Why retire in Latin America

There is an article in the Christian Science Monitor titled Why US baby boomers are retiring in Latin America that is rather good. If you already moved and are happy with your decision, you probably don't need to read it. On the other hand, if you need a bit of a kick in the rear or need something to explain to your friends back home why you moved, it is a pretty decent starting point.

Rather than the typical piece written by someone with something to sell, the article has multiple authors who at least don't appear to be trying to sell you anything. (The exception are some quotes from those who would like to sell you something but they are only about the idea of moving.) It covers both the up-side and the down-side of various locations.

Retiring outside the US certainly isn't everyone's idea of utopia. One of the biggest obstacles is a simple one: managing expectations. Some people think living in Ecuador, Panama, or Mexico will be the same as living in the US, only cheaper. It isn't.

As Zach notes, many countries in the region operate at a different rhythm. A less-frenetic pace can be good for retirees. But it can also mean slower service at a restaurant, notorious bureaucratic delays in getting land titles or driver's licenses, and scheduled dates with plumbers or carpenters that never happen.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

This was what I saw on the exaggerated Mexican figures

I understand that the numbers for Mexico are exaggerated

Can't find the site quickly so don't know what's accurate.

My guess is that most of the really poor won't leave their communities and families because that's their informal safety net. And the really rich can buy spreads in the San Ynez Valley next to Michael Jackson So there's a middle range -- the people who have some money (minimum resettling costs for here as a renter who doesn't drag a lot of crap here are circa $6 to $10K; most of the highers rollers here probably have less than a million).

Many people go back home to retire. I'd be curious as to what percentage of the US Social Security checks were going to people who were born in the US. I suspect Mexico's American retirees have a large number of US citizens who were born in Mexico. Probably more people go back home to retire after working in places with better jobs than retire to somewhere strange.

I spent some time on Encuentrad24, and can find a house that looks passable in any city in Nicaragua for under $40K, often in the 20K to 30K range. That includes Granada, Leon, and Managua. The Granada hustlers tell the newbies that the only place to buy is Granada, that there are serious problems with buying any place else, and that the average house price is $200K.

Roatan is a English-speaking/Creole-speaking part of Honduras, though 70% of the land is owned by non-Islanders. My friend who has land there is going to be looking at Bluefields since she's heard it has fewer retired Americans and is predominantly Creole-speaking.

As for the woman who couldn't live on her pension in Honduras -- yow. Either Honduras is much more expensive than Nicaragua, or the woman wanted to live beyond her means (nobody with a sub-$1K pension and no other income can really afford to hire full-time help). B., She was not a legal resident or was grandfathered in since my understanding is that Honduras requires $1,500 a month as minimum income for pensionado visa at this time.

My experience here is that whatever the minimum required money is for any given country, that's probably what it takes to be lower-middle class in that country. After renting for a year or more, buy or rent a lower middle class house in a safe enough neighborhood (often working class or lower middle class neighborhoods are safer because the neighbors watch each others backs and beat the crap out of any thieves they catch). If you can't pay cash, rent.

http://mexfiles.net/2013/05/10/and-all-they-will-call-you-will-be-retire... Good article on what can be problems with retirees.

Rebecca Brown

More data points

Costa Rica is, I believe, $1000 (used to be $600), Guatemala is $1000. I wonder what it is for the US. :-)

Looks like that's a no at any price other than $1 mil investment

The figure for retiring to the UK is a net income after overseas and United Kingdom taxes of at least GBP25,000 per annum. Don't know what the tax rate would be and what the gross minimum would need to be. That's an after tax income of US $41K- ish, so gross annual would be over $60,000.

Rebecca Brown

Honduras, yes it is $1,500 for a Pensionado

A Rentista is $2,500 a month (from a source outside of Honduras e.g. bonds, rents, deposits, etc.)

Inversionista is a Minimum $50,000

Honduras / Guatemala

Guatemala uses the same standard for both Pensionista and Rentista, $1000. The Honduras numbers are as correct as they are crazy.. There is little reason for any C.A. country to have a pensionista standard higher than say 75-100% of the average U.S. Social Security Check ($2500 is more than my 3 school teacher Honduran neighbors and their police, nurse, and lawyer spouses make, combined!). If you want to attract people, you need a reasonable amount. The Honduran amounts are so high, the number of retirees going on these plans has plummeted. There was a time not that long ago when the rentista amount was less than the average U.S. SS check.

OK But

The rentista monies are not as assured as a state pension is.

Do you think with a $1,500 pension start point, they are trying to ensure that you have enough money to live away/out of trouble?

I see so many gringos down here living on fresh air and hiding for the last 4 days of the month. $600 is too low for them and they can be a nuisance. Do you think Honduras is onto that?

They're paying a premium of around $100 a month more

…to live in San Juan del Sur comparing your rent to two bedroom house rents here. Also, if people have expensive habits, that's a factor. Or if they want to live in a "really nice house" (my brother the reverse mortgage counselor gets lots of people who put too much money in the retirement house and who can't afford to keep up with the taxes and insurance).

The other issue, which I think Nicaragua is going to have to deal with eventually, is the health care load. I think we should pay a buy in to INSS and then pay something monthly, but that would probably mean more perpetual tourists. Same issue in Mexico -- and the pensioner minimum income is pegged at 400 times the minimum wage (http://mexfiles.net/2013/05/10/and-all-they-will-call-you-will-be-retire...) as of 2013. This is now $2500 a month. Mexico is more expensive than here, but obviously some people live on far less than the minimum they're requiring of expat retirees now.

I think people can deal with life here on $600 a month if they're frugal, in reasonably good health, had enough money to set up coming in, and don't drink, smoke, or hire sex partners, or live in an area with lots of other gringos. I like having the $92 more, and will like having a bit more (either through investments, or investments and buying a house) once my father's estate settles. Rent should be under $200 for anyone on $600 a month, preferably under $100. This probably rules out Granada other than perhaps a rented room, San Juan del Sur, and maybe Managua (guy who was at the Sollentuna Hem said his house was $200 US a month in a safe part of Managua near the US Embassy). At $600 a month, people shouldn't be eating out more than occasionally, should not be drinking more than occasionally, and should have come down with enough to completely set up housekeeping here ($6K minimum for renters).

Some people came here when the minimum was $400 but didn't regularize their relationship with the Nicaraguan government then, and so can't now. People who did get residency then are grandfathered in if I understand correctly.

Rebecca Brown

the cost of ``free`` medical care

here is limited to the ability of the facility. You can`t bankrupt the free hospital if they don`t have the means to treat you!

I saw how the triage works here with my mother-in-laws illness and death. They will treat you as best they can. When they realize you will be hospitalized more or less for life or that you need surgeries they cannot provide and there is no nursing home to send you to, they pump you full of antibiotics and vitamins, give you a transfusion, and then you have a good day in which they send you home ``because you are too healthy to be in the hospital``. By the time you get readmitted the next day, it`s all over but the funeral.

It probably would be good if foreigners could buy into the INSS side of the regional hospital

``Socialism works fine until you run out of other peoples` money``

Margaret Thatcher

on the inss..it would be nice..

i havent used the free system down here..but never really had anything serious..catarac..prostrate..paid out of pocket..on being sent home to die fast..fine with me..

Maybe

Yes, not that hard to find those in that desperate wait for the next check, here too. But, they aren't just the $600 monthly people as countless people are like that the end of each month, regardless of of that check they await is $600 or $1600 (many drink or gamble or drug or hooker it away, regardless of size). To be honest, thinking logically isn't always the best way to approach life (or laws) in Honduras. I don't know that the minimum increases came due to any assessment on the moral quality or financial planning skills of the average $700 monthly rentista. Per high profile (criminal) problems, they usually seem to be focused on very rich or very poor foreigners. I suspect lawyers were behind the increase, only because the already way overpriced fees residencia and rentista and such fees went way up when the monthly minimums went way up. I am sure Nicaragua is somewhat similar: for every weird, wild, wacky, well-known (for all the wrong reasons) foreigner on a small pension there are countless others who are closer to invisible, but because they do not attract attention they are often not counted in any overall assessment. Then again, different people have different perceptions per the minimum $ needed to live in Honduras. I saw a blog from this summer where 3-4 people flatly stated you needed 150% of the average SS check, $1600-1800 monthly, "just to live here". I am not sure where they live or what they do, but I am reasonably sure they have never been in a middle class neighborhood, not even on a visit. Even in quickly overpricing Honduras, this is a hell of a lot of money, really - if you are talking about a single person, and they were.

I think one of the fantasies is being rich here

….and having staff and a very nice house. Basically, if that's the plan, then, yeah, it's pricier, especially if the Central American residence is going to be the base for international travel. $2K a month in the DC suburbs wouldn't buy much.

The friend who came down to Nicaragua with me in May 2010 has a son who thinks she should retire in another country (she's still working beyond 65). I said if she's got her house paid off, and her SS is over $1500 a month, I don't think there's a huge advantage to doing it. One real savings is in not having to heat or A/C. She has a rental unit in her house that covers those costs for her. The other is lower housing costs, but anyone with a paid for mortgage free house should really think about what they'd be gaining by moving. Electronics and Internet/cell phone costs are pretty close or higher Food is somewhat cheaper, but that varies.

Rebecca Brown

I,ve always assumed

that the low income thresholds, like Nic`s pitiful $600 a month, were for the benefit of Nicaraguans who worked abroad and one way or another are coming back with small proveable pensions. First world foreigners would need much more money, whether from the documentable pension or other sources.

One of the traps here is to assume that somebody who is happy on a thousand a month as a mochilero is going to thrive here permanently on the same amount of money.

``Socialism works fine until you run out of other peoples` money``

Margaret Thatcher

How much does it cost to live in...

I suspect this website is already listed on Nicaliving elsewhere, but it is a good example of someone and friend doing more or less what they want when they want, and it isn’t THAT expensive: In Nica Now - Living & Loving Life in Nicaragua / One Month’s Living Expenses: Granada, Nicaragua. Depends, of course, what your “wants” are. And, this is for two people ($700 each), and is not that much over the standard SS check even when combined - even though that is not how they are funded, obviously. But, this is done in likely the most expensive place in the country, in a new building, with far above norm amenities, includes internet, restaurants, house wares, etc. If you have been there or elsewhere in the country, you know how much could be saved on the rental angle. Depending where you were, you may opt out of vehicle ownership. Problems (and costs) arise when you want to live like you do, or a lot like you do, in the U.S., Canada, wherever - only in C.A. They have less elaborate pricing for where they were in Leon & San Juan del Sur, too: Making the Moves - One Months Living Expenses, 3 places . See also the right-side links on 1-month living expenses around C.A., here: Monday (or something) - One Month, One Town ... more Info Than You Care About! (there is a kindle item too, but the links give snapshots of some well known locales).

Getting rid of car and A/C make a huge difference anywhere

Gas here is $6 a gallon; cabs are 10 Cords a trip. I generally walk everywhere except to the grocery store -- so my transportation costs in an average week are C$20, less than a dollar US, so roughly US $4 a month.

$6K over three years is $2,000 a year beyond the SS basic, so I've had $166 a month average over the last three years beyond the SS. That's what paid for the furniture, the washing machine, phones, residency, etc. I don't need anything further, though there are some things I want.

Rebecca Brown

The Car Is

surprisingly inexpensive EXCEPT for the combustible. Gas is my biggest single monthly expense.

As far as the import goes, if you choose the right vehicle, it's not that expensive, and if you successfully apply for residency you can bring a vehicle in tax free. One consideration when choosing vehicle or no is, you WILL need a gated, secure space to store the vehicle overnight. So the house you find will have to have a locked space for the vehicle.

Get in touch with me if you want me to drive it down. I'm doing one in about ten days, and another in March 2014. Someone who's name is on the title will have to ride with me; I'll deliver your vehicle to the Nicaragua border point where you can do the import paperwork in exchange for the vehicle cargo space. PM me if you are interested; PM me if YOU are doing it, I have some very relevant suggestions and a pretty firm handle on the cost.

Your private vehicle opens endless doors to out of the way places, AND the rest of CA, gives you a secure place to store your luggage while traveling, and puts you on your own schedule. True, buses go almost everywhere, but they go hot, dirty, germ-laden,, and NOT on your schedule. You arrive at your destination needing a bath, and exhausted. True,, gas is expensive, but no more so than Canada or Europe . . ..I think it's still a fair trade-off.

In my particular case, I'm going to try to limit my gas cost by hiring a "shopper" to make the numerous trips I make to Estelí for construction and hardware items, but by bus. We have a hardware store that ships to us by bus; describing my needs is often beyond my current vocabulary but that will change. I've already begun to use more of the local hardware stores for common items, all of them are re-supplied form Estelí on a daily basis,, but if you need a pipe wrench, you have to know the Nicaragua word is "stilson". And, that's true for just about everything.

AC and the desire for it will depend on where you settle. I would think it is difficult to do without some AC in Granada and Leon. In Jinotega, Matagalpa, you don't need it; Estelí and Condega, some days (and nights) it would be nice. A lot of other things can mitigate the heat: $200 spent on elastomeric paint for your zin roof will drop the inside temp ten degrees, and minimize the time when the house is unpleasantly hot.

Food in Nicaragua remains a bargain (not so in CR). I'm not happy with the quality and freshness I find in Condega, but I've been in other towns and other markets, and the fruits and vegetables are much nicer. This will be my first year with a big garden and some livestock. There is very much a horse and cart situation with all of this: I needed a reliable caretaker, electricity and pressurized water, -- on the farm before I could plant the garden I wanted, and raise the animals I was interested in.

I hope to do better with the beef, particularly. Good Nicaraguan beef exists, but is very hard to find. I bought a ice chest sized refrigerator / freezer that plugs into a car accessory receptacle and am bringing it down this trip (thank you, Rebecca, your link, you suggestion). This will extend my range somewhat in sourcing meat and vegetables.

What you DO here would IMHO drive your expenses more than basic living costs. I could easily live in Condega, and live well, on $600 /mo. My rent is $190 /mo for a very large house with a large courtyard, and gated parking. Pictures of the house and courtyard are on NicaLiving. The property is very secure. My electric bill is $60 (last month) and I am not particularly careful. Water is $4. Trash is something like $4 year. Home phone, internet, and unlimited cell run another $65. If I were living alone, I can't imagine spending more than $100 /mo on food if I were to go Nica: rice, beans, some chicken, milk, juice, home made bread, eggs. Do Nuts from PriceMart are only $4; it's the getting there that hurts.

Plan on some upfront investment in your house. Paint, plumbing and electrical repairs, and a good cleaning. Pest mitigation. Screens. Appliances and furniture.

great post

i'll ask for your help

"Maybe, just once, someone will call me 'sir' without adding, 'you're making a scene." -Homer J. Simpson

yep..on a car or truck..

wouldnt live down here with out 1..my place in mga..no air conditioning..

Does not compute

A Nicaraguan doesn't need a pension, or anything, in order to live in Nicaragua. They have Citizenship -- they don't need to prove anything other than they are Nicaraguans.

I don't know a lot of mochilleros with $1000/mo of income. But, I also don't know a lot of Nicaraguans with $1000/mo of income. While I am sure the mean income in Nicaragua is relatively high (that is, over $1000/mo), I would expect the mode income (that is, the income of the person where 50% of the population makes less) is much lower than $1000/mo and I would guess lower than $500/mo.

Most of the $1000 a month families seem to have two incomes

The real problem with gringos is that too many of them come here expecting to have staff and a really nice house. That will take more than $1K a month.

Sounds like the woman in Honduras stuck herself in that trap.

Check the CIA World Fact book for more realistic figures on Nicaraguan's economy.

Rebecca Brown

"countless others who are closer to invisible"

Smile...

Yes, yer Sid & Doris who have lived out in campo for as long as I have been here, I see them in a truck maybe twice a year. "They keep themselves to themselves" as Mom would say.

Prices On Encuentra24

often don't reflect the reality of the market, especially if the seller is aiming his property at a foreign buyer.

That said, it's one of the better places to look for Nicaraguan property.

Use rent average with 20% increases every three year.

Multiply that by 10 years and that's as good a starting point as I could come up with. Anything over rent average per annum multiplied by 20 is nuts anywhere unless the neighborhood is fabulous and the house has gold fixtures. $100 x 12 x 10 = $12,000 for instance.

The owners seem to go by the rent per year average times 20 or 25 when setting the asking price around here if it's not a "let's see what we can con the gringos out of" price.

Rebecca Brown