According to a recent story in the the Wall Street Journal nearly two-thirds of those between 45 and 60 plan to postpone their retirement, a steep rise from two years ago. That was a steep jump from just two years earlier, when 42 percent of the people in said age group expected to put off retirement. This new trend is primarily due to the financial losses, layoffs and income stagnation sustained during the last few years of recession and recovery. Many middle-aged Americans used their savings during those lean years and now find that leaving the work force on their original timeline is no longer a good idea. They are also facing low interest rates, an uncertain future for Social Security, and a lower likelihood of receiving employer health insurance after retirement.
Is their a way to avoid having to delay one’s retirement plans? A possible solution might be to relocate to another country in order to downsize and simply one’s lifestyle. Countries south of the border like Costa Rica haven become popular with Americans who want to retire with dignity, above all not have to keep working and have a decent lifestyle.
Indeed relocating to Costa Rica is doable for those who want to retire for less. One couple who write a popular retirement newsletter about living for less in Costa Rica recently stated “ During a normal month, we spend about $1,700, and when we travel around to see this beautiful country, we might spend a few hundred dollars more.”
Here is an example of a “rock-bottom” budget for a single person who only has a monthly income of $1500. I think it would be difficult for someone in a similar situation to live in the U.S. for same amount and have the equivalent lifestyle found in Costa Rica.
Rent $300 to $350
Electricity and water $30
Cable TV $25 +
Internet cafés $20
Public Transportation $50
Monthly public health insurance (medicines included) $60
Meals out $50
Public health care $60
Personal care (clothing, sundries, etc.) $100
Entertainment/local travel $150-$200
On the other end of the scale a couple who owns a $150,000 home here that is free and clear and has a car will probably have the approximate monthly expenses in Costa Rica.
Private medical insurance $250 (depending on your age)
Dental care $50 per month
A part time maid $100 to $150 +
Beauty parlor $75
Food including inexpensive fruits and vegetables from a Farmer’s market and some imported American products $700 per month
Entertainment (movies, socializing) $200- $300
Dining out a couple of times a week $300
Private gym $50 – $100 per couple
Car insurance for a relatively new car $150
Utilities (water and electricity) $100
Telephone (using Vonage or Skype for long distance) $50
High speed Internet $50
Cable or satellite TV $50
Car repairs and related expenses $100
Garbage $40 per year
Property taxes on your $150,000 home $30 per month (more expensive if the new luxury tax applies)
Misc. expenses $300
* Really what you spend here depends on your lifestyle. If you want all of the imported goodies then you will spend a lot more than you would purchasing local products.