Interest in retiring overseas seems to be growing. For example, the print subscribers of International Livingmagazine, a publication for professionals wanting a luxury retirement, grew from approximately 39,000 in 2009 to 100,000 in 2014. And the Social Security Administration’s 2014 statistical supplementreports 605,166 people in foreign countries as beneficiaries up from 467,846 as reported in the 2011 statistical supplement.
Data shows it can be cheaper to retire in a place like Panama or Costa Rica (please know I’m not advocating for either country) than it is in the U.S. And a number of savvy Central American countries now market to U.S. retirees. According to Viva Tropical, a web site highlighting life in the Latin Tropics for U.S. expats, filet mignon can be had for $5.50 per pound. But that’s local beef, not something flown in from Nebraska. Viva Tropical’s writers note that if you want all the conveniences (and foods) of home, you may spend more than you would retiring in Florida.
Some countries offer tax incentives to U.S. expats. Many of these countries have communities of expats; so that, U.S. citizens can socialize with their fellow citizens abroad. Some countries (e.g., Costa Rica) offer a level of universal health coverage.
Retirement planning research is a must, though. Some foreign countries have a history of political instability and regime-change. And other countries may not honor a U.S. will or trust for the disposition of foreign assets. So it’s important to determine if you need to draw up a will or trust in whatever foreign country you choose to retire in and own assets.
When one of our clients retired, the couple chose to live six months of every year overseas. The arrangement required them to travel a couple of times per year. But they found the lifestyle too difficult as they grew older.
I wouldn’t call overseas retirement a mainstream idea, yet. Yes, it’s attractive to think you’ll just connect with family and friends via social media tools or video calling when you miss them. But as people age, they typically realize they need their family for support. Sometimes, it’s as simple as not wanting to miss sitting down with the kids or grandkids.
If you have a question, please send it to me at [email protected].