Retire in Costa Rica

People choose to retire outside of their native country for a variety of reasons. Some people choose to retire abroad in order to bask in a preferred climate. Some people crave a shift in their pace of life, and some retire abroad for a change of scenery-be it the mountains or a beach. For a large number of retirees, the primary consideration for retiring abroad is their finances.

The reality of rising inflation and a falling income come retirement age encourages a search for affordable living, beyond borders, in retirement.

Over the last 45 years, inflation in the U.S. has averaged about 4.5% annually. If you currently earn $50,000.00 per year, you will need to earn $52,250.00 next year ($50,000.00 x 4.5) and so forth in order to maintain your present standard of living and stay even with inflation. In the same vein, if your investment returns an average of 8% you can reasonably expect inflation to eat away about 3% to 4%, based on historical figures. At 4% inflation you will lose half of your purchasing power in 18 years. Certainly no one can predict the future and inflation could in fact decrease and inflate investments. However, with the events of 2008 and 2009 most American retirees are not counting on inflation decreasing to secure their future.

International living has revealed itself as a viable option for retirees. According to the Social Security Administration, in 2002, 242,128 American retirees had their Social Security benefits sent outside of the U.S.

Costa Rica sports between 30,000 and 40,000 Americans, approx. 1% of the total population, according to the U.S. embassy there. Costa Rica has lured American and European retirees with its beauty, affordability, and stable government. One reason being that so many retired Americans have chosen Costa Rica is that Costa Rica is a tax haven for retirees. Americans living in Costa Rica do not have to pay income taxes on social security received from the U.S. government.

Countless testimonials from Americans now living in Costa Rica claim their social security check affords them luxuries that it wouldn't afford at home in the states. In Costa Rica, dining out will set you back $10, beach front real estate can be a fraction of what it costs in the U.S., and an orange will cost you seven cents. Additionally, testimonials by American retirees describe a more peaceful day to day life in Costa Rica-one void of crime and stress.

According to the U.S. Census Bureau, by 2010, nearly 40 million Americans will be 65 or older. By the year 2030, that number will jump to nearly 76 million. One can be certain that as inflation continues to rise, a percentage of people will be looking to retire outside of the U.S.

Retiring to Costa Rica is becoming ever more popular, and it’s not hard to understand why. With a lifestyle generally cheaper to afford than the equivalent in Canada, the United State or Europe and rental properties going from between three hundred to six hundred dollars in rural and urban areas, even the less financially affluent can look to Costa Rica as an attractive prospect to while away their twilight years.

It has one of the highest standards of living in Latin America, is the oldest and most stable democratic government in the region and has one of the longest life-expectancy rates in the world, as well as a low violent crime rate, and numerous outdoor activities to undertake in the glorious tropical climate.

Just a few hours away from the southern states of the US, with flights cheap and frequent, it offers the advantages of a high standard of living with the comfort of being close to home for Americans, as well as much the same infrastructure to which they have become accustomed – communications (internet, surface mail, land and cell phones), entertainment (including two quality British newspapers and cable television with both US and British television channels, together with English language books and movies), shopping and so on.

Add to this the natural beaches, rolling hills, rainforest and stunning wildlife of the region, makes the attraction obvious for many retirees.

But what can retirees (particularly expatriate retirees) expect from their retirement in Costa Rica, especially in reference to topics such as cost of living, medical expenses and the like?

COST OF LIVING

As stated, rental properties in Costa Rica can be found between three hundred to six hundred dollars, although this on the lower end of the market. Retirees who are somewhat more affluent (and don’t mind showing it) have plenty to choose from as well, with luxuriant three bedroom homes near San Jose starting at over fifteen hundred dollars per month.

Food costs vary, particularly in the noticeable difference between local and imported food. Buying local products could cost as little as twenty to forty dollars a week to feed a whole family, but buying imported goods from the higher end of the market could cost over two hundred.

This dichotomy is the same in other areas, but while some things may seem disproportionately expensive in comparison to western countries, it is balanced out by the fact that some other while seem disproportionately cheaper. For example, buying a new car could cost almost twice as much as it would at home – yet employing a housekeeper could cost you as little as two dollars per hour. Gas and diesel usually cost considerably more – but entertainment costs (for example, trips to concerts, fairs and museums) are often noticeably cheaper.

There is also the distinct advantage that retiring to Costa Rica means no tax on your social security.

MEDICAL EXPENSES

Medical expenses in Costa Rica are low, but the quality of the medical services is second to none. There are currently three options for Costa Rican citizens – subscribing to the Costa Rica Social Security (CCSS), private insurance through the INS (National Insurance Institute) or a mixture of the two. Taking the private option costs between fifty to a hundred dollars per month, per person. The social security option will cost around the same but for a whole family (two adults, and two minors). This option also includes, for those who subscribe under the age of fifty five, a mandatory pension payment commencing once the subscriber turns sixty five.

Private clinics, doctors, laboratories and specialists are all easily accessible, and competitively priced against the U.S., as well as dentists and periodontists. There are even cosmetic surgeons for the vainer expatriates! The majority of doctors are board certified in the U.S. and have either practiced or studied in the U.S. or Europe.

WEATHER

Pleasant and mild is the best description of the climate in Costa Rica, with no extreme seasonal changes (particularly when compared to other countries sharing the same latitude). There is a maximum temperature of ninety two degrees Fahrenheit (or thirty three degrees centigrade) at the height of summer. The wet season generally lasts from May to November, the dry season from December to April.

Temperatures can vary between differing regions – the Intermontane Central Valley (where San Jose is located) has an average temperature of sixty eight degrees Fahrenheit and can be considered ‘dry’, in comparison to the Caribbean Slope which has an average temperature around seventy eight degrees Fahrenheit and is most definitely regarded as ‘humid’. The northern area of the Pacific Coast, meanwhile, is totally dry for six months of the year. Higher mountain areas, such as Cerro Chirripo (Costa Rica’s highest peak) are much colder, sometimes reaching below freezing at nighttime. Snow is unheard of in Costa Rica, while rainfall usually occurs in the late evening or at night.

HOUSING COSTS

Houses can be bought at an up to seventy percent cheaper rate than their equivalent in the United States, and property tax is likewise generally lower. Small but still respectable homes can be purchased for as little as forty five to ninety dollars per square foot. Expatriates retain the same land and property rates as Costa Rica residents.

MAKING THE MOVE

If you are considering retiring to Costa Rica, it’s smart to be prepared and perhaps get a taste of what your life would be like there before you make the big move. A stay – even a lengthy one – as a tourist would give you some idea of day to day life in Costa Rica and the cultural differences, as well as giving you the opportunity to explore all the different micro-climates to choose which would suit you the most. A tourist visa would allow you to stay for up to three months, and your own country’s driving license will be valid there as long as you have a passport as well. If such a lengthy holiday is out of the question, it is recommended that you move to Costa Rica for a six month trial period before making the transition completely permanent.

INFRASTRUCTURE

Costa Rica has a growing and progressive infrastructure, with an outstanding bus and taxi system and two modern international airports, one in Liberia and the other in the main capital city of San Jose. There are also many smaller landing strips throughout the country. While the smaller country roads may not always in the best of conditions, most the country’s main highways are modern and well-maintained compared to other Central American country's.

If you have traveled in Costa Rica then you know how captivating the beaches, jungles, and mountains can be. The beauty of Costa Rica along with the warmth of the Ticos and the affordability of a day to day life encourage retirees to research what Costa Rica offers. It is not uncommon for retirees to look towards their favorite vacation spots as a possible place to call home.

If you have never traveled in Costa Rica, I suggest you enrich your life and take a trip to the paradise many now call home.

Resources for more retirement in Costa Rica information

Abigail Durden is a writer with over 20 years of experience traveling, writing and living abroad. Her newest book, Live and Retire in Costa Rica is an informative guide that explains how easy it is to make the move to live in Costa Rica. Please visit the following link for additional information: Free Costa Rica Tips

Scott Oliver, the author of How To Buy Costa Rica Real Estate Without Losing Your Camisa and his extensive research and countrywide connections will help inform and protect you by giving you the facts about Costa Rica condos, trustworthy Realtors, mortgages, real estate developments and expert and objective information about living and retiring in Costa Rica.