
5. No Widespread Crushing Poverty
With only a small population, Uruguay doesn’t have millions of people in crushing poverty – unlike most Latin American countries. But it’s not just because of the small population. Uruguay has a solid middle class and the smallest gap between rich and poor in Latin America. We saw a country full of nice modest houses. Uruguay is a middle class country.
Yes, there is poverty and there are some wealthy neighborhoods too, but it doesn’t have the dichotomy like you see in Mexico, or neighboring Brazil or Argentina. It’s surely another part of the reason the crime rate is so low. The whole country just feels egalitarian, family-friendly, modest, and safe.
6. A Healthy, But Small Expat Community
In the last decade, retirees have been increasingly moving to Uruguay. The country receives hundreds of new arrivals from the Unites States each year. And there are now large expat communities in Montevideo and the beach towns to the east – about 5,000 Americans in total. That’s awesome for retirees, because it means there are all kinds of support groups and events organized by and for expats.
But, unlike other popular retirement destinations in Latin America (for example Ecuador and Panama), Uruguay is not overrun with expats. If I’m going to retire in Uruguay, I want to feel like I’m living in Uruguay, not the U.S. Otherwise, why not just stay in the U.S? Uruguay seems to have a good balance – there is a decent expat community, but it is still relatively small.
7. Income Taxes
Now, I’m not one to recommend living in a place just because of the taxes. But, and the same time, you can’t ignore them. Uruguay’s tax system is super friendly to expats. Uruguay generally doesn’t tax income earned abroad, with a few exceptions.
For the first five years of foreign residency, any income earned outside of Uruguay can be completely tax free (in Uruguay). That includes any foreign earned income for you digital nomads. It also includes passive income earned abroad, like rental income, pensions, dividend income, and capital gains – all of it, completely tax free!
After five years, however, things change. You’ll have to start paying Uruguayan taxes on your foreign dividends, capital gains, and interest, to the extent they are not already taxed in another country.
However pensions earned abroad, rental income on foreign properties, and foreign earned income are never taxed in Uruguay, even after the first five years. Here is a good explanation of Uruguay’s tax system for foreign residents.
Now, a few things we noticed that you may or may not like about Uruguay:
Retire in Uruguay: What You May or May Not Like
1. The Beaches
The beaches in Uruguay are great. Really great. They are really, really… great beaches. But they’re not world class. They are a lot like the beaches of the east coast of the U.S. So, if you’re some kind of beach nut and you want to go off into your sunset years with world class beaches, Uruguay is not for you.
In fact, I’d say if you’re looking to retire specifically to a beach destination, you can do much better than Uruguay. Try Cancun, Thailand, or some South Pacific island. Don’t retire in Uruguay just for the beaches.
It’s not a problem for me. I’m not such a beach nut. In fact, I’ve lived in San Diego for years, and hardly gone to the beach more than a few times each year. For me, the beaches in Uruguay are a bonus, but not the primary attraction.
2. The Weather
If you think everywhere south of Texas is hot and humid, you’ve got another thing coming. Uruguay is not tropical at all. It is decidedly temperate. And the winters are decidedly cold and foggy. The springs are variable, and the summers are hot.
If you want tropical, warm, and sunny, Uruguay is not for you. Personally, I like seasons. I don’t necessarily like the extremes of the U.S. East Coast, but I do like seasons. I don’t want to live in a tropical place because there are no seasons. In Uruguay, there is a winter, but it never snows. I think the weather there will be good for me.
Retire in Uruguay: What We Really Didn’t Like
1. The Food Has Little Variety
There is very little variety to the cuisine in Uruguay. This can’t be overstated. Uruguay is the king of beef – especially grass-fed beef. But, when Uruguayans aren’t eating beef, they’re probably eating a “chivito.” That’s a sandwich that comes with beef, ham, bacon, egg, and an appointment to see your physician:
And if they’re not eating a steak or a chivito, the only common choices are pizza and pasta. There’s really very little diversity of food options in Uruguay. And that’s saying something from someone who has lived and traveled all around South America.
If you don’t love steak, and chivito sandwiches don’t appeal to you, you may be a little frustrated with the food options in Uruguay. Even the country’s supermarkets are not stocked with a wide variety of food. In Uruguay’s supermarkets, it seems that about half of the space is dedicated to various cuts of beef, and the other half is for the pasta. Good luck finding the proper ingredients to be able to cook Chinese, Thai, Indian, or even Mexican dishes.
This is partly due to high import taxes, which discourage imported products.
2. It’s More Expensive Than You Think
And those import taxes are a big reason why Uruguay is more expensive than you think. Yes, it’s cheaper than California or New York, but Uruguay is certainly one of the most expensive places in all of Latin America. It felt like the cost of living is comparable to some of the less expensive places in the United States – such as the Midwest. Here are some comprehensive price comparisons.
Uruguay’s high costs could defeat the whole purpose of retiring abroad to save coin. There are plenty of other places in Latin America where your hard-earned dollars will go much further.
But the cost to retire in Uruguay really depends more on how you live. If you live in a gated community near the beach, it can be more expensive than the equivalent U.S. lifestyle. On the other hand, if you want to live more modestly like a local, you can retire in Uruguay for much cheaper than you could in the U.S. – and still be near the beach. I’m more in the latter group myself. I don’t want to move to another country just to be surrounded by other foreigners and locked up in a gated community.
3. Little Geographic Diversity
The green, wide-open spaces of Uruguay are beautiful indeed. But, there is very little geographic diversity in Uruguay. You’ve got the beaches, and then you’ve got the interior. The highest mountains in the country are just small hills.
For someone coming from California, lack of geographic diversity can be boring. In Southern California, you can surf in the morning and ski in the afternoon (although I don’t think I’ve met anyone who’s actually done that). But, anyone living west of the Rockies can drive a few hours and be in a completely different natural environment – mountains, deserts, lakes, beaches, etc.
Uruguay is more like the eastern half of the U.S. – much less geographic diversity. I’m sure you can get used to it, but if you want more variety, then you should consider retiring to Central America, Ecuador, or Chile instead.
I hope to retire abroad one day in Latin America – probably in more than one country. Not only because your money can go further, but mostly because living in a foreign country is an incredibly rich experience. Retirement is a huge opportunity to explore the world. And there is nothing like living in a place for a few years to really explore it.
Uruguay, it turns out, has a lot going for it. It is a unique country, with a unique culture, and is really not like other places in Latin America. Uruguay feels a little like Europe or North America, and like Latin America at the same time. And they have the best steak and alfajores on the planet (sorry, Argentina).
Uruguay’s downsides include a relatively higher cost of living and a disappointing lack of diversity in food and geography. But, no place is perfect. Good health care, educated & friendly people, and low crime rates are massive benefits that are probably more important to most retirees. So, I can see why so many people choose to retire in Uruguay. Maybe I will too.