I had heard the term geographic arbitrage and didn’t really know what it was, so a little searching informed me that this is earning a high income in a high cost region compared to earning the same income and living in a low cost region. Whilst I wasn’t able to engage in geographic arbitrage during my working life, I will try this as a retiree.

When you engage in retirement arbitrage, you take your retirement in a lovely scenic place overseas to live a better quality of life. For Australians that is generally South East Asia with countries such as Thailand, Indonesia, Philippines, and Malaysia. Of course developed countries such as Singapore, Taiwan, Japan and South Korea offer great opportunities but tend to be larger cities with higher costs.

For European heritage Australians whose families mostly emigrated to Australia in the 1950s, they typically consider returning to their native countries such as Italy, Greece, Spain, Portugal and the Slavic countries. Americans may look at Asia or Central America, but I typically do not hear of many Australians seriously looking at Central American countries.

I am looking for a country with warm weather in summer and reasonable facilities. For me, Portugal seems to offer plenty. I can spend my time in a scenic area with a great lifestyle and good summer weather. Likewise, Italy is also interesting if I stay out of the large tourist areas of Rome, Florence or Venice. Sure, if I can find a place in the countryside, the amazing Italian train network can get me most places. Even better, Italy has a reciprocal agreement with Australia for medical treatment. With a couple of years before I can retire early, I need to start planning.