6 Reasons Not to Retire Abroad

(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.

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.

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)

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.

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.

By MarketWatch