Overseas Retirement Guide

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by Doc Dougherty, aka Bajadock, 5 June 2013

It must be the summer travel season that brings out so many “best places to retire on a budget” and “overseas retirement” internet articles.  Most of these puff pieces are written by someone who has vacationed to these spots.  Or worse, they are written by realtors.

And too many of these overseas retirement articles aren’t date stamped.   You may be reading about Costa Rica from a 1995 perspective.  In nearly 20 years, things have changed, youbetcha.

Panama, Thailand, Spain, Ecuador, Belize and the Mexico Highlands are often in the “top ten” lists in most of these articles.  Hey, I have been to a few of these spots and there are many happy ex pat retirees enjoying those paradises.

So let’s get back to you poor working stiff baby boomers contemplating life after Cleveland, Ohio.  Most live in their pre-retirement location due to circumstance.  Work, family or other needs put you in that 3rd beige house on the 2nd cul-de-sac on the left.  You make the most of it and work your ass off.  But, now that retirement is near, set your sights a tad higher.  Why not find retirement overseas?  Before you throw your dart at the world map, here is my list of questions and options to ponder about your ideal retirement spot.

1. Lifestyle…If your retirement needs include weekly Nordstrom visits, 5 star dining and opera, a rural mountain village is going to expose your inner “Deliverance” character.  What are your ABSOLUTE MUSTS?  Massage, Beauty Care, Sporting Events, Music, Culture, Wine, Exercise Facilities, Pet Care, U.S. Television Programming, High Speed Internet (actual speed often disappoints overseas) and more choices are so individual that no location will fulfill all of your needs.  And within each country you are exploring, cities and locations 60 miles apart will offer completely different choices.  I’m single, but, I’ll warn couples that you will have lots of negotiating(what’s new, you ask?) on your differences about all of this.  Make your MUST list, find out how to get it and how much it will cost in your new target location.  My secret MUSTS: U.S. sports programming, eccentric movies and $10-$12 red wine values.

2. Local Climate…Many internet articles on retirement are written by real estate types who exaggerate their local climate.  “Mild”, “Cooling Breeze”, “Temperate” and other subjective adjectives are the warning signs.  “Average year round temperature of X” is also a red light.  If Denver, Colorado’s avg year-round temperature is 60F, whattheheck does that tell you about the climate???  Try Weather Underground for locations and use the historic data available there.  My favorite climate line was from someone in San Felipe, Baja, trying to tell me that 80s temps were most common with a few days in the 90s during summer.  That 80s line was true… at 4am.  And there are a few days with high temps dip into the 90s.  But 100-110F is the norm in “San Flippy”.  A September 2005 visit to Vancouver Island convinced me that I would live somewhere on the Pacific Ocean.

3. Your Ideal Climate…Suppose you have lived most of your life in the Great Lakes area of the USA.  You have romantic ideas of living on a tropical beach.  How much sand can you stand pouring in through your windows and doors.  How will the salt air affect your appliances and furnishings?  Will the soothing surf sounds become a pounding drum that keeps you awake at night?  Will you miss seasons changing?    Humidity, bugs and imprisonment in air conditioning are not my thing.  I love outdoors and I enjoy weather variety.  I’m glad I figgered out that a tropical climate is ok for my vacations, but, not ok for my everyday activity.  My January 2006 visit to Panama helped with my climate choice.  That and regular visits to Florida reenforced my need to escape extreme heat+humidity.

4. Violence/Safety/Politics…If you get your world information via the major tv networks, you really have no idea what is going on.  Get on some internet discussion forums in locations you are considering.  Read local newspapers with translation tools.  Don’t forget to read the reader comment sections at end of articles.  What has been happening politically in your focus areas during the past 20 years?  “Someone was murdered there last month” is as worthless as “I know the uncle of a friend who moved there 5 years ago and hear he is very happy”.  Walking the streets of downtown Ensenada at night during my real estate search let me know that I had found a safe, comfy city. 

5. Neighborhood…Do you want to be  fully immersed in the culture or in a whitey ex-pat location or mixed?  One challenging thing about Latin American urban cities is the noise factor.  Perhaps your inner Mexican yearns for fiestas, dancing and tequila.   But, can you handle regular nights with blaring music at 3AM?  Or maybe that secluded spot on the hill overlooking the beach and waves looks perfect.  But, is that rural site worth the trade-off of a 1+ hour commute to your grocery, doctor, entertainment and other services?   My ideal would be a 20 minute drive to a city of 250,000 population.  My 45 minute commute to Ensenada(pop 400,000) is just outside of perfection, but, I like my rural spot above the waves.

6. Expenses…Housing, food, utilities, entertainment/dining, home maintenance and other items need to be considered.  Other than housing, your 2 biggest expenses are most likely going to be medical and travel.  If you have a specific medical need, best to find locals with same condition and discover how they get care.  What about healthy medical maintenance/checkups?  On travel, how often do you plan on vacations and visiting children/grandchildren/friends back in the USA?  What do flight prices and availability look like, how long will travel take, overnight hotels to meet flights, meals, etc? That $400 coast to coast USA flight can turn into a $3,000 total flight expense in a hurry for distant ex pats. …2 hour drive to San Diego airport works great for me.  It’s a full day for my drive to San Diego, 2 flight connect to Orlando and drive on that end, but I still catch happy hour at day’s end.

7. Family/Friends Visitation Access…Expecting regular visit from the grand kids or your BFFs?  Many expat retirees are disappointed when they discover that lamestream media influenced family members don’t want to risk decapitation in Latin America.  Or that a round trip ticket for 2 to your paradise is a month’s wages.  Or that due to flight connections, 4 days of their 7 day vacation will be spent in an airport.  Be prepared to say goodbye to more than a few relationships because of these and other barriers.  If you have chosen adventurous friends and your family members have a similar explorer spirit as you, you will have loads of visitors knocking on your door.  Lucky to enjoy regular visitors here in Ensenada and most repeat.

8. Visas/Documentation/Importation…What is the process and how much does it cost to be a legal immigrant in your overseas retirement paradise?  Many countries realize the competitive nature of alluring U.S. baby boomers and have recently made it easier to immigrate.  Others, like Mexico, have made it more difficult.  Do your homework.  What does home ownership look like?  Also, how will you get your household stuff to paradise?  This is the time to seriously evaluate your home inventory.  Most I talk to in Mexico who moved loads of stuff regret it.  It is usually easier and much less expensive to sell your stuff and buy what you need at your new location.  It’s just stuff!  Though Mexico’s new visa requirements are muddled with higher income requirements(December 2012), the legislature is moving toward easier land ownership for foreigners. 

9. Language Skills…How much of the new language will you be required to learn?  How will you learn it?  I don’t think language learning is necessarily some unique aptitude.  Friends of mine who enjoy adventure and make a new language a game are successful in learning.  Can you be fluent in 90 days, like the commercials advertise?  ¡Ni Modo!  But, if you can learn numbers, basic food items and a few hundred words in 90 days, you will be doing OK.  Maybe in a year you can be somewhat conversant.  Make it a lifetime game to really enjoy all that is available in your new paradise.  My Spanglish is a work in progress and only Gringo scolds reprimand me for mistakes.  Perfection seems like such a wasteful goal to me.

10. Feet, Eyes, Ears on the Ground!!! …If you can’t afford a minimum of 10-12 days on the ground, your odds are minimal on choosing the right spot.  Think of it in terms of past vacations.  During your last 7 day vacation, how much did you learn about the area?  Most try an extended visit of 30-90 days to get as many answers as possible.  Longer visits also produce better questions.  That is also why most recommend renting for a year before you throw down money for a house at your overseas retirement location.  Missing the perfect filet mignon may shock you.  But, finding an endless variety of inexpensive ceviche and seafood cocktails may seduce you.  Only Sano’s for your filet in Ensenada, but, I prefer peasant food for my daily pleasures.

Thanks for adding your questions/whatifs to comments below. 

The author moved from Denver, Colorado to Ensenada, Mexico in late 2006.  Total time on the ground in Ensenada before buying real estate: 5 days.  Total time from end of 2006 Ensenda vacation to permanent residence:  5 days.

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2 Comments

  1. Posted June 5, 2013 at 19:56 | Permalink | Reply

    For people retiring to Mexico: You plan to stay more than a year, right?

    If so, Mexico has actually made it much much easier. If you have just $125,000 in retirement savings or total pension + SSI income over $2,500 a month, then you qualify immediately for Permanent Residency.
    steve

  2. David Merralls
    Posted June 8, 2013 at 11:20 | Permalink | Reply

    We took 30 people to San Jose del Cabo Mexico for a party on the beach, I only went so my wife had someone to drive a bus:)) ended up buying a condo on spec sight unseen (we had stayed in the complex). Six years later still really happy with our choice (even given the property bust re prices) and are ready to spend lots more time there.

    Any downsides to obtaining perminent residence in Mexico? Dave M

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