Retirement Without Borders: How to Retire Abroad in Mexico, France, Italy, Spain, Costa Rica, Panama, and Other Sunny Foreign Places (And the Secret to Making it Happen Without Stress) by Barry Golson, Thia Golson and the Expert Expats (With), Expert Expats (With)

From the Publisher

Barry Golson knows all about retiring abroad — he and his wife, Thia, have lived in six different countries. Now they choose expatriate-friendly locales around the world for their low cost and their high quality of living and explain how to investigate and settle in each country with minimum hassle and maximum pleasure.

Taking you step-by-step through the process of researching, testing, and finally living abroad, the Golsons' practical how-to guide covers all the major issues, including health care, finances, real estate, taxes, and immigration. Each location is profiled by an expatriate writer who has made that country his or her home and who knows how to answer all the questions about living richly and economically in some of the world's most beautiful places.

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Table of Contents

Read an Excerpt

TEN REASONS TO CONSIDER MOVING ABROAD

Retirement is a troublesome word to baby boomers, not just because many of us resist the idea of getting old, and not just because many of us have no intention of ceasing meaningful work. It is above all troublesome because so many of us, as our high-paying years begin to fade, will face one of two scenarios:

• We won't be able to afford the lives we've led until now.

• Even with adequate finances, we haven't lived out some of our dreams.

Surveys have shown that as many as four out of five baby boomers have not saved enough for a comfortable U.S. retirement, and the latest figures indicate a national savings rate approaching zero. (In Japan, it is 20 percent.) To those of us who were banking on our house values to see us through, our parents could have told us: what goes up also comes down. For many of us, this will mean continuing to work, even if work is no longer meaningful, in an attempt to keep the income flowing. For others, it will mean downsizing and downscaling, often to locations not intrinsically interesting to us. Baby boomers always did rebel against their parents, and although many of us will do the usual thing of moving to Florida and Arizona, many more will wonder if that's all there is.

Even when finances are not the prime consideration, it is natural that many of us will look forward to something different. After a lifetime of work that has given us little spare time, skimpy vacations, and the unrelenting pressures of job security, child rearing, and getting ahead, many of us may dream about a more fulfilling, culturally richer life that we may have glimpsed only onholidays, or in our reading, or in movies, or on postcards.

You may recall the feeling: You're leafing through a magazine with alluring photographs of someone's villa in Spain, and you lean back and begin to daydream. Or you've spent a couple of weeks at a resort in Costa Rica, and you and your spouse decide to check out the local real estate listings just out of curiosity. Or you're winding up a sunny tour in Europe, and one of you turns to the other and says, "Why do we have to fly back next Sunday? Wouldn't it be wonderful if we could just live here full time?"

That's how the thought creeps in.

Then you put down the magazine, or you fly back to your workaday lives, and the reality and familiarity kick back in. Change is scary, what's known is comforting, and that's why eight out of ten Americans say they want to retire where they presently live. Americans have a tendency toward insularity. More than other nationalities, we value convenience, we do not speak other languages (we insist others speak ours), we're bad at geography and history, we tend to draw conclusions from the anecdotal, and — especially compared to Europeans, who move seamlessly across each others' borders — we don't have that much experience with other cultures. We've strayed far from our immigrant roots. We travel, but mostly here at home.

But not all of us.

There are no hard figures on how many Americans live abroad, but estimates range from four million to six million, military excluded. Expats are advised to check in with their consulates when they first arrive; it's anyone's guess how many do. We didn't. Americans wary of being tracked by our government certainly don't. And no one tracks part-time residents who move around. As to how many of these Yanks abroad are retirees, we have an idea how many Social Security checks are sent abroad (about a half million), but that doesn't tell us much; most expats keep U.S. bank accounts. We do.

One thing is certain: the number is growing. If you're thinking about a move, you will feel less and less alone. In Mexico alone, some 20,000 American immigrants a month, in a reversal of the usual story, cross the border on their way down the coasts to buy, rent, or otherwise establish homes to the south. The word is getting out, just as work is letting out for the boomer generation. For some, it makes a lot of sense.

Here are ten reasons:

1. A sense of adventure. You've had a good working life, you may have launched your kids, you've lived in one place for quite a while. There are new things you'd like to do, passions you haven't yet tapped, a yearning for change. To reinvent yourself. One study shows that the number one reason expats move abroad is not costs or climate but to experience a new chapter in their lives. Change can be the grit that keeps things interesting in your retirement years.

2. A desire to travel, to get away. Sure, you can quench your travel while living in the States, but how much easier would it be to get to know Latin America if you lived in Mexico or Panama? To travel around western and eastern Europe if your staging area were Barcelona, Spain? To experience Asia and Southeast Asia if you were living in Chiang Mai, Thailand? And to be able to spend real time in a new location, even put down a few roots, not just pass through. Moreover, some of you may feel a desire — a need — to experience a different political climate.

3. Lower cost of living. Boomers have saved an average of $50,000 for retirement, pensions are scarcer than ever, Social Security won't easily cover American-sized costs. Prospective retirees looking at twenty-five years on a fixed income may see a train wreck ahead, as housing, insurance, and medical costs keep going off the rails.

As far as Latin America is concerned, then, the prospects are enticing: depending on what you choose, you can live on a fraction of your U.S. costs. In a passage much quoted on the expat online message boards, Walter Russell Mead, of the Council on Foreign Relations, wrote a couple of years ago, "An income that can barely cover a double-wide in Florida can swing a condo south of the border. For the price of a condo in Phoenix, you can often have a villa in Mexico." Well, he probably hasn't checked the price of Mexican villas lately, but we take his point: instead of downscaling, you can upscale.

In Europe, even where it's more costly to live (for most of this 2K decade, that's been a wide swath of Europe), the expenses you don't have can make the difference. The affordable, or free, medical care you get from state-supported systems; the tax exemptions reserved especially for expats; the far cheaper insurance — these can make Europe, still, an attractive financial choice. One U.S. retiree in France, while acknowledging the effect of the falling dollar against the rising euro, told us, "There are ways of living here nicely. You can still find a house for twenty percent of the price of houses in the expensive parts of the U.S. — New York and Connecticut. Did you know the prices of baguettes and coffee are fixed? And the quality of life here is so much better!" We take her point: instead of living frugally in place, you can live frugally in style. Even if costs are similar, or higher than in the U.S., the allure of Europe's deeply rich culture and its "quality of life," as residents call it, balance out the costs for most. In some locations in Europe, stalled or falling house prices have mirrored those in the U.S. and may present an opportune moment to find good value.

4. A slower pace. Much of the world sees Americans as hurried, harried, driven, impatient. If we're honest, we probably see ourselves this way as well. Whether it's our overscheduled childhoods, our frenzied school years, our single-minded careers, our fifty-week work years, our fast-food meals, and our rush to get to the next place, fast, our counterparts in other parts of the world often think us mad.

As you'll find in our Latin American chapters, expats there unanimously cite a more tranquil, slower-paced lifestyle as one of the chief pleasures of their new lives. While it's true that the relaxed sense of time in Latin countries can drive ex-corporate warriors around the bend, successful settlers adopt it as their own. They come to appreciate mañana as a way to slow down life's urgencies; they understand the word not so much as a specific promise as a good intention. They stretch out their days. They learn to stroll, not jog; to chat, not chatter; to relax, not relapse.

In southern Europe as well, despite some acceleration from keeping pace with America (and Asia) in a competitive world, life for expats is a more tranquil affair. Among those who have made their homes among the natives of Languedoc, France, or Umbria, Italy, there is always time to linger over a market, a meal, an errand. Even in the big southern European cities, expats report that long, languid lunches and late, meandering dinners have not yet disappeared. The café life is alive and well.

5. Climate. It's not that America doesn't have a rich variety of climates. It's just that, given a preference for sunnier skies, and the high cost of living on almost any stretch of U.S. beach or coastline, the view from abroad offers a world of good weather to choose from. In dozens of countries, homes can be found in lovely, sunlit locations that would have been bought and flipped twice in the United States. Though we don't wish to be overly harsh about Florida's steaming summer days or Arizona's scorching afternoons, it's nice to contemplate year-round balmy temperatures in Cuernavaca, Mexico, spring breezes in Aix-en-Provence, France, or even the warm autumn drizzle of Verona, Italy. Furthermore, where costs are reasonable, it's more affordable for retirees to follow their own weather, shifting headquarters inland when the coasts become too hot or heading for the hills when their city streets simmer.

6. Previous experience. For some, retiring abroad is an opportunity to go back in time. Expats who once worked abroad and liked it may find that retirement is a chance to more fully live an experience that enriched them. Those who served in the military, who had memorable R & R experiences, are returning — to Southeast Asia or the Philippines or Panama — anywhere this country's troops have gone to capture hearts and minds. There is also a growing movement in heritage retirement, to return with an American savings account to settle in one's country of origin. This can mean a first-generation American immigrant returning to childhood friends and family or a third-generation citizen intrigued by his ethnic heritage.

7. Greater freedom. A common refrain among expats is that they feel freer abroad than they do in the U.S. It's odd at first to hear this in Latin American countries where the bill of rights is less than robust, or in European countries whose governments watch over its citizens protectively. Some of it undoubtedly is caused by nearly a decade of increased government monitoring after 9/11, and some of it has to do with the sense that the U.S. is hemmed in by legal constraints; no nation has anywhere as many lawyers per capita. Daily life is a lawsuit waiting to happen.

Abroad, people don't fear being sued for picking up and hugging someone else's child; they open a B and B with a certain amount of red tape, but without doubling their costs with liability insurance; they can carve out a private life high on a mountainside without fear that the "revenooers" are coming after them. We hear it often, and not just from older, political types. A young Mexican-American waitress of about eighteen was serving us in our village, working hard; she told us she'd lived in the States for several years but chose to return to Mexico. We asked her why. "To be more free," she said.

8. Taxes. Again, expats probably count a higher proportion of libertarians than the average U.S. population. They don't like government monitoring, and they especially don't like taxes. Volumes have been written on tax avoidance in overseas havens — the Caymans, anyone? In some of Europe and all of Latin America, property taxes are far lower than in the United States. One irritant is that the U.S. is among those countries that tax its citizens' income worldwide. But there's a big benefit for the ordinary middle-income retiree: you have an exemption of $85,700 on any income earned while living abroad. That said, other taxes, such as sales and capital gains — particularly in Europe — are another topic altogether, and not nearly as happy.

9. Health care. This deserves its own chapter, and gets it, but suffice it to say for now that this cardinal fear of Americans abroad — inadequate medical care — is, in many locations, and in many ways, a bad rap. In both Europe and, perhaps surprisingly, Latin America, health insurance, medical care, medical procedures, hospital facilities — even nursing-home care — is both more affordable and a lot better than Americans believe.

10. Senior and retiree benefits. In much of Latin America, pensionados have privileges ranging from special residence visas to deep discounts on taxes, lodging, and transportation. In 2008 Panama was offering pensionados an absolutely unbeatable array of benefits — from airline and hotel discounts to generous tax abatements — aggressively bidding for the retiree business.

You won't find similar blandishments in European locales, other than benefits offered to all senior citizens. But we've heard from expats everywhere that older people receive genuine respect abroad. Family ties are close, parents and grandparents stay at home, and society — government, media, church — supports and nurtures the elder folk. In America, many of the aged find that they are tolerated, but not always esteemed, by family and society at large. Many look to a future in elderly enclaves or absurdly expensive nursing homes. So the prospect of feeling valuable again is no small benefit to gray-haired boomers looking overseas.

Copyright © 2008 by Barry Golson