En español | Mexico continues to draw the largest number of U.S. retirees, but other Latin American nations are becoming increasingly popular. “They’re nearby, sunny and cheap,” says Kathleen Peddicord, author of How to Retire Overseas.
They also offer health care options, more political stability than in the past and perks geared to retirees, she says. And many retirees who move to Latin America keep their Medicare coverage, then head home to use it if they suffer a serious illness or need an expensive medical procedure.
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Don Robinson, 66, is a retired realtor from San Diego who now lives in the Mexican city of La Paz, the seaside capital of Baja California Sur. He pays less in Mexico for his prescription drugs and happily visits local doctors for routine medical care.
“But as good as the medical community is here,” he says, “I would still be more comfortable using my Medicare and medical facilities in San Diego if something more serious came up, such as cancer.”
Other retirees buy local health insurance or international insurance plans. Hospitals in Latin America couldn’t compete with those in the United States before, but now they are often just as good and a lot less expensive, Peddicord says.
Next: U.S. retirees could receive their benefits overseas. >>
U.S. retirees also continue to be eligible for Social Security benefits, and many have their checks directly deposited in foreign banks. Among the Caribbean and Central American countries, the Dominican Republic and Costa Rica have the most beneficiaries, and in South America, Colombia and Argentina have the most, according to the Social Security Administration.
Latin American countries also offer perks. In Ecuador, for instance, you can import household goods duty-free, and Panama allows you to import an unlimited amount of used goods and a car duty-free. Mexico and many other nations offer retirees discounts on everything from airfares to utilities. Mexico also provides discounts to expatriates on medicine and medical care as well as job training and placement services through its Instituto Nacional de las Personas Adultas Mayores.
U.S. expatriates in all countries must file yearly tax returns, but the IRS allows retirees living overseas to exempt the first $92,900 in earned income from U.S. taxes. And while some countries, including Mexico, require retirees to file tax returns, others such as Nicaragua and Panama don’t tax out-of-country income.
Many retirees still wonder if, despite the perks, Latin American countries are safe. Peddicord says that, overall, they are. But check the U.S. State Department travel advisories before making your decision.
Next: World Bank study analyzes aging in Latin America. >>
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