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A lot has been made about how retiring abroad (Thailand, Panama, Costa Rica, Ecuador etc.) is so much cheaper and can effectively double or triple your nest egg in terms of purchasing power but is this really true? When I look at cost of living in these countries I am not particularly impressed by the inflation stats and how expensive some of these places are compared to what you are getting (i.e. living in a 2nd world country).
Large swaths of the United States offer very cheap housing (for example you can buy a 3bd/2ba nice house in Evans, CO in the outskirts of Denver for $200k! and if you cook your own food, shop for groceries the smart way and spend judiciously on luxuries the cost of living should not be any more than living in one of these so called cheap expat hotspots...
A lot has been made about how retiring abroad (Thailand, Panama, Costa Rica, Ecuador etc.) is so much cheaper and can effectively double or triple your nest egg in terms of purchasing power but is this really true? When I look at cost of living in these countries I am not particularly impressed by the inflation stats and how expensive some of these places are compared to what you are getting (i.e. living in a 2nd world country).
Large swaths of the United States offer very cheap housing (for example you can buy a 3bd/2ba nice house in Evans, CO in the outskirts of Denver for $200k! and if you cook your own food, shop for groceries the smart way and spend judiciously on luxuries the cost of living should not be any more than living in one of these so called cheap expat hotspots...
opinions?
Well, if money is your sole concern, you may well be right. It has been sixteen years since I did the financial tear-and-compare test, and what was the case then is very likely not the case now.
However, "worth it" is not limited to dollars in my mind. And I have met other Americans who relocated outside the U.S. for whom this was not the sole consideration, nor even the primary one.
If a person has other considerations, then you may well have gotten it wrong for at least some of us who have emigrated from the U.S.
I don't think most retired expats are the penny pinchers that they're made out to be. After all, living abroad may carry some financial risks that you aren't exposed to in your home country. These types of people are adventurous for the most part and are looking for a retirement that involves a little more than hitting the senior day buffet special at the local Golden Corral.
You mention the $200K "steal" in BFE Colorado. I can think of several spots in Europe where you can find better deals, not to mention SE Asia and Latin America.
One thing most people overvalue is housing cost as it relates to cost of living...I don't know about you but housing is probably about 15-20% of my overall cost of living. Where you save on inexpensive countries is on services.
In general, housing of similar construction quality is not going to be cheaper abroad because construction materials and the skills to build aren't that different as you go to different countries....so that's going to highly affect the cost of housing although local economy is going to affect that as well.
I just got back from living for 16 months in Arequipa, Peru and I could live there for half or less than where I live in Washington. Housing costs are a bit less but cost of restaurants, groceries, haircuts, taxis, cell service, medical services, and all services are much cheaper and that's where you save.
I could live in Chiang Mai Thailand for less than half what it costs where I live in Washington and Arequipa about half. But you need to factor in the costs to fly home if that's in your plan (it would be in mine).
When I first retired, I moved to Phuket, Thailand. At first I thought the move would be more or less permanent, but family obligations came up and I'm now back in the states. That'll change in about five months, though, and I can once again do whatever I want. Maybe I'll move back overseas, and maybe I won't. I'm still exploring the options.
As for the cost of living overseas vs. living in certain parts of the US that are not expensive?
On paper, a place like Thailand can look cheaper. And in many ways it may well be. But in the end, if you're like me, you'll end up spending all the money you have coming in every month, regardless. I guess the question is: where can you have the best quality of life for XXXX dollars per month? What are your priorities? That can make a big difference.
I like the beach. Just the other day I was looking online at condos on Maui. Expensive. Everything you buy there is also expensive. Phuket would be a better deal if I wanted to live on a tropical island. But different people have different ideas about what would make them happy.
Also, know that property ownership rights will vary, country to country. For example, you can have a 30 year lease on a house in Thailand, but you can't legally own it. Or rather, you can't own the land. To get around this, people contrive complicated ownership strategies. Some day, they may have trouble. However, owning a condo in you name IS possible. In any event, real estate can be somewhat cheaper in Thailand, whether you rent or own.
Food can be very much cheaper, if you're willing to eat the local food. In Thailand, a few dollars will buy you a good meal. Eat the same meal in a US restaurant and the cost will be close to $10.
Transportation can be cheaper. Medical care is definitely less expensive by a large margin. Having your laundry done doesn't cost much. You can buy most medications over the counter. No prescription necessary.
Basically, it's probably more of a matter of where you want to live than a question of money. You'll spend it all no matter where you live. Just my opinion.
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