Retiring and Living Internationally

Many a waking dream has the familiar setting of retirement spent relaxing on a beach, in a mountain home, in front of a lake, or engaging in outdoorsy activities. Sometimes, though, that dream is dashed by “I could never afford that” thinking.

As comprehensive financial planners, we are oftentimes forced to think about our clients’ retirement visions with an open mind. Over the last five years, I have heard, with increasing frequency, the option of retiring and living in a foreign country as something that is not only an idea but a reality worthy of at least a bit of research.

Of course, for most Americans with whom I have discussed retirement, living internationally full-time may not be a realistic option due to the proximity of friends and family, health care concerns, and, of course, leaving the only culture and language they have ever known.

Those considerations aside, the high costs of health and home care, elder care, housing, dining, and entertainment, paired with increasing inflationary rates, spur some people to consider establishing a residence outside the U.S. where their U.S. dollars would stretch far beyond what they purchase domestically.

Here are some of the benefits of life as an expat:

Lifestyle (aka purchasing power): Cost-of-living index measurements[1] commonly indicate that an expat couple can live comfortably from $1,000 to $1,500 per month. This typically includes many extras, such as entertainment and associated costs. Maid service, in-home chefs, caregivers, and other services that would be available to only “rich people” are commonly available to expats on a slim budget. Meanwhile, a $1,500 monthly budget would be considered well below the poverty level in many areas of the U.S. We see Social Security income alone for couples (and even singles) commonly exceed this by several hundred dollars.

Health care: Anyone looking to retire overseas should be concerned with the quality of health care. How does it compare with the U.S. and Canada? Is it possible to get comparable quality? The answer for some countries is a resounding yes. Sometimes it is even better than what is on offer at home—and at a more affordable price. We have clients who regularly obtain dental, eye, and bodily surgeries abroad, and I have personally not known a single one to experience anything short of a good result.

Measuring the quality of health care is difficult, and it is hard to put a number on it. We can, however, put a number on the price of medical procedures. As reported in a Washington Post article[2] (paraphrased): An angioplasty that would cost close to $62,000 in the U.S. is $9,400 in Spain. A hip replacement is more than $40,000 in the U.S. but just over $1,000 in Costa Rica. A knee replacement is $40,000 versus $11,000. And a facelift is $9,000 versus $5,000.

The list goes on ad infinitum for costs. In addition, you frequently don’t have to worry about deductibles, co-pays, double-digit annual premium increases, additional treatment costs, etc. Unfortunately, because of systemic corruption in how medicine is charged in the U.S., we simply spend many multiples more than other countries’ citizens.

Dental and vision care are not to be forgotten, either. Prescription eyeglasses elsewhere run about one-third of the U.S. cost. Modern-tech dentistry is available everywhere. For example, a state-of-the-art zirconia crown costs around $1,800 in the U.S. but only about $300 in Costa Rica. With dental insurance being so useless as to be considered virtually nonexistent in the U.S., it is an easier comparison to make.

Pedestrian lifestyle: Many expats desire a slower pace, relaxing and enjoying what really matters. My parents, when they traveled internationally, would often return home saying a phrase I have come to remember: “Americans live to work, and Italians work to live.” They would say that about almost every country’s people and culture they experienced. I have witnessed it as well in my travels and experiences with friends from foreign countries.

It is not that you can’t follow the “work to live” mindset where you sit at this moment. In fact, I try to relax and have fun almost every weekend—there’s nothing unique about that. However, your local climate and culture have a lot to do with how you will live your life.

There are good reasons why we have over-50s or over-60s communities even in our backyard. These are communities that restrict home ownership and residence simply by age. And that’s because older people generally slow down a bit. For cultures in many countries where retirement is attractive, life is to be enjoyed. They have perfected the “art of doing nothing.” Maybe you can too!

Of course, we have barely scratched the surface of a move to an international location. There are other complexities, such as taxes, that we will discuss later. But, for now, if you have been dreaming of retirement as an expat, I hope this article has given you some points to consider.


1 - According to “International Living” study, January 1, 2010, “World’s Best Places to Retire in 2018.”
2 - Washington Post, “21 Graphs That Show America’s Health-Care Prices Are Ludicrous”, Ezra Klein, March 26, 2013.