Money & Policy

6 Reasons Not to Retire Abroad

From safety issues to language barriers, this author says: stay home

(This article appeared previously on MarketWatch.com.) 

As the number of retirees in America rapidly grows, so do retirement promoters pitching supposedly friendly, low-cost and exotic destinations such as Mexico, Belize, Nicaragua, Costa Rica, Panama, Colombia and Ecuador, to name just a few.

Pitches to retirees for a better retirement choice — especially those on fixed incomes facing an uncertain economy and U.S. inflationary trends — often fail to mention that those exotic countries, though seemingly less expensive to live in, may be prone to much greater inflationary problems and worsening economies than the U.S.

(MORE: The Best Place for You to Retire)

Here are six things to keep in mind if you're considering spending your retirement years abroad. They may give you second thoughts.
1. Personal safety Your own safety should be your foremost concern, along with the availability of easy access to competent medical service. Historically, save for Costa Rica, all the countries mentioned above have experienced some turbulent, and often violent, pasts by way of civil wars, social unrest, unsteady governments and outright hostility against foreigners — particularly Americans.
Mexico has been going through a serious crisis in the last decades due to drug wars, instilling fear in locals and foreigners and for good reason. Many have been harmed by the criminal cartels.
2. Medical services Many of the aforementioned countries claim to have special medical facilities and medical coverage geared toward Americans. Such facilities, however, may not be close to the place where you want to retire.

Further, most of those facilities may charge cash. To get money back from your insurance provider may require hurdling through red tape, which could take months, if not years. Red tape associated with the foreign claims, be it medical or otherwise, is much more time-consuming abroad.

(MORE: Best Cities for Boomers to Pre-Retire)

Quality of service also comes to mind. Think of it this way: Why do so many patients from those countries come to the U.S. for more serious medical treatments? This can be a good enough reason to question their level of medical expertise.
3. Language barrier You may not think of it much before retirement departure, but unless you decide to go to Belize, all of those above countries are Spanish speaking. Unless you have some knowledge of Spanish, you may be cut off from the rest of the world, so to speak.

Being reduced to be able to communicate only to a few that know some English, or to your fellow American expatriates, narrows your circle of acquaintances and friends dramatically.

You may decide to learn a new language as you go, but to most retirees this may prove very difficult and in some cases impossible.

Doing any administrative paperwork requiring translation also adds to your living cost. So, besides being cut out in terms of communication with most of the crowd, you wind up with some unplanned expenses in translating important documents, such as negotiating the contract to buy a local property or to lease one.

(MORE: Buying a Second Home for Retirement)

4. Homesickness and nostalgia You might not have given it much thought, but this may be one of the most compelling reasons not to retire abroad.

Most of us who have been away from home for any extended time know the feeling of loneliness and emptiness that eventually sets in. This is a natural phenomenon. Once you have lived in your country all your life, it is hard to transport yourself into another culture, another style of living and even another way of thinking.

Many a retiree who left to retire abroad later returned back to the good old U.S.A. for that very reason. I learned this firsthand when I visited Costa Rica on many occasions in the late 80s and early 90s, by talking to American retirees there.
5. Unforeseen expenses Think of the possibility of something happening to you requiring serious medical attention. Rather than relying on the local doctors that may not be at par, you may be forced to put yourself through the expense of going back to the U.S. for medical treatment. This alone could run into thousands of dollars.

The other concern may be your medication. For example, the familiar medication which you are accustomed to receiving may be differently branded and not of the same quality as the one that you are receiving right now.

Factor in that if a loved ones becomes ill or passes away, you'd have to make an emergency trip back home, which again will require expenses that could run into thousands.

In short, you may be subject to bad advice, whether of a personal or an investment nature. Preparing documents for living arrangements, local investments and extending your local visas will all make you incur additional costs.

6. Cost of living The living accommodations abroad may not be as cheap as you think. A decent two-bedroom apartment in Costa Rica will set you back around $1,200 a month, plus the cost of electricity.
Given the above considerations, I strongly believe that America is the greatest and most beautiful country in the world, providing its citizens with the best of civil and financial securities. That's why I suggest you read two interesting articles that appeared in MarketWatch: 10 Best U.S. Cities To Retire In and 10 Budget Cities Where You Can Retire In Comfort. They may make you rethink retiring abroad.

So unless you happen to be an adventurer, stay home and retire where you belong.

Dan S. Barnabic is a consumer advocate and expert on condominium proliferation. He has worked more than four decades in real estate as an agent, broker, property manager, and condo developer. Barnabic is the author of The Condo Bible. He currently lives in Toronto. Find Dan on Twitter, Facebook and on his website: condobible.com


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