Retirees Head Overseas
To Lower Living Costs
By Jasmina Kelemen
ALTOS DEL MARIA, Panama -- In a lush valley hidden in the coffee-producing hills of Panama, the sounds of tropical birds singing and burbling brooks compete with the rumble of cement trucks groaning their way uphill.
The steady convoy of trucks is ferrying labor and material to the hundreds of sprawling, ranch-style homes being built in this new gated community an hour and half outside of Panama City, many by U.S. retirees.
While precise figures aren't available, a compilation of data and anecdotal evidence suggests that aging Americans aren't only interested in buffing their tans or improving their golf swing, but are actively seeking out lower living costs in places where the much-debilitated dollar still reigns.
"It's very limited in the States what you can choose from but in retirement havens all around the world you can stretch your dollar three times more," said Kelly Campbell, a certified financial planner and owner of Campbell Wealth Management. "It can be more affordable to retire abroad than in the States."
That remains true even as economic concerns batter U.S. markets. Housing prices might have fallen more than 30% in once hot markets on the East and West coasts but they're still exponentially higher than prices in the developing world, said planning experts.
"Obviously, a few years ago when the real estate market was really good ... people were really doing a lot of investing in Latin America; now it's actually a lifestyle change," said Suzan Haskins, Latin America editorial director for International Living.
Living cheaper abroad
Offering special property tax breaks, generous senior citizen discounts and affordable living costs, Panama has in just a few short years established itself as a welcoming haven for Americans looking to stretch limited incomes during their golden years.
"Once you're established here you can live a cheaper life and a nice life," said Honey Dodge, who owns a bed and breakfast in Altos with her husband Larry that often caters to Americans who are in the process of building homes nearby.
In countries like Panama, Ecuador and El Salvador, which use American currency, $1 will buy you far more than it would in even the least expensive regions of the U.S., said experts.
According to the Migration Policy Institute, a growing number of U.S.-retirees are headed to the warm climes and cheaper lifestyles found in Latin America, especially Mexico and Panama.
In Panama, the number of visas issued to U.S. retirees tripled between 2003 and 2005, according to a study published in 2006 by the MPI. In the previous decade in some regions of Mexico the number of U.S. retirees jumped nearly 200%.
Concentrating its research in communities in Panama and Mexico, the Migration Policy Institute found that a large portion of those who moved there cited affordable health costs as chief among the reasons that pushed them to look outside the United States.
The findings challenge the conventional idea that retirees abroad are "amenity-seeking migrants" and illustrate that they are also moving to meet more basic needs, said the report.
The Dodge's experience affirms the report's findings.
"If you're less than Medicare age and disqualify for insurance you could be in big trouble," said Honey, who is 61 and moved to Panama from Texas in 2005.
As retired small-business owners with potentially serious medical issues, health insurance in the States became prohibitively expensive for the couple, said Honey.