August 17, 2010

Retiring In Luxury Overseas For Cheap - Bargain or Bogus?

Every so often you'll see an article or hear someone talking about how you can retire in Panama, Costa Rica, Belize, Mexico or some other country and live like a king off some small sum of money.   It has always seemed to be a little "too good to be true" if you ask me.  These stories often paint a picture of the 3rd world as some sort of tropical paradise where you can live in a mansion, hire a maid for 50¢ a day and eat caviar every meal all while supporting yourself on half your social security check.   One such article recently went out by Yahoo titled How to Retire for Under $1,500 a Month.

Luxury or Barebones?

The article from Yahoo is specifically talking about living for under $1,500 a month.  But what are you spending and what are you getting??    They describe a couple living an apparently luxury lifestyle in Belize.  

"The pair lives very comfortably, without wants or financial worries. They've had no trouble making friends in their new community because the folks in Belize speak English. They eat out three or four times a week. They barbecue lobster and filet mignon at home. They have reliable Internet to keep them connected to the outside world. By choice, they do not have a television. "I used to think that the news was important," Jason explains. "But not anymore." The retired couple has a maid and a gardener, each of whom visit once a week."

Wow that sounds awesome.    Lobster and maid service plus reliable internet??   Sign me up!

The article then goes on to give a sample budget after noting that everyone's spending habits are different

--Rent: $300
--Utilities, telephone, and Internet: $500 (Your biggest expense in this country.)
--Groceries: $150
--Health insurance: $50
--Entertainment: $100
--Car expenses: $300

Hmmm.   Wait a second.  I don't see anything in that sample budget about lobster or maid service.  

I was a little doubtful about that budget so I decided to check around for other quotes.  I did a quick search on Google for "cost of living belize" and came up with this article What Things Cost in Belize.   I skimmed through the costs for groceries and entertainment and they don't seem significantly cheaper than what you can pay here in the U.S.A.   Hmm.  Further down on that page they list some sample budgets.

Affluent couple = $4,833
Middle-Class couple = $2,472
Barebones = $859 (single person using public transportation and govt health system)

Ok so now we've got different budgets for different lifestyles.   Did the article from Yahoo say anything about "barebones"?    No, as I read it they were implying you could go out to dinner for lobster and have a maid for under $1,500 a month.  Yet the $1,500 a month is closer to the "barebones" level described by the other page.    But that level of lifestyle is riding a bus and using government healthcare.     

That gives me the Yahoo article and the source above from giving contradictory pictures of the cost of living in Belize.   I figured a 3rd source would be should help clear the picture.   This Cost of Living in Belize article
gives examples of various prices.   They seem to be closer to US prices than not and hardly a super cheap bargain.  They also say that "Retirees interested in simple living can budget about US$1,500 or less per month" and I think the keywords thare are "simple living" which doesn't usually include maid service and lobster.

You can live a "barebones" lifestyle in Belize for cheap, but can't you do that in the USA too?     If you want a "middle class" lifestyle in Belize then it will cost you quite a bit more than $1,500 a month.

Paradise or Not?

The picture of a country like Belize as a sun soaked tropical paradise does forget a few important details.   They go on at length for a paragraph about how "Belize is a beautiful little country."    They say " It's a peaceful, eco-tourist retreat" and a "fisherman's and diver's paradise."  

Here are some facts about Belize
The Homicide rate in Belize is the 9th worst in the world at about 33 per 100,000.   Thats 6 times the rate of the USA.

Several items gleaned from the CIA world factbook:

80% of the roads are unpaved
33% of the nation lives in poverty
While English is the official language it seems it is the 4th most spoken : Spanish 46%, Creole 32.9%, Mayan dialects 8.9%, English 3.9% (official)

Natural hazards  are :  frequent, devastating hurricanes (June to November) and coastal flooding (especially in south)
Environmental issues : deforestation; water pollution from sewage, industrial effluents, agricultural runoff; solid and sewage waste disposal

It may be sunny but Belize doesn't exactly sound like paradise if you look at some basic things like paved roads and proper sewer disposal that we take for granted in America.

Do You Really Need to Move Overseas?

If you live frugally during retirement by doing things like riding public transportation and depending on government health care system then you can do that in the United States.   There are a lot of places in the USA with very cheap housing and most of them have paved roads.   Most Americans wouldn't consider moving to the inner city ghetto when retiring but people seem to think that moving to Latin America with equally high crime rates and worse infrastructure is a good idea.   If you want to live cheap then ride the bus, eat out less and maybe move to a lower cost of living, rural or urban area in the USA.  

Note : Nothing against Belize

I don't mean to 'pick on' Belize specifically.   I've never been there and I don't have any real reason to think its a bad place.   I'm talking about Belize because the Yahoo article did.    I had to hunt through a lot of pretty pictures of pristine beaches and beautiful sunsets from Belize to find the run down house pictured above.

For another perspective on living in Belize as an ex-pat American see The Rules are Different in Belize.

Photos by anoldent and vår resa


  1. Nice research work to prepare a counter opinion. I agree with your way of thinking here. One could live cheaply in rural America and live relatively cheaply, without going offshore.

    I think a lot of people are motivated by tropical climates and proximity to water, thinking that it must equal paradise. Plus, there's that something for nothing urge that lurks un the background for many folks as well.

    In reality, there are a lot more factors, such as the ones you mentioned, that might make a place somewhere that one doesn't want to retire. When you put it all together, there are pros and cons to every move like this. The article glossed over them, but you did a good job of painting a balanced picture.

    I'm not moving anywhere:)

  2. Thanks for this! That's better research than the story writer did.

    And yeah, we could live on 1.5K/month (not including health insurance) if we moved to DH's home town in the rural midwestern US. But there's a reason it doesn't cost anything to live there...

  3. I'm multicultural, my heritage is Costa Rican and Caucasian, when I was younger I lived with my parents in Costa Rica and it was ok but it wasn't paradise.

    We moved to the United States and we got naturalized as U.S. Citizens, but I don't know why its so trendy to move to Latin countries, don't get me wrong, I'm not trying to be rude or to hurt anyones feelings but I really believe the U.S. has the best quality of life in the world.

    I like living in the U.S. and I would never give it up for anything. There are problems everywhere, not just in the U.S. I don't understand why more Americans don't just move to states where the quality of life is more affordable.

    There is also a whole adjustment period when you do move, I think it was easier for me because I was a kid when we moved to the U.S. I picked up English right away, and spoke it fluently within a year. It took my parents a lot longer because they were older.

    You really have to mentally prepare yourself for something like that especially if you haven't traveled much and have lived in one country for most of your life. I do encourage people to travel first and to stay for an extended period before moving for retirement.

    As for me, I'll be retiring in the states when my time comes. Living in the U.S. is pure heaven after Costa Rica. ;)


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