Living abroad for a few years in the cheaper countries...

J

JoseSantiago

Dryer sheet wannabe
Joined
Oct 22, 2020
Messages
24
Hi friends,

So I wanted to get some thoughts, I am close to the glorious early retirement and have always wanted to live abroad, in my pension system if I leave at 20 years (public safety) my pension is around 65k, verses 25 80k, I have saved from real estate and construction work, and various side jobs so I'll have around $1 million in 401/457 (hopefully w no major dips), mortgage paid off, no kids, no divorce payments. I'm considering leaving at 20 rather than 25 and living in south america or cheaper parts of Europe for 5 years instead of working 5 more years. I could rent my house out for $2500 a month (minimum). My thinking is to not touch my 401/457 and live soley off rent and a bit of pension, thus making the package perhaps even better than working 25 years.

What's been the general experience in moving to cheaper countries and renting out your primary?

Any... I wish I knew I should think about? I.e. Dual taxation?

I'm fluent in 3 languages and hold dual citizenship to live in the EU, South America a bit more complicated but doable to legally stay.

Thanks as always for any thoughts or feedback.
 
Sounds like you know what you want to do. You don't grow younger and healthier. Go for it and follow your dreams. With the pension and savings you'll be good either way if healthcare isn't an issue.
 
Do you have an idea of which countries you might wish to live in?
We strongly considered Mexico, but just didn't pull the trigger in the end. Just like some very cheap places in the USA, one needs to know the medical expertise availability, safety of the area and cultural behavior, just to name a few aspects to check out.
 
I like this idea and am possibly thinking of doing the same in the early part of my retirement while I'm still healthy enough to enjoy it. Health care insurance if will be much cheaper which is a large factor as well.
 
If I retire in Europe I get "free" healthcare from my dual citizenship. I'm not well versed on this but know enough that it's better than lower income level us healthcare but not equal to top care. Travel health insurance policies are suprisingly cheap for long term. I currently don't have any healthcare issues and may not to do this if I came down with something. So I'd stick to something like this or local healthcare for catostrophic

Countries I've looked at:

Southern Italy (super bargain prices)
Mexico
Colombia
Ecuador
Peru (this one has gotten a little more expensive)
Costa rica (also more expensive now from when I began looking)
Serbia
Paraguay
 
Based on your listings, have you also looked at Panama?
 
JoseSantiago said:
Hi friends,

So I wanted to get some thoughts, I am close to the glorious early retirement and have always wanted to live abroad, in my pension system if I leave at 20 years (public safety) my pension is around 65k, verses 25 80k, I have saved from real estate and construction work, and various side jobs so I'll have around $1 million in 401/457 (hopefully w no major dips), mortgage paid off, no kids, no divorce payments. I'm considering leaving at 20 rather than 25 and living in south america or cheaper parts of Europe for 5 years instead of working 5 more years. I could rent my house out for $2500 a month (minimum). My thinking is to not touch my 401/457 and live soley off rent and a bit of pension, thus making the package perhaps even better than working 25 years.

What's been the general experience in moving to cheaper countries and renting out your primary?

Any... I wish I knew I should think about? I.e. Dual taxation?

I'm fluent in 3 languages and hold dual citizenship to live in the EU, South America a bit more complicated but doable to legally stay.

Thanks as always for any thoughts or feedback.
Click to expand...

I have lived in Peru for the past 16 years, although it has changed greatly it was an amazing experience. Due to covid and the lack of tourists, rental prices have dropped to extremely reasonable levels. Overall, other costs are the equivalent of Florida prices. For a single guy Colombia would be my first choice!
 
We have thought about that, though our window may be narrow. My wife can retire in 2028 (at 60), at which time I would be almost 63. The main reason we would do it is cheaper health care between the time neither of us was working, and the time I reach Medicare eligibility in late 2030 (as things are now). But the cost of moving for 3-5 years doesn't seem worth it. I'm just holding on and seeing what happens with health care here in the next 5-8 years.
 
Years ago we considered that but after delving deep I discovered that to maintain our quality of life there wasn't much in the way of saving. I have Fed retirement and Fed health insurance which can be used out of the US so that wasn't the issue. The parents of my niece, who are Mexican, don't even want their daughter to visit so Mexico isn't an option.

You are better off finding a place in the US with a low cost of living.
 
We loved the lifestyle of Mexico. We weren't afraid to drive the country and saw some awesome places over the 3 years, full time. Also close to Belize. We just drove over and spent a few weeks there.

We still spend a month there every year on average. I'd consider any of the countries you mentioned. Costa Rica is one on the expensive side... DW just visited friends in Tamarindo in Dec.
 
JoseSantiago said:
Countries I've looked at:

Southern Italy (super bargain prices)
Mexico
Colombia
Ecuador
Peru (this one has gotten a little more expensive)
Costa rica (also more expensive now from when I began looking)
Serbia
Paraguay
Click to expand...

Serbia seems to be somewhat of an exception here.
 
Nemo2 said:
Serbia seems to be somewhat of an exception here.
Click to expand...

Wasn't on my radar till this summer. I went mainly because lack of restrictions and it turned out to be a blast, and pennies on the dollar compared to most of Europe.
 
JoseSantiago said:
Wasn't on my radar till this summer. I went mainly because lack of restrictions and it turned out to be a blast, and pennies on the dollar compared to most of Europe.
Click to expand...

How about Croatia, Romania, Bulgaria? All nice.
 
I vacationed in Panama in Dec 2000 . The heat and humidity made Miami look like Alaska. Driving road rules in Central and South America are strictly optional. Cops can get bribed, money talks if one gets in that situation.
 
Last edited:
You will be taxed by the US as if you stayed.
The house makes it awkward, because if you didn't have it, you could move to a State that does not have income tax. Otherwise most states will be keen for you to continue to pay taxes to them while you live outside the US.

Being a long distant landlord is no treat, who will manage the place ? repairs, interview new tenants, etc. After being away for 5 years, will you really want to return to that house ?
 
Nick12 said:
I vacationed in Panama in Dec 2000 . The heat and humidity made Miami look like Alaska. Driving road rules in Central and South America are strictly optional. Cops can get bribed, money talks if one gets in that situation.
Click to expand...
Sorry but that is an over simplification and doesn't apply to all countries. I live in Uruguay and bribes and corruption here are about the same as in the US, quite uncommon. Brazil is another story however. Depends where and South America is huge. Would you judge all of the US based on Los Angeles or Kansas?

Most drivers are quite good too. People stop at stop signs, red lights and are generally courteous
 
As a non resident Citizen you will not be subject to state income tax. Owning a home in the USA doesn't make you a resident. I own a home in a high tax state in New England but live in Uruguay and make it my Domicile. A legal concept you have to meet the criteria for. You can't just hang out on a tourist visa in another country to qualify for example. You may need to prove days of the year you were outside the US too.

For me, I retired here and sold my home and moved 100% and just a couple years ago bought a place to visit in the US for a few months a year. My cost of living dropped by 50% when I moved here from California but then my lifestyle changed. House is large by local standards @2000sq ft. but 1/2 the size of the one I had. No swimming pool but I am 2 blocks from the beach. You can spend as much money in a place that is cheap as a place that is expensive. Depends how your life changes or not.

If you move to say Spain or Serbia your daily costs might go down, but in the US you might shop at Costco and eat home a lot. In europe you might travel constantly and eat out at 5* restaurants because your other costs are low. Grab flights to Paris, London etc where as tourist money flows like water.

I see it with expats here in Uruguay who realize it is as expensive as their life was in the US or more. They will buy a car like they had at "home" and while a 40K can buy you a nice car in the US that car will cost 100K here. They travel back to the US every couple of months and that costs quite a bit. They don't know how to set up a VPN or use VoIP and cut the cord so pay a lot for foreign TV services and calls home (i pay $25 a year for unlimited calls to and from the US to my house or cell phone here). They live in high rise buildings with full amenities because of fear of crime and have a maid every day. They didn't live like that in the US.

I am not saying you have to live like a local worker. We live really well by any standard and have saved more in retirement than I did while pulling down a substantial salary in Los Angeles. Where you live, how you live, how you structure your investments, where you get your heath care and how, all will make a big difference.

We have great health care in Uruguay but if you want to be covered in the US it will cost you. Still less than if you lived in the US but still. Other than hospitalization (major Medical policy) I self insured for many years. A check up at the local clinic was $4, prescription drugs are pretty much over the counter and the ones I take cost the same a my copay used to be in the US, without the crazy monthly premium and deductible limits.

Suffice it to say, there is no one answer and yes you can move to a low cost of living town in the US and save a bundle too. But if you want the adventure, or living in rural america isn't your thing, then becoming an expat can offer a better life for less.
 
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