I am re-posting this after my first month of traveling in South America. The realities of retiring abroad, vs the glossy fantasies of the internet and other media, are more clear to me now. I have been successful in traveling in Columbia for less than my Social Security pension, while enjoying some amazing places. But some of the places touted, even today in the latest International Living Newsletter, such as Medellin, which I wrote about here, don’t seem to me to be realistic for retirement unless you are a very comfortable pensioner with a cush bank account. Even then, getting old in Medellin would be a challenge. I am still optimistic, and could imagine settling in a place like Villa de Leyva, especially with glorious Bogota a couple of hours away for a good infusion of urban culture when desired.
Here is what I wrote last month:
“Retiring abroad is easier and more affordable than ever before. These days it really is possible to spend your days relaxing beneath palm fronds on a Caribbean beach, enjoying farm-fresh produce in a mountain haven with year-round spring weather, or wandering the storied streets of a historic and cultured European city…or all of the above.” International Living
The Internet bubbles over with advice for how to retire and live a happy life forever under the palm trees, being waited on by attentive hired help, eating, drinking, and playing cards with your fellow happy-as-hell expats.
A lot of online companies get rich hyping seminars, “webinars” and even what appear to be pyramid schemes, especially regarding real-estate.
Then there is the reality. Or, the realities.
The first reality is that most people reading my blog, not all, for sure, will fall into the bracket of those who will not be able to retire the way we think we should in our home countries. It is just true that the expectations we have come to have for how we want to live, how we should be able to live, may not be realistic.
“A global survey of people’s attitudes to retirement savings shows while Australians expect to spend 23 years in retirement, their money will run out after only just 10 years, leaving them on the age pension.” source
“The latest National Retirement Risk Index from the Center for Retirement Research (CRR) at Boston College says that more than half (53 percent) of households risk falling more than 10 percent short of the retirement income they’ll need to maintain their standard of living. More than 40 percent of retirees are also at risk of running out of money for daily needs, out-of-pocket spending on health care or long-term care, according to the Employee Benefit Research Institute (EBRI).” source
So we come to consider the alternatives. What if we could meet our expectations elsewhere, where the sun always shines and the cost of living is half of what it is at home? We fantasize, and there are lots of snake oil salesmen willing to feed those fantasies.
The other reality is that moving to another country as an older adult is, well, to put it mildly, a challenge. The majority of us live close to where we were born. If we are Americans, that life generally was rather parochial. Americans tend to be monolingual, for example. It is not unusual to hear someone say that there is no real reason to travel, because we have it all in the States. If we aren’t parochial, we certainly are naive. I read recently where American expats without legal status were being deported from Mexico; one 70 year old didn’t know she needed a visa to live there.
Here are some considerations if you are thinking about moving abroad:
- Family. I think this can be a deal breaker for some of us. If you have a close family or have family members who depend on you, or upon whom you depend, it is rather difficult to tear up roots. It isn’t insurmountable, but it should at least go into your calculation about where you retire. For North Americans, Mexico and Central America, and even South America can be possibilities, as well as the Caribbean. But know that Sunday dinners will be had without you. For Australians, there are places nearby, such as Bali or Malaysia.
- Language. This is easier for North Americans, because Latin Americans speak Spanish, which is incomparably easier to learn than Indonesian. If you learn the basics of the language before moving some place, it will help a lot with the transition.
- Friends and Social Life. If having a large group of friends and an active social life soon after arriving, then you have to choose your location accordingly. Be frank with yourself about how dependent a person you are. I found in my years in Asia that there were a lot of long nights of self-doubt for lack of a close group of like-minded people. I consider myself a very independent person who has spent many years living abroad in many countries.
- Legal Matters. Where to begin? With a lawyer, probably. You need to know how to get your money and pension from your home country, how to get legal where you are going, and how to deal with legal matters when you get there, especially when it comes to contracts and real estate.
- Health Care. This is crucial. There are a number of countries that are offering medical tourism and promoting their health care systems. But it isn’t free. Does your insurance from home cover you abroad? Certainly Medicare does not, at all. Can you get insurance where you are going (there are countries where this is possible, and some where it is dubious). If you live close to your home country and are able to travel there for your pensioners’ insurance that’s good for most things. If you have retired someplace and are permanently committed there, you will need to be able to rely on the local health care system. This ruled out Siem Reap, Cambodia for me, as I would want to go to Bangkok, Thailand for health care.
- Food. Yes, this is an important consideration. Buying imported foods in developing countries will bust your budget. You love Thai food. Really? 3 times a day? Noodles or rice for breakfast? Rice and something else for lunch? Rice and (hopefully) something else for dinner? Most of it quite spicy?
- Transportation. I can say unequivocally that I will be depending on public transport where I live. Can you live without a car? If not, can you afford a care where you are going, and insurance, and do you want to drive on the roads there? For most Americans, cars are a part of their identity. Factor this in to your thinking.
I’m sure I’m missing something. I would never advise against retiring abroad; it is a good solution for a lot of us. But do so with a very sober assessment of yourself and your circumstances. I have no regrets about having expatriated many years ago; it suits me. But I am no longer really of my country. When I go back, it isn’t my home. Life has gone on without me. This is yet another reality.