Smart Planning for Retirement in Costa Rica
Retirement in Costa Rica can be a thrilling new chapter; however, it can also be a bit overwhelming. Here are five things to consider as you prepare for your retirement in Latin America:
Pension, Social Security, and other financial concerns
You will probably open a new bank account in Costa Rica but it may not be necessary to transfer all of your money down south. You can keep your accounts in the States and continues to receive your pension payments, social security checks and other sources of income in those accounts.
ATM withdrawals can be expensive at $3 on the ATM end in Costa Rica and $3 to $5 per transaction from your bank, but they are available in a pinch; with a little bit of planning ahead, you can write checks from yoru US bank and deposit them into your Costa Rica bank. You will only need to wait 10 to 30 days to clear, depending on your bank. Wire transfer is also another option and some banks like Scotia Bank and HSBC have branches in the US and in Latin America.
Depending on your status as a US Citizen, dual citizen, main beneficiary, dependent or otherwise, you may be able to receive your social security benefits in Costa Rica, possibly through direct deposit to your account. You can read more about the regulations from the US Social Security Administration.
Medical care and medical insurance
Retiring in Costa Rica often makes financial sense simply because of the lower cost of medical care costs that is available in Costa Rica,
Since Medicare will not cover your medical insurance needs abroad, many retirees opt to purchase international insurance policies. Costa Rica has excellent medical care and also offers the option of socialized medicine through the caja.
What to do with the house in the States
Should you opt to sell your home in the States you will likely find that you can purchase a home that is equal to the one you left behind or better for less than your selling prices back home. In Costa Rica, non-citizens can own property, which is not always the case in other countries.
Some retirees however, choose to keep their house in the states and take advantage of the rental cash flow income it can provide.
Something to remember, though, is that you will need a property management company or someone you trust to help manage your property and receive rent payments for you; also, your rental income will be considered income, thus creating tax considerations that you may not have had previously. Talk to your financial adviser to see where income from your rental property would leave you standing.
Shipping your things
A good international moving firm can help you calculate an approximation of your shipping costs of shipping your belongings.
Once in Costa Rica you will be liable for import taxes based on the items you ship over. Costa Rica grants a $500 allowance per family member every six months.
In some cases, you may find it is cheaper to sell your furnishings and appliances in the US and buy new ones on Costa Rica.
Bringing cars into the country can be very expensive depending on the age of your car as well as the model and make. You may want to do some research before shipping your car down to determine whether or not its worth it.
One of the best things about retirement in Costa Rica is that it is so close to the States that it makes visiting family back home easy and affordable.
With a number of direct flights from many major cities flights can be as little as five hours or as much as 8 with a layover and tickets can be found at great rates year round.
In addition to that close proximity, technology allows us to stay in touch easily by using voice over Internet solutions that often include video calling. Finally, free texting is easy too for those quick hellos when you just feel like saying hi.
With some planning ahead, retirement in Costa Rica can be a wonderful new chapter, as well as allow for an affordable lifestyle in your golden years.