Ask the Expat
Retirement in Latin America: An Overview
Retiring Abroad to an exotic location with a pleasant climate and friendly locals is a dream for many soon-to-be retirees. But to make this happen requires loads of commitment, research, tenacity, and patience. To help you with your research of suitable retirement destinations, I have compiled a list of attractive countries around the world that might be suitable for retirees from North America, in terms of climate, quality of life, affordability, and safety. Not all countries I have listed are equally affordable, livable, or safe, but they all have their own unique qualifications that make them attractive, and they all merit the attention of anyone interested in retiring overseas. I have selected several countries from each continent that I consider attractive destinations for North Americans. This first part of the series covers the Americas
To narrow down the number of destinations, I have used visa considerations as the number one criteria. All countries on my list have visa provisions that allow foreigners and/or American citizens to settle in their country without special requirements such as business investment or family ties that would exclude the majority of interested retirees. I have also excluded countries that may be pleasant, affordable, and stable, but have very cold and/or damp winters, which many retirees would rather avoid.
Mexico and Central America
Mexico’s great advantage for American retirees is its proximity, but what was once an extremely safe and cheap retirement haven for expatriates has become a country wrought by pockets of a violent drug war, in reality most of the country is as safe or safer than most locations in the U.S., as Tim Leffel also points out in his essay on the commercial media's overstatement of the dangers in the greater part of Mexico relative to being at home. Another advantage is that Mexico has made it easy for Americans to settle in the country, which helps to alleviate the enormous red tape usually associated with moving to another country. Although most popular retirement destinations are still relatively safe, the ubiquitous drug cartel violence has seriously, if perhaps unfairly, affected Mexico’s reputation as a pleasant and safe destination for American expatriates and retirees, with incredible health care savings to be had. Over one million U.S. retirees continue to live quite happily in Mexico, and the government is seeking a target of five million retirees from the U.S. in the future.
If you still see Mexico as too violent for you, the next closest Latin American retirement destination is Costa Rica. Much smaller, safer, and more stable than Mexico, Costa Rica continues to attract expatriates and retirees from North America. This has led to the construction of retirement homes and retirement communities, and as a result buying property and living in Costa Rica is no longer as cheap as it once was.
Panama has become an off-shore banking Mecca and retirement haven mainly for those who need to hide their wealth from the IRS. Fueled by international banks and their customers, Panama has experienced a great construction and development boom over the past decade. The country, especially Panama City, has no doubt become more modern and developed, but the cost of living has also risen, and there are now more Americans in Panama than ever before.
If you are interested in retiring in Central America, you should also research other destinations that are not regularly touted as the “best” retirement havens. Guatemala is very cheap and has many beautiful colonial towns and destinations suited for retirement. Although much less developed than Mexico, Costa Rica, or Panama, Guatemala (outside of the more dangerous Guatemala City) offers low cost of living, a good quality of life if you choose the right destination, and great local cultural traditions with very little American or outside influences. Belize is a similarly quiet and laid back destination and has the advantage that it is English-speaking while the local currency is pegged to the dollar, eliminating exchange rate variations. Belize also offers a retirement visa for foreigners.
South America is a continent with great cultural and geographic diversity, and it pays off to do some research to find the country that best suits you. Each country has its distinct culture and way of life. Uruguay and Argentina are perhaps the most European countries, whereas Andean nations such as Ecuador have a largely indigenous population with a distinct culture and way of life that is quite different from Western civilization. Brazil on the other hand is a modern fusion of indigenous, African, and European cultures. It offers South America’s highest standard of living with a modern urban lifestyle, but if you choose, you can also live in a thatched hut in the Amazon and sleep in a hammock. Leaving these very important cultural factors out of your considerations could spell disaster in your overseas retirement efforts. Ecuador’s capital Quito may have a year-round pleasant climate, but if you don’t like the level of development and different way of life there, you won’t be happy for very long. Sure, there are expatriate communities and retirement enclaves for North Americans all over the world, but you can’t surround yourself with compatriots 24 hours a day without isolating yourself from the local culture to some degree. Living abroad inherently means being engaged with local people, we strongly believe, and to do so with satisfaction, before moving, you need to make sure you like the people and the country.
The secret to finding your retirement spot is to consider all factors that are important to you, and to make your decision not merely based on investment or financial considerations. Each South American country has its own unique immigration laws, and it’s best to do some research to find out what works for you. Buying property in Uruguay makes you eligible for a temporary residency visa, but to live in Brazil, you need to apply for a retirement visa and have at least US$2,000 in monthly retirement income. Argentina offers a rentista (retirement visa), requiring proof of retirement or investment income of AR $8,000 (ca. US$1600 at 2012 exchange rate) from outside Argentina. The cost of living in Argentina is higher than in Uruguay and much higher than in Ecuador, but it is a huge and diverse country with a great culture, vibrant cities, and beautiful quiet, small towns.
Ecuador has a similar retirement visa which also requires income from outside the country of about US$800. If you don’t have proof of a retirement pension, a $25,000 real estate investment or bank CD deposit in Ecuador is sufficient. What makes the country attractive is the great Andean landscape with its mild high-altitude climate, its low cost of living, rich local culture, and easy access to some of South America’s greatest pre-Columbian and colonial monuments. Ecuador uses the U.S. dollar as its official currency, which is a great advantage during a time when the future of the U.S. dollar is uncertain.
There are several other expat websites which discuss issues in detail which you can find on our website in our expatriate websites section, should you seek more specific information in your research, but we strongly urge taking as long a trip through Latin America as possible before making any decisions, as you should also go by your "gut feeling" or the allure for you of a location as well as the facts.
Author's note: This column has an interactive format, and readers are encouraged to submit questions, suggestions, and commentaries, some of which will be addressed in the upcoming issues of the Transitions Abroad Webzine. If you have questions about living abroad that you would like have addressed, you can send them to firstname.lastname@example.org, or ask in our comments section.
Volker Poelzl is a frequent contributor to Transitions Abroad. He has traveled in over thirty countries worldwide and has lived in ten of them for study, research and work.