American Retirement Abroad
Top countries for retiring abroad, and tips
before you go
By Andrea Coombes,
Last Update: 12:12 AM ET July 18,
Part 3 of a three-part series. See also Part 1: Years of
Living Dangerously and Part 2: Longevity Maintenance
SAN FRANCISCO (CBS.MW) -- Retiring to an exotic locale where
empty beaches stretch endlessly and a trip for provisions is an
adventure isn't just a fantasy for many Americans.
About four million U.S. citizens live abroad, a large but
un-tallied number of them retirees. Some countries are
especially attractive to older Americans, such as Mexico and
Costa Rica. For instance, about 90 percent of the 30,000
Americans living in Costa Rica are retirees, said author John
"The vast majority of North Americans choose to go to Mexico
because it's so close and inexpensive," said Howells, who's
written several books on retiring abroad.
The popularity of the two countries is nourished by their
proximity to the U.S., which makes family visits easier, and by
governments eager to draw retirees and their disposable
In addition, living in these countries is cheap by American
standards, though some warn that shouldn't be the only
consideration for going.
"If it's strictly for money, it doesn't work. That gets
old," said Sue
Weiss, who left the Silicon Valley with her husband, Joel
Smith, for a small town near Guadalajara, Mexico, two years
"If you don't speak Spanish, and Americans rarely do, you
need a support group, someone to talk to about 'Are the
Cardinals going to win the Series?'" Howells said. "People go
crazy, unless they love to become part of the culture and it's
not very often that happens. Unless you have a lot of people
already there, you're not going to have people coming in."
Europe on my mind
After Mexico and Costa Rica, European countries top the list
of favorite retiree locales: The United Kingdom, in part
because it lacks a language barrier, and Spain, Portugal,
France and Italy are all popular, though American expatriates
there are outnumbered by their European counterparts, experts
The weak dollar now makes most European countries less
desirable to retirees, but some say it's still possible to live
frugally in Europe.
"If you're not traveling and staying in expensive chain
hotels and renting a car and all that, you can live
inexpensively," said Rosanne Knorr, author of "The Grown-Up's
Guide to Retiring Abroad."
"If you don't live in one of the hot spots and just live
your life, it's quite frequently less expensive than (here),
and the food is better, at least in France," said Knorr, who
spent five years living in France with her husband, before his
serious illness forced their return.
Other English-speaking countries -- Canada, New Zealand and
Australia -- are not popular, Howells said, because 90-day
visas are strictly enforced and those countries' governments
don't make it easy for expatriates to move there.
Before committing to spend the rest of your life in a place
you don't know, take a trip there, experts said. Living abroad
doesn't make sense for everybody, particularly in countries
where the infrastructure is not what Americans are used to.
"Rent for a while," Howells said. "Visit everywhere you can
and talk to people. Get different opinions. It's not for
everyone. (Some people) get very upset when things don't go
their way and things aren't the way they are in Omaha,
Nebraska. They don't stay very long."
In Mexico and Costa Rica, for instance, "some of the roads
will have potholes," Howells said. Plus, "you can't expect to
have someone come right over to fix the plumbing. 'Manana'
doesn't mean tomorrow, it means sometime in the future, if
ever. Some people get distraught about that."
While you're assessing the climate and local amenities, also
talk to other expatriates living there to make sure they're
people you'd like to have as neighbors, Howells said.
"Sample various communities and make a final choice based on
the other expatriates who are living there, and not necessarily
which area has the best view or the cooler evenings," Howells
Also, becoming an expatriate doesn't have to mean leaving
the U.S. forever. Income permitting, many retirees keep their
stateside house, buy a second home in their country of choice,
and split their time between the two, Knorr said.
Moving abroad isn't as complicated as many people think,
experts said, but there are some considerations to make before
you take the plunge.
Health care. Medicare does not cover U.S. citizens outside
of this country, so expatriate retirees should consider buying
insurance in the other country (some countries allow foreign
residents to buy into their universal health plan). Or,
consider buying the international health insurance offered by
some insurers. Also, some expatriates continue to rely on their
Medicare for their serious illnesses, returning to the U.S.
when the need arises, though many find the health care in the
host country to be equal, and often better, than here, Howells,
Knorr and Weiss each said independently.
Laws and taxes. Review the visa rules for any country you
intend to visit or move to at the U.S. State Department Web
site. As for taxes, U.S. citizens owe tax on income earned in
other countries, though the federal government does have tax
treaties with other countries that reduce or eliminate what's
owed. (Of course, taxes are still due on income earned on
assets held in the U.S.) But tax rules will vary widely based
on an individual's situation and the country. "Talk to an
international tax attorney before you make any major
decisions," Knorr said. She also recommended researching
inheritance laws before purchasing property, as some countries,
unlike the U.S., require a portion of assets go to children
when one spouse dies, leaving the surviving spouse with less
than may be expected.
Real estate. Don't always expect to use financing to
purchase a home in a foreign country, as cash is often
required. Also, Weiss recommends expatriates work with a
licensed real-estate agency to avoid being scammed into buying
properties that are government-restricted. Mexico, for
instance, has designated some areas as land that cannot be
The complexities are worth it, some say. "It was the
highlight of our life together," said Knorr, whose husband
passed away recently. "The ambiance was much slower and
relaxing. John took up art, I wrote, we rode bikes all over the
vineyards," and traveled by car to Spain, Portugal and other
"Everybody should try it once," she said. "They can always
For more information, try the following sites:
EscapeArtist.com, ExpatExchange.com, ExpatExpert.com, American
Citizens Abroad, and the State Department's Tips for Americans
Casa Preciosa Side Bar Notes:
This CBS.MarketWatch.com report advocates visiting an area
to 'taste test' what life is like before moving abroad as an
We agree with this advice and if you are thinking of making
Mexico your retirement home in the future, take a look at what
retirees in Lake
Chapala enjoy on a daily basis.
You might start by seeing exactly where
is Lake Chapala, Jalisco, Mexico.
The Ajijic-Chapala Lodging offers lots of choices but
probably the most comfortable and secure, is to stay in
Ajijic Homes for
At the top of the list is Casa Preciosa
Ajijic Accommodations that are second to none.
Casa Preciosa provides the comforts of home while you are on
vacation in Lake Chapala, Mexico.
One of the major attractions to Lake Chapala is the weather.
In fact, when retirees search Google for “the best weather
in the world for retirement” click on the link and you'll
see what they get.