I would suggest picking up a weekend copy of the FT. There are numerous ads for real estate in the UK and elsewhere in Europe.

Where have they travelled in Europe? What places did they like?

If they have never travelled before, they need to go and find out what life is like outside the US. It is different living outside the US and they to find out where they will be comfortable.

When will this be? 2007, in five years, in ten years?

They will need time to take care of getting the legal permits to live in the country they choose and buying property.

The usual advice is to rent some place where you might be interested for 6 months before you invest in a retirement home. I'm somewhat familiar with the European market as I have relatives in several countries there. Be aware that the way the market operates and the legal complications vary widely from country to country and you need a reliable professional to guide you through the process. I also have an American friend who has lived in Portugal, with her Portuguese husband, for 20 years, and they have stories of many dealings with murky titles and weird sellers, where negotiations go on for months...and then fall through. They even had an experience where they spent several months trying to buy a house, and then found out that the seller didn't really have title to it.

I'm not trying to discourage you, but this is something your father should only do if he makes himself well-informed and gets good advice.

A good investment in Europe right now is the southeast. The weather is good and the properties are not as expensive as in other parts of europe. The island of Cyprus is developing nicely and the mediterranean sea is wonderful. There is a nice project in the north of Cyprus right on the beach and they even have a professional golf course. So that way both your parents can have what they want. Kudzu's idea sounds good, maybe your parents should rent out a place before they deside to move there for good.

Here is a link that might be useful: Cyprus Property

You should try Spain for Golfing and beaches along maybe Costa Brava and Costa Del Sol and as you go down the peninsula further try Gibralter alot of english spoken there aswell. If you think prices are high in the US get ready to be shocked. Prices are typically 4-5 times higher.

If you would still want warm weather, beaches and plenty of golfing you should try Southwest Florida especially Naples and Marco Island...Golfers Paradise.

Here is a link that might be useful: IBR

Bulgaria is up and coming and very affordable. If they want to stay closer to home, Mexico is always an option.

Here is a link that might be useful: Windows2Paradise

What is behind the "buy European" idea? Think it will be cheaper to buy and live? Not necessarily, and not without missing some of the benefits Americans and Canadians are used to. Right now a lot of Brits are buying in southern states in America.

I get into this comparison thing on the TripAdvisor's "Hawaii" forum. People ask about vacationing in Mexico, the Caribbean, South America. There's no comparison to living in a State with good roads, good water, a real concept of law and public health, and virtually no poverty. It's all the good stuff of the tropics without the bad stuff.

I don't think Medicare is available outside the US. He must look into quality and cost of healthcare before making any decision.

Really, the question is too broad. Without knowing the individuals, it is hard to recommend a new location. there are so many considerations to living abroad. Also, what is your definition of affordable. Living in a foreign country is well, very foreign. what languages do they know? How adventurous are they, moving to a foreign country require that spirit.
Medicare is not available, but many countries have very low cost medical plans available, the quality of care is sometimes questionable.
Why are tehy considering such a move, what are they looking for or expecting to escape?

Thank you all for your advise! I printed out all your suggestions and showed my dad. For some strange reason he liked that Cyprus Property, even though I asked in a golf forum and they told me that the north of Cyprus is a no go... I guess he liked the price...

Here is a link that might be useful: Cyprus Property