With life spans expanding and money shrinking, many current and future retirees may find their pennies pinched. Retiring in another country is possibly a good solution to this financial dilemma, but there are additional reasons to consider retirement in another country as well. Let's look at three major reasons to consider aging in place abroad.
1. Financial Advantages
Some countries offer high-level living at low prices. The story goes that two women friends were comparing notes when Mary, the older of the two, began speaking of how hot it was in her new home country. Julia said she could not bear such heat and felt sorry that Mary had to live there. However, when Julia heard that Mary had a full-time cook and housemaid for just a few dollars a month, she urged her friend, "Stay there! Stay there forever!"
Retirees may be able to live as well or better than they did pre-retirement, on pensions, investments and Social Security in countries where goods and services are inexpensive. Some countries have tax treaties with the United States so that income is not taxable in the country, thus avoiding double taxation. The IRS offers a "Tax Guide for U.S. Citizens and Resident Aliens Abroad" that gives country-by-country details on important tax responsibilities.
Costa Rica, Panama and Belize in Central America and Malaysia in Asia are examples of places that have tried hard to make retirement in their countries attractive and affordable. Perhaps more countries will do so as the world's population ages.
Central American Comfort Zones
Costa Rica is well known as a good place to retire, but that may be changing. For example, Costa Rica issued special, long-term visas to the retired as well as several tax incentives in addition to low cost, high-quality living. Recently, however, Costa Rica has limited some benefits to foreigners. What is more, since word about Costa Rica has become widespread, by the laws of supply and demand, retirement living in the country is not quite as good as it was before the prices of goods and services, as well as housing, started rising.
Panama borrowed a page from Costa Rica and offers financial benefits to retirees who move there. These benefits sometimes include up to 50% discounts on many things if a woman is at least 55 years old or a man is 60 or older. Retiree status is simple to prove to obtain these steep discounts. An applicant needs to prove an existing pension benefit of some sort of at least $1,000 per month. Since the Panamanian currency is U.S. dollars, there is no need to worry about an unfavorable exchange rate.
Belize has also made itself welcoming to retirees from other countries. Qualified Retired Persons (QRPs) may easily become permanent residents of Belize, even if they only visit the country for part of the year. Belize exempts QRPs from all taxes in Belize, including import taxes on big ticket items, like cars and furniture. If a person has $2,000 per month in income from any source, and the person is 45 years of age or older, he or she can be a Belize QRP and spend their retirement days in that Caribbean nation.
For North Americans, the advantage of moving to Central America is its proximity to the United States, making airline travel affordable for trips to see the kids, grandkids and friends.
While Central America is a good hunting ground for an affordable and pleasurable retirement, Malaysia is tempting also. Launching and promoting a "Malaysia Is My Second Home" project (MM2H), Malaysia does not tax retirees on any income originating in other countries. Establishing residency and acquiring a multiple entry visa is not difficult. If a person has $3,200 per month from retirement income sources, he or she can make modern Malaysia, with its high-stepping economy and the warmth of its people their home away from home.
Thailand is also a pleasant and economical place to retire in Asia. Modern, with an enjoyable pace of life and beautiful vistas, Thailand makes itself easy to like by granting lengthy retirement visas and pleasant living at moderate prices.
2. Medical Expenses
Health care is an ever present concern for retirees. It is one of the major sources of retiree spending, even with Medicare taken into account. A sobering thought: when you are out of the United States you are not covered by Medicare.
However, since health care is much less expensive in many places in the world and comparable in quality in some places, the considerable medical costs of growing older may be offset by living in a country where services are much less expensive and low cost health insurance is offered.
Some retirement hot spots noted here are havens for medical tourism, such as Costa Rica, Panama, Malaysia and Thailand. In particular. Mexico, with its excellent medical centers, is accessible from Belize.
3. Climate, Coasts and Culture
Retirees traditionally prefer warmer climates where the cold does not seep into tired and arthritic bones and joints. The countries named here have tropical climates. Gardening, outdoor life and recreation are important factors of a fulfilling retirement for some persons, as are coastal views and beaches in many of the cited lands. The good weather beckons people to spend more time outdoors in active, life-enhancing activities. The scenic attractions and cultural atmosphere invite participation and engagement. Learning about a new culture, and even learning a new language, keep the brain flexible and stave off cognitive deterioration.
The three good reasons to consider the possibility of retiring abroad are food for thought for anyone approaching retirement age. It is pleasant to consider that an exotic, sun-filled, low-cost, high-style life may await you.
CNN Money. Ultimate Guide to Retirement - Should I Retire to Another Country? (n.d.) Available online at http://money.cnn.com/retirement/guide/retirementliving_Relocating.moneymag/index4.htm.
Peddicord, K. 3 Countries that Welcome Foreign Retirees. Money. U.S. News & World Report, Sept. 4, 2012. Available online at http://money.usnews.com/money/blogs/onretirement/2012/09/04/3-countries-that welcome-foreign-retirees.
Peddicord, K. The Best 18 Places to Retire Overseas. Money. U.S. News & World Report, March 19, 2012. Available online at
Real Living Real Estate (website). Available online at http://www.realliving.com/pages/senior-living-abroad