Is It Possible To Retire In The Dominican Republic on US$2,000 Per Month?

Over the years there have been plethora of articles about retiring abroad on shoe string budget.  Articles with the title come to Panamá, come to Costa Rica, Live in Thailand, and of course retire in the Dominican Republic.  But is it true one can really live well on less in the Dominican Republic (and perhaps some other destinations also?) The honest answer is yes! but it all depends.  It depends upon your lifestyle, it depends upon what is important to you and it also depends what you want to use as a basis for living costs.  In other words, just like many other things in life, the devil is in the details. 

Let us start off with one monthly budget item that certainly has gone up in cost the world over: food. Interestingly enough, the recent devaluation of the US Dollar (read inflation, and I know, I Know – the US Government says inflation is low and not to worry) has pushed up food prices globally, and it has been worse in any country that uses the US Dollar as it’s own national currency (aside from the United States, this means Panama, Ecuador and El Salvador). On average, inflation in countries outside the US that use the US Dollar has been roughly 10 percent, whereas in neighboring nations that have their own currency inflation has been around 5 percent.

With regards to inflation inside the US, the popular financial commentator, Mr. Jim Willie, noted food prices for specific list of various food brands and items back in January of 2013 and checked the prices for those very same items in January 2014. What did he find? Prices had gone up anywhere from 10% to 30% in some cases, for some products.  And despite the rhetoric to the contrary, the United States via it’s own fiscal policies (or fiscal mismanagement, if you prefer) has in fact been exporting inflation to the rest of the world.  

So, with that said, you will find various supermarket prices in the Dominican Republic higher in September 2014 than they were say in September 2012.  And of course, as has always been the case, imported items will cost more than the prices in the native country of manufacture (regardless if from the US or Europe).  Stated more plainly and more directly, Heinz Ketchup, French's Mustard and Green Giant canned peas will cost more in a Dominican Republic supermarket than it will at a supermarket inside the US. So, if those items are must have on your monthly shopping list, then be prepared.  However, there is some good news and this is where the Dominican Republic offers a dramatic benefit over other Caribbean destinations such as The Bahamas, St. Martin, St. Kitts, Barbados and any other island nation that has very limited home based agriculture or food industries. 

The Dominican Republic is actually situated on the second largest island in the Caribbean, by square mileage, and it has a very diversified and developed agricultural industry.  In fact, the country produces enough food to feed it's own population and it exports excess production of rice, chicken, eggs and so on.  And because it is a self sufficient nation in regards to food, and because wages are of course a fraction of what they are in the US or Europe, prices for locally grown produce (or food products, like pasta, ketchup, cooking oil, or even laundry detergent of which there are local brands) is going to cost much less than their imported counterparts.  As an example, yellow bananas can be purchase for about the equivalent of 12 cents US, avocados for about the equivalent of 25 cents US each, etc.  As the old saying goes, man (or woman) cannot live on avocados or bananas alone, but this just gives you a basic idea of how locally grown produce will save you money.  And the same is going to be true for beef, pork, and chicken.