Americans are moving and retiring abroad in record numbers; some do so to fulfill a dream of tropical or alpine ease, some to save money, some for adventure. The numbers might surprise you -- 550,000 Americans currently receive Social Security checks overseas, up from 400,000 in 2000. And studies indicate that 3.3 million of the country's 78 million boomers are interested in retiring abroad.
The attraction of retiring to a foreign country is not limited to those approaching traditional retirement age. In fact, many eager potential transplants are younger folks looking to "retire early," or to escape the rat race, or to live a simpler (or even identical) lifestyle in their own idea of paradise. And some folks don't want to retire at all per se; they may want to go lead rafting tours, run a B&B or offer photography workshops in their new home.
Whichever way your pleasure tends, here is a primer on making your dream of retiring abroad a reality.
Knowing a lot about a destination may be less important than knowing a lot about yourself. Suzan Haskins, senior editor for International Living, offers the following advice.
"Profile yourself ruthlessly," she said. "Being a tourist is far different than being a resident. So knowing what makes you comfortable personally (especially from a cultural standpoint) and what drives you crazy is important."
Haskins offers a great example: "If you're a big city person and love to get away from the rat race on vacation and do nothing but hang in a hammock on an undiscovered beach, you may think that's how you want to spend your retirement. But think hard about that -- can you really give up the symphony and the theater and shopping malls? You may be better suited to a larger city with proximity to the beach."
By the time a destination hits the "Best Places to Retire" lists (the mainstream media lists at least), many of the best properties are gone, prices are up and Amerians abound.
Showing up late to the party may not always be a bad thing, however -- not everyone has the fortitude to be among the first expats in a new location, and to have had some folks clear the logistical brush can be a tremendous help.
Whether leading or following, you will want to do a heap of research, especially on the more mundane aspects of everyday life.
"You need to research everything, from the climate during various seasons, the housing options, the infrastructure (including Internet reliability), to all the legalities, including visa qualifications, tax obligations, requirements for bringing your pets, and duties if you bring your household goods," Haskins says. "Most importantly, be sure you will have good access to quality health care, and know your options for health insurance."
When I was in college, an older friend and mentor spoke frequently about retiring to the homeland of his ancestors, and worked hard to save money to be able to retire there. Upon his retirement, he and his wife were gone within a month -- and were back within another two months.
"It was terrible," he told me. "It was cold and wet, the people were not welcoming, it was impossible to get around, and within two weeks I wanted out."
As we all know from our own travels, very few destinations turn out exactly as expected, and this goes 24 x 7 x 365 for a place at which you intend to spend most or all of the rest of your life. If there is any one thing you should do before pulling up roots for good, it is to take a long, uninterrupted stay at or very near your intended location. A long vacation or even a couple of weeks won't quite cut it; you will want to shoot for more like a couple of months, a season or even a year.
"We always recommend that you not buy property at first, but rent until you get some experience under your belt," Haskins advises.
While you are there, see what it costs to get a week's worth of groceries, what it costs to eat out and how easy it is to get simple services like a haircut or a car service. The truly mundane activities you ignore on vacation can become essential when you live there.
A big part of the expat experience, especially for retirees, is figuring out recurring expenses. The exercise of putting together a budget should include everything you pay for at home, plus:
- Increased electrical costs in a hotter/colder climate
- Potentially higher gasoline costs
- Cost of Internet access and high-end electronics
- Home, car, and health insurance
- Cost of transport for medical care
- Whether you will maintain Medicare, which does not cover you overseas but may be useful if you need to return to the U.S. for medical treatment
- Any unusual home expenses, such as security systems, waste disposal costs, etc.
- The cost of visits back home, whether to see family or for weddings, funerals, banking or estate issues, emergencies and the like
Other money concerns might be access to stateside bank accounts, whether your pension/social security/other check can be sent by mail or (even better) direct deposit, if there are local bank branches to do simple banking, if there are any really onerous tax implications, if your accountant can work with you remotely and more.
While it is true you can live overseas pretty cheaply, don't ignore startup costs, which can be formidable.
"It's quite easy to live in many locations overseas on $2,000 a month," Haskins says (she and her husband Dan Prescher have even written a book about it), "but there will be startup costs. In the first months, you'll need to pay for your visas and any associated legal costs. You'll probably have a first- and last-month rental deposit, you'll want to buy some one-time supplies and furnishings for your rental home, and so on."
Expat lore is rife with folks who did not seem to fit in at their new "home" until they truly mastered the local language. Some stick it out while others are driven away, but almost everyone thinks it is important.
Beyond the language issue, you will want to investigate the local culture and norms of behavior. The differences can be quite jarring; witness Vanessa Van Doren's list of cultural shifts she needed to adapt to upon moving from the U.S. to Germany -- and then compare them to Ed Keith's very different experience after moving from the U.K. to Spain. Germany and Spain are only about 600 miles apart, but the cultural differences will make your head spin.
"The biggest challenge/surprise is probably culture shock," Haskins notes. "Nowhere is just like your home country. There will be different laws (or lack thereof) and different ways of doing things. You may not be able to find your favorite brand of peanut butter or scotch, and if you do, it may be crazy expensive, thanks to import tariffs. And again, the language issue: the little things you take for granted (ordering a pizza, asking the guy at the hardware store for a specific item, going to the pharmacy) can be daunting."
You might think of Ecuador as a hot, balmy country, but the most popular expat roost there is Cuenca, a mountain town with very temperate weather year-round with a record high temperature of 80 degrees. The rainy season features sunny mornings and rainy afternoons. Farther north, the interior of El Salvador is similar but flipped, with frost in the morning and cooking sun in the afternoon.
So while you might think of South and Central America as hot all the time, this is not always the case; it is important to know that climate is not always straightforward and merits research.
Check out the nearest medical facilities -- as a rule, the farther from the major cities you get, the more dramatically the types and quality of care drop off.
If you're approaching retirement age, you may not want to live up on a mountain or in a treehouse.
Look into pet policies, including quarantine laws and local restrictions.
Research the requirements and timeline to get a driver's license.
Know the local home ownership and property rights laws, including whether residency/citizenship is required to own property and whether you must reside in the house for a minimum amount of time each year.
Finally, Haskins says that keeping your wits about you can make all the difference.
"The only thing I would add is not to leave your brains at the border," she says. "There is a great big, wonderful world to explore, but do that with common sense and the same kind of careful deliberation and self-preservation you would rely on at home. Don't trust someone just because they speak your language, for example. Give relationships time to develop. Keep an open mind and enjoy the experience. This is not rocket science ... there are lots of great resources to help you and expat forums (such as those at International Living) where you can get advice and suggestions.
"All these little issues will work themselves out over time and those who have a positive attitude and approach every day as an adventure will thrive and LOVE the experience. The biggest pleasant surprise is how much you will personally grow and change over time. Living in a different culture not only broadens your horizons but [also] keeps you young, and if you let it, it can make you a better person."