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The American Dream Packs Its Bags

Sexagenarians take note: in a time of weak markets and shaky pensions, retiring well on a tight budget may be easier than you think. There’s a place where warm weather, good health care, low taxes, friendly neighbors and beautiful surroundings are available year round, cheap, and beachfront homes go for about $100,000.

Curious? It’s in a nice central, American location. But it’s not El Dorado, Kansas. It is in fact Costa Rica. From the travel brochure (aka the WSJ):

I’m 60 years old and retired from a 35-year career as a legal secretary…. The first thing I see each morning when I step out on the porch of my home in Costa Rica is the ever-changing Gulf of Nicoya…

Besides doing normal household chores, my days are spent taking long walks, going to the beach (a 10-minute stroll), swimming in one of two local pools, napping, reading and corresponding with family and friends. We’re blessed with wonderful neighbors, a mix of native Costa Ricans (called Ticos) and expats from Canada, Belgium, Germany, the Netherlands, Scotland, Spain, Italy, Singapore and the U.S. Especially during the dry season (November through March), parties (“fiestas”) are plentiful.

A failing Rhode Island public pension will go a lot further in a place like Costa Rica than in the US.

It was once unheard of for seniors to go to Florida and Arizona for retirement, and the early pioneers were able to get cheap homes.  Now the old retirement destinations are pricey, and many seniors can’t afford to go.  But life can be so much cheaper overseas that more and more seniors are flying beyond Miami and Phoenix for new frontiers farther south. It may some day be as ordinary for the old folks to go beyond US borders as it is now for them to leave the Snow Belt.

For some, the prospect of old age relocation is exciting and optional; for others it may be necessary. Public pension funds and union schemes, from the state level to USPS, have been grossly over promised, under invested, and the rate of return badly overestimated.

A combination of cheap airfares, high unemployment and crimped retirement savings will induce many to consider following the American dream beyond our shores. Moving away also keeps pesky college grads from prolonged squatting at mom and dad’s. Skype and email can keep you in touch.

Via Meadia wishes expatriates bon voyage. Moving abroad for your autumn years can be a fresh lease of life. It can also be a lot more than a change of scenery and cost of living. Retiring abroad offers potential new settings for community, cultural, business and humanitarian involvement.

Government policy should advance this idea; I’ve written before and still believe that the US should work out arrangements so that medical treatment overseas could be covered by Medicare, and that foreign banks who meet tests of safety and soundness would be eligible for direct deposit of Social Security checks.  For cash strapped older Americans, it means a retirement closer to the one they have been dreaming of.  For the neighbors, it provides new sources of income and employment — without costing the US a dime in foreign aid.

When the going gets tough, the tough get going — to Costa Rica if they have to.

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  • Kris

    Ladies and gentlemen, place your bets! If I were to retire in some Exotic Foreign Location, which would happen first?
    1: EFL would suffer a level of “unrest” that would cause me to sprint to the nearest US embassy.
    2: Laws would be passed making out-of-country retirees ineligible for Social Security and government pensions.

  • SC Mike

    As the program itself is currently constituted, Medicare payments for US retirees living abroad would be politically charged and unlikely to pass for the simple reason that Medicare is broke. Politicians are unwilling to risk an outcry about paying foreign healthcare providers when so much more needs to be done at home.

    Under a Ryan-like plan, it would be possible and could be a really great deal for the ex-pats in a country like Costa Rica where there’s both state-sponsored and private healthcare; they could use their RyanCare premiums to pay for private care or go the full public coverage route which is available there if one does not mind long waiting times.

    But under ObamaCare these retirees would end up “paying” for both Medicare (if you get Social Security, you have to pay premiums for supplemental insurance and the IRS will enforce that), and then pay for private or public coverage in Costa Rica. A raw deal, but it is for the greater good.

  • WigWag

    Panama is also an increasingly attractive spot for American retirees.

  • Jbird

    Moving abroad seems like a great idea. . . until you get grandchildren

  • Marj

    One very important problem here: medical care and, for even later in life, nursing homes.
    US medicare isn’t valid overseas, meaning that expat retirees have to foot the bill themselves (or hope that their country of residence provides some coverage after a period of permanent residency, which can be tricky). There’s also the quality of medical care overseas. I’ve recently moved back overseas (I grew up abroad), and (contrary to conventional wisdom and Michael Moore) US insurance coverage and quality of medical care is much higher. It’s kind of amazing how little commentary there was on Sonia Ghandi’s trip to the US for an operation, after all we have heard about ‘cheaper but just as good’ medical care in places like India

  • Toni

    Plus, Costa Rica has no extradition treaty with the U.S.!

  • John Foster

    Belize is also supposed to be nice, and it has that whole ex-British-colony, English-speaking thing going for it.

  • Dr. Kenneth Noisewater

    When the world economy tanks, I would not want to be the gringo that can’t speak the language in a lot of these countries.. And their militias have guns, while you’re not allowed to have one..

  • ken in sc

    I read that Costa Rica does not have sound real estate laws. Almost any native Costa Rican can lay claim to your property and win in court,after you have paid for any improvements. They can also legally squat on your property.

  • mjhlaw

    I’ve been looking at several options, including Nicaragua and Panama. Here’s one of many developers that are targeting this market:

  • willis

    “from the state level to USPS, have been grossly over promised, under invested, and the rate of return badly overestimated.”

    You mean, the rate of return badly inflated.

  • K Scott

    Why not set up a deal with Mexico and other countries whereby their people can come here to work in the same number as they let Americans go there – to retire if they want – and with the same privileges. Don’t have to carry or show ID, can buy a house, work, access medical care, go to university,sign up to vote etc. The America Without Borders program

  • gringojay

    I resettled in the Dominican Republic 20 years ago where all types of ecosystem niches are found, all levels of medical are exists & you can rent or buy all kinds of property with secure title. The people actually like Americans & anyone with common sense crime avoidance need not fear – especially the type of senseless stateside violence. However, if you are limited to your power chair or already had (say)cardiac revascularization yet you are still living independently then obviously stay where your medical support system is working well . Longevity in DomRep is common & then too, Miami hospitals are a close flight if non-emergency medical condition develops (it is quicker to fly from DomRep to NYC than to fly NYC to LA ). Some international insurance policies have direct affiliation with Mt. Sinai Medical Center for coverage exclusively in that Miami branch (medivac is obviously expensive). DomRep government facilitates renewable permits of foreign residency, including permanent status, without the need to leave the country & waste that expense. Play ball!

  • Michael Kennedy

    I think many Social Security checks are sent to other countries. There is a web site with the information here:

    Medicare is another matter but it will be as much of a problem here soon.

  • jaafar

    I’ve been retired in Thailand for about ten years and those years have been the happiest of my life.

  • Jim.


    Nothing personal, but I would be fighting tooth and nail to prevent any significant portion of the trillions our nation spends in entitlement outlays from going overseas. We let too much money flow out and bring too little back as it is.

  • Jacksonian Libertarian

    I don’t think we should make it easier for retireds to leave, in fact I think you should have to be living in the US and be a US citizen to receive any entitlements.

  • boqueronman

    Ah, it’s good to be correct… and 7 years ahead of the pack. We sold our home in 2004. We have been living comfortably, and cheaply, in Central American country X ever since.

    Why? Temperatures between 85-65 all year; full time household help; personalized, inexpensive household maintenance and repair services; office visits to internationally trained medical specialist at $25 a pop; cost of living at 50% of U.S. levels; and no U.S. taxes (except federal) and no local taxes (except a small VAT). All on a pension.

    Of course there are downsides. If you feel it necessary to be exposed constantly to the finest of material goods and culture, not for you. If you cannot feel comfortable in a country where your physical and property security is in your hands, not for you. And, of course, if you feel out of place in a non-U.S. culture and language, not for you.

    For me and my Central American-born wife we thank our lucky stars each and every day that we made the choice that we did. What I am expecting is the realization on the part of “seniors industry” that what is happening is that LA is exchanging its productive youth and the path lies open for our aging population to take their place here.

    When, for example, will the medical industry wake up and realize that Central America is the next “medical tourism” destination. The health care industry in the U.S. is being strangled. A group of doctors or clinics that have initiative and foresight will make a killing offering affordable, quality care to “death paneled” U.S. seniors south of the border. There is money to be made.

    And for all you authoritarians – Jim and Jacksonian Libertarian (hah!) – go take a hike! I pulled my weight when I was working and the social contract at the time of retirement allowed me to make a decision to move to CA in my own interest. If your main man and his posse – Obama and the Progressives – get their way your wish will probably come true. But since I was prudent and saved, I will then raise my middle finger to you and your President!

  • Gary

    @Jim, @Jacksonian Liberatarian (not)

    So you’re saying that after I paid my SS and Medicare taxes for 40 years in the workplace, I have no right to those benefits if I choose to live overseas? Collectivists are all theives.

  • jaafar

    Jim & Jackson: Your idea sounds just fine to me, as long as it includes this rider: “You must be a U.S. citizen living in the U.S. to be liable for the U.S. income tax.”

    After all, citizens living abroad don’t get a lot of the benefits paid for by taxes; they don’t get U.S. roads, schools, hospitals, etc.

    But when the money is coming IN (via taxation), I guess you have different rules than when the money is going OUT. And let’s conveniently forget all the FICA taxes paid for many decades, and just swipe the retirement benefits “unless you do exactly as we say.”

    Let freedom ring (not).

  • Abelard Lindsey

    Nothing personal, but I would be fighting tooth and nail to prevent any significant portion of the trillions our nation spends in entitlement outlays from going overseas. We let too much money flow out and bring too little back as it is.

    I don’t think we should make it easier for retireds to leave, in fact I think you should have to be living in the US and be a US citizen to receive any entitlements.

    Then those of us who either live overseas or who plan to retire overseas should not have to pay the taxes to support these entitlements at all. If you don’t agree with this, you are way over the top.

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