Thinking of retiring, or so obsessed with the idea you’re stashing away money you don’t have for 30 years in the future? Well, it’s true, depending on your lifestyle, retirement can be expensive, especially if you’re thinking of doing it in the United States. You, do however, have options:
Relocating overseas is often a grand adventure. You get to reinvent yourself in a new place and completely start over. Moving to a foreign country in retirement could also dramatically lower your cost of living, housing, and medical care, meaning you could afford more luxuries than would ever be possible in the U.S. Here are the seven best reasons to retire overseas.
1. Reduce your cost of living, perhaps dramatically. The primary motivation for many people considering retirement in another country is the opportunity to stretch their retirement nest egg. It is possible to live comfortably in retirement in a number of safe, welcoming, beautiful, and interesting destinations on as little as $1,000 per month. And some of these places are already home to communities of foreign retirees who can offer friendship and like-minded company. For the retiree on a budget, moving abroad can turn a make-do and get-by retirement struggle into a lifestyle of comfort and freedom. Top destination choices for reducing your cost of living in retirement to $1,000 per month or less include Cuenca, Ecuador; Granada, Nicaragua; Santa Fe, Panama; and Chiang Mai, Thailand.
2. Lower cost medical care. The cost of medical care abroad could be a fraction of the cost back home. Medical tourism has become a big business in a number of countries that are welcoming to foreign retirees. As a resident retiree in Panama City, Panama; Medellin, Colombia; Kuala Lumpur, Malaysia; and Puerto Vallarta, Mexico, for example, you will have access to top-notch, international-standard medical care that has been developed, at least in part, for medical tourists.
Medical procedures can cost half as much or less as they would in the United States. First world hospitals in these places are often staffed with English-speaking and U.S. medical school-trained doctors, which make these cities top choices for retirees with any ongoing health concerns. They also mean that, living as a retiree in these locations, you could afford even elective procedures, such as cosmetic dentistry or other cosmetic care. The cost of a crown in Medellin can be $300 to $400. The same procedure would cost three to five times as much with a U.S. dentist.
3. You could enjoy little luxuries you could never afford back home. Retiring anywhere in the United States, the typical retiree is looking at scaling back his lifestyle. Even an above average retirement budget doesn’t usually allow for household help or indulgences like regular massage or spa treatments. In other countries, you can enhance your standard of living in retirement. Take the average monthly Social Security payout with you to Ecuador, Nicaragua, Panama, Thailand, the Philippines, or Malaysia, and it’ll stretch to accommodate all kinds of extras. As a retiree in any of those countries, you’d never have to do another household chore again, if you didn’t want to. You could afford not only full-time help around the house, but a driver, gardener, in-home massage, nice wines with dinners at home, and regular dinners out. In each of these countries, you could engage full-time household help for $200 a month or less. A once-a-week gardener could cost $50 a month. And an hour-long massage from a professionally trained masseuse who will come to your home with a massage table can be as little as $20.
4. Your health insurance expense could be $100 per month or less. Health insurance and medical costs are typically a significant part of any U.S. retiree’s budget. In other parts of the world, full local health coverage can cost $100 a month or less, which for many people is less than the cost of Medicare premiums.
When retiring to another country, you have an important choice to make about health insurance. You can choose an international policy from an international insurer such as Bupa, or you can opt for a local policy in the country where you’re retiring. If you qualify for local country coverage (the primary determining factor is age), you’ll likely be pleasantly surprised by the cost. It can be less than $100 a month, and sometimes much less depending on your circumstances and age. A retired couple living in Boquete, Panama, for example, could arrange local Panama insurance for $80 per month. A local policy based in Montevideo, Uruguay that provides full coverage including prescription medication and in-home follow-up care can cost as little as $60 per month.
5. The climate could be ideal. Perhaps you already live someplace sunny, warm, and pleasant. However, if your life until this point has been spent in a part of the world that sees big snowfalls, extreme seasonal change, or a phenomenon like hurricanes, retiring overseas could be your chance to choose the weather that suits you best. Would you prefer a spring-like climate year-round, consistently warm weather, or watching the subtle changes of seasons? Imagine your most comfortable climate, and then target those places where you could enjoy it.
The best tropical choices include Ambergris Caye, Belize, and Roatan, Honduras, which also qualify as two of the most affordable places to retire in the Caribbean. For 365 moderate and pleasant days every year, consider Medellin, Colombia, and Cuenca, Ecuador. If you like change and contrast, take a look at Uruguay and Croatia, two countries that enjoy four moderate seasons annually.
6. Your housing cost could be reduced to less than $500 per month. When planning for your retirement overseas, it’s best to consider the cost of housing wherever you’re considering relocating separate from the general cost of living there. The cost of housing is typically the biggest part of any retirement budget. The good news is that, in certain parts of the world, you can reduce it to $500 per month or less. In a few places, you’ll be able to get by on as little as $300 per month. This is the case in parts of Panama (not Panama City), parts of Belize (not Ambergris Caye), parts of Ecuador (outside Quito), and most of Nicaragua, Thailand, and the Philippines. With rent of $500 per month or less, even a modest retirement budget could produce a comfortable retirement.
7. You could reinvent yourself and have a grand adventure. For many people, the most compelling reason for considering retirement in another country is the cost of living and of housing. If your retirement budget is small, perhaps you feel you have no choice but to relocate somewhere your income will support a comfortable lifestyle. Anyone who chooses to retire overseas because he thinks he can’t afford to retire in the U.S is in for a big surprise, because a greatly reduced cost of living is only the beginning of the payoff of spending your retirement someplace new and foreign. The other big (maybe bigger) benefit is the chance the move will give you to start over.
What did you want to be when you grew up? What dreams and hobbies have you set aside your entire life until now, as you’ve made a living, paid the bills, and raised a family? Pull them out and dust them off. Now’s your chance.
Whatever objectives, pastimes, and play times you’ve long day-dreamed about pursuing, now you can. Retirees have an opportunity to travel, wander, and discover. You could spend your days writing a book, learning to paint, or studying a foreign language. Some retirees choose to start a business, be a mentor, or volunteer.
Once you’ve positioned yourself in new geographic surroundings, the world will appear new. From this foreign vantage point, you’ll notice new chances for reinvention, fun, and maybe even for profit. Once you make a plan to retire to another country, it’s difficult to predict where that move might lead you.
Kathleen Peddicord, a contributor to this article, is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat.