American ex-pats retiring in Ecuador
To casual visitors, this colonial town in southern Ecuador looks like it was torn from the pages of history. With its cobbled streets, soaring cathedrals and bustling markets, it exudes a lazy, old world charm.
But Cuenca is also on the cutting edge of a very modern trend: providing a safe haven for U.S. retirees who have found themselves unwilling — or unable — to live out their golden years at home.
The growing wave of expat seniors is not only upending notions about retirement in the hemisphere but reshaping the face of communities throughout the Americas. And the trend is expected to grow as waves of baby boomers exit the workforce ill-prepared for retirement.
There’s no accurate way to measure the phenomenon, but the Social Security Administration was sending payments to 380,000 retired U.S. workers living abroad in 2014 — up 50 percent from a decade ago.
In the Americas, records show that seniors are flocking to Canada, Mexico, Colombia, the Dominican Republic and Ecuador.
For a guy like me who’s not a millionaire this all makes sense.
James Skalski, Cuenca retiree
Best known for the Galápagos and providing asylum in its London embassy to WikiLeaks founder Julian Assange, Ecuador is home to 2,850 retirees receiving benefits, according to the U.S. government. But that number doesn’t tell the full picture. The city of Cuenca recently conducted a census that found its municipality alone was home to almost 10,000 foreign retirees, most of them Americans from Texas and Florida.
On a recent weekday, Susan and Michael Herron were having a long, lazy breakfast by the side of the Tomebamba River that cuts through the city. Both in their 70s, they have the lean look of people whose principal mode of transportation is walking — and a sense of adventure usually found in people half their age.
They had previously “retired” in Central Florida, Georgia, Alaska, South Carolina and Panama before finally settling on Ecuador — because it was beautiful and cheap.
“We could have survived [financially] in the United States if we had moved to a more rural area,” said Susan, 71, a semi-retired property manager. “But we wanted to take this chance while we were still healthy enough to be able to do it.”
In Cuenca, a city of about 350,000 people, they’ve found robust public transportation, an extensive museum network, solid healthcare and markets bursting with fresh fruits and produce. It’s a place where their two-bedroom, two-and-a-half bath apartment costs less than $400 a month. They’ve found that for about $1,500 a month, they can live a solidly upper-class lifestyle, dining out frequently and traveling.
“In the United States, we couldn’t afford to go anywhere,” Susan explained. “We were having to stay home.”
Countries across the hemisphere are trying to woo U.S. retirees — and their pensions. Mexico, Panama, Nicaragua and Costa Rica, among others, try to make it as easy as possible for seniors to set up shop.
But city officials say Cuenca is something of an accidental hotspot.
“Cuenca never wanted to attract retirees,” said Ana Paulina Crespo, the director of international relations for the municipality. “In fact, we’re facing lots of problems over how to deal with a phenomenon that we aren’t responsible for creating.”
The city is trying to combat local fears that the retirees are both driving up land prices and bleeding the public healthcare system, she said. And the language barrier has become a source of local irritation. Some restaurants and even neighborhoods seem like English-only spaces.
“Cuencanos are feeling like strangers in their own city,” she said.
Starting in about 2009, Cuenca became a viral sensation on retirement websites. International Living, an influential publication, ranked it the top expat retirement site several years running. As newly arrived retirees began blogging, there was a snowball effect.
“The internet has changed everything,” said Dan Prescher, a senior editor at International Living who recently moved from Ecuador to Mexico to be closer to his family in the United States. “Now you can talk to expats who are living the life in real time. It has lowered the research bar for those who are thinking about it.”
A full 73 percent of the retirees in Cuenca, according to the city’s survey, said they found out about the city via “best of” rankings online.
But the city owes some of its popularity to an economic crisis — and the socialist policies of a president with a penchant for bashing the United States.
Crisis and Socialism
In 1999, Ecuador suffered a financial and banking meltdown that forced millions to go to the United States and Europe looking for jobs. Now many of them are coming home — often speaking perfect English and with degrees from internationally recognized universities.
President Rafael Correa, who stepped down last month, also poured the nation’s oil wealth into hospitals, roads and infrastructure that have made the country rich with public services.
U.S. retirees who used to be slaves to their automobiles rave about the 12-cent bus rides (with the senior discount) and free symphonies.
Doris Soliz, a ruling-party congresswoman who represents this part of Ecuador, said it’s ironic that U.S. citizens steeped in capitalist values are attracted to a country that has embraced socialism.
“We’re a city that’s become a destination for older adults to enjoy their retirement years precisely because of all of our public services,” she said. “The public transportation, the public health, it’s all part of the quality of life.”
There are drawbacks to life abroad, of course. Some seniors said they felt isolated amid the language and cultural barriers, and felt that they had to be on guard from being fleeced by local merchants who saw them as walking ATMs.
Healthcare in Trump age
If there is a real driving force for retirees, it’s healthcare. Although the Trump administration has said it will leave Medicare untouched, its desire to scrap the Affordable Care Act amid rising premiums has created anxiety among seniors, said Prescher with International Living.
“Look at what retirees [in the U.S.] are facing,” he said. “They have a fixed income, maybe their investments haven’t been doing that well and now nobody knows what public healthcare will look like in the United States.”
“In the face of that … if you can live in a place where you can cut your cost of living in half while getting access to high quality healthcare, you have to think seriously about it,” he added.
James Skalski, a 74-year-old semi-retired architect and builder from Minneapolis, credits the city’s quality but quirky medical establishment for turning his life around. When he arrived here three years ago, he was 20 pounds overweight, had high blood pressure and was running from a family history of heart disease.
“In the United States, all they would do for you is give you drugs,” he said. Here, a holistic doctor worked with him for six months, using a regimen of nutrition, chelation therapy and meditation that Skalski said reversed all that. Price tag: $1,600.
“Just last month, I had to go to the dentist for inflamed gums, and the dentist was using state-of-the-art X-ray equipment made in Germany,” he said. The X-ray, antibiotics and dentist visit ran him less than $30. He encouraged a friend to travel from Alaska for dental work. With flights and all, it was still cheaper.
“It was a real eye-opener,” he said. “For a guy like me who’s not a millionaire, this all makes sense.”
Cuenca’s survey of retirees found that most were either paying for healthcare out-of-pocket or had private healthcare. But some are reliant on Ecuador’s public healthcare system. Foreigners only need to pay into the system for three months before they have access to full benefits.
Because Medicare doesn’t cover most costs abroad, the Herrons, for example, were paying $84 a month to belong to the public healthcare system. When Michael, a 76-year-old retired IT worker-turned-novelist, recently ended up in the emergency room for a cardiac issue, the total bill was $133. In the past, the same procedure in the United States had been billed to his insurance company at $186,000.
Crespo, the city official, said the retirees are pumping money into the economy, but there are growing concerns over how they might be affecting the healthcare system.
“We’ve heard about cases where someone night need brain or heart surgery that might cost $300,000 in the United States and they have the operation here for $300 because they had paid into the system for three months,” she said. “The price differences are abysmal.”
Congresswoman Soliz said the legislature is planning on doing a comprehensive study of how foreign retirees might be straining public resources.
But city officials are also aware that retirement spots can fall out of fashion. Crespo wondered if the election of Trump could shift the balance.
“We don’t know if people are going to go back to the United States because of Trump or go somewhere else, like Europe,” she said. “There’s so much friction with Latinos right now [in U.S. political rhetoric] that we don’t know what might happen.”
The Herrons say they’ve tried to isolate themselves from the U.S. political news by not having a television. And while they say they have no desire to return to the United States, they’re open to continuing their retirement adventure in some other country.
But for the moment, they’re still enjoying the little details of laid-back Latin American living.
“We keep pinching ourselves,” Susan said. “We can have a two hour lunch and not be rushed out of the restaurant.”