More people are retiring overseas according to Wharton School of Business. Older people place a higher value on the present moment. Retiring abroad allows one to enjoy the present moment with more ease than retiring in the U.S. and can lead to greater happiness.
Beckoned by foreign countries with mild climates and a lower cost of living, many retirees view living abroad as the fulfillment of a life-long dream. Some are former snowbirds who opt for a Caribbean island or Latin American country; some seek out charming villages in Portugal or Spain, and others have landed in more exotic locales, such as Malaysia.
About 350,000 American retirees receive Social Security benefits in countries other than the U.S., according to the Social Security Administration’s annual statistical supplement. The majority of those people live in Europe, Canada and Mexico. As many as 3.3 million American baby boomers are planning to retire abroad, according to figures from Travel Market Report, the industry publication. Three years ago, the paid subscription base of International Living, a magazine for retirees who live overseas or plan to, was 39,000; today, it’s 80,000.
What’s driving them abroad? Money — or lack of it. The cost of living in most international retirement destinations is much less than the U.S. Rent in San Jose, Costa Rica, for instance, is 57% lower than in Philadelphia. Consumer prices in Chiang Mai, Thailand, are 59% lower than in Boston. Groceries in Seville, Spain, are 36% lower than in San Francisco.
One of the most pressing financial concerns facing prospective retirees is whether they will have enough money to pay for medical and long-term care expenses. Health care costs have risen rapidly over the last decade and show no signs of abating. A 65-year-old couple retiring in 2012 is estimated to need $240,000 to cover out-of-pocket medical expenses — the costs not covered by Medicare — throughout retirement, according to the latest retiree health care costs estimate calculated by Fidelity Investments. This represents a 50% increase from 2002, when the estimate was $160,000.
Many countries offer subsidized national health care. Depending on citizenship and age requirements, foreigners are often eligible for the programs, and the level of medical care is generally quite high.åÊ
A lower cost of living and access to health care aside, many boomers are drawn to overseas retirement for emotional reasons. After years of staying in a place because of their jobs or their children, they seize on living in a foreign country as their last shot at excitement.åÊ
Personally, I have vacationed in St. Kitts in the West Indies and they have a path to citizenship if you buy property there. Healthcare providers in this country are not developed so that is a big consideration. One thing you should look for when considering the healthcare portion of this equation is whether the hospital you might use is accredited by Joint Commission International (JCI).
åÊ(Source: Knowledge at Wharton)