As the title states, this article is about why Americans retire outside the USA. In January 2016, Paulette and I sold or gave away almost everything we owned, said “hasta lluego” to all our family and friends and boarded a plane to our new life chapter. We joined the huge number of Americans who retire outside the USA. We had to go “overseas” because our first destination was a Caribbean island! But we have never left the “Americas”. Colombia, where we currently live is in the Eastern Standard Time Zone. But we live so near to the Equator, they don’t use daylight savings time. So part of the year we are on Central Daylight Time.
There are many articles about where to retire. What makes mine different is that it is based on our actual experiences, and we have no agenda. I believe there are three primary reasons why Americans retire outside the USA. I’ll discuss each one and give you my observations based on real experiences. We aren’t real estate companies, travel companies or freight companies. This is just me sharing my thoughts about why you should seriously consider retiring outside the USA.
Reason #1 Cost of Living
Whether you are retired or thinking about it, I’m sure you have already looked at your retirement income. Except for a very few, your retirement income will be significantly lower than it was when you were working. You are going to have to make serious changes in how you spend money. There is almost no way you can live comfortably on your Social Security or Pension. At least not in the USA or Canada.
For example, even if your home is paid off, you still have taxes, insurance, utilities, maintenance, repairs (weekly trips to Home Depot or Lowes), gardening and lawn care, security, etc. It costs a lot of money to “own a home”. If you still have a mortgage, then your housing costs could easily take half your income.
Retire outside the USA to save on Housing
We currently rent a nice 3 bedroom apartment in Poblado, the best neighborhood in Medellin, Colombia. We also have 24-hour security guards controlling entry. Our apartment is on the 20th floor with a sensational view of half the city. Rent is about $650 per month, utilities are about $115, and high-speed internet is about $50. Most apartments in the city are built without air conditioning or heat because we don’t need either. And with no insect problems, we leave our windows and balcony door open 24 hours a day.
For a detailed list of costs in Colombia, please click here. This is just an example. You can use that site to check prices anywhere in the world.
Transportation Costs outside the USA are Cheap
Except in very rare circumstances, if you live in North America, you have to have at least one car. When we considered moving back to the US last year, that car was going to cost us about $850 per month including payment, insurance, fuel, and maintenance. With all our other living expenses, the car was going to make it impossible to live on our Social Security. But not having a car is not an option.
However, in many places outside North America, a car is optional or unnecessary. Public transportation is safe, dependable, and cheap. Lots of places are within walking distance. Here in Medellin, our 24-hour grocery store is a block away, two large modern malls are 2 blocks away, and there are at least 200 places to eat within walking distance. The bus and metro train cost about 75 cents. We don’t need or want a car.
Health Insurance and Healthcare Cost Much Less
Being retired in the United States, you must have Medicare Parts B and D. You also need a Supplement to cover out-of-pocket expenses and deductibles. Total cost for a couple is probably around $500/month. But you also have copays and other costs such as dental not covered by Medicare. And there are many limitations associated with Medicare.
On the other hand, if you retire outside the USA, many countries around the world have subsidized healthcare and health insurance. And the doctors are highly trained, many in the US. Here in Medellin, our health insurance costs about $30/month in total for both of us. Many of our doctor visits cost us $1. So far both of my prescriptions cost nothing. Since we can’t get Medicare benefits outside the US, we opt out of Medicare Parts B & D and we canceled our supplements. So we get to keep that $500 per month.
Many other things cost less than in the US, especially any services you need. We just hired a maid. She comes every other week, works hard from 8 am to 3 pm and we pay $20. A few months ago I drilled a hole in my bathroom wall and accidentally hit a pipe. Water came shooting out of the wall. Our walls are concrete, so the plumber first had to chisel out the wall to find the pipe. He then fixed the pipe, repaired the wall, and painted the new part to match the rest of the room. The cost was $25. A taxi or Uber ride generally costs no more than $2-3.
Another thing we have learned is that down here, most of the Expats don’t care about “keeping up with the Jones'”. Everyone is on some level of “fixed income”. You rarely see cars such as Lexus, BMW, or Mercedes. Kia, Renault, Chevy, and other similar cars are far more prevalent. And most are not purchased new. So you can see that these savings make it much easier to live on our Social Security.
Reason #2 Weather & Nature
No matter where you live in North America, there are times when it is either very hot or very cold. Most of America has distinct seasons. At some point, it will get very uncomfortable. And many of the trees lose their leaves and everything is some shade of gray. Often, you must have the equipment to remove snow, add salt, scrape ice, etc.
The last 3 places we have lived are in the mountains. Boquete Panama is around 4,000 feet, Cuenca Ecuador is about 8,500 feet, and our apartment in Medellin is about 5,000 feet elevation. Being higher up this far south makes the climate much more comfortable year-round. Even though Cuenca is very close to the Equator, the elevation made it just a little cold for us. But it was fairly constant all year.
Medellin, Colombia is Perfect for us
We have now chosen to retire outside the USA to Medellin, Colombia, which is known as “The City of Eternal Spring”. We have only one season, the best one. Daily temperatures range from 60-80 Fahrenheit and never vary by more than a couple of degrees throughout the year. As a result, it is green, there are flowers all the time, and fruit and vegetables are always plentiful.
Boquete, Panama was Pretty Great, Also
In Boquete, we could see the 11,000 foot Volcan Baru from my home office window. And there was no need for a fence in our back yard. Our yard backed up to a mountain that climbed almost straight up for about 1,000 feet.
We have all the tropical birds we read about all our lives. Macaws, all sorts of Parrots, Flamingos, many colors of Tanager, Toucans, Bananaquits, and our favorite – the gorgeous blue-green Mot Mot that waited on Paulette’s chair every morning for his piece of banana. All of the pictures above were taken by me in Boquete, Panama.
The photo at the top of this article was a very fun day for us and everyone around. We took a trip to the East End of Roatan Island and came upon this dockside cafe. The guys playing are all retirees living on Roatan, and they are doing it for fun. Any money given was donated to a local charity. So we are all out in the middle of the day with gorgeous blue water and blue sky in the background and a lot of new friends to meet. This is how retirement should be.
We never planned to find the perfect place and settle down for the rest of our lives. We were looking forward to going to a place for a while, learning, enjoying, making new friends, and then moving and doing it again. All our working lives, our vacation trips could only last a week or two. You just can’t get to know a place in a week.
Our Goal – Retirement Adventures
We wanted the freedom to stay as long as we were enjoying it and then see what else was out there. So in the past 3 years, we lived in 4 different countries (Honduras, Panama, Ecuador, and Colombia). We also visited Peru and Costa Rica for about a month each. We have had many awesome adventures.
Everywhere we go, we always invite our granddaughter to come for a visit. She is about to turn 21 and she has been to a lot of places with us. Last month, she came to Medellin for 2 weeks. The highlight of that trip was going Paragliding twice! We have awesome videos, but I think they are all too big to show here. Never fear, my friends at Wealthy Affiliate will tell me how to do it. In the meantime, here are a few photos of that experience. And yes, Grandpa also flew!
You Can Make Friends Easily
It is so easy to make friends with fellow Americans in new places. We have a lot in common because we all went through a similar decision process to retire outside the USA. We have good friends from all the places we have lived. Social Media, WhatsApp, and our blogs allow us to communicate regularly with them.
And we all have so many stories, it is easy to just walk up to someone and ask where they are from. An hour or two later we know each other’s life story. A month later we are friends for life. Many of the communities have scheduled activities designed to help Expats meet Expats. In Boquete, they had a Tuesday morning market. Several hundred people showed up each week.
I hope you have enjoyed this story. And I also hope you learned some good information. My wife and I will be adding quality articles as we write them. But remember, we are retired, so it might take us some time! Check back often. Please comment and let us know if you have questions or want an article on a particular topic.