How Geographic Arbitrage Can Cut Years Off Your FIRE Timeline (With Real Numbers)
Bali, Indonesia. Indonesia recently ranked as best country to retire in Asia. Photo by Darren Lawrence on Pexels.
Reading time: 10 minutes
Quick answer: Geographic arbitrage—retiring in lower-cost countries—can shorten a Financial Independence (FIRE) timeline by several years, often more than increasing investment returns. The effect comes primarily from reducing annual expenses, not from taking more market risk.
What you’ll get from this guide 📊
✔ A concrete, calculator-based example of geographic arbitrage
✔ How retiring abroad can cut years—not months—off a FIRE timeline
✔ Why lowering retirement expenses often beats saving harder or chasing returns
✔ A realistic FIRE case study you can adapt to your own numbers
✔ How cost of living translates directly into years of freedom
✔ Where geographic arbitrage helps most—and where it doesn’t
✔ How to combine math first, destinations second (the right order)
TL;DR — Geographic Arbitrage & FIRE Timelines ✈️
⏳ Geographic arbitrage can reduce a FIRE timeline by 5–10+ years
💰 Lower retirement expenses = smaller FI number = faster career exit
📉 Cutting expenses often matters more than higher returns
🛠️ Calculators turn “what if” into real timelines
🌍 Destinations matter—but only after the math works
🔁 Geographic arbitrage can shorten your timeline—without forcing you into a specific lifestyle
How Retiring Abroad Can Accelerate Your Path to Financial Independence
Using the Financial Independence Calculator to Model Geographic Arbitrage
We offer a Financial Independence (FI) Calculator—free for newsletter subscribers—that estimates your FI number (the portfolio needed to cover your monthly expenses) and your timeline to FI based on income, spending, portfolio value, and return assumptions.
What makes this calculator especially useful for geographic arbitrage is that it can model how retiring in different countries changes your early retirement timeline, using cost-of-living data to adjust expected retirement expenses.
In this article, we walk through a concrete, calculator-based example to show how much geographic arbitrage can accelerate a FIRE (Financial Independence, Retire Early) timeline—and why lowering expenses often beats saving harder or chasing higher returns.
After the main case study, I also apply the same calculator to our own situation to show how these trade-offs look in practice for our household.
This is not a country-ranking article; it’s a numerical demonstration you can adapt to your own situation. If you’re looking for country rankings and selection criteria, see our data-driven shortlist of strong geographic-arbitrage destinations here.
A Real-Life Example: How Geographic Arbitrage Changes a FIRE Timeline
We will present an example based on a US case study, given that US readers represent by far the largest viewership share in my blog. For non-US friends, though, don’t fret: these high salary numbers don’t really mean much by themselves, unless they are accompanied also by a high savings rate.
Let’s look at a hypothetical US household on their FIRE journey that discovered the concept of financial independence through a colleague in their mid-twenties. After some introspection on what matters most to them, and after reading some life-changing books on personal finance, they decided to save and invest aggressively over 8 years in their twenties and early thirties.
However, kids soon came into the picture, reducing their savings rate and slowing down their path to FI. At age 45, both partners in this US household currently earn a combined net income of $120,000. Their expenses have finally stabilized to $84,000 per year and they have managed to accumulate a solid net worth of $650,000 through consistent saving and investing.
As observed in the output of the FI Calculator below (Figure 1), and assuming a 7% real return on investments and the 4% rule of thumb, this family still needs about 13 more years of work before reaching Financial Independence.
These calculations use conservative assumptions (real returns and withdrawal rates) and are intended for planning—not prediction. With their 30% current savings rate, it will still take them a while to get to their FI number of $2.1 M (25 times their annual expenses as per the 4% rule).
Figure 1: Applying our Financial Independence Calculator—free for newsletter subscribers—to the example above. As per the case study presented above, this US household reaches—in the baseline scenario—early retirement in 12.6 years at age 57.
* Further Reading – Article continues below *
Four Ways to Accelerate FIRE — and Why Geographic Arbitrage Is Different
Having the ability to retire at 58 can still be considered a huge success. But let’s assume that, like many others in the workforce, both workers are experiencing burnout at work and would prefer to accelerate this timeline.
These are many options they could consider at this point. Here are four actionable strategies to reach financial independence faster:
1) They can increase their savings rate, by either increasing their income or reducing their expenses. Depending on how aggressively they do this, they could likely shave off another 2-3 years. But, assuming they have already optimized their expenses as much as possible, or simply find it difficult to do so with kids in the picture, this first option could certainly be challenging
2) They can explore using more aggressive safe withdrawal rates (e.g., starting with a 5% SWR with guardrails instead of relying on the 4% rule), which could reduce their financial independence timeline by 2.5 years. By using a 5% SWR, their FI number would go down to $1.68M, a substantial decrease from the original $2.1M. This approach, however, means the household needs to be flexible with their retirement spending—being disciplined to align their yearly spending with the ups and downs of the stock market and their portfolio returns
3) They can explore the possibility of pursuing Barista FIRE, which we discussed last week. If they are experiencing substantial burnout and dread the possibility of staying in their current jobs for another 13 years, they could transition to part-time work, reducing stress while maintaining a base income that allows them to cover a substantial share (but not all) of their expenses, while already enjoying many of the benefits of Financial Independence.
4) Finally, they can consider the possibility of taking advantage of geographic arbitrage (including seasonal geographic arbitrage) and moving abroad in retirement to more affordable countries for early retirement. Our FI Calculator provides the user with this information. The remainder of this blog post will focus on this fourth option—specifically, how lower cost of living affects years to FI, not which destinations are best overall.
How Retiring Abroad Changes the Math (Not a Country Ranking)
This section focuses on “timelines”, not on identifying the “best” countries—that comparison is covered separately in our regional and ranking-focused guides (e.g., Europe, Asia, Latin America, Nordics).
Let’s assume that the family is comfortable and even excited with the prospect of leaving the US. Whatever this reason may be, the key question is: How much earlier could this household retire by considering different countries?
This is exactly the question our new FI Calculator addresses. It considers cost of living (COL) data from over 106 different countries (Numbeo, 2025) to calculate whether it is possible to retire in different locations.
Let’s continue using the previous example. We saw that it would take the family almost 13 more years of grinding to make it over the finish line. But, as observed in the map of Figure 2, their exact financial situation looks very different if they are open to considering other countries for retirement.
The specific countries shown here are examples—the key takeaway is how sensitive FI timelines are to expense reductions, regardless of destination.
Figure 2. Output of out FI Calculator to the example above. Map displaying the timeline to FI (years) across 106 countries. To illustrate the power of geographic arbitrage, the case study household could retire in Indonesia and Thailand in 0.5 and 2.5 years, respectively. The FI tool is free to use for email subscribers.
Indeed, with only 2 more years of work they would be able to retire in 36 countries of the Numbeo dataset, including popular destinations such as Indonesia, Philippines, or Malaysia. With just one more year of saving, destinations like Thailand and Mexico become feasible too. Any of these choices means potentially reducing your working career by a decade while maintaining a comparable or even higher quality of life in retirement.
Again, this is not for everyone, but for those who may find it exciting to live abroad it can be a very good solution to consider.
The FI Calculator also provides this information on a tabular format: to illustrate, see Table 1 below, where the timeline to FI is displayed for 53 countries within reach of the 3-year time mark. It also displays the relative cost of living (%, relative to user’s country, in this case the US) and how the retirement expenses are adjusted. If you are interested to consider more expensive retirement destinations please feel free to play around with the tool.
Of course, not all low-cost countries are equally suitable—this is why cost-of-living math also needs to be considered together with healthcare access, safety, lifestyle fit, and other factors which are evaluated separately (see our Retirement Relocation Tool).
Table 1: Timeline to Financial Independence (years), following the US household example above. Displayed are countries where early retirement could be achieved within the next 3 years (as opposed to 13 years in the US). The additional 53 countries of the dataset are not presented in this table, but can be found in the tool.
| Country | Relative COL (%) | Adjusted Retirement Expenses ($) | FI Timeline (years) |
|---|---|---|---|
| India | 24.1 | 20265.2 | 0 |
| Libya | 22.3 | 18718.2 | 0 |
| Algeria | 28 | 23513.8 | 0 |
| Bangladesh | 23.4 | 19646.4 | 0 |
| Nepal | 26 | 21812.2 | 0 |
| Pakistan | 20.6 | 17326 | 0 |
| Egypt | 22.5 | 18872.9 | 0 |
| Russia | 29.1 | 24442 | 0.1 |
| Tunisia | 30 | 25215.5 | 0.3 |
| Paraguay | 30.6 | 25679.6 | 0.4 |
| Iran | 30.9 | 25989 | 0.4 |
| Kosovo | 31.9 | 26762.4 | 0.5 |
| Ukraine | 31.5 | 26453 | 0.5 |
| Indonesia | 31.5 | 26453 | 0.5 |
| Brazil | 32 | 26917.1 | 0.6 |
| Belarus | 32.8 | 27535.9 | 0.7 |
| Morocco | 33.7 | 28309.4 | 0.8 |
| Colombia | 33.3 | 28000 | 0.8 |
| Uganda | 33.5 | 28154.7 | 0.8 |
| Iraq | 33.5 | 28154.7 | 0.8 |
| Kyrgyzstan | 34.8 | 29237.6 | 1 |
| Uzbekistan | 34.6 | 29082.9 | 1 |
| Vietnam | 34.8 | 29237.6 | 1 |
| Kenya | 35.2 | 29547 | 1.1 |
| Philippines | 35.2 | 29547 | 1.1 |
| Kazakhstan | 35.7 | 30011 | 1.2 |
| North Macedonia | 36.6 | 30784.5 | 1.3 |
| Malaysia | 37 | 31093.9 | 1.4 |
| Ecuador | 37.4 | 31403.3 | 1.4 |
| Bosnia And Herzegovina | 37.4 | 31403.3 | 1.4 |
| Peru | 37.8 | 31712.7 | 1.5 |
| Azerbaijan | 37.6 | 31558 | 1.5 |
| South Africa | 39.8 | 33414.4 | 1.8 |
| Sri Lanka | 39.6 | 33259.7 | 1.8 |
| China | 40.9 | 34342.5 | 2 |
| Venezuela | 41.6 | 34961.3 | 2.1 |
| Georgia | 41.6 | 34961.3 | 2.1 |
| Ghana | 41.3 | 34651.9 | 2.1 |
| Moldova | 41.8 | 35116 | 2.2 |
| Romania | 42.7 | 35889.5 | 2.3 |
| Zimbabwe | 42.5 | 35734.8 | 2.3 |
| Dominican Republic | 43.3 | 36353.6 | 2.4 |
| Thailand | 43.6 | 36658.5 | 2.5 |
| Poland | 45.8 | 38448.6 | 2.8 |
| Hungary | 46.6 | 39138.1 | 2.9 |
Beyond Cost of Living: What Else Should You Consider When Choosing a retirement destination?
While cost of living is usually the dominant driver of how much earlier you can retire abroad, it’s not the only one. Tax treatment of your investments—especially capital gains—can also affect your actual retirement budget. Even if this is typically a secondary factor compared to COL, it’s smart to check how different countries treat investment income before making a decision.
The information on changing FI timelines across countries becomes very powerful when used in combination with our complementary Retirement Relocation Tool (also free for email subscribers; screenshot below in Figure 3), which provides information on how potential retirement destination countries compare with each other across a whole range of variables: safety, healthcare, political stability, pollution, climate, english proficiency, openness, natural scenery, and natural disaster risk.
The methodology of the Retirement Relocation Tool is covered in detail in a dedicated page. The tool dynamically plots different countries against cost of living (y axis) and a retirement suitability index that scores countries on expat-friendly metrics (x axis). As per the instructions, you can use sliders to decide on the importance of each variable for finding your suitable retirement destination (see left of Figure 3).
Are you torn between retiring to popular retirement destinations such as Spain, Portugal, Indonesia, Malaysia, Thailand, Philippines, Mexico, Uruguay, and many others? Understand first, how the timeline to FI changes across these different destinations, and, secondly, how the different countries rank across other important variables unrelated to cost of living.
You might be surprised—sometimes good geographic arbitrage opportunities are closer than you think, or even in higher cost countries. For example, in our analysis of retiring in Denmark vs Germany we revealed how cheaper housing can sometimes outweigh higher taxes and cost of living.
Figure 3: Screenshot of our Retirement Relocation Tool (free for email subscribers; PC only). Which countries represent the best options for early retirement, considering safety, healthcare, and many other variables typically considered to determine a country’s suitability?
Our Personal FI Journey and Retirement Options Right Now
As promised, we will now share what our timeline to FI looks like at the moment. This was discussed in further detail in previous posts, which covered both the challenges of pursuing FI in Germany and the challenges of reaching FI while raising a family.
Entering our personal information in the FI Tool, we are currently 6.4 years away from FI (using a 5% SWR + guardrails). Our current savings rate (after kids) has stabilized at around 38%. This is substantially lower to the savings rate we managed in the earlier years, but still relatively high.
If we considered relocation to a lower cost of living (Figure 4), we’d already be financially ready to retire in 32 countries right now, including Malaysia, Philippines, Colombia, Vietnam, or Indonesia, and we’d be not too far away from retiring in Thailand (<1 year), Greece (<3 years) or Spain and Portugal (<3.5 years).
Figure 4: Applying our Financial Independence Calculator to our situation. We could already retire in 32 different countries in the dataset, including Malaysia, Philippines, Colombia, Vietnam, or Indonesia.
💬 Please let us know in the comments below what this map looks like for you! Where could you already (or in a few years) retire to? Have you thought of any other alternatives to the 13-year grind beyond the four strategies we presented in today’s post, e.g., taking mini-retirements?
🌿 Thanks for reading The Good Life Journey. I share weekly insights on personal finance, financial independence (FIRE), and long-term investing — with work, health, and philosophy explored through the FI lens. If this resonates, join readers from over 100 countries and subscribe to access the free FI tools and newsletter.
👉 New to Financial Independence? Check out our Start Here guide—the best place to begin your FI journey.
Disclaimer: I am not a financial adviser, and this content is for informational and educational purposes only. Please consult a qualified financial adviser for personalized advice tailored to your situation.
About the author:
Written by David, a former academic scientist with a PhD and over a decade of experience in data analysis, modeling, and market-based financial systems, including work related to carbon markets. I apply a research-driven, evidence-based approach to personal finance and FIRE, focusing on long-term investing, retirement planning, and financial decision-making under uncertainty.
This site documents my own journey toward financial independence, with related topics like work, health, and philosophy explored through a financial independence lens, as they influence saving, investing, and retirement planning decisions.
Figure 5. Lisbon, Portugal. Portugal is a popular destination for retirees and scores very highly on our Retirement Relocation Tool. Photo by Vita Marija Murenaite on Unsplash.
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Frequently Asked Questions (FAQs)
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In many cases, relocating to a lower-cost country can shorten a FIRE timeline by 2–10 years. The exact impact depends on how much expenses drop relative to your current spending, not on investment returns.
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Often yes. Reducing expenses lowers both your FI number and required withdrawals, which compounds its effect. For many households, cutting costs beats incremental savings increases.
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No. While LeanFIRE benefits most dramatically, even higher-spending retirees can materially reduce timelines by relocating to moderately cheaper countries.
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Taxes matter, but they are usually a second-order effect compared to cost of living. Large COL differences dominate timeline outcomes in most scenarios.
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Quality varies widely. Some lower-cost countries offer excellent private healthcare, while others require careful planning and insurance coverage.
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Yes. Many people use slow travel or seasonal geoarbitrage to validate costs, lifestyle fit, and healthcare before committing long-term.
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Yes. Optional income (Barista FIRE, part-time work) would further shorten timelines but is intentionally excluded for conservatism.
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Because rankings depend on lifestyle preferences. This article focuses on timeline mechanics; country comparisons are covered in separate guides.
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It introduces new risks (political, legal, cultural), but also reduces financial risk by lowering required portfolio size.
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Run your own numbers using the FI Calculator, then explore suitability using the Retirement Relocation Tool.
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