Rolando Gutierrez grew up in Miami, but he knew he wanted to eventually move to a quieter, more affordable place where he could live comfortably on his City of Miami police sergeant pension. After a few trips to Central America, he found his retirement nirvana in a tiny town four hours from Panama City. He now lives on 15 acres, less than a mile from a main road and not far from a river than runs through his property.
“I love it,” says Gutierrez, 56. “Miami is a wonderful place to work in and to hang out. I love all the cultures, but the traffic is horrible, the politics are horrible and it’s expensive.”
Gutierrez is just one of thousands of recent retirees who have discovered that the American dollar can buy more overseas. Lured by affordable housing, inexpensive healthcare and vibrant ex-pat communities, more Americans are heading south of the border to spend their golden years. Some are calling Latin America the new Sun Belt.
Though no one knows the exact number of retirees moving abroad, some government figures help to define the trend. The number of American retired workers receiving Social Security checks in other countries has been steadily increasing for more than a decade. In December 2002, about 242,128 retired workers — not including spouses or disabled workers — received their monthly benefits abroad. By 2012, that figure had jumped to 359,767. The increase was most pronounced among those headed to Latin America. In South America alone, the number of U.S. retirees climbed from 8,677 to 15,698 in the same time period, according to the Social Security Administration.
Yet experts believe these figures account for only part of the actual exodus. Because some retirees continue to bank in the U.S., the Social Security numbers are an undercount, says Carol Barron, associate editor of International Living magazine.
She points to other numbers that underscore the trend. Attendance at the magazine’s annual Fast Track Your Retirement Overseas conference in Las Vegas has been climbing, too — from 475 in 2010 to 800 in 2013.
“The attraction of Latin America is huge,” says Dan Prescher, an Omaha native who now lives in a gated community in Cotacachi, Ecuador, and writes for various websites about his experience. “You get more bang for your buck and you’re close enough to get back to the family in half a day.”
Prescher, who with his wife Suzan Haskin, wrote a book, The International Living Guide to Retiring Overseas on a Budget, admits he sometimes thinks about moving back because his extended family, including a grandchild, still live in the states. “But I run the numbers and it makes no sense,” he adds.
When Gutierrez ran his numbers, it made all the financial sense in the world to make the Miami-to-Panama move. He bought his first property in Panama in 2007, while still working, and moved when he retired in 2010. He now owns four properties and has remodeled a couple of homes, but best of all, he says, he has no debt.
“I live large on $18,000 a year,” he says. “Back in Miami, I used to spend $12,000 a year just on [real estate] taxes and insurance.”
He runs down his monthly budget and gloats about a Panamanian pernsionado program which offers foreigners lifelong residence in Panama if they receive a monthly pension of more than $1,000 on the theory that this will pump up Panama’s economy. Panama also does not tax foreign-earned pensions and offers sizable discounts to retirees on hotel, restaurant, movie theater and other expenses.
Where does he find the most impressive savings? Healthcare. Though he continues to visit his cardiologist in Miami twice a year, other types of medical care for him and his wife run a fraction of what he would pay for similar services in the U.S. After a recent car accident, an entire medical work up at a hospital cost him $84. The care, he says, was excellent.
Some South Florida retirees head farther away than Latin America, enticed by family ties and a slower pace of life. At the end of June, Sonia Lewis, 70, packed the last of her belongings in her longtime South Miami-Dade home and moved to her husband’s hometown in Morocco. She likes the idea of small town life and can live there for a fraction of the cost, renting a high-end two-bedroom, two-bath condo for $150 a month. Her pension and Social Security also buy her other perks, including household help. “I don’t have to clean house,” she says. “I don’t have to cook or wash.”
For Irma Solano, heading south is also about returning to a homeland she left decades ago, as a young widow. Solano, 63, has an apartment in Cali, Colombia, and, like Gutierrez, she realizes she could afford a better lifestyle there. But she also has a daughter and two grandchildren in Miami making the decision a little more complicated.
“I adore Miami. I feel I belong here, but I have a lot of family in Colombia, too,” says Solano, who worked for the state of Florida for two decades and owned a flower shop in Miami Lakes before a work accident forced her to file for disability.
“I’m really thinking about this a lot,” she adds. “It’s exciting but it’s also a little scary to sell everything and go.”
The exodus of retirees accelerated during the Great Recession, when low interest rates, a plunging stock market and decimated house prices forced workers close to quitting to think of other options for retirement. While three decades ago, retirement might have meant moving to Florida or Arizona, now some are willing to venture farther afield to make their savings last longer.
“There has been a perfect confluence of events to get this started,” explains Kathleen Peddicord, founder of the Live and Invest Overseas publishing group and author of a book on retiring abroad. “And they’ve all come together to make it easier for Americans to both live and retire abroad.”
The revolution in communication has shrunk the globe, providing many options for potential retirees to check out foreign locales and connect with other U.S. ex-pats already living there. Tour companies have sprung up to cater to people thinking of retiring overseas. Blogs about living abroad abound, and once they move, retirees can stay in touch with family through Skype or FaceTime.
“It’s so much easier to get around the world these days,” Peddicord says. “Moving overseas no longer means walking away from your old life completely. You’re usually just a plane flight away.”
Twenty-first century retirees are different, too. They’re healthier and more active than past generations.
“Boomers are retiring a little differently than their parents,” says Gabrielle Redford, executive editor of AARP media. “They’re more adventurous and they’re more interested in pursuing an active lifestyle. They’re willing to look for other options.”
Not everyone is cut out for an adventure, however, and Redford and others issue this warning repeatedly to starry-eyed explorers. Living abroad may be romantic — until the electricity falters or the bureaucracy becomes an overwhelming obstacle.
“The retirees who are here are gutsier,” says John Ohe, a business executive who moved from Philadelphia to Guatemala after he was laid off during the recession. He now runs a Guatemala-based tax-preparation company that serves ex-pats worldwide.
“They have a distinct personality. They’re brash. They’re not afraid. They’re not easily frustrated. They can take a lot of bumps on the road.”
And there will be bumps — lots of them. In Macaracas, Panama, for instance, Gutierrez immediately noticed that electrical service tended to be spotty. So he invested in a generator.
“The roads were also horrible when I got here, but they’re slowly improving,” he adds.
In her trips to Morroco, Sonia Lewis was shocked to see donkeys and people riding in carts alongside automobiles. She’s gotten sick from drinking the water. And, “believe it or not, the driving is a little worse than in Miami.”
When Prescher, 60 — the writer who moved to Latin America in 2001 — is asked for advice, he warns prospective ex-pats to do serious soul searching and investigate their potential new home thoroughly. “You need to be running to a place, not away from something,” he says. “If you think it’s going to be America light, you’re going to be sorely disappointed. Type A Americans won’t be able to adjust.”
When an arrangement doesn’t work, it’s often due to poor planning, says Ohe, who speaks to clients around the world. He has noticed that some retirees move to a place after only one or two short visits. They don’t thoroughly check out visas, tax filing rules, mail service, banking and healthcare. Ohe, for example, first moved his wife and two young children to Nicaragua, only to find the weather “oppressively hot.” He eventually settled in Antigua, in the central highlands of Guatemala.
“Making friends within the community is very important,” he says. “You need to have someone you can go to when you have a question.”
Peddicord, the overseas retirement book author, says the small details of a place can mar a retiree’s experience. Two common peeves: garbage and poverty. “It may seem like silly things, but it does come as a shock to many Americans,” says the Panama City, Panama, resident. “There are a lot of things they take for granted when they’re living in the States.”
Surprisingly, language doesn’t come up as a major obstacle. Most retirees settle in small cities where there is a sizable community of English-speakers. Some speak enough of the language, usually Spanish, for a simple conversation. And there are plenty of classes to help those who want to learn.
“You don’t have to become fluent,” Peddicord adds, “but it does help the quality of the experience. You should at least know enough to order in a restaurant or to ask a question.”
Lewis, now living in Morocco, doesn’t speak Arabic, but she has worked on improving her French, which is also spoken there. She thinks it will only get better with practice. “I’m a little scared,” she admitted before leaving. “But I see life, my life, as an adventure, and moving halfway around the world is just one more.”