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I hear Costa Rica has nice American style communities. I also hear your social security and pension would go much further. Would you be able to retain Medicare and return for more critical matters? Obviously if you can afford to plan for this you would not be a Medicaid candidate. Would love to hear first hand experience.

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You can continue to receive your Social Security, but your Medicare will not be of value outside of the U.S.: If you wish to have Medicare available for you upon visits back to the U.S., you will need to continue to pay the monthly premiums even if you now live outside the U.S.
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Having traveled around a lot, I can say that the first thing you want to find out is what level of medical care they have available. If you aren't bilingual, you want to make sure you can talk to doctors and nurses. A third world paradise can become a living h*ll if you get seriously injured or sick! Been there, done that.
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I lived in Mexico for a few years & just let go of my place down there, just 3 years ago.
One thing I learned from living there was never to invest any more money then you could afford to loose.
I found it to be of great wisdom. This is my experience.
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My husband just had knee replacement surgery in Costa Rica and I can tell you that it was a wonderful experience. Of course, being in America we went through a medical assistance organization. They have government subsidized and private health care. We were in a private hospital (Clinica Biblica) that rivals ANY American hospital and the surgery was a fraction of what we would pay here, $12,000 as opposed to $53,000! The surgery and the care were excellent. I've never met a doctor that enjoyed his work like this one did. But we were told by expats there that the place to retire was Panama!
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If you live in a foreign country you still have to file a U.S. tax return. If you have income from the U.S., you pay U.S. taxes on that income. If you live in a foreign country like Mexico that has a tax treaty with the U.S., and earn money in that country, you pay taxes on that money to the foreign government. But up to a fairly generous cap the amount earned abroad is not taxable in the U.S. That is, you don't pay taxes twice on the same money. But you do have to pay it once, in whichever country the money comes from.
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Keep in mind that if you keep your US citizenship, you'll have to fill out US income tax every year, otherwise you can be greatly penalized... Anyone else have information on taxation outside of the US?
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PS. Although Medicare isn't accepted abroad, in many countries, you can buy good medical insurance at a fraction of the U.S. cost. I don't know what current rates are, but I had private insurance coverage in Mexico for almost anything that could happen for under $1,000 a year. And I had great doctors and hospital facilities (in Mexico City).
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We are moving outside of the US probably in 4 years as DH retires in 3 and kid well into college by then. We are in the planning phase right now. I favor Uruguay (stable, well-educated & youngish & we fly in/out of BA) and hubby prefers Spain (great deals easy to fly into then train plus EU access). We looked at Barranquilla /Cartegena (everybody's Canadian!) and Ecuador (no way). Mexico coastal very developed & so very $$$ and although the current rules have changed for ownership but still is somewhat limiting which is a concern. There are well established existing ex-pat communities in Mexico - San Miguel dA & Cuenavaca have 2nd/3rd home foreigners & ex-pat Americans (you can rent houses too so you can see if those cities can work for your lifestyle) - both are great. If you have health concerns, Guadalajara has topnotch hospitals and a huge teaching hospital that is a feeder school for foreign medical grads into the US. Out of Houston or San Antonio you can pretty well fly early in the morning and be at your home in Mexico that night. There is a huge community of Mexican nationals who do this and have homes in both Houston & SA to do the reverse of this too!

For UR or SP, it looks like about 40-55K yr and that includes buying into a national or hospital health care system which do everything that a US hospital does but for about 70% less. Both countries view SS as income that is acceptable for granting a residency visa (all the countries seem to be tightening up on doing this as they just will not take in any that cannot support their living in their county). You have to be able to show guaranteed income to get your residency card. If you want to be a dual, then you need to have enough funds to do a passport buy-in if the country has this type of program. If your serious about this, becoming a dual is the way to go imho. A lot of folks in Costa Rica did that back the past couple of decades as it was cheap to do and that is why the huge ex-pat community there now (lots of US and also lots of Colombian's). Panama has a dual buy-in. For me what is happening in Panama is just too high-rise dense development which is not what we want. There is a magazine, International Living, that covers moving out of US, although they seem pimp Ecuador & Panama a lot so keep that in mind.

I think the big issue is what the end plan is:
- moving and NOT planning on ever returning to the US. You need to have a US address that is stable for all your US mail to go to and that will DHL or FedEX your mail to you. If you have family who can do this, then great. Otherwise you need to have an attorney who does this for you or a service who does this forever for you. You want to have this well established in advance too.
- go back & forth so you keep a home in the US. You have to look into the costs to see if this is really feasible. You may have to downsize (sell the house, get a small condo or apt) to make this work.
- you want to well in advance do banking with a group that has a presence in the country you move to. Citibank, BoA, HSBC are in a lot of countries besides the US. Get your credit cards changed to chip&pin too.

About the taxation ?, it depends on the country whether your retirement is viewed as taxable income by the host country. Most view SS as non-taxable. Also countries do not want you working either, retiring and spending is ok, but working is not allowed. If you have enough $$ to come in an start a biz that employs that is OK but going an working under the table like teaching English can be a serious problem if found out as you signed off on your residency card that would not happen. Good luck, it's good to be adventurous in retirement.
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I am planning on retiring to HI once Dad does not need me anymore. Kaiser Medicare gets good rating there. BUT you need to keep in mind that everything costs more there, there is less to do movie etc wise, getting stuff is time consuming and has extra shipping, you are separated from your friends by an airplane flight (time and money), Specialty food items might be less common (sugar free, etc). Culturally there can be resentments, beginning with buying affordable housing out from under locals who earn less. Be sure to visit for an extended time, rent a place for a year, before you move away. In most locations, the local folks are living a very different lifestyle than the one you see being sold for$500,ooo-5,000,000!
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Just a little comment to ferris1, Costa Rica is not a US territory...maybe you are confusing it with Puerto Rico...which is a Commonwealth of the USA
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