Retiring in another country could mean a retirement experience that is richer, fuller, and more interesting. But it’s difficult to walk away from the life you’ve known until now and create a brand new one for yourself in a place where you don’t know anyone or speak the language. Here are some of the most common retirement overseas mistakes and how to avoid them.
Investing in a place of your own too soon. Potentially the biggest mistake you can make when retiring to another country is investing in a new home from the outset. Wherever you decide to relocate, you should rent for at least the first few months to give yourself a chance to try your chosen place on for size. Renting keeps you mobile and flexible. It allows you to avoid the carrying costs of property ownership and means you don’t have to invest in furnishing a new place while you’re still figuring out if this town is the right fit for you. You may find that the country you’ve targeted is what you’re looking for, but perhaps the neighborhood isn’t. If you’re renting, that’s no big deal. When the term of your lease is up, you can move across town or to a different town altogether.
Basing your entire retire overseas plan on information you’ve gleaned from the Internet. The Internet can be a useful place to get ideas and advice about moving abroad. But please don’t formulate and then carry out a plan to upturn your entire life and move to a foreign country based solely on what you read in my blogs or in anyone else’s either. Websites, chat groups, and free downloadable reports are all great resources, but they can’t substitute for the most important part of formulating any retire-overseas plan: Visiting the country yourself.
My job is to prompt your thinking and introduce you to some of the most attractive options on offer in some of the most appealing corners of the world. You have many tempting choices for improving the quality of your life, reducing your cost-of-living, and embarking on the adventure of your lifetime. But please don’t chart a course for a country that you haven’t seen firsthand. Plan an extended visit. Stay on through the least-agreeable time of year—the hurricane season, the rainy season, the peak tourist season, or the off-season. Find out what life is like after all the tourists have gone home and nearly every shop, café, and restaurant in town has shut its doors until they return.
No amount of Internet research, reading, or planning can substitute for traveling around a place yourself. You’ve got to walk the streets, watch the sunsets, and meet the people. Sometimes you’ll know within hours of arriving in a country. If you feel safe, welcome, and comfortable, then that place could be for you.
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Thinking that your retire overseas plan must be all or nothing. Break your adventure down into steps and start small. You don’t have to move full-time at first. Rent someplace for three to six months. Don’t worry about figuring out how to qualify for a permanent residency visa. Don’t ship a container full of all your worldly possessions. You can keep this simple. Take a trip, stay as long as you can without severing all ties back home, and leave yourself an escape hatch.
Trying to spreadsheet your new life. You want to review detailed budgets for any countries that interest you as potential retirement havens. You need to understand the local tax rates and to investigate local health care and insurance options. This research and planning is important. But, once you’ve carried it out, set it all aside, and let your heart take over.
Why do some retirees prefer Nicaragua to Costa Rica? In many ways, these countries are similar—the same Pacific coast, geography, and climate. The better you get to know them, though, the more you realize that these two countries are more different than alike. Some of the differences can be spread sheeted. The cost-of-living is lower in Nicaragua, for example, and the medical facilities are superior in Costa Rica.
A friend considered both countries carefully and chose Nicaragua. When I asked him why, he replied, “Nicaragua simply appeals to me more, for reasons that I have trouble explaining.” I understand. I prefer Nicaragua, too. I find this little country with a troubled past infatuating and am especially drawn to its colonial city, Granada. Everywhere I travel in this centuries-old town, I find something pleasing—the red tile roofs of its haciendas, the blue and white steeples of its churches, the barefoot children playing and laughing in its central plaza, and the sounds of the horses’ hoofs as they pull their carriages along the cobblestoned streets. These things can’t be quantified. You can’t plug classic colonial architecture into a formula in a spreadsheet. But these can be the things that matter most.
Letting yourself become paralyzed by the planning. Do your research, make your plans, and then take the leap. Don’t spend your best and healthiest years analyzing and planning. These are years of your life that you’ll never recover.
I’ve met many people who’ve been thinking for years about living or retiring overseas. They can tell you how to get a visa, where to open a bank account, how much to budget for rent, and the per-square-foot price of buying a home in a dozen different countries. Still, they’re deliberating, weighing the options, and not quite sure that the time is right. To each of these people I’ve said, “Just do it.” Pack your bags and go for it. What’s the worst that could happen?
As long as you haven’t bought a new home, invested in obtaining full-time permanent residency, and put everything you own in a container and shipped it off, discovering that the first place you try on for size doesn’t fit isn’t a big deal. You can return home, having had a grand adventure and an interesting holiday, or try retirement haven B on for size.
Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter. Her book, How To Retire Overseas—Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Books.