02/13/2013 01:26 pm ET Updated Apr 15, 2013

Pioneers In Cuenca -- How Lee And Julie Retired At Age 49

Cheapest Places To Retire

"When I was 49, the engineering company I had been working for for many years went through a restructuring," explains American expat Lee Harrison. "It created an opportunity for those of us who were interested to take early retirement.

"My wife Julie and I were ready for a big change. We wanted an adventure, to take ourselves as far outside our comfort zones as possible," he adds. "So, when this chance came along to retire well ahead of the timeline I'd had in mind, I jumped at it."

Lee and his wife considered many options for where to retire overseas. Finally, they settled on Ecuador. It seemed to offer everything they were hoping for.

"Sometimes people who've retired to other countries boast that their lives in their new countries are hardly different from the lives they left behind back in the States," Lee says. "That's not the case with Ecuador. Living in Ecuador, you never forget that you're in a foreign country. For Julie and me, this was one of the biggest attractions."

However, the most important reason that Lee and Julie chose Ecuador as the place to reinvent their lives at this stage was the cost of living.

"As we made our plan for where to go," Lee remembers, "the reality of what we were doing began to settle in. I was only 49 years old, for crying out loud. What if we ran out of money? I began to worry about being back in the States at age 75 looking for work."

Lee spent a lot of time running the numbers and, finally, he and Julie found the courage to make the leap.

"We satisfied ourselves," Lee explains, "that, in Cuenca, Ecuador, the city we'd focused on, my pension would allow us to live very comfortably."

Lee and Julie were pioneers. Two of the original Cuenca retirees, in 2001 they received Visa 1 and Visa 2 from the New York consulate when they applied for legal Ecuadorean residency.

"We lived in Cuenca for nine months before meeting another English-speaking couple," Lee says. "We didn't mind. We were having so much fun taking advantage of all we discovered that Cuenca had to offer. This is a very cultural city, with free symphony events, museums and annual art shows.

"The best news, though, during those early months," Lee continues, "was the realization I had that the cost of living was even lower than I'd estimated. Cuenca enjoys great mountain weather year-round. This means no heat and no air conditioning. I had underestimated the effect of the climate on our overall budget."

The cost of living in Cuenca has increased steadily in the dozen years since Lee and Julie first took up residence. Still, this remains one of the most affordable options in the Americas. You can rent an apartment for as little as $300 per month. More typical is $500 monthly. Figure a total budget of $1,600 per month if you rent; $1,200 per month if you own your own home.

And you may, indeed, decide to invest in a place of your own. The cost of real estate in this city is one of the greatest bargains in all of Latin America, cheaper than in Montevideo, Uruguay; Medellin, Colombia; Fortaleza, Brazil; Panama City; or most any other Central or South American destination you might consider. You could buy a small city condo for less than $50,000.

Gas, too, is cheap, at $1.48 a gallon, and Ecuador is a great place for exploring by car. Lee says that he invested in a car soon after making the move, because he and Julie so enjoyed motoring around the country. He advises figuring an additional $150 per month if you own a car.

One thing to remember about Ecuador is that this country uses the U.S. dollar. For an American retiree, this means it's easier to understand what things really cost; it's easier to keep track of what you're really spending, month to month; and, very important, you don't have any currency-exchange risk. You may still have local inflation to contend with, but you won't have to worry about that being compounded when the exchange rate goes against you.