The South American nation bordered by Colombia and Peru scored the highest marks in InternationalLiving.com's annual ranking of the best places to retire.

With monthly estimated living expenses ranging from $900 to $1,400, Ecuador surpassed Panama, Malaysia, Mexico and Costa Rica, which rounded out the top five countries.

"I think the combination of a welcoming culture, the great weather, the affordability and its proximity to the United States all go together to make it a good package," Dan Prescher, the special projects editor for the website, said on Thursday.

"Panama has a lot of the same things going for it, but it isn't quite as affordable as Ecuador," he added in an interview.

Editors at InternationalLiving.com analyzed data and information from correspondents in the countries most popular with American and Canadian retirees to compile the results, which were based on a host of categories: cost of living, climate, property prices, healthcare, ease of integration, retirement infrastructure, entertainment and amenities and special benefits for retirees.

A large part of Ecuador's appeal is how inexpensive it is for retirees. A beer costs just 85 cents. A doctor's visit is $25, roughly the same price as a one-hour massage.

"Seniors resident in Ecuador qualify for half-price entertainment and local transport, discounted airfares and refunds of sales tax," Prescher added.

Panama, which came in a close second, won praise for its pensioner visa, which speeds up residency, retiree discounts on medicines, entertainment and restaurants, and its friendly people.

Malaysia, the only Asian country to make the top five, drew retirees to its shores with its tropical climate, low cost of living and cheap rents, similar factors that boosted Mexico and Costa Rica's appeal to retirees.

Most of the better countries for retirees were Spanish speaking, including Uruguay, Colombia and Spain. Thailand, which placed ninth, was the only other Asian nation to make the top ten, thanks to its affordability, exotic locales and outdoor lifestyle.

Although the language may differ, Prescher said retirees adapt easily because they usually choose a country with a culture familiar to them.

"Most people know or can learn enough Spanish to get along," he added.

Malta squeezed in at No. 10, winning points for its very low crime rate, Mediterranean climate and abundance of English speakers. English is the second language of Malta, which is a European Union member.

Ireland, France, Portugal and Italy were other EU nations that made the ranking of 22 countries, along with the Philippines and New Zealand, which scored the worst for the cost of living, along with France, but ranked high for integration.

"The places that have been popular with expats for the last five to 10 years tend to stay in the rankings unless something drastic happens, a big political or economic change," Prescher explained.

(Editing by Chris Michaud and Tim Dobbyn)

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