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News April 2013

Aid for Age

Americans Overseas

By Tait Trussell

The romantic notion of moving to a foreign country sometimes conflicts with tax issues, political instability, and public services. Most people could give up Heinz ketchup and Ben & Jerry’s ice cream. But is electricity, water, telephone and Internet service adequate?

Social Security checks are flying overseas at an accelerating rate. Some 350,000 American retirees get their payments in foreign countries, reports the Social Security Administration’s annual statistical supplement.

Some Americans are seeking adventure. Some are looking for a spot where they can live on the cheap. Others are fed up with what many believe our country is becoming economically and socially.

Travel industry publication Travel Market Report says at least 3.3 million baby boomers plan to retire abroad. International Living, a magazine for retirees had paid subscriptions of 39,000 three years ago. Today, 80,000 subscribe.

Thousands of folks are stretching their incomes in places that many people would find hard to locate on a map.

For instance, Dan Preacher and his wife moved from Omaha, Nebraska, to the little town of Cotacachi, Ecuador. He now lives with his wife in a condo they bought for $50,000 in a gated community overlooking the Andes Mountains.

“The cost of living is half what we’d pay in the United States,” Preacher says. The Preachers hike to hot springs and local restaurants. They have no car so they pay 25 cents for a bus ride when they want to go downtown. Fresh fruits and vegetables are available year round.

Family and friends are as close as contacts by Facebook or Skype provide. And there’s no way “we could live as affordably in the U.S.”

David Reibstein, professor of marketing at Wharton School of Business at the University of Pennsylvania, said in the school’s online publication Knowledge.Wharton, “People live where they do because of their jobs. When they’re not working anymore some move to a comfortable climate where their dollars last longer.”

Rent in San Jose, Costa Rica, is 57 percent lower than in Philadelphia, for instance. Consumer prices in Chiang Mai, Thailand are 59 percent lower than in Boston. Groceries in Seville, Spain, are 36 percent lower than in San Francisco, according to Knowledge.Wharton.

The romantic notion of moving to a foreign country sometimes conflicts with tax issues, political instability, and public services. Most people could give up Heinz ketchup and Ben & Jerry’s ice cream. But is electricity, water, telephone and Internet service adequate?

Important factors are driving more people abroad. Americans’ confidence in their ability to afford a comfortable retirement is at historically low levels, according to the Employee Benefit Research Institute. The Federal Reserve says the financial crisis erased 18 years off gains for the median household’s net worth.

One of the most worrisome concerns facing retirees is whether they will have enough money to pay for medical and long-term expenses. Health care costs show no signs of abating. A 65-year-old couple is estimated to need $240,000 just to cover out-of-pocket medical expenses in the U.S. — the costs not covered by Medicare — during their retirement, according to a calculation by Fidelity Investments.

“Nobody knows how the U.S. will resolve its fiscal problems,” said Olivia S. Mitchell, a Wharton professor who specializes in health-retirement analysis and policy.

Medical tourism is becoming “very popular” in Singapore, India and Thailand, Mitchell notes. Many of the doctors were trained in the U.S. “and cost might be a quarter of U.S. fees.”

Kathleen Peddicord, founder of the Live and Invest Overseas publishing group, recommends Kutching, just inland from the coast of the Island of Borneo, as a location with laid back charm and a high standard of living for a bargain cost. You can relax on pristine beaches, play golf and see the latest Hollywood films. Cost of living, she says, can be less that $600 a month for a home-owning couple.

A particular attraction in Malaysia is its high standard of health care and its low cost. The risk of being a victim off violent crime also is practically non-existent, she maintains.

Peddicord also tells of retirees, such as Anne Watson-Russell, 62, who needed to live where it would cost no more than $1,500 a month. She moved to Panama, where some of her biggest decisions are to pick one of seven nearby beaches for her daily swim.

Patrick Robinson, 83, moved to what Peddicord calls one of the “healthiest and most affordable” places on earth – Vilcambamba, Ecuador. His monthly budget is around $1,300.

Nicaragua boasts the lowest cost of living in Central America. The city of Granada on the north shore of the largest lake in Central America is known for its horse-drawn carriages and colorful colonial homes, some of which have been converted to boutique hotels—some occupied by North American retirees.

It is near the equator, but at 5,000 feet, temperatures average between 65 and 81 degrees. Clean air and water and healthy organic food in a stress-free atmosphere enable some residents to live to age 100.

Makes one itch to explore faraway places with strange sounding names.

 

Tait Trussell is an old guy and fourth-generation professional journalist who writes extensively about aging issues among a myriad of diverse topics.

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