FIRE glossary
Geoarbitrage
Retiring to — or spending extended time in — a lower-cost country so the same lifestyle needs a smaller portfolio.
How the factor works
Ember scores each covered country's cost of living relative to a UK baseline of 1.0 (100%). Multiplying your planned annual spend by a country's factor gives an illustrative spend figure for that country, which flows straight through to a proportionally smaller (or larger) FIRE number on the safe-withdrawal-rate basis, since required pot moves in direct proportion to spend.
An honest confidence caveat
These factors are seeded illustratively from openly-licensed price-level data (OECD/World Bank PPP, Eurostat price-level indices) and are explicitly marked LOW confidence across every country in Ember's data, pending a broader data-governance verification pass. Treat them as a rough, illustrative starting point for research, not a forecast or a guarantee of what your actual cost of living would be in a specific city or neighbourhood within that country.
Geoarbitrage isn't only about cost
A lower cost of living usually arrives bundled with a different tax regime too — sometimes more favourable, sometimes not. The two effects compound rather than cancel out predictably, and are worth researching together rather than looking at the cost-of-living factor in isolation. See the tax-drag-on-withdrawals term and /countries for the tax side of the same move.
The parts a cost-of-living number can't see
A single national factor smooths over huge internal variation — the capital city is rarely representative of the whole country, and a comfortable expat lifestyle can carry a very different local price tag than the number implies. Visa requirements, minimum-income thresholds for residency permits, and healthcare access are separate practical questions the cost-of-living factor says nothing about, and are worth researching directly before treating a low factor as the whole picture.
Worked example
The same $40,000/yr lifestyle, priced in two countries
United Kingdom (100% of baseline)
US$1,000,000
Mexico (48% of baseline)
US$480,000
equivalent spend ≈ US$19,200/yr
Cost-of-living factors are low-confidence, illustrative comparisons against a UK baseline — not a forecast. See /countries for every covered country's figure and its confidence label.
Across borders
This term is, by definition, entirely a cross-border concept — see /countries for the tax side of the same move (income tax, capital gains, inheritance tax) alongside the cost-of-living comparison shown here.
Common questions
How accurate are the cost-of-living factors?
Low confidence by design — illustrative comparisons against a UK baseline built from openly-licensed price-level data, not verified local price surveys. Use them as a starting point for research, not a figure to plan a move around.
Does geoarbitrage automatically change my required pot inside a plan?
The factor itself is a standalone comparison tool. Inside an actual Ember plan, a residency move's effect on spend is modelled explicitly — through a geo-arbitrage overlay or a residency-timeline change — rather than silently rescaling your baseline spend figure.
Which countries does Ember cover?
See /countries for the full list, alongside the income-tax, capital-gains and inheritance-tax picture for each one.
Related terms
See geoarbitrage in your numbers
The free calculator gives a rough estimate; the full planner models your actual accounts, pensions, residency moves and taxes — with the maths behind every figure shown.