The small South American country of Uruguay, nestled between Argentina and Brazil, may be one of the world’s best kept secrets as a destination for both retirement and vacation travel.
Uruguay offers First World living at prices that are lower than many people in North America, Europe, Australia, and New Zealand are accustomed to paying. Uruguay is more expensive than many places in Latin America, but still quite affordable.
Uruguay is one of the most politically, socially, and economically stable countries in South America. Uruguay has modern, up-to-date infrastructure, including high-speed Internet and phone system, safe drinking water throughout the country, and high-quality medical care at inexpensive prices.
Montevideo: Culture and European Influence
The cities, Montevideo in particular, have European-influenced architecture and charm. 90% of the citizens there have Spanish, French, or Italian ancestry. The Spanish influence isn’t surprising – it was the Spanish who colonized Uruguay, and it’s a Spanish-speaking country. You’ll also find more Italian influence than you might expect, which can be traced back to a large influx of Italians between 1870 and 1930. So you’ll find paellas and empanadas, baguettes and small croissants, pizza and pasta of all sorts, as well as steaks and fries on the culinary landscape of Uruguay.
The beef in Uruguay is exceptionally good, as are the local wines. As a result, a large percentage of the meat you’ll find in restaurants and grocery stores is beef. If you’re not a red meat eater, you may be disappointed by the range of options available to you.
There are many fine restaurants and an active nightlife. Montevideo offers a range of live performance options. The national ballet, opera, and chamber orchestra all perform in the modern Auditorio Nacional Adela Reta (Adela Reta National Auditorium) with seating for 2,000. You will also find electronic music, jazz, and rock playing in Montevideo nightclubs, small theaters, and bars.
The people are laid-back, friendly, well-educated, and polite. Uruguayan society is very egalitarian with a large middle class, in contrast to many other places in Latin America where there is noticeable income inequality and many people live in poverty. Former President Jose Mujica, who claims to have never worn a tie in his life, had no possessions other than a small farm and an old car. Current president Tabaré Vasquez is a physician who continues to work in his medical practice part-time.
Punta del Este: Beaches, Beauty, and Serenity
There are beautiful beaches right in Montevideo, and most of Uruguay’s coastline is lined with beaches. The ultimate Uruguay beach town is Punta del Este. For years, Punta has been the destination of choice for the rich and famous of Latin America and Europe, but it’s still accessible to the middle class. Punta del Este is beautiful, clean, well-maintained, and very safe. There are palm trees, gleaming condo towers, and single-family homes with trim lawns. Outside Punta, the rolling hills of Maldonado are serene and picturesque.
Given its clientele, real estate in Punta del Este is predictably higher than Montevideo or anywhere else in the country. However, condos in the $100,000-$200,000 price range can be found. An interesting characteristic about Punta’s real estate market is that price is determined more by the newness of the building and the amenities, not so much by location. So, you might find a $150,000 condo a short distance from million-dollar-plus residences. The town of La Barra, next to Punta del Este, is a good choice to consider since you would have proximity to Punta del Este, but with lower prices and fewer tourists.
The population and the activity noticeably surge during high season (January-February). During the off-season, it can be pretty quiet. There’s plenty of art and culture to be found as well. Punta del Este has several modern art museums and hosts an international jazz festival every year.
During our visit, the greatest impression we left with was that the area was very relaxed, serene, and welcoming – in sharp contrast to Buenos Aires (where we had just spent three days) and Rio de Janeiro (where we spent three days at the end of our trip) where the atmosphere was frenetic, tense, and often unsafe. We definitely plan to return to visit Montevideo and spend a few more days in Punta del Este.
I always caution people about moving full-time to beach towns and other resort locations. They are seductive and fun places to visit, but not necessarily a good place to live year-round. In this regard, Montevideo is probably the better choice for a permanent retirement destination, while you can easily drive a couple hours to Punta del Este for a week or a weekend.
The country has modern, up-to-date infrastructure, including high-speed internet and phone system, safe drinking water throughout the country, and high quality medical care at inexpensive prices.
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Cost of Living
Based on cost-of-living comparisons on Numbeo.com, the overall cost to maintain a comparable standard of living in Montevideo is comparable to less expensive areas of the US, such as the Midwest. Cost of living in Punta del Este is a bit higher.
Health insurance costs about $51 a month. Income tax rates are very reasonable (10-25 percent) and are only paid on income generated in Uruguay over $12,000 a year. That means that your retirement income is not taxed by Uruguay. (It’s still taxed by the US, of course.) Value-Added Tax (VAT) is fairly high, but it’s included in the sticker price of everything you buy. Uruguay places stiff import taxes on goods from outside the country, which may be why income taxes are so low.
Prices in Uruguay are higher than in most other places in Latin America, yet still reasonable by world standards. If low-cost living is a high priority, this may not be the place for you. Given the high quality of healthcare, infrastructure, and overall quality of life, I think Uruguay is an appealing option to consider.
The climate is moderate, although the humidity can be high (ranging from 50% to 100%) and it’s often windy. Average highs and lows in summer (January) in Montevideo are 28 and 17 °C (82.4 and 62.6 °F), respectively. Winter (July) average highs and lows in Montevideo are 14 and 6 °C (57.2 and 42.8 °F), respectively. The country receives an average rainfall of 37.4 inches annually, and much of the rain is accompanied by thunderstorms. Natural disasters, such as hurricanes, are extremely rare.
It’s Easy to Immigrate
It’s relatively easy to get a foreign retiree visa. To qualify, you must have a documented retirement income of at least $1,500 per month. The country allows you to move your household possessions, including one car, into the country without being taxed. Uruguay is also pet-friendly and there is no quarantine period once you arrive with your pet.
One of the main disadvantages of living in Uruguay is that travel to and from the US can be lengthy and expensive, and currently the only direct flight from Montevideo to the US flies into Miami. However, Uruguay is close to Buenos Aires, Argentina, so you’ll have more options for travel to and from that city. Other connections are available through Santiago, Chile and Panama City.
Uruguay was the first South American country to institute civil unions, and the second to institute same-sex marriage (after Argentina). Punta del Este, the main seaside resort in Uruguay, has a tradition of being one of the most gay-friendly tourist destinations in Latin America.
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©2014 Dave Hughes. All rights reserved.
Updated January 7, 2020.
Montevideo beachfront: Luis Gustavo Fraccarolli Buriola. Some rights reserved.
Montevideo buildings: Jmalfarock. Some rights reserved.
Teatro Solis, Montevideo: Gustavo Uval. Some rights reserved.
Punta del Este beach with hand sculpture: Dave Hughes. All rights reserved.
Undulating bridge in Maldonado (outside Punta del Este): Dave Hughes. All rights reserved.
Punta del Este shoreline: Jimmy Baikovicius. Some rights reserved.