Musings on a Dec day

The first storm of the season hit yesterday and the water is running like a river down the street and the rain is beating like a toy drum on the roof. As the end of the year approaches and the reality of facing another Canadian winter faces us, many Canadians may think that it might be an option to retire outside of Canada. My friends and I were talking about that recently. By moving to another country the idea is that you could instantly increase your retirement spending power. My neighbour lives in Costa Rica for a long time every year and claims it is far cheaper than living in Canada. 

In Canada, we have many seniors, who we call Snowbirds, who travel south for the winter. Canadian law allows us to stay out of the country for up to almost 6 months without losing our health benefits. Mexico, Costa Rica, Malaysia and Panama all enjoy far better climate than we do and much lower costs of living. 

According to International Living Magazine, you can live on one-half to one-third what you could in any Canadian city and have a good lifestyle in any one of their top places to retire to in the world. Here is a partial list of places they recommend Peru, Spain, Nicaragua, Portugal and the number one place in the world to retire is Costa Rica. For the full list go here

The federal government offers primers on retiring abroad (https://travel.gc.ca/travelling/living-abroad  and find the link “Retirement Abroad”). This government site also offers many other great sources of information about living and retiring abroad. For example, they have some interesting information about coping with Culture Shock and paying taxes.

Another source of information is The Canadian Snowbird Guide by Douglas Gray. As we talked about the idea of retiring in another cheaper country, a friend suggested that it may be a good idea, but until you have lived in another country for a while, it might not be a good idea to pack up and leave permanently. He told us of a friend of his who decided with his wife that they would move to New Zealand. He and his wife thought there would be more opportunity there than in Canada. His friend sold everything and moved and a year later they had moved back. It seemed the dream was different than the reality. My friend suggested that a good idea is to try out a destination before making any permanent decisions. Rent a home for a year and see what daily life is like. If it matches or exceeds your expectations, you may be able to afford the retirement of your dreams on far less money than you expected. I tend to agree with my friend.