When the time comes to retire from your working life of the past 50 years or so, will you be ready to live in the same country in which you have always lived? Can you afford your house payments on just your retirement income? How about renting an apartment in the middle of town? Payments, upkeep and maintenance on your car(s)? Food, utilities, entertainment? The cost of everything continues to increase, and your fixed retirement income may not be enough to keep up with all the changes.
But there are still places in the world where your retirement money will stretch quite a bit further than at home. Today I’ll tell you about one of them: Hungary. To be specific, Budapest, Hungary. I moved here in 1999 to teach English as a foreign language and with an eye to a future retirement haven. Prices for everything were super cheap back then; people who lived in Vienna even came to Budapest to shop.
Well, things never stay the same. Over the years prices have, of course, risen, although not as much as you’d think. Hungary is no longer dirt-cheap, but Budapest is still a good value for people who want to live a good life for less in Europe. Retirees moving to Budapest from a similarly-sized city in Europe, North America, or Australia can easily cut their expenses in half. And the rest of the country costs even less.
Expats in Budapest
Estimates of how many expatriates live here range from 30,000 to 50,000; in fact, there are enough “expats” in Budapest to support business newspapers and magazines in English. So you won’t be all alone if you choose to move here.
I was earning more than 13 million forints (in 1999 Hungarian money – HUF, or forints) annual gross in the United States, working in the financial industry. It was always steady, reliable work, but not the best-paid industry available. When I moved to Budapest and began teaching English, my monthly net earnings after one year were around 135,000 forints per month, increasing to around 338,000 forints per month after, say, five years. I took a huge initial pay cut, but I was one-thousand percent happier. Why? Read on.
Retiring in Budapest
After teaching English in Budapest for eight years, I retired and I still live a much better life than I could in America on what I have to spend. The cost of monthly house payments or rental, plus car costs alone, would be more than my monthly retirement income, which is around 475,000 HUF net. Here in Budapest, my monthly flat rental, plus utilities, averages around 80,000 HUF ($400 US), right in the middle of town. Budapest’s public transportation system of metro, trams and buses is excellent, so I don’t need a car; in fact, I haven’t even driven a car since 1999. I eat out several times a week and I still have enough money to travel wherever and whenever I want; I have now been to 58 countries, and I still take around five or six trips each year.
I’ve watched life in Budapest get easier and easier as the years have gone by, partly through my personal adjustments, and partly because the level of English fluency locally has gotten steadily better.
Hungary joined the European Union in 2004, but the country still uses the Forint, which is a volatile currency. Prices quoted here are based on 225 forints to the dollar, but I’ve seen it as low as 148 and as high as 300. So check the current rate before cursing my name because prices have changed.
The countryside of Hungary is still quite cheap, but few expats live in the rural areas unless they’re in the wine industry. Most choose to live in Budapest, around Lake Balaton, or in one of the smaller cities like Egér or Pécs.
Hungary got hit hard in the European economic crisis like many other nations on the continent, but has recovered faster. The official unemployment rate was 8% in mid-2014, which looks downright glorious compared to Italy, Spain, Greece, or Portugal. In many ways, this feels like a nation on the rise and young people are displaying something not seen much in the past couple hundred years of Hungary’s history: optimism.
Housing Costs in Hungary
The residents of Hungary figure their rent costs in hundreds, not thousands, of dollars and you won’t find many single people or couples paying more than $1,200 (about 270,000 HUF per month), even in the capital. When you get into smaller towns, you can get a house for that. In fact, most locals pay between $200 and $500 a month rent for an apartment, not including utility charges. In the southern wine region, there are houses with a nice garden going for the same monthly rental. I know an expat from New Zealand working for a winery by Lake Balaton, who was paying $210 (47,250 HUF) a month for his two-bedroom apartment with a lake-view balcony.
The website Numbeo.com uses New York City for a price basis and compares costs of living around the world to that base, using 100 as the NYC average. For rent prices, Hungary comes up a 10 and Budapest is 12. This will vary greatly by location, of course, but on average you can expect to pay 1/8 to 1/10 of what you would in your current situation if you’re living in New York City.
I pay just under $300 for my apartment in District 5, one of the most desirable and central areas of the city. (If you’ve come to Hungary as a tourist, you’ve been there to see the sights).
Buying a property
If you decide to buy something eventually, which you can do freely as a foreigner, a typical apartment in Budapest will cost between 28 million and 40 million HUF for 100 square meters. It’s a buyers’ market right now for a very bad reason: a lot of Hungarians took out loans to buy property in the pre-EU days and did it in Swiss Francs, because that was a stable currency. Now they owe far more than what the property is worth because of the Swiss Franc’s rise, so there’s a mass selling of properties due to exchange rate fluctuations. Combined with the high unemployment so prevalent in much of Europe now, there are far more sellers than buyers.
Health Care Costs
In Hungary, medical care is good; dental care is excellent. With the rise of cross-border medical treatment happening in many places globally, Hungary has jumped on the trend with both feet. Many residents of the UK and Ireland come here to have dental work done or to receive good medical care at a discount. In addition to standard dental care over the years, I had to have dental implants a few years ago. I would have had to pay several thousand dollars in the US; in Budapest, the charge for two implants was just over $1,000.
Getting a cleaning and check-up at the dentist is around $80; getting a set of x-rays is about that much again.
Food & Drink
Two people can usually have a good cloth-napkin dinner with wine for around $50. If you eat at more humble places, a soup will be a dollar or two and main dishes range from $3 to $7. When you shop in the market, prices are at the low end for Europe. You can get rolls for 10-25 cents each or a huge baguette for a dollar or less. Get 100 grams (around 1/5 of a pound) of good cheese for a dollar, 100 grams of good local sausage for $2, and a jar of pickled veggies for another dollar or so.
For a buck or less, you can generally buy 100 grams of any of the following items in the market: raisins, peanuts, sunflower seeds, banana chips, or dried apricots. Or you can get a kilo of seasonal fruit or peppers, cabbage, potatoes, radishes, or carrots. A big bunch of white asparagus runs about a dollar. How much do you pay for that in your local Albertsons or Safeway? A family of four would probably spend $120-$160 a week on groceries, not including wine; in Australia that would easily be $300 or $400.
Hungarian wine should be known around the world, but the Soviet occupation days seriously hurt its reputation and the recovery will be a long one, so for now it’s one of the best quality-to-price values in the world. In many countries, expats complain about the difficulty of getting decent wine for a decent price, so if that’s a big priority, put Hungary on your list. You can find a nice drinkable table wine bottle in a store for $2, something quite good for $4 to $8. If you spend over $10 you might end up with something from a “winemaker of the year” who has adorned Hungarian magazine covers.
As Hungary was once part of the Austro-Hungarian Empire, you can get a killer coffee and pastry here just as you can in Vienna – but for literally one quarter of the price. After you do a double-take at your low bill in a wine bar, finish with a coffee and dessert for another nice surprise.
Getting around Hungary is relatively cheap by bus or train when you want to get out of town. Figure on $10-$12 for a trip of two hours, or $30 to go as far as you can possibly go within Hungary. Seniors and young children travel free. The longest ride on the suburban railway out of Budapest (30 kilometers) is just $2.50.
Budapest has a fantastic metro and while it’s no real bargain on a ride-by-ride basis (around $2.00 per ride), a monthly pass that also works for the trams and buses is a good value at less than $50. If you’re of retirement age, you might squeak by for free and EU citizens over the age of 65 can legally travel on the entire public transport system, free of charge.
Taxis and bikes
Apart from the ride from the airport, taxis in Hungary are a bargain. In general you can get around the center of Budapest in a cab for $3 to $7. It’s around $2 to start and $1.25 for each kilometer, so it’s hard to spend $10 anywhere unless it’s a long haul. Like much of Europe, this country is set up well for those on a bicycle and some expatriates use a bike as their main means of transport. In Budapest there are lots of dedicated bike lanes and the city recently introduced the new city bikes, a pay-and-ride bicycle system used successfully in other European capitals. In the countryside there’s not nearly such an abundance of cars as you see in the capital.
Frequent promotions on the train system and Eurolines bus make international travel from here a bargain. If you plan ahead you can get to Vienna for less than $20 or to beach locations of Greece, Bulgaria, or Croatia for around $60.
If you pay your own utilities they can vary greatly by the season. My utilities are a good example, going from $30 in summer to $200 a month in winter. My place is not the best insulated in town, so I pay more in the winter for heat. In the summer, utilities are much lower. Internet plus television cable service is $15 to $50 per month depending on speed and if you want a great connection, you can usually get it in the cities. The lowest-priced speed is generally 5 mbps, which is fine for a lot of people.
The land of Liszt and Bartok has an abundance of cultural performances going on at all times, from high-brow opera in the capital to an annual festival of wine songs in the south each year. Performances that aren’t free are very cheap by European standards. The theater is amazing here; the cost of going to a ballet or opera can nearly bankrupt you in Australia or New York City; here it’s for everyone. Tickets usually start at $5. If you buy really great seats on a weekend for a popular show it might cost you all of $25.
Visas in Hungary
Hungary is part of the Schengen Agreement covering much of the European Union, which means you can’t just stick around here on a tourist visa. You get three months upon entering the zone, but after that you have to leave the whole Schengen area for three months before returning. No problem if you’re only coming for the summer; terrible if you want to settle down for longer.
To get residency without being tied to a specific employer, you generally have to show you’re doing work a local can’t do, like teaching English, or you have to show that you’re self-supported by income from abroad e.g. a retirement pension. You can see a sample of costs and documents needed at the following site, which also warns you that requirements may change at any time.
A work visa is good for a year and renewable. Expect to endure a lot of bureaucracy and if you don’t have a college diploma, it’s going to be even tougher. You theoretically have to apply in your own country and will then have 30 days after entering Hungary to get the local paperwork sorted out. If you’re interested in knowing more about the process of gaining legal residence in Hungary as a retiree, please contact Stuart McAlister from Inter Relocation at email@example.com.
Most people who want to stick around either get a work permit connected to a specific job and company, or a residence permit that’s not tied to one employer. Americans can only get residency for two years, then they have to renew. I have looked into permanent residency, which you can apply for after being in the country for three years. This costs money for a lawyer and requires a lot of additional paperwork. Most of the items need to be translated into Hungarian as well, plus you have to show proof of health insurance or buy into the Hungarian health care plan.
Do you have Hungarian blood? If so, you could be on the fast track to residency. If you have ancestral roots in the country, you can get real citizenship without giving up your original one, making you one of those enviable people with two passports. You have to speak Hungarian, but you can take intensive language courses while you’re living here and collecting paperwork. This is a back door into the EU, which would also give you the ability to live elsewhere.
Hungarian is an especially tough language to crack, but you’ll often need at least some basics when you get outside the capital. Many courses are offered through local language schools in Budapest, which should get you started on what you need to know. Of course, so many more people speak English now than when I moved here that it’s much, much easier to get along these days.
For all of your relocation needs, of course, your friendly English-speaking Representative at Inter Relocation is ready and able to help you define your objectives and arrange for pretty much all documentation. Just check their website at: www.Interrelo.com or just contact the company owner, Stuart McAlister.
Still not sure about retirement in Budapest? Pay us a visit and check out the city and environs. Conde Nast travelers recently voted Budapest one of the top places in the world to visit, and The City on the Danube was also voted Europe’s Most Welcoming City. Budapest will no doubt cast its spell on you as it has on me and so many other foreigners. It really is a magical city on the Danube.
Book: Getting Out: Your Guide to Leaving America, by Mark Ehrman
Book: A Better Life for Half the Price, a new book by Tim Leffel, author of The World’s Cheapest Destinations: 21 Countries Where Your Money is Worth a Fortune.
Various websites offer information on living abroad; look under ‘Expats’ and the country of your choice.