Retirement Article
Six Important Topics You Must Consider Before Retiring Abroad
Scott A. Gese
Dreaming of retiring to somewhere outside of the country? Living the expat life in places like Europe, Mexico, Central America and beyond sounds exciting.
Vlada Karpovich/PexelsBefore and after the 2024 U.S. Presidential election there were many celebrity types threatening to leave the country if their candidate didn't win.
When you have a lot of money you can go pretty much anywhere you want. For the rest of us, moving out of the country would be a major expense. It may seem like a good retirement idea, but is it.
Many of us working class people dream of retiring to somewhere outside of the country. Living the expat life in places like Europe, Mexico, Central America and beyond sounds exciting. Is moving abroad nothing more than a pipe dream? For many of us our roots run deep. Pulling them up will only happen in our minds.
For others it's more than a dream. They start formulating their plan well before retirement.
Here are a few important things you must consider before you take the plunge.
Where in the World
If your plan is to live outside of the country when you retire, you need to decide where you want to put down new roots.
This step requires you to actually do something besides just think about it. It requires action. If you have more than one retirement possibility, you'll need to visit the places on your list. You'll need to actually visit each country, not once, not twice but several times in order to get a feel for it. YouTube is not a sufficient substitute for boots on the ground. You need first hand experience. I'm mainly going to concentrate on Central America as that's where my experience comes from.
The weather/climate, the culture, the people, the food, and the cost of living are some other factors you need to take a look at. By all means this is not an exhaustive list.
All of the above need to be experienced first hand in order to give you a better understanding of what you'll be in for. Only then can you make an informed decision, which in turn will give your retirement plan a much better chance of succeeding. I'll briefly expand on each one of these topics.
The Weather
There are many countries around the world that have climates similar to areas in the U.S.. If you're leaning toward a European destination you'll have an easier time with this topic than those who want to retire on a beach in the tropics. In the U.S., unless you live in the deep south you have no clue what it's like to live in a humid climate. Even if you do have a clue, you may still not fully know what you're in for. The beaches in Central America are hot and humid in the summer and when the tropical monsoon season shows up, be ready for maybe not as hot (80's as opposed to the 90's) but very wet/humid conditions. Things easily mold in this kind of climate. You have to be prepared to deal with it. Putting boots on the ground in every season will give you an advantage when it comes time to making that final decision.
The Culture
When you move out of the country be ready for culture shock. It will hit you no matter where you end up. Different countries do things differently. Sometimes subtly and sometimes not so much. Every culture has different lifestyles and traditions. If you can't handle change you should stay where you are.
This is especially true if you plan to move south of the border. Petty crime is high and not highly criminalized. Many home owners have bars on their windows and it's not for ascetics although that might be what they tell you. Most home owners own a dog or two for security reasons. They bark at all hours of the day and night and their owners don't try to keep them quiet. Outside of larger cities garbage service is sparse. Most people burn their trash so be prepared for smoke. The roads, mail system and many 'conveniences' you take for granted in the U.S. are all sub par. You will need to learn to assimilate. If you can't handle the culture shock you'll be returning home sooner than expected and disappointed. Better to find out if you can handle the culture before you spend the time and your retirement savings moving twice.
The People
Most people are friendly especially if you know the language. If you don't know it but at least try to learn it they will more readily accommodate you. Remember it's a different culture and the citizens of that country are not the same as you. They act, talk and do things differently. Expecting them to know your native tongue or trying to change them more to your liking is the wrong approach. You are in their country. You are the one who needs to make changes.
For the most part, if you don't already know their native tongue, learning a new language will be one of the biggest challenges you face. You'll need it when dealing with getting yourself set up in your new country. Google translate will get you only so far. Hiring a interpreter is a good option when you need to deal with bureaucracy. Finding a good attorney when handling the logistics and paperwork of settling in is another.
As with anywhere in the world, there are those who will try to scam you and others who just don't want you around. You need to be self aware and as they say, you need to 'keep your head on a swivel'.
The Food
Obviously the food is more authentic. Spicier, hotter and just plain different than the Americanized version you might be used to. This can either be a good thing or a bad thing. It depends on how your stomach can handle the change. Your stomach will adapt and you'll eventually get used to it. Outside of the city many neighborhood restaurants aren't inspected. I've eaten at restaurants where the kitchen had a dirt floor and chickens roamed the area looking for food scraps. The food was delicious and I never got sick. But that's not always the case. My wife and I once stopped at a beach bar where I ordered a beer from an unopened bottle and my wife had a glass of water. She got sick. Food and even water can be hit and miss outside of a larger city.
Cost of Living
Depending on where you decide to retire, your cost of living will vary. Even if you move to a country south of the U.S. Border, a cheaper cost of living is not guaranteed. It will vary depending on your lifestyle. If you refuse to adapt to the lifestyle of your host country and continue to try and maintain an American lifestyle for instance, you may find the cost of living to be more than it is now in the U.S.. If you can adapt to the culture, you'll generally find it to be less expensive. In which case you'll have the best of both worlds. An expat retirement for less money.
So that's my take on retiring out of the country. Don't jump in feet first. Test the waters and take it slow and easy. If you can adapt to the many changes you'll encounter, you'll have a very rewarding retirement.
One More Thought
Home sickness, health concerns and being unable to cope with cultural changes bring many expats back home. Statistics show that around 4% of expats return home within the first year and as high as 60% leave within the first five.
If your dream is to retire abroad, It's important you do everything possible to beat the odds. Keep in mind, 60% of expats may leave within five years. This means 40% were well aware of and prepared for what they were getting themselves into. They continue to enjoy the expat retirement life well beyond the statistical five year timeline. I hope you end up being one of them.
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