Retire Abroad - Live Well for Less
By Ruth Halcomb
"An income that can barely cover a double-wide in Florida can swing a condo south of the border. For the price of a condo in Phoenix, you can often have a villa in Mexico," Walter Russell Meade pointed out in an essay that has been widely quoted and reprinted. Meade is a senior fellow at the Council on Foreign Relations and author of "Power, Terror, Peace and War: America's Grand Strategy in a World at Risk."
Helping seniors retire where costs are low would greatly ease the cost strains on Medicare, Meade says. He adds that the federal government should smooth the way by extending Medicare coverage outside our borders, where health care providers could be certified, inspected and qualified, and the costs would be lower. "The executive branch should negotiate retirement agreements with neighboring countries to provide an appropriate legal framework for millions, possibly tens of millions, of U.S. seniors moving south," he argues.
International retirement isn't a political issue yet, but the economic advantage of living in a foreign country isn't lost on today's retirees. Soaring health care, housing and energy costs in the US threaten the financial security of those living on a fixed income or on a budget. Many realize that they can live better for less in another country, and although they can collect Social Security wherever they go, they cannot, at the present, take advantage of Medicare.
Health Care and Other Costs
Is U.S. medicine the best in the world? Some assume it is but a recent survey shows that less than 50% of Americans are satisfied with the care they've received in this country. Many of those who move abroad are willing to take their chances on local health care even without help from Medicare. And it's not unusual for Americans to travel to Mexico, Costa Rica, India, Thailand and other countries for various types of elective surgeries.
In Mexico, where 500,000 to 1 million Americans now live, foreigners can buy into the state-supported insurance system for just hundreds rather than thousands per year. Expats there have reported positive experience with such serious procedures as open-heart surgery and cancer treatment. Private insurance offers more options, and there are policies designed especially for expats. Individuals who do not plan to return to the U.S. for care pay far lower premiums. Many physicians in Mexico and elsewhere speak English, often as a result of having trained in the U.S.. Quality of care can vary anywhere, of course, with larger cities usually offering more high-tech equipment and specialists.
A visit to local clinics and hospitals is an important part of any fact-finding trip for prospective expats. So is asking expats about their experiences with medical facilities and doctors. An Internet search will turn up useful information, too.
Low Living Costs and Other Advantages
Low living costs are a major draw for expat retirees. A condo in Panama City or Rio with balconies overlooking the ocean might only cost a little more than that double-wide in Florida. A spacious villa in Mexico or Thailand might be comparable to the cost of a small cottage back home. Consider, too, that utilities cost less in areas with even temperatures year round. Need assistance in caring for spacious living quarters? Domestic help and gardeners are inexpensive as well. Some expats, of course, live very modestly, either by choice or necessity. Those not accustomed to having household help around may decide that privacy outweighs the convenience.
Only a few things, such as imported items, cost more. All in all, moving abroad can make a retirement income stretch further or can make early retirement a viable possibility.
A Question of Where
Retiring abroad can make perfect sense from practical and economic standpoints. But that's not the way most people decide on where to retire. They take a vacation and fall in love with a place, an atmosphere, a lifestyle. They like the way they feel when they wake up in the morning or when they walk down the street.
Something strikes them on a subliminal level. Perhaps they sense that they'll have more leisure time and more personal fulfillment, that they'll have an opportunity to be themselves. Then they go home, clean out their closets and defend their dream to friends and relatives who think they've gone mad. They haven't, but they're better off if reality sets in while they're still in the planning stage.
Retiring abroad can mean creating a life that's new and exciting. If you detest cold winters, you can decide to live where you'll never shovel snow again. If you live inland but yearn for the seashore, you can awaken to the sound of surf every day. You can explore "roads not taken" and yes, live your fantasy.
But consider - do you really want your retirement ambience to be very different from where you live now? If you're accustomed to a big city with concerts and museums, you might be bored in a remote seaside village with only a few expats who turn out to be die-hard beach bums. Be aware, too, that even in a large foreign city, the expat community will be more like a small town. Friendly, yes, but gossipy, too.
You may be thinking, "I don't want to be around other Americans. I want to meet local people." This is a good attitude to have, but it's harder than it seems unless you have language skills and family ties to help you connect. Moving to the town your grandfather left decades ago, you may be greeted with open arms, especially if you share a common language. But where you have no such connection, you may find locals eying you suspiciously and wondering what you're doing there. In a while you may be wondering the same thing.
It might surprise you that many move abroad hoping to get away from other North Americans eventually feel drawn to communities with large numbers of expats. And some expat returnees report being unable to integrate into local communities. Consider whether you need to feel like part of the community where you live or if you can accept the role of the outsider, the local eccentric, the gringo who is a bit "loco" (crazy).
Sometimes the best candidates for moving abroad are couples, especially those who enjoy each other's company for hours on end (and frankly, not all compatible couples do). If one of you wants to sit on the beach with a good book and the other wants to socialize with other English speakers, be sure that you'll both get what you want. If you're single, you'll probably feel more comfortable in an expat community that's not organized like Noah's Ark, all paired off two by two.
How far away is too far? If you plan to return to North America often, the number of miles matters less than the cost of airfare and the time required for travel. Retirement havens in large cities and tourist destinations are easier and cheaper to get to.
Staying in Touch
One of the hardest adjustments for expat retirees is being far away from family and friends. Until recently, international phone calls were very expensive, almost prohibitively so. Now, thanks to international calling rates available via the internet and phone services such as Rebtel, you can stay in touch across many miles and international borders. The cost is low enough that you can communicate often with people you care about.
Besides clarifying what you want in retirement, find out all you can about the places you're considering. Is there a time in the summer when everybody leaves for cooler climes? Are there laws prohibiting foreigners from owning property near the border or near the beach?
Early on, check out the residency requirements for the countries that interest you. Very few overseas retirees are expatriates in the true sense of the word, that is, they don't renounce their citizenship. Instead they become legal residents of the country where they live.
Some countries have specific requirements for foreign retirees such as minimum income, good health, no police record, etc. Information is generally available from your nearest consulate or from the consular services department of the embassy. If you meet the requirements, you may be allowed to bring household possessions and perhaps a car into the country tax-free. Some expats have only tourist visas, which entails crossing the border, then returning.
What about learning the local language? Your experience will surely be richer if you do. Language schools often include home stays with families, which is a good way to get to know the local culture. But if you lack an ear for languages, don't let this stop you. Many expats get by with a few phrases, hand gestures and general good will.
By all means, learn as much as you can about the country itself: its culture, traditions and history. Know what constitutes good manners and when the national holidays are. Read up on the country's revolutions, wars and efforts at peace. Some of the stories are as grim as the landscape is beautiful. Even places that seem like paradise aren't perfect. Just be sure you know the imperfections as well as the advantages and adventures that await you.
Ruth Halcomb is the founder of Network for Living Abroad and editor of Updates from liveabroad.com. She is also the author of Women Making It, Patterns and Profiles of Success and other books, and writes about business and career issues for various magazines.
Resources See our Articles for specific countries.