By Anh Thu Tran
The idea of traveling and living abroad used to be reserved for adventurers and wanderlusts. That’s no longer the case. According to the Social Security Administration (2016), more than half a million people are currently living abroad and collecting Social Security. Additionally, about one-third of Americans would consider retiring abroad. What is driving this trend? While there is a confluence of factors, the primary are economics and technological advancements. Increased cost of living (especially health care) and difficulty in amassing sufficient retirement savings have encouraged Americans near or in retirement to seek an alternative home. Increasing connectivity via technology and trade has made the world a smaller place and, thus, has lowered some big hurdles (e.g., isolation from family and friends) from living abroad.
Things to consider
While the thought of living in exotic locales can be intoxicating, success requires a good deal of forethought and planning. Although each individual situation is unique, there are several key factors to consider when evaluating the option of retiring abroad. First, how familiar are they with the primary language that is spoken in the country and are there pockets of English speaking expats or locals who can provide them with the services they need? Second, what is the cost of living in the preferred locale? Is it better or comparable to the United States? Third, what is the social / political stability of the foreign country? Are the locals friendly to foreigners? Is there a sizeable expat community that can help ease the transition? Can one obtain visas or residency fairly easily? Fourth, what is the state of healthcare in the preferred country? Is it equivalent to what is offered in the States? What should one expect to pay for healthcare services? Fifth, what is the condition of public infrastructure and personal amenities? Are they manageable?
While different may be good, too different can be bad as it requires a great deal of adjustment. So, it’s important that those looking to relocate abroad align their needs with what their chosen country offers.
Most popular countries among retirees
Numerous publications offer rankings on the attractiveness of different foreign countries based on the factors above. Here are the top ten preferred countries (in order of ranking) for relocation by U.S. retirees.
- Mexico – More than one million American expats, lower cost of living, sunny weather, proximity to the States
- Panama – A broad mix of internationals, pensioner program (aka steep senior discounts), proximity to the States
- Ecuador – Stable year-round weather, diverse climate due to great range in altitude
- Costa Rica – Biodiversity (e.g., beach towns, rainforests), low cost of living, lots of adventure activities
- Colombia – Low cost of living, decreasing crime rate, relative proximity to the States
- Malaysia – Able to own property, high-quality food, good healthcare
- Spain – Lower cost of living, good infrastructure, different forms of entertainment
- Nicaragua – Low cost of living, beautiful beaches, relative proximity to the States
- Portugal – Cheaper than Spain, few expats, sandy beaches, mountains, lots of seafood
- Malta – 300 days of sun per year, quick flights to other European cities, excellent health care, English is second official language
Before moving abroad…
While retiring abroad can solve some problems, it often introduces others. As with any major, life decisions, it may be wise to test drive different options before taking any big (and potentially costly) leaps. Some expats suggest moving slowly into foreign soil. For example, first consider taking a long vacation in the preferred country to get a better feel for the place. Then, for a more realistic (or holistic) experience, try renting in the preferred locale for a few months. Consider living there during off seasons when the weather is less ideal and see whether or not it’s endurable. While most people can weather through the sun (pun unintended), far fewer can slog through the rain, bugs, etc. So, it’s important to test drive ones’ new life before making a permanent change.
As with most things in life, there are trade-offs. For those considering retiring abroad, careful planning, research and preparation are the keys to success.
- Retirement Abroad – Checklist and Considerations (US State Department)
- Best Places to Retire (International Living Magazine)
- Insurance plans for travelers and expats (IMG)
- Travel insurance guides and review (Blog)
- Cost of Living Calculator
- Top Retired Expat Blogs
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