Forget Retirement? In Central America You Don't Have To

July 15, 2010 | Posted By: Claudia Gonella
The recent economic downturn has diminished 401(k)s, scrambled nest eggs and devastated retirement plans. According to data from the Center for Retirement Research, 51 percent of households are at risk at age 65 of not having enough retirement income to maintain their pre-retirement standard of living.

The key question is no longer "How early can I retire?" but "Will I be able to have a comfortable retirement?"

The future appears dismal and many people are finding it hard to decide what to do. But others have stopped whining about the economy and are out looking for an alternative. They've run the numbers and realized that moving overseas for their retirement makes more sense than growing old in the US.

Given the region's close proximity to the US, Central American counties are often at the top of the list of overseas retirement destinations. So what is it about the region that makes it attractive to retirees?

Cheaper cost of living and affordable real estate
According to data compiled by Reveal Real Estate, it is possibly to live comfortably in Costa Rica or Belize on less than $1,800 a month. Those very worried about their finances can bring the number down to as low as $1,300 in the dollar-stretching economies of Panama or Nicaragua. The cost of beach or golf property is also far lower in Central America than the US or Canada, with Nicaragua real estate being the cheapest in the region.

Tax breaks and ease of residency
Central American countries are actively eying the retirement demographic and rolling out the welcome mat to woo retirees to their borders. Panama, Costa Rica, Belize and Nicaragua all have attractive retiree programs offering good tax breaks, no restrictions on property or business ownership (an important factor for those who wish to work during their retirement) and straightforward residency programs.

Amenities and a sense of community
Of course retirees can't just pick a spot and expect to find good local hospitals, grocery stores full of western goods, golf courses and thriving expat communities. Some areas of Central America have unmaintained roads and dire infrastructure. Most retirees begin their research in the most mature destinations such as Ambergris Caye in >a href="http://www.belize.gov.bz/" target=_blank">Belize, the Central Valley of Costa Rica or Panama City in Panama, and only then expand outwards to the more 'emerging' and undeveloped areas.

Healthier lifestyle and lower health care costs
Health care costs are a prime consideration for retirees. The good news is that many surgeries and medical procedures can be performed at about 30 percent of the cost of the US. The bad news is that hospitals offering a US standard of service are few in number and often only restricted to the capital city. (On the other hand, it's also often ignored that expanding horizons, meeting new people and adapting to new cultures may make retirees healthier and more mentally energized.)

Avoiding currency fluctuations
By choosing their retirement country carefully, US retirees can avoid worries over currency fluctuations. For example the official currency in Panama is the US Dollar and the Belize dollar is pegged to US dollar.

So before you resign yourself to giving up on that dream of an ocean-side retirement home. Remember that things might not be as bad as they seem. If you are able to expand your horizons beyond US borders you may find it possible to have a comfortable retirement, with all the trimmings, for far less than it would cost back home.

Additional Financial Resources

  • 5 Top Financial Apps of 2013
  • 401k vs Roth 401k: Calming the Confusing Chaos
  • 10 Ways to Include Your Kids in Your Family Finances
  • 2013 Edition-Tax Deductions You Cannot Miss
  • Four Ways to Save Your Tax Refund Safely


    This article was written by Claudia Gonella, co-founder of Reveal Real Estate, a site dedicated to helping international real estate investors in Central America make better investment and lifestyle decisions.
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  • Comments
    January 28, 2013 | Posted By: HaileyWrites
    "Healthier lifestyle and lower costs of living" sounds perfect. I'm ready to pack up an leave right now. :) Actually I'm already putting money aside into a fund that will cover my moving costs, since those types of things, such as overseas car shipping and all,can really add up quickly, especially if you don't shop around first. Can't wait though....
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