Several months ago, I polled readers of this blog on the topic of moving after retirement. I was surprised to find that 80% of respondents were at least considering a move. I didn’t specifically ask whether people were thinking of moving within the U.S. or to another country, but several respondents indicated in their comments that they were considering an international move. Some people are also considering the idea of living part of the year in the U.S. and part in another country. Several European countries were most frequently mentioned.
There are many reasons why people dream of moving when they retire. Some of them overlap, and more than one may apply to you. Here are just a few:
Cheaper cost of living. Of course, we would all prefer to spend less money of living expenses. Even those of us who have saved adequately for retirement are probably facing the prospect of living on a fixed income that is not as high as what we’ve been accustomed to making.
But for those whose retirement savings fall considerably short, a move to significantly cheaper living arrangements is a necessity. Certain countries in Central America, South America, and Southeast Asia have been getting a lot of attention as places where retirees could live for as little as $1500-2000 per month, including some budget for eating out, internet access, etc.
Health care is more expensive in the United States than almost anywhere else. One of the greatest drivers for moving to another country is cheaper health care. Cheaper does not necessarily equal less quality; France and Costa Rica, for example, have two of the best health care systems in the world, at significantly lower costs.
Different climate. Generally, people who desire a climate change choose to move someplace warmer, such as Florida or Arizona. I live in Phoenix, and I sometimes hear people talk of retiring someplace cooler!
Many retirees are migratory, moving to sunnier, warmer climates during winter. In Phoenix, I know present and future retirees who want to move to cooler climates during summer. This is an alluring option for many, but be sure to factor the cost of owning or renting a second home or maintaining a recreational vehicle (RV) into your retirement budget if you choose to do this.
Live in a place that’s more to your liking. On a high level, we always have the choice of where to live. On a more practical level, where you live may be heavily influenced by where your job is or where good job opportunities exist. Once you retire, you are no longer bound by this constraint. There’s nothing holding you to an area that you don’t like or, to look at it more positively, there’s nothing to stop you from living where you really want to live.
The only word of caution I would offer here is to think long and hard about moving to a place where you have enjoyed spending vacations. Many vacation destinations are nice places to visit, but lack many of the qualities that are important for long-term everyday living.
Closer proximity to loved ones. You may need or want to be closer to aging parents or to your children and grandchildren.
A new adventure. This is often the most alluring and possibility-filled reason to move. After years of living in the same place and being tethered there by your job, you may yearn to discover new lands and experience new cultures in a way that you just can’t do on a brief vacation.
This may involve permanently moving to a new place (domestically or internationally), or it may mean a nomadic lifestyle, travelling the country (or the world) in an RV or a houseboat, or a series of short-term rentals.
Several months ago, while researching possibilities for living in foreign countries, I discovered the International Living web site. It provides a lot of useful information, including first-hand accounts of living in some of their favored countries by expats who currently live there. The web site offers a lot of useful information, but I suggest that you proceed there with several caveats in mind:
- Their greatest driver is low cost. They discuss many other aspects of living in a given place, but low cost is always their primary criterion, followed by health care. This is well and good, but if low cost isn’t your biggest concern, many wonderful places to retire won’t show up on their pages.
- They seem to look at the world through rose-colored glasses; that is, they focus heavily on the advantages of living in a given place while soft-pedaling the disadvantages. They don’t cover matters such as ease of immigration, infrastructure, cultural elements you might miss, etc.
- If you subscribe to their email newsletter, be prepared to receive a deluge of sales-oriented emails. I received two every day. Admittedly, they are running a business, and in order to run a profitable business, they have to sell things (in this case, reports and subscriptions). But they’re not subtle about it, and receiving twice-daily emails gets old fast.
They just released their 2014 Report of the World’s Best Places to Retire. You can click the link to learn more, but to whet your appetite; the top five are Panama, Ecuador, Malaysia, Costa Rica, and Spain.
As I’ve discussed before, I always take “best places” surveys with a five-pound bag of salt. Great places to live are as subjective as they are objective, and the criteria that the list creators use rarely align with the criteria each of us have for where we’d like to live.
The allure of retiring to another country can be strong. I admit that whenever I visit a country I really enjoy, I tend to fantasize about moving there.
If you are considering retiring internationally, here’s a checklist of things to research and consider.
- What are the immigration requirements? Can you immigrate to the country you’re interested in as a retiree, or do you need to move there while you are still working or below a certain age? Some countries allow non-citizens to remain in the country for up to 180 days, so perhaps a partial-year living arrangement is possible. Australia and New Zealand are difficult to immigrate to, but some people take advantage of their 180-day tourist visas to spend half the year in one country and half the year in the other.
- How can you participate in that country’s health care system? Those who have not paid into the system during their working years will probably need to purchase health insurance, but this may still be much more affordable than health care in the U.S.
- Do you speak the language, or are you willing to learn? Seriously, if you plan to live in a country in which English is not the primary language, you really should learn the local language. Some people move to locations where there is a large English-speaking expat community and they never fully engage in the local environment. Even in places where English is widely spoken as a second language, the locals may speak English with you out of necessity but you may find it difficult to become integrated into their social circles.
- How often will you want to return to your home country? How soon until you start missing your family and friends? Travel expenses back to the U.S. (or whatever your home country may be) could significantly eat into the savings you think you are realizing by moving to a place where the cost of living and health care is lower.
- How much are you willing to leave behind? Shipping a lot of possessions to another country can be expensive. Plus, most places you will probably consider living will be smaller – probably a two-bedroom apartment or smaller. Many retirees downsize at some point even when they stay in the same country, or even the same community.
- What cultural, entertainment, and recreational amenities will you have to do without? If you enjoy American TV shows, theatre, movies, concerts, sports activities, etc., how much of that will be available where you are thinking about living? Of course, every place has its own cultural, entertainment, and recreational amenities, and if you are willing to discover and embrace what’s available in your new home, you’ll be happier.
- Can you adjust to the differences in shopping and dining options? In the U.S., Canada, and other “first world” nations, we’ve become accustomed to large shopping malls, large grocery stores with a wide selection, “big box” retailers of all types, and a plethora of restaurants offering a wide variety of world cuisines. If you retire to a smaller town in a smaller country, your shopping and dining options may be much more limited. On the other hand, the food you buy from marketplace vendors may be fresher and more delicious, and the food in the local restaurants may be wonderfully authentic. But it will be different, and you will probably have less variety and choice.
- How is the pace of life different, and will you enjoy that? In most other places in the world, the pace of life is slower than in the United States, particularly in U.S. cities. Of course, this may be just what you want. But you may find that the more casual service you get from waiters, repair people, government agencies, etc. may be frustrating (at least until you get used to it).
- What is the weather like year-round? Often, we visit places during their summer season. What’s it like during their rainy season? How cold does it get in winter? Is the area prone to hurricanes or other undesirable weather phenomena?
- How stable is their government? How will their system of government and their local politics affect you? How are foreigners and minorities accepted by the local people outside of the tourist-facing businesses? Will your religion, race, or sexual orientation be an issue?
I highly recommend that you (and your spouse/partner, if you have one) make a list of everything in your life that will change when you move to your new country. List what things are most important to you in your day-to-day life, and determine what you will want to move with you, what you can replace in your new home and what you will do without.
I recommend utilizing the Retirement Visualization Guide to help you identify your priorities and desires for your retirement, and then applying the filter of what will be possible in your new home.
The single best piece of advice I can give to anyone who wants to move overseas is this: Give your new location a trial run of a year. Rent a place in your new locale, and don’t sell your home and your possessions in your home country until you have lived in your new place for at least six months and you’re sure you are going to like it. Find someone to house-sit your home, or if you rent now, put all your stuff in storage.
Experience your potential new home during all four seasons. As a tourist, it’s impossible to know what it will be like to live in a place on a day-to-day basis after the thrill of novelty and discovery wears off.
© 2014 Dave Hughes. All rights reserved.
Photo credit: Peter Dutton. Some rights reserved.