For some retirees, the recession has made relocating to another country an attractive way to cut expenses while still living the dolce vita. But although your cost of living may plummet and your quality of life could improve, make no mistake: You won’t be in Kansas anymore.
Living in a non-English-speaking environment is just the beginning. “Everything, from grocery shopping to celebrating Christmas, will be different,” says Kathleen Peddicord, a longtime expatriate and author of “How to Retire Overseas: Everything You Need to Know to Live Well (for Less) Abroad” (Hudson Street Press, $25.95). “If that will be a source of frustration, retiring overseas is not for you.”
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But if you’re intrigued by foreign cultures and customs, the move to Latin America could be a good fit. And some Latin American countries offer financial incentives to attract transplants. In Panama and Mexico, for example, you can import your household goods tax-free, which could save you thousands of dollars on your move.
With all of its benefits and active expatriate community, Panama is among the most affordable and appealing options for retirees. In fact, for several years running International Living magazine has ranked Panama one of the best places to retire. Panama’s generous “pensionado program” offers U.S. retirees who relocate to the country discounts on utilities, airline tickets, doctor bills, hotel stays, and even movie tickets and cultural events.
To qualify, you need a guaranteed pension of just $1,000 a month for an individual plus an additional $250 a month per dependent (your Social Security check counts). You will need a Panamanian lawyer to file your papers. To find a local lawyer, ask other expats, or use an online resource such as www.movingtopanama.com, which provides a wealth of guidance on the logistics of relocating to the country. (Anyone over age 18 who meets the financial requirements can apply for the pensionado program.)
Mexico, with its inexpensive real estate, good health-care system and relatively relaxed visa policy, is another affordable option for retirees. International Living ranked Mexico as the No. 1 retirement haven for two of the past three years. (In 2009, it slipped to the No. 2 spot, behind Ecuador.) Areas popular with retirees, such as Lake Chapala and San Miguel Allende, are far from the volatile border towns that have been plagued by drug-cartel violence.
Costa Rica, another popular destination, also scored a slot in International Living’s top 10. Real estate profits there are exempt from capital-gains taxes, and the country offers tax incentives to start your own business. The attractive financial climate adds to the allure of a country already known for its tropical weather and beautiful beaches.
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