Take a moment to imagine retirement and picture your perfect setting. Maybe you're dreaming of moving to Florida? Arizona, perhaps?
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How about Costa Rica?
Retiring abroad is becoming a more popular option for seniors. The Social Security Administration estimates nearly half a million Americans have retired abroad, and according to a report from the Associated Press, the number of retirees moving out of the U.S. has increased 17% from 2010 to 2015.
There are plenty of reasons why moving abroad may sound appealing. Maybe you're looking for a change of scenery. Perhaps you've been eager to travel the world and you're finally getting the chance to do it. But one of the biggest reasons retirees move is money.
Is retiring abroad right for you? It's a big decision that shouldn't be taken lightly, but here are three signs retiring in a new country may be a good choice.
1. Your retirement savings are a lot less than you'd hoped for
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The median amount working-age American families aged 56 to 61 have saved for retirement is just $17,000, according to the Economic Policy Institute. So if you're like a lot of soon-to-be retirees, your retirement fund may be a little (or a lot) smaller than you'd hoped for.
You may think your only option is to continue working until you do have enough to retire -- or worse, risk running out of money during retiremente. However, you might be surprised how far your savings can go in a country with a lower cost of living.
In Quito, Ecuador's bustling capital city, the average 900-square-foot furnished apartment costs around $450 per month. You can even move to a tropical paradise in Cancún, Mexico, and find a 900-square-foot furnished apartment in an upscale part of town for less than $750 per month.
Before you start packing your bags, you'll still need to do your research and find out how far your retirement savings will go in certain countries. But choose the right country, and even meager retirement funds can last a lot longer than they would in the U.S.
2. You're anticipating high healthcare bills
Healthcare in the U.S. is incredibly expensive, even with Medicare helping to cover some of the costs. In fact, the average 65-year-old couple retiring today can expect to spend over $275,000 on healthcare costs during retirement.
In some other countries, though, healthcare is far more affordable. Mexico, for example, is a popular expat destination partly because of its healthcare system, and many hospitals in the country have American-standard facilities to appeal to expats and retirees. Also, once you become a resident, you can take part in the country's social security system and pay around $33 per month for health insurance.
Similarly, France was ranked No. 1 out of 191 countries for its healthcare by the World Health Organization, and expats are allowed to apply for public healthcare coverage once they establish residency by living in the country for at least 183 days per year. The average doctor's visit in France costs just $26, and 70% of that is reimbursed by the government.
3. You're willing to make sacrifices
Moving to a different country is a much bigger commitment than moving across town or to a new state. You'll have to seriously consider whether you're OK leaving friends and family behind, adapting to a new culture and way of life, and possibly learning a new language.
But if you're willing to make sacrifices, taking on a new adventure may be good for more than just your wallet. Traveling to a new country forces you outside your comfort zone, which can also be good for your brain. Things like learning a new language and navigating a new environment can strengthen your cognitive and social skills, according to a report by the Transamerica Center for Retirement Studies. Mental stimulation and socialization are especially important as you age.
Also, 86% of people in the study said their overall mood and outlook had improved as a result of travel during retirement, and 78% said their stress level had improved as well. So if you're willing to make the jump and move to a new country, you may thank yourself for it down the road.
There are many wonderful countries where you can live in comfort on a small (by American standards) budget, so don't limit yourself to the U.S.
The $275,000 retirement cost you can't afford to mess up
If you're like most Americans, you're a few years (or more) behind on your retirement savings. And it's a tough pill to swallow, but half of retirees will pay $275,000 or more for healthcare out of their own pocket.
Fortunately, our retirement experts have identified little-known tactics to reduce your costs while still getting the quality care you deserve.
Millions of Americans miss out on opportunities to pad their pockets by $5,628… $11,125… even $16,122! You don’t want to be caught scrambling for cash to pay your retirement bills.