The Downside of Retiring Abroad

The Downside of Retiring Abroad

You could travel back to the United States to receive proper medical attention, but at what cost? The money you may be saving would be poured out into out-of-pocket medical expenses, lodging, travel, and ongoing property management at “home.”

The strain of cultural differences or just a general growing sense of homesickness may catch you off guard in a foreign land. Moving abroad to retire is a very big decision. Many children of retirees do not like the idea of being so far away should their parents need help. A quick glance at some appealing cost of living numbers do not show the actual cost, or the opportunity cost, as economists will call it. The cost isn’t just the monetary value; it also includes what you would be giving up. For many, the idea of retiring abroad, while appealing, isn’t worth it in the end.

When it is time to finally sit on the nest egg and enjoy a slower (or faster!) pace of life, the question of where to retire may weigh heavily on you. The cost of living in the United States varies from state to state and even town to town, but one thing for sure is that hundreds of thousands of retirees have made other countries their retirement abodes. Is this the right decision for you?

What it All Boils Down to – Money

Before you put your home on the market to take flight for another country…

The reason for the large migration to other countries is financially driven. In an economy like ours today, it is hard to place a once well-deserved trust into a failing Social Security system and retirement nest eggs that, according to Wharton University, lost 18 years of gains during the global financial crisis. With the stock market taking regular plunges lately, could it be time to say sayonara? Before you put your home on the market to take flight for another country, let’s take a closer look at what many experts say about the reasons why you should not retire abroad.

Look at All-Around Living Expenses

When looking at the cost of living, many people naively make the mistake of looking into the price of retirement community homes only. Many retirement promoters are even touting the affordability of housing in areas such as Mexico, Costa Rica, and Panama. But when you take a look at the actual cost of living in such locations, the prices associated with everyday living may be higher, and they may offset the savings on retirement community housing.

Practical Day-to-Day Barriers

Not to be neglected is the fact that even in major cities in the world, Englishis not the lingua franca. This may become a problem when out for a nice dinner, while using a cab, or needing to hire a professional service.

Will you have a car in the foreign land, or will you utilize other transportation services that will cost additional money? What are licensing requirements and fees there? While it may not seem like a big deal, people drive differently in other lands and not just on the other side of the car. You could be putting yourself in danger by driving in situations you are not used to. This is not to mention the difficulties many seniors face with driving anyway as they age, such as impaired vision and declining hearing and reflexes.

The banking systems are different in foreign countries and in some places, they are not very honest. The cost of utilities is different, and regulations surrounding electrical and water systems are not as numerous and stringent as here in the United States. Home systems may operate far less safely than here in the States.

The elderly are vulnerable to scams

The elderly are vulnerable to scams even in their own language and society, where they are fairly savvy about the way things work. The risk may be even greater abroad, where cultural cues others might easily pick up on may be lost in translation.

What about the process of changing out your currency? While you are not likely to choose a country that will incur losses, other countries are still battling major inflationary problems. There is just no way to predict the future of the value of U.S. currency in foreign markets.

Medical Expenses

This is probably the most concerning of all. Many of the countries that retirees are spending out their days have national health care systems. There tend to be lengthy waits for needed procedures and a higher denial of claims, leaving patients, especially the less prioritized elderly, with inadequate options. With the exception of countries like India, Singapore, and Thailand, where doctors train in the United States and return to their countries, many are not up to par with American quality of care.

Another consideration should be any prescription medications you or your spouse are on. They may not be available in other countries. Will you be able to find a suitable alternative? What if something were to happen and the specialized medical attention you would need is unavailable?



Wharton University of Pennsylvania. (July 18, 2012). What’s Driving Americans to Retire Abroad? Money- or Lack of It. Knowledge@Wharton. Available at: Last Visited January 20, 2016.

Barnabic, Dan. MarketWatch. 5 Reasons Not to Retire Abroad (July 15, 2014). Available at Last Visited January 20, 2016

Tanner, Michael D. (March 18, 2008). The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World. The Cato Institute. Available at Last Visited January 20, 2016.