More Retiring in Other Countries

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)

More Worried About Retirement

Americans today are more worried about their retirement finances than they were at the end of the Great Recession in 2009, according to a nationally representative survey of 2,508 adults conducted by the Pew Research Center.åÊ

About four-in-ten adults (38%) say they are ‰ÛÏnot too‰Û or ‰ÛÏnot at all‰Û confident that they will have enough income and assets for their retirement, up from 25% in a Pew Research survey conducted in late February and March of 2009.åÊ

Concerns about retirement financing are now more heavily concentrated among younger and middle-aged adults than among those closer to retirement age‰ÛÓa major shift. Retirement worries peak among adults in their late 30s.
åÊ

The new Pew Research survey finds that among adults between the ages of 36 and 40, 53% say they are either ‰ÛÏnot too‰Û or ‰ÛÏnot at all‰Û confident that their income and assets will last through retirement. Only about a third (34%) of those ages 60 to 64 express similar concerns. In 2009, it was Baby Boomers between the ages of 51 and 55 who were the most concerned that their money would not last through their retirement years. Only 18% of those 36 to 40 years old were similarly worried.

The share of adults saying they are ‰ÛÏnot too‰Û or ‰ÛÏnot at all‰Û confident that they will have enough income and assets to last through their retirement years has grown from 25% in 2009 to 38% in the latest Pew Research poll. Surveys conducted by the Gallup Organization over a longer time period suggest that these concerns have grown steadily in the past decade. According to Gallup, the percentage of adults who fear they will not have enough money to live ‰ÛÏcomfortably‰Û in retirement has grown from 32% in 2002 to 66% last year.åÊ

There are no easy answers here. While the survey speaks about living in retirement, underlying all of this is the fear that if something catastrophic happens, your finances will be wiped out. And sadly, that could be the scenario.

While most of the emphasis in reform has been in hospital and physician healthcare, the fact is that most of the activity will take place outside these settings. Aging in place and home health will grow. Assisted living will as well.åÊ

But to really prepare for aging, do yourself a favor and maintain the best physical health you can. You will increase the probability of aging with quality tremendously. Yes we all need to save but that is easier said than done. And the financing options for long term care are simply not there. And keep in mind that all this worry in turn causes stress and in turn affects your health. So while it is important to be concerned and start taking the best action you can, don’t dwell on it.

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