10 Tips to Consider Before Retiring Abroad

Nicaragua Coast

1. Investigate the crime rate. Places like Brazil and Mexico can be extremely dangerous. There are safe places in almost any country, but consider how much you might be restricted in your daily activities.
2. Can you take living far away from friends and family? Losing contact with these people is the number 1 reason why people return to the USA.
3. Consider what medical care is available, and at what cost. In many countries it’s a pleasant surprise that you can buy affordable insurance and quality care. In others you might be disappointed in the quality of care, and face an expensive medical evacuation back to the states. This is particularly true for some of the medical specialties Americans have come to expect.
4. Will you have to live in a gated enclave? For many folks, this is OK. For others, it might be too restricting a lifestyle.
5. Check out the tax situation. This is perhaps the most complex area to investigate. The Forbes article explained how living in France can be affordable from a tax standpoint, if you take the right steps like putting your assets into a trust and distributing money to yourself in a certain way. For the unwary, however, double taxation and steep inheritance taxes might take away the bargain status.
6. Evaluate the political situation. Some countries in Latin America have a changeable political environment. The situation might be peaceful one day, but a new dictator could change all of that. You don’t want to a resident on the day the government is overthrown.
7. Are you OK with widespread poverty. The reason why you can hire a maid for $50 a week in some countries is because of the grinding poverty in your new country. Some people find they are not comfortable living in a place feeling like they are the feudal barons among the serfs.
8. Will you be welcome as a resident? Some countries like Australia only want high asset or high income residents, so budget seekers might be unwelcome. Obtaining a visa might be harder than you think.
9. How will you get money sent to yourself. Forbes reports that the U.S. prohibits direct deposits into accounts in certain countries like Vietnam. As a result you must follow tight restrictions on how your social security payments are made to you, and processing fees can take a big hit of your income.
10. Just how adventurous are you. In our experience the happiest expatriates fall into 2 classes. Those who love immersing themselves in another culture, including learning the local language, make up the first group.The other group is very happy to live in a gated community and embrace the lifestyle there. Those who retire abroad just to save money are rarely the happiest.

Forbes also came up with its list of the friendliest countries for retiring abroad. Making the Forbes cut of the best places to retire in the world were Austria, Thailand, Italy, Panama, Ireland, Australia, France, Malaysia, Spain, and Canada.

Bottom line: Retirement abroad requires careful research. Talk with people who have done it. Read the books. Hire a tax expert. Determine your priorities and carefully investigate the places you are considering. Lastly, go ahead and visit your new paradise. If you like it, rent for a while. Ultimately that’s the only way to be sure.

Top 10 International Best Places to Retire

Our friends at International Living Magazine have just published their annual list of best places to retire in the world. In what appears to be a tight contest, Ecuador beat out Mexico for the number 1 spot on the Annual Global Retirement Index. Latin and Central American countries head up the list, with only two European countries (Malta and Italy) making the list. In our minds the list shows an unhealthy bias towards Latin America and a disregard of Europe and Asia. That bias is probably a reflection of cost and familiarity. Go here to read their article and list of the best retirement countries and towns.

Without further ado, here is their top 10 List:
The Top Ten Best Places to Retire (and total points out of a possible
100):

Ecuador 79
Mexico 78
Panama 77
Uruguay 75
Italy 73
Brazil 71
Argentina 71
Costa Rica 70
Malta 70
Australia 70

The colonial city of Cuenca was singled out as the best place in Ecuador. “It’s a place of old-world beauty,” writes Sheridan in the magazine’s cover article, “where you can enjoy the wallet-pleasing prices that deliver a private retreat for as little as $300 a month.”

International Living rates 30 countries in its annual index. Rating factors include real estate costs, special benefits offered to retirees, culture, safety and stability, health care, climate, infrastructure, and cost of living. Tax breaks and special government programs to attract retirees are also considered in the selection.

Caption: Boquete, Panama.

Topretirements Opinions
With more than 200 correspondents helping out, International Living has done a very thorough job of rating these countries. All of the countries selected have outstanding places to live. In fact, all of the towns selected within these countries (see article) seem great.

In our opinion though the list of countries is too heavily weighted toward low cost of living. For example, Mexico as #2 is a bit frightening. Many, but not all, expatriates in Mexico live in safe enclaves inhabited mostly by other expatriates. While that might be a great retirement for some, the lack of significant interactions with the local populace, and the restriction to a fairly small geographic area, make it a less than desirable retirement alternative for our tastes. Hopefully Mexico will overcome its current safety problems and be the welcoming destination it could become. There are certainly towns and cities in Central and Latin America where an adventurous American who is willing to learn Spanish or Portuguese could interact with the locals. You do have those two attributes to be happy though, in our opinion, as well as be comfortable with widespread poverty.

Our favorites in Central America would be Costa Rica and Panama. These countries have the political stability and friendly attitude towards the USA that give them an edge. The only problem with Costa Rica is that only small parts of the country are developed - infrastructure is sometimes in short supply. Panama has the problem of expatriate enclaves.

What’s not on the list
We tend to think more about the countries that didn’t make this list. Ireland or Scotland for example, where just about any American could not only speak the language, but interact with the social fabric. Villages in rural France, Spain, and Portugal where the lifestyle is simple and rich (not to mention the food and wine). New Zealand, Thailand, Portugal, Greece. Countries in the old iron curtain such as the Czech Republic. Some of these countries will be more expensive (and a bit harder to get to), but in our opinion the life experience will be richer than living in a gated enclave or a very poor city somewhere else. Like many of the expatriates who live in Central America, retirement in these countries is generally more of a seasonal lifestyle due to legal restrictions and a desire to spend some time in the good old USA.

Your Thoughts
We gave you our opinion, what’s yours? What countries would make your list of the best places in the world? Please respond to this blog via the Comments section below.

For further reference:
Vilcabamba, Ecuador
Costa Rica as a Retirement Destination
What You Need to Know about Retiring in Mexico
Topretirements List of Countries and States for Best Retirement

Drug Wars Put Scare on Mexican Retirement

Up until now one of the best strategies for a lower cost retirement was to head south of the border, Mexico way. But escalating drug violence in Mexico is causing many Americans to either stay put in the U.S. or move a bit further to a central American country like Costa Rica or Uruguay in South America.

By far the worst violence from the drug cartel battles is occurring near the U.S.-Mexican border. But almost every Mexican state has seen significant numbers of drug-related murders. The dispute is now spilling out into Arizona, Texas - and even Chicago and Atlanta. The trouble started after a crackdown by President Calderon 2 years ago. Power struggles between rival gangs are a big source of trouble. Fired police officers looking for new sources of income are another. More than 6,000 people connected to the drug trade or law enforcement were murdered in 2008 alone. As an example of how bad things are, Mexican police arrested a man this January who confessed to dissolving the bodies of 300 victims in acid.

So far there is no end in sight to the violence. It remains to be seen what the impact of this violence will be on what has been a steady stream of expatriates seeking the good life on the cheap in Mexico. Even though real estate, food, energy, a maid and gardener are all way cheaper than they are in back in the states, more people will probably decide to pass on that lifestyle in favor of their personal safety. Resort cities on the water like Mazatlan, Puerto Vallerta, or even Acupulco are affected. Places like Aijic/Lake Chapala, San Miguel de Allende - which have very high concentrations of U.S. citizens living there - are probably less at risk in the way of drug crime. One way expatriates living in those areas can improve their safety is to fly directly to their destinations, thereby avoiding road travel and the extremely dangerous areas near the border crossings.

The U.S. State Department has issued a Travel Advisory for Mexico. It states that the areas near the U.S. border are the most dangerous. Travelers should avoid border areas, never drive at night, avoid places of prostitution or drug dealing, stay away from certain towns, and avoid specific roads. Consult the travel advisory for more details.

Reference:
Guide to Mexican Retirement

What do You Think? If you have an opinion about the dangers of Mexican retirement please use the Comments section below.

Join Our 2008 Costa Rica Real Estate Tours

February 6 - Here is a great opportunity to vacation in beautiful Costa Rica, famous for its natural surroundings Topretirements is pleased to announce a partnership with Boomers in Costa Rica, a firm owned by U.S. expatriates Andrew Mastrandonas and Preston Gitlin. They have been leading the most reliable real estate tours in Costa Rica for years - the feedback and references from their tours are a joy to read.

The tour is 3 nights/4 days and focuses on the beautiful Central Valley of San Ramon, the prime international retirement destination. You’ll stay in a charming B & B and be escorted to a range of properties designed for North Americans. Each tour is structured to meet your individual preferences. While there you will find out more about how to buy and move here, as well as meet local architects, real estate agents, and U.S. expatriates who have already moved here. Tour dates are February 25 – 28, 2008, March 10 – 13, 2008, and April 7 – 10, 2008 - sign up now to reserve your spot.

The tours are great fun as well the absolutely best way to evaluate if Costa Rica real estate is for you. Here is where to go for more information:
Costa Rica real estate tours

Or, to make your reservation directly, go to: Costa Rica real estate tour reservations

Diane Rehm Show Focuses on Retirement Living Abroad

November 8 — One of our favorite radio show talk hosts, Diane Rehm, recently had a great program called “U.S. Expatriates in Mexico and Beyond”. Use this link to listen as she and her fascinating guests discuss this topic that interests so many retirees.

Diane’s November 6, 2007 show explored how reverse migration appears to be on the rise as more Americans relocate and retire abroad. She and her guests took a look at what drives their decision and what life is like once they take the leap.

Her guests included: Caren Cross, who made the documentary “Lost and Found in Mexico” about her experience in moving to San Miguel de Allende;
Debra Lattanzi Shutika, professor at George Mason University and author of the forthcoming book, “Beyond the Borderlands: Mexican Transnational Lives, New Destinations, and The Sense of Place”; and Lee Harrison, roving Latin American editor, “International Living” magazine.

The guests indicated, not unsurprisingly, that Mexico is the most popular retirement destination for U.S. expatriates. Costa Rica and Panama also attract many U.S. citizens. The exact number of Americans living abroad is difficult to determine, since our government apparently doesn’t track that statistic. About 1 million U.S. citizens are estimated to be living in Mexico. Two of the towns with the most Americans are San Miguel and Aijic (in the Lake Chapala region). One of the guests estimated that up to 16,000 Americans reside in San Miguel during our winter season.

Costa Rica View

Lee Harrison cited 3 different kinds of buyers of Central or South American real estate:
- Second home buyers who can’t afford what they want in the U.S.
- People who want to change of their lives or start a new career
- Retirees driven by economics; they either want to improve their life style on a fixed income, or they want to retire earlier

One of Harrison’s most interesting points was in response to Diane’s question about what types of retirees are happiest abroad. His reaction was that although many people start out with money as their biggest motivation, the happiest people tend to be those who embrace the new lifestyle they find abroad.

Other guests explored broad-ranging topics such as culture, how they happened to come to live abroad, finances, impact on the local environment, friends, etc. If you are contemplating retiring abroad, we recommend listening to this podcast!

For more information see these Topretirement resources:
- Buyers Guide to Buying Real Estate in Costa Rica (Part I)
- What it’s Like to Retire in Mexico