Now that Americans are living longer than ever than ever before, more retirees are choosing to move abroad after they leave the workforce. In 2013, the Social Security Administration sent benefit checks to more than 373,000 retirees living outside the U.S., up from 307,000 in 2008.
As far as choosing the perfect destination for your golden years, the options are practically endless. If you receive Social Security benefits, you can still get your check in just about every country in the world (with a few exceptions). Some countries offer perks specifically aimed at attracting expat retirees, like Ecuador, which peddles discounts on everything from public transportation to flights. And Panama gives expats a break on utilities and offers a special visa that allows anyone receiving a monthly pension to live there permanently.
Fantasizing about retiring in another country is one thing — actually packing up your American life and moving is quite another. There are obvious challenges, like making sure you’ve saved enough to cover your expenses in another country, and others, like learning a new language and getting used to cultural differences you may never have anticipated -- all of which can make the transition difficult. So we tracked down a handful of retirees who have successfully created new lives for themselves abroad to find out how they did it.
Here are their stories (note: some answers have been edited for clarity and space):
Maria (61) and Robert Blount (65)
Moved from Lehigh Acres, Fla., to Puerto Cayo, Ecuador in 2013.
Why we moved: My husband was a college administrator and I worked as an underwriter for Prudential Financial. I love the ocean but could not afford to purchase beachfront property in Florida — besides, Florida is too hot and muggy for us.
How we did it: We started planning long before we moved. We purchased a 2,400 sq. meter lot right on the beach in 2004 when land was affordable. At that time I paid USD $44,000, which is what was called the “gringo price" (meaning, they charged us a higher rate because we were American). But I didn't mind because I knew the prices would rise. On the land, which is in a fishing village, we built two identical apartments on top of each other.
What life is like now: Most of our food comes from our land since we grow organic fruits and vegetables and our protein supply comes from our front yard: the Pacific Ocean. I like the serenity of a fishing village and my husband likes the peace and safety. We go back to visit family once per year.
How do you manage your finances? We lead a very simple life with no frills. We built a rugged and safe house as opposed to something more elegant to suit our needs as we age. We both worked long careers and we have pensions and 401(k) savings, along with some income from real estate investments in Florida. Our monthly expenses are very low: phone $7; Internet $22; cell phone $12; electric $25; transportation $50; food $125; and entertainment $30 [about $270 a month].
Richard Wold, 57
Moved from San Diego to Tijuana, Mexico in 2006.
Why I moved: I wanted to retire somewhere and still be close to my mother, who I care for in San Diego. Tijuana is just 30 minutes away, just across the border.
How I did it: I worked in law enforcement for almost 20 years in total but I do not have a pension because I switched departments several times. Each time I switched departments, I would withdraw my retirement [funds] and use that money to move and buy another house in a new location. From those investments, I now own a ranch and some small rental properties [in San Diego], which helps compensate for my lack of pension. This means that I do not have to work at a traditional 9-to-5 job everyday but I do need to make money. I am a fisherman and I go fishing in Mexico with a permit which costs about $50 per year and I sell my fresh fish when I can.
What day to day life is like: I consider myself semi-retired. I live in Tijuana near the San Diego border so I can cross the border every other day to take care of my elderly mother in southern San Diego, but other than that I prefer to stay in Mexico. I recently spent the weekend with some American friends at a couple of bars, watching football and then we went fishing and had a great time for a fraction of what it would cost in the U.S. I’ve also gotten remarried to a woman from Honduras. I recently went on a three-week trip throughout Central America in order to expand my knowledge of the region and improve my Spanish.
How I manage my finances abroad: My rent is only $250 a month for a nice one-bedroom apartment. My electric bill is subsidized by the Mexican government and it averages around $25 a month. Water is about $25 a month. But what I really like down here is how reasonable entertainment is. To go out and have a few drinks and go dancing all night can be as low as $12 to $15. And a nice restaurant with great food, drinks and a view of the ocean will maybe cost $40 for a couple. I live like a king here in Mexico and I am just 10 minutes from San Diego, so I literally have the best of both worlds.
Jennifer (45) and Barrie Garfinkel (74)
Moved from New Orleans, La., to Sommervieu, in northwestern France in March 2003.
Why we moved: My wife, Jennifer, always wanted to live in France and she’s fluent in French. I was retired and after researching where we wanted to move, we decided that the best country to retire was France.
How we did it:. We bought a house in Cesseras, in the south of France, in the summer of 2002 and we officially moved almost a year later. A couple of years later we decided to move because it was difficult for Jennifer to find work that far South. We headed moved north to Sommervieu, which is in Normandy. We decided to keep our Cesseras house, which we visit during the summer. In Sommervieu, we rent a beautiful cottage. I have a US pension, which is improving every day as the Euro continues to fall. Formerly, I was a computer consultant with my own company, but I started delivering groceries when I was 14. My late wife was a racehorse trainer and we raced, bred, trained and managed racehorses for 25 years.
What life is like now: We rent a beautiful cottage with a nice sized garden. It's peaceful and quiet. We have wonderful neighbors with whom we have lunch and dinner at times. I have a subscription to Major League Baseball and watch the games on my computer and tablet. We have a chihuahua and a cat. I love being with my wife. We go to the beach, try new restaurants and just enjoy life. I have no plans to return to the U.S. Jennifer returns often to see friends and family. My son also owns property in France. He visits twice a year. I love the stress-free living.
How we manage our finances: I have a U.S. pension, which is improving every day as the euro continues to fall and the U.S. dollar strengthens. Since healthcare is so cheap, everything else is relative. We spend about USD $140 per month for our health insurance. That covers everything, including all drugs. I had a hip replacement two years ago. My out-of-pocket payment was $12. We spend approximately $2,300 per month. That includes food, health insurance, rent, heat, water, taxes, phone, Internet. As the euro drops in value, it gets easier. Fuel for the car is the most expensive item. It's about $5 a gallon.
Michelle Huffman Carson, 56
Moved from Plantation, Fla. to Valle del Cauca, Colombia in April 2011.
Why I moved: I was a flight attendant with Delta for 30 years and I had always wanted to live in South America. I moved to Colombia after my daughter was killed in a tragic hit and run accident in 2010. I was also going through a divorce.
How I did it: I started selling everything: the house, my car, furniture, everything in my house, jewelry, clothes, basically all my material things that were not of special value to me. I think I was so traumatized that anything that kept me occupied was good. I could think about something other than my daughter being gone. I look back at what I accomplished in three months and just shake my head. I had strength I did not know I had. I can speak Spanish now, but could not when I moved. I love that I have learned a new language at my age.
What life is like now: I have flourished here. I knew I would need income so I bought an old villa and have renovated it in the mountains of El Meson, La Buitrera in the Valle del Cauca. I have now started a bed and breakfast named Villa Migelita and am getting many people writing to come. I blog about it here. I’ve had my ups and downs but everyone does. I return to the U.S. twice a year to renew my visa and to do my taxes, but in one more year I can apply to become a permanent Colombian resident.
How I manage my finances abroad: I’ve always been a budgeter and I saved through a 401(k) when I was working. I live on a fixed income from my pension and I also make money by selling eggs and bananas from my farm. It is very cheap to live here. I only need $1,500 for monthly expenses here. I have the best health care they offer in Colombia and it is around $140 a month. After my divorce, I could not afford my healthcare costs in the U.S. ($800 for COBRA). I bought my house for cash at around USD $60,000. I am debt-free except for a small amount on two credit cards, which I used to rebuild my credit.
Don Robinson, 70
Moved from San Diego to La Paz, Mexico in 2007.
Why I moved: I was in the real estate business a broker, appraiser and investor for nearly 30 years. But I got killed during the housing crisis. I can’t say exactly how much I lost but I wound up with just one house that had equity left in it. I wanted to retire but I needed to live in a place where I could live on my Social Security benefits alone. I had spent a few days in La Paz, Mexico around 10 years ago and remembered it as being a very pleasant, clean and friendly town. I also needed to be close to my mother, who I still care for in San Diego.
How I did it: After losing most of my real estate investments, I left the U.S. with around $100,000, which I earned by selling the only property I owned that still had equity. I was able to buy a Ford Focus, a Harley motorcycle and some used furniture.
What day to day life is like: My neighbors are all Mexicans and even though very few speak English they are very, very friendly. It’s a nice neighborhood made up of mostly families. For work around the house that I don't want to do, like yard work, labor is extremely cheap. I usually pay more than what they ask. There are some frustrations you need to adjust to, but each time it begins to bother me I think of what it would be like living in the States again and I immediately adjust my attitude. People are friendly and courteous, the weather is good except for the summers which are blazing. But what the heck, that's what air conditioning is for.
How I manage my finances abroad: I'm a single man and can live quite comfortably on around $1,200 a month. Food and clothing prices are not much different than the States, however, housing is very inexpensive. For USD $380, I rented modern and very large, two-bedroom, one-bath apartment with secured parking and a tiny view of the water for six years when I first moved. Last year, I bought a large two-bedroom, two-bath home with a huge triple size lot and only around six blocks from the water. This cost $72,000 and property taxes run only around $120 per year. A comparable home in California would cost between $250,000 and $300,000.
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