For years, Ron and Donna Carlson had been searching for the perfect retirement spot. After long professional careers, they were living comfortably in Camas, Washington with a view of the Columbia River and Mt. Hood. Winters were spent in a second home on a golf course in Surprise, Arizona.

"We realized that after we retire we aren't going to have the income to maintain the lifestyle we're accustomed to," Ron says, "but we're determined to try. So we started looking for that perfect place to live. At the top of our list of requirements were great weather and a low cost of living."

Longtime subscribers to International Living magazine, Ron and Donna knew that their retirement dollars would stretch much farther if they were to relocate outside the United States, and they began to explore the idea of retiring in Latin America.

Using International Living as their guide, the Carlsons made trips to Panama,Brazil, Mexico, and Europe. This past January, they found their new home – in the city that's now been named the top retirement destination on International

Living's Annual Global Retirement Index -- Cuenca, Ecuador.

Cuenca is almost on the equator, but at 8,000 feet elevation. "The weather is perfect year round," says Kent Zimmerman, a U.S. expat who lives in Cuenca.

"There are flowers everywhere, green grass, and rushing rivers. The elevation sounds high (it's about the same as Aspen), but studies continually show how healthy it is for you. It's so energizing, you feel 10 years younger."

Cuenca, and Ecuador in particular, has so much to offer, says International Living editor Laura Sheridan, that it bumped Mexico from the top spot on the publication's Annual Retirement Index.

"It's a place of old-world beauty," writes Sheridan in the magazine's cover article, "where you can enjoy the wallet-pleasing prices that deliver a private retreat for as little as $300 a month."

Indeed, says Ron Carlson. "We bought a 4,000-square-foot penthouse apartment in Cuenca with fantastic views and all the amenities we could want. We paid far less for it than we would have elsewhere. And we have the world's best weather."

Also, he explained, Ecuador offers a low cost of living, top-notch healthcare, and some appealing benefits for retirees, including half-price airfares and other transportation costs, and big discounts on a variety of other expenses like taxes, utilities, and entertainment.

"Moving here will not be a reduction in the quality of our lifestyle," Carlson said. He and his wife expect to be able to retire and move to Cuenca by the end of 2010.

To determine the Annual Retirement Index, Sheridan says 30 countries are analyzed and ranked in categories including real estate costs, special benefits offered to retirees, culture, safety and stability, health care, climate, infrastructure, and cost of living.

"We look closely at the best opportunities worldwide for retirement living," she says. "Where will the retiree's dollars go farthest? Which country is the safest? Where is the health care best? We give top priority to those things that matter most to anyone planning for retirement, including programs with special benefits for retirees. . .things like tax breaks and discounts, for example, that various governments offer in an effort to attract investment and retirement dollars."

Ecuador may be the best-kept retirement secret in the Americas, she says, especially when it comes to real estate prices.

"For a decade now, Ecuador has been one of our favorite locations for overseas retirement," she says. "In fact, it won the top honor in 1999 and has been among our preferred locales ever since. This year, it's back at number one -- followed by Mexico, Panama, Uruguay, and Italy."

"Keep in mind that every place has its pros and cons. And every country has pockets where living is easier, or cheaper, than another," she says. "In Ecuador, for instance, some expats live in small towns, like Cotacachi, in cooler mountain climates. Others live in fishing villages on the coast. And still more choose cosmopolitan cities like Quito and Cuenca."

The same is true of Mexico, Sheridan says, which last year earned the top spot on the Retirement Index. "Living in a resort city like Puerto Vallarta is more expensive, and arguably more stressful, than living in a smaller and lesser-known town like Tepic, just a few hours north."

This is the 17th year that International Living, founded in 1981, has compiled its Annual Retirement Index.

The United States ranks #22 on the Index and receives particularly bad marks in the area of special benefits for retirees. It scores well in both safety and infrastructure. At the bottom of the list are the United Kingdom and South Africa--primarily because of high real estate prices and, in the U.K., overall high cost of living. In the case of South Africa, the country didn't score particularly well in any category.

"No place scores a perfect 100," stresses Sheridan. "Even Ecuador, our number one retirement destination, earns a score of only 79. The best, but not perfect. If you're trying to pick a place to retire, keep that in mind. There will be good points and bad, no matter where you go. Realizing that ahead of time will help eliminate disappointments later."

The Top Ten Best Places to Retire (and total points out of a possible 100):

• Ecuador 79
  
• Mexico 78
  
• Panama 77
  
• Uruguay 75
  
• Italy 73
  
• Brazil 71
  
• Argentina 71
  
• Costa Rica 70
  
• Malta 70
  
• Australia 70

To read the article and see the complete scores for every country in every category, go to www.retirement-index.com.

For interview and further comments, contact Suzan Haskins at shaskins@internationalliving.com.

International Living has more than 200 correspondents traveling the globe, investigating the best opportunities for real estate, travel, retirement, and investment and contributing to its monthly magazine, special reports, and more. Every year, International Living hosts conferences and events around the world that help its subscribers learn about offshore opportunities. Learn more at www.InternationalLiving.com.

Article by: Suzan Haskins - www.InternationalLiving.com