• Travel Abroad, But Don’t Retire There

  • by McKenna Meyer

Panama tops International Living’s list of this year’s most desirable retirement locations.

Why Latin America?

The remarkable value of the dollar, cheaper standard of living, and eased qualifications for residency through the “Friends of Panama” visa make Panama the preferred choice for retiring abroad. However, Panama continues to face problems with bureaucracy, poor infrastructure, high crime rates, and traffic that may make you question their ranking.

While Latin America dominates many of the “best places” lists, it’s important to remember that a cheaper standard of living doesn’t mean that these countries are immune to problems. Particularly in Latin America, greater inflation and unpredictable economies can be much worse than the inflation and economic fluctuation we experience in the United States.


Here are International Living’s Top 10 Places to Retire Abroad in 2014:

  1. Panama
  2. Ecuador
  3. Malaysia
  4. Costa Rica
  5. Spain
  6. Colombia
  7. Mexico
  8. Malta
  9. Uruguay
  10. Thailand


The names on this list are desirable because they have an exotic appeal. However, it is important that you go beyond a “Top Places List” when determining whether or not to retire abroad.


Be careful before you base your retirement decision on a best places list

These lists have eye-catching titles, but they are often subjective and based on general statistics. Many of the factors used to determine what makes a city, state, or country desirable can vary a lot over the course of a year while ignoring important data that is more difficult to quantify. For example, whether or not a location offers the activities you enjoy, is a sports town with a loyal fan-base, has a bustling downtown, is near friends and family, and meets your career needs, are all immeasurable factors that should influence your decision to move.

Instead of basing a decision off of a list of general factors, it is more important to focus on what matters to you, like an affordable housing market, transportation, safety, access to medical facilities, and social interactions, rather than what the media has coined the “best” place for you to retire.


What to look out for when considering retiring abroad

While it may sound idealistic to retire on the coast of Panama, the country’s weak infrastructure would make transportation very difficult. This is especially concerning to retirees whose safety and health is often dependent on community support and access to medical facilities. Even if you did have access to medical services, is the quality sufficient? Many people from Latin American countries travel to the United States for their medical care which may make it worth re-thinking Latin America as your retirement destination.

Your personal safety is also a primary concern when living abroad. Many of the countries listed have violent histories with corruption, civil wars, social unrest, and drug trades. Although this is a general observation, traveling to a foreign country is quite different from actually living there. There is a lot to take into consideration when making these kinds of decisions and no list is going to be able to predict your retirement needs better than you can.


Facing a language barrier could be another obstacle when moving abroad, especially when you are dependent on that language for your communication. Unless you already know the home country’s language, it could be very difficult if not impossible, to learn a new language later in life. As a result, you could find yourself paying unexpected fees for translation services on things like administrative paperwork. Additionally, there could be inevitable social isolation as a result of facing language barriers.


Retiring abroad could be harder than you expect and the “best places to live” lists can be deceiving and contradictory. The good thing about these lists is that there are so many that you could find hundreds of great places to live that meet your retirement lifestyle right here in the United States. (Find out why these 10 states are great for retirement!)


Use a reverse for purchase to buy a new home

Aging in place is of utmost importance to the baby boomer generation. Another benefit of retiring in the U.S. is that you could use a reverse mortgage loan to finance the purchase of a new home. It’s called the reverse for purchase option. With a reverse for purchase, borrowers use the equity in their existing home to purchase a new home. Just like a traditional reverse mortgage loan, the loan will eliminate any monthly mortgage payments* and keep you on title of your home**.


Many seniors have used a reverse mortgage to purchase a new home, live more comfortably in their current home, or even finance their travel to some of these exotic locations. You don’t have to move to Panama, Costa Rica, or Thailand to enjoy the beauty that these places have to offer. By taking advantage of a reverse mortgage loan, you could finally travel to your dream destination.

*Homeowner is still responsible for taxes, insurance and property maintenance.
**You remain responsible for counseling costs, taxes, insurance, and maintenance expenses.