A Cheap Retirement in Costa Rica
17 August 2006Free the Drones is going to be doing a series on cheaper, overseas locations that Americans and Europeans can consider for retirement. Moving to another country is a serious step - for many retirees, it’s the best one. But it also involves a significant amount of research before you go. These posts will try to give you a start on that research, and point out both the basics to you and where you can go for more information. Today, we’re starting out with one of the more popular locations for American expatriates: Costa Rica.
Costa Rica is a small, peaceful country in Latin America. For those of you with no geography skills, it’s in North America, but just barely - one of the smaller countries that are in between Mexico and South America. It’s popular among U.S. residents for many reasons:
1) Climate. It’s sunny year-round, and doesn’t have much change in temperature seasonally. The main change is that it is either in a wet or dry season. It’s sort of along the lines of Florida and California temperature-wise - it averages 72 degrees Fahrenheit.
2) Affordability. Costa Rica is sort of in the medium-range of other countries - you can certainly spend up a storm there, just like in the U.S. - but many things are cheaper, including housing and hired help. For example, this website has a discussion of the costs from a current expatriate:
The cost of medical care, food, utilities and entertainment are substantially lower than in the states. A phone call to any place in the country costs the same. Housing in most areas is a fraction of what you are accustomed to paying.
We just purchased a new three-bedroom, two-bath home with financing and are paying less than we did for rent here. The cost of our home was about $62,000. We pay $452.00 monthly including insurance and have a 15-year mortgage in dollars. Property taxes are rock-bottom and there is no capital gains tax if you sell your home. Hired help is also inexpensive. A full-time maid may even be hired for for as little as $200 monthly—a luxury reserved for only the wealthy back home.
It’s a good article, and I recommend that you go read it if you’re thinking about moving there. You’re not going to be living on a buck a day or something in Costa Rica. BUT it will cost a lot less than in the U.S., especially if you don’t waste money in tourist traps and expensive bars.
It’s also important to note that the tax burden there is a lot lower - there are sales taxes, municipal services taxes, and property taxes, but overall you’ll be paying a lot less.
3) Safety. It’s still a low-crime country, especially compared to surrounding Latin American countries. Part of this is the attitude - the people are pretty laid back, and the country doesn’t even have a military. BUT - you should be aware that the crime rate is pretty much what you’d expect from a standard U.S. city. In recent years crime has increased somewhat. The State Department has a report on this here. Mainly, the crime consists of scams and car theft, but there have been reports of some violent crimes as well. The verdict:
While common criminal activity is similar to what is found in any large U.S. city, there are criminal activities that are particular to Costa Rica. Criminals frequently prey on tourists through street scams, automated teller machine thefts, robbery of their effects left in rental vehicles and, increasingly, credit card theft, to include number skimming.
In Latin America and South America, political stability is a big concern. Costa Rica is pretty safe on this front. As this site points out, it’s been a stable democracy since 1948, so it’s got a pretty good track record.
4) Other Americans. This is a big plus for the country - many other places don’t have a high expatriate population. You may not think you’ll care - but if you live in another country for awhile, with no one from your own culture there, you can get lonely. Costa Rica is a very popular destination for Americans looking to retire abroad, and in fact has one of the highest per capita rate of American citizens living abroad there. You’ll have other people to make friends with, and there are also American-specific retirement communities there.
5) Health care. The health care system there has a good reputation - and if you become a resident, which is pretty easy, you get much cheaper health care than you would in the U.S., at comparable quality.
6) Transportation. There are many flights back to the U.S. from multiple carriers, and the infrastructure and roads are pretty good overall. This can be very important - if you’ve still got relatives or friends you want to visit in the U.S. especially. You might find yourself needing to come back for some reason, so it’s good to plan on being able to do it.
Those are the main reasons Costa Rica is so popular. We’ll continue exploring the nuts and bolts of retiring there in the days to come.
Discuss this on the Free the Drones Retirement Forums here.
6 Responses to “A Cheap Retirement in Costa Rica”
August 20th, 2006 at 8:10 pm
[...] We’ve recently been taking a look at various practical aspects to retiring abroad in a specific country: Costa Rica. We looked at the general reasons why people decide to retire to Costa Rica. Then we took a look at the first step you should take - researching some books about retiring to Costa Rica. Last, we talked about how you need to go to Costa Rica to attend cheap retirement seminars from local expatriate associations. Now, we’ll discuss another thing you can do while you’re down there: go on a guided retirement planning tour. [...]
August 23rd, 2006 at 5:50 pm
[...] 1) Some general reasons why people retire to Costa Rica. [...]
October 1st, 2006 at 1:15 pm
You have a very good website here, thanks for taking time to publish it. After some six years in Costa Raca do you still fell the same??????
October 1st, 2006 at 1:37 pm
Hey Gordon,
I’ve personally never been to Costa Rica, this is all stuff I researched on the web considering whether it would be a good idea to take the expatriate option for retirement. You might be thinking of one of other web sites linked from here (they’re all by other people, many of whom haved lived there for quite awhile).
October 11th, 2006 at 3:24 pm
[...] It’s been awhile since the series on retiring to Costa Rica, so I figured I’d get started with a slightly different option in another part of the world: Thailand. It’s another expatriate destination that is generally more popular with British Commonwealth citizens than Americans because of historical colonial presence in the region (although Thailand itself was never colonized, nearby countries were). There aren’t as many Americans heading out there for several reasons. [...]
January 23rd, 2008 at 8:27 am
I have been reading about all the great reasons why retirees should relocate to Costa Rica. I will be visiting Costa Rica in May 2008. But my research indicates that 40% of retirees have difficulty adjusting and return to the U.S. within two years. What are the reasons to dislike Costa Rica, or not adjust?? Thanks for the info.