The Ultimate in Travel: Retiring Abroad
Tami Fincher dives into projects head first. Two years into a 5-year plan to retire early in Central America, her short list – so far – is Boca Chica and El Valle de Antón, in Panama, and Guanacaste Province, in northern Costa Rica.
She and husband Stephen Fincher are making their plans to join the growing number of Americans-turned-expatriate retirees. In 2016, more than 603,200 Social Security checks were mailed to retirees, their spouses and widows living abroad. They are moving as much for the adventure as for the lower cost many countries offer.
An exotic retirement isn’t for everyone. Even if they could save on living costs, people who’ve never been keen on international travel might prefer to remain close to home and grandchildren. But the baby boomer wave is pushing up the number of U.S. retirees living abroad – by 11 percent in five years, according to the U.S. Social Security Administration, which tracks its pension checks sent overseas. Ex-pat’s favorite countries include Japan, Mexico, France, Thailand, and Colombia. (More are listed on the next page.)
To assess the pros and cons of Costa Rica vs. Panama, the Finchers made their first exploratory trips, to Costa Rica last June for their 20th anniversary and to Panama over the New Year’s holiday. If Tami, age 53, has her way, they’ll retire in about three years and sell their Houston home to relocate.
Steve, 57, would like to work at least one year after that. He’s a dog person, so much so that he got a job 13 years ago selling invisible electronic fences to keep dogs from wandering away from home. He feels this is important work and wants to keep doing it.
But both agree on this: it would be fun to get away. Tami’s employer, an international oil company, once stationed her in Paris for a year. She also has worked for short periods in Belgium, Venezuela, Singapore and Bolivia. As a world traveler, she knows it is essential to carefully plan such a dramatic change. “I read about people changing their minds after they move, because they didn’t plan.”
But it’s okay, too, if they move to Panama or Costa Rica and things don’t work out. They’ll try another country – why not Ecuador? Once they leave the United States, “we’re going to be gone,” Steve said, as will their Labradoodle, Labrador-Pit Bull mix, and Black-mouth curs.
While money is not their sole motivation, a much lower cost of living abroad will facilitate their early retirement. Experts generally encourage baby boomers to work as long as possible to put themselves in the best financial position in retirement.
Aware of the risk, the couple wisely consulted a financial adviser extensively to make a sound plan. “If something catastrophic happens, I believe we can learn to live without,” Tami explained. “Some of the happiest people live with much less!”
She has a traditional pension, and together they’ve saved “more than the average American” in their 401(k)s and IRAs, she said. “We didn’t have kids or college or cars to buy.” They’re being smart about Social Security and will delay filing for their benefits until they’re at least 68. Claiming benefits at 70, rather than 62, increases the size of monthly Social Security checks by 75 percent.
On the other side of the money equation is Central America’s low living costs, particularly for medical care. As International Living Magazine explains about Panama, “you can find the best of care at a fraction of what you’ll pay back in the U.S. Your doctors will often speak English, and they are far easier to access than back home, too.”
Tami’s research indicates they can buy health insurance for $80 a month in Costa Rica. In Panama, paying for medical care out-of-pocket would be cheaper than, for example, staying in Texas and signing up for post-employment COBRA health benefits for the 18 months allowed under federal laws.
The Fincher’s bottom line: lower expenses mean more fun. Steve expects to “drastically” cut their spending by relocating, without sacrificing a comfortable lifestyle. He likes to fish and belongs to a shooting club, activities he’ll continue overseas. Tami enjoys off-road cycling, and they both hike and want to “hop around to Ecuador or Columbia or Peru,” she said.
(Tami made a video of their Panama trip on YouTube.)
Steve does worry about getting bored in such small towns, after 18 years in Houston. While they are planning to stay abroad for the long term, they’ve agreed to come back together if either doesn’t like living overseas.
On their trip to Panama, they learned that the fishing village of Boca Chica is “nature’s haven. Beautiful, water, the scenery, the green,” Tami said. El Valle, nestled in the mountains, is cool though not cold. It’s also a larger town with amenities like coffee and bicycle shops and a two-hour drive to Panama City.
Panama is “completely different” from Costa Rica, she said. Whatever country they choose the Finchers view living abroad as their own version of paradise.
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