Retiring abroad can cut expenses, but don't let wanderlust blur vision
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When Sid and Barb Williams began searching for the perfect place to retire, they never thought they'd wind up living outside the United States. But they kept hearing about the benefits of retiring to Panama.
The Central American country not only offers a warmer clime than their hometown of Cincinnati but also provides a lower cost of living, generous financial incentives for retirees, and a reliable and affordable health-care system. Plus, Panama uses the U.S. dollar, so there's no need to hassle with foreign currency.
After visiting, the Williamses were so entranced by the area's beauty and value that they decided to go for it. In 2008, just as the stock market began to head south, they did, too. For less than $250,000, the Williamses bought a three-bedroom, three-bathroom (plus maid's quarters) condo in a new nine-story building overlooking the Pacific Ocean.
Today, they are happy about their decision and their timing. "We could have retired comfortably in the U.S.," says Sid, 66. "But we live three to four times better down here."
Do a reality check. For some retirees, the recession has made relocating to another country an attractive way to cut expenses while still living la dolce vita. But don't let wanderlust blur your vision.
Although your cost of living may plummet and your quality of life could improve, make no mistake: You won't be in Kansas anymore. If you don't thrive on change and aren't comfortable in new situations, retiring to another country might not be the right choice. It also helps if you're intrigued by foreign cultures and customs.
Stretch your dollars. Some Latin American countries offer financial incentives to attract transplants. In Panama and Mexico, for example, you can import your household goods tax-free, which could save you thousands of dollars on your move.
With all of its benefits and active expatriate community, Panama is among the most affordable and appealing options for retirees. In fact, for several years running International Living magazine has ranked Panama one of the best places to retire. Panama's generous pensionado program offers U.S. retirees who relocate to the country discounts on utilities, airline tickets, doctor bills, hotel stays, and even movie tickets and cultural events. To qualify, you need a guaranteed pension of just $1,000 a month for an individual, plus an additional $250 a month per dependent (your Social Security check counts).
Mexico, with its inexpensive real estate, good health-care system and relatively relaxed visa policy, is another affordable option for retirees. International Living ranked Mexico as the No. 1 retirement haven two of the past three years.
Do your research. Consult the experts. Aside from talking to other expats, you'll find a wealth of online resources at http:/
Once you settle on a destination, it's a good idea to visit during different seasons. If you've picked a city but aren't sure where to live, rent before you buy to be certain you're happy with the neighborhood.
Work out the logistics. Handling your taxes, your household budget, your visa and your health insurance from outside the United States will initially add a layer of complexity to your life. It's a good idea to hire someone to help you with your taxes, particularly in your first year or two abroad.
