Hint: You’ll Have to Move…
Millions of folks are coming to the realization that they can’t afford the comfortable retirement they expected. The solution for them could lie south of the border.
Retirees can live very comfortably in Latin America for $25,000 a year or less—that’s about half of what it would cost in some parts of the US. Property taxes are extremely low in Latin America. We pay property taxes of less than $55 a year for our 1,100-square-foot condo in Ecuador. Health care is inexpensive. Great meals cost just a few dollars. Homes can be very affordable. Some Latin American nations even offer special discounts to retirees.
Example: Panama’s “pensionado” program offers retirees 50% off many entertainment-related costs and the closing costs of a home loan, among many other savings.
And despite what many Americans fear, you can live in Latin America without sacrificing safety or high-quality health care…and without feeling isolated or out of place. Residency permits tend to be easy to obtain, and US pensions and other US retirement income often are not taxed. (But US citizens are required to report income annually to the US government and pay US income taxes no matter where they live.)
Here’s what you need to know…
Many parts of Latin America now have excellent—and affordable—health care. Urban and suburban areas popular with foreign retirees often have modern hospitals and doctors who speak English well and who were educated in well-regarded US or European universities. (The quality of health care may not be up to par in rural parts of Latin America, however.)
Paying for medical care in Latin America usually isn’t a problem, either. Most countries in the region have a socialized health-care system that is open to foreign residents. If this public system does not meet your medical needs, there’s often a high-quality private health-care system as well.
Prices in this private health-care system are likely to be much lower than in the US. Doctor and dentist appointments typically cost $20 to $40…hospital procedures tend to cost one-quarter of what similar procedures cost in the US…health insurance for people of retirement age can cost as little as $50 a month—sometimes with no deductible. (Alternatively, many top hospitals in Costa Rica, Nicaragua, Panama and Uruguay have plans that provide steep discounts on hospital services for perhaps $25 to $75 per month.)
In some ways, medical care in Latin America is even better than in the US. Doctors tend to spend more time with their patients than they now do in the US…and some doctors make house calls and/or give patients their personal cell-phone numbers.
Examples: Costa Rica has a very good national health-care system and an excellent private system. Areas of Mexico popular with expatriates, such as Lake Chapala and Puerto Vallarta, have very strong private medical providers who are used to treating American retirees. Panama City has a Johns Hopkins–affiliated hospital that is as technologically advanced as an elite US hospital.
If a major medical issue arises and you are enrolled in Medicare, you also could return to the US and use Medicare to pay for treatment. However, Medicare does not cover medical treatment in foreign countries.
When Latin America is mentioned in American news reports, the story is often about political instability or violent crime. That is not typically the reality faced by American retirees. There are very legitimate safety and stability issues in Venezuela, El Salvador, Argentina and near the US/Mexican border, but most of Latin America is quite safe. Even countries such as Nicaragua and Colombia that are associated with war and drugs in Americans’ minds now are safer and more stable than before.
Staying safe in Latin America is like staying safe in the US—stay out of the bad areas. The local expat community can warn you about places to avoid. In our 13 years living in seven different parts of Latin America, we’ve never felt unsafe, much less witnessed or experienced violent crime. The most serious crime we’ve encountered is pickpocketing on trolley cars.
One of the major complaints of Americans who retire abroad used to be that they felt cut off from their families, friends and culture. The Internet has significantly reduced this problem. Today’s expats can use the Internet-calling service Skype to make video calls back to the US for free. They can watch US television shows, movies and certain US sporting events over the Internet, too. And certain Latin American expat communities have become so large and well-established that they feel almost like US communities.
Examples: Large, well-established expat communities include Lake Chapala, Puerto Vallarta and San Miguel de Allende in Mexico…Boquete, Coronado and Panama City in Panama…and the Central Valley of Costa Rica.
In some parts of Latin America, many locals speak English, too, further easing any feelings of isolation. Still, you will enjoy living in Latin America more if you learn to speak Spanish.
If you live in or near a Latin American city that has a major airport in a country not too far from the US, flying back home for visits won’t be much different from flying back to a northern state from, say, Florida or Arizona.
Climate and Culture
Americans tend to associate Latin America with warm winter weather and relaxing beachfront living. If that’s what you’re looking for, there are plenty of options.
Examples: Puerto Vallarta, Mexico…Coronado, Panama…Dominical, Costa Rica…Ambergris Caye and Placenia, Belize.
But if you consider steamy summer temperatures a turnoff, head to higher elevations. We live in the mountains of Ecuador and never need air-conditioning or heating.
Examples: For nice temperatures year-round, consider Costa Rica’s Central Valley…the Sierra (mountain) region of Ecuador, including Quito and Cuenca…the Mexican highlands including San Miguel de Allende and Lake Chapala…Medellín, Colombia…and Boquete, Panama.
And if cosmopolitan city life is more your speed, there are plenty of culturally vibrant cities in Latin America.
Examples: Panama City, Panama…Mérida, Mexico…Quito, Ecuador…and San José, Costa Rica.
To Find Your Retirement Spot…
Visit Internet bulletin boards aimed at expats to learn more about potential Latin American retirement destinations. Just type the name of a Latin American city, region or country and the word ”expat” into a search engine to find these.
Examples: Gringo Tree offers bulletin boards for Cuenca and Quito, two popular spots for expats in Ecuador (GringoTree.com). Facebook is another resource where you will find plenty of expat-related pages.
On these bulletin boards, you’ll find expats chatting about what life really is like for Americans in these places. Post any questions that you have about retiring to the area. You even might strike up friendships with retirees who already are in the area—knowing someone in the area could make a future visit more enjoyable and informative.
Spend at least one month, preferably longer, visiting an area before deciding to retire there. Rent a home rather than stay in a hotel or tourist condo during this trial phase—the touristy parts of Latin America tend to be very different from the areas where people actually live. Latin America does not have many property-rental agencies, but some real estate agents rent out homes on behalf of clients. Request real estate agent recommendations on the area’s expat bulletin boards. In addition to some sightseeing during this visit, try to do the everyday, ordinary things you actually would do if you lived there. For more information, go to our website, InternationalLiving.com.
Dan Prescher, special projects editor of InternationalLiving.com and Suzan Haskins, Latin America editor of InternationalLiving.com. The couple currently resides in Ecuador and has lived in seven different locations in Latin America—Quito and Cotacachi in Ecuador…Panama City, Panama…San Juan del Sur, Nicaragua…and Lake Chapala, San Miguel de Allende and Mérida in Mexico. They are coauthors of The International Living Guide to Retiring Overseas on a Budget (Wiley). InternationalLiving.comDate: November 15, 2014 Publication: Bottom Line Personal