5 Reasons Why Retiring Abroad Will Shock You Into Living Again

October 3, 2017

Most people stumble into retirement — what they are usually faced with is a loss of identity and purpose.

In a new book “Prescription for a Happy Retirement”, Dr. James Bash calls this the new PMS — Post Work Melancholy Syndrome. Whatever you call this state of mind, don’t let it happen to you.

What a lot of people need is a good shock to the system — retiring abroad just might do the trick.

Have you ever been in an environment where everything was unfamiliar and your senses were hyper-active? Retiring abroad will feel like that at first.

Things will smell different, look different, act different, taste different, sound different. Even you will start acting different and that is exactly the point.

You will sense that something is happening inside of you. That what you assumed to be true before may actually be less certain now.

A new perspective maybe. Or the awakening of something inside you that cries out for redefining life on your terms. Retiring abroad will test your hidden assumptions about the life you want to lead for the next 30 years or so.

10 million baby boomers retire every day in the US saying good-by to their old job routines. Some are prepared for what lies ahead. Most are not!

I am not just talking about finances. Up to this point, you have done what is expected. You have built a career, maybe raised a family, diligently paid your mortgage and stashed money away in your 401K. Life has probably thrown you more than your share of curve balls but you kind of followed the grander playbook.

Now the playbook is missing. Somebody ripped the pages out. Now what? You feel lost at sea.

That little voice in your head keeps going off. Do the right thing and you will spend your golden years enjoying 5 o’clock buffet line specials, endless rounds of golf (substitute shuffleboard if you wish) and lots and lots of TV watching. Wash, rinse, repeat for 30+ years?

Census data shows that More Americans Are Retiring Abroad. Maybe you will benefit from this trend as well. You could be shocked into living again.

Here are 5 reasons why retiring abroad could be the best decision for you:

#1. The pace of life is slower which ironically will make you think more about what you really want to do

Having more time to smell the roses or more likely a good cup of coffee. More time for conversation? Watching a sunset from your ocean front balcony? A mid-afternoon nap? How delightful.

Yes, I want a bit of that! Life in many countries just moves slower. If you have a type-A personality you will have to adjust at first and dial it down a bit, but think of all the free time you will have.

The word “manana” translates to tomorrow but what it really means is maybe tomorrow, maybe in a couple of days, maybe in the rainy season. Is life really that urgent?

A slower pace of life will give you more time to think. It will also allow you to reconnect with yourself, your significant other and the world at large.

#2. The cost of living is less and you will be able to afford to do a lot more fun activities

Who doesn’t like a sale? Especially when it is on everyday prices. A big part of the appeal of retiring abroad is about stretching your nest egg.

Surveys show that one of the biggest worries of people, as they retire from their full-time careers, is outliving their savings. Would it not be great if you could remove one more worry from your list? Imagine being able to live well on an income of half or even a third of what you were earning before.

Let’s take a quick look at cost of living numbers for countries in the Americas. Numbeo is an organization that compiles such data from actual consumers. From my own experience, the cost estimates seem to be in the ballpark — maybe not down to the penny but the actual rankings of the countries conform to my own intuition.

Source: Numbeo

What does the data say? Retiring in the Caribbean will cost more but you already knew that from taking those family vacations. The good news is that there are plenty of other places offering a more inexpensive lifestyle than at home.

For example, have you thought about moving to one of the most affordable places in the western hemisphere — Ecuador? The cost of living is about 40% cheaper than in the US.

While not as affordable, how about Costa Rica? With any luck you could find yourself surfing next to Tom Brady. If that is not enticing how about moving to Panama and salsa dancing to the tunes of Tito Puente? Both come at a 20%+ discount.

#3. Your brain will feel stretched again as you encounter many new things.

Not only will your surroundings be new and unfamiliar but you will most likely need to learn a new language. Spanish? Portuguese? Thai?

How about new customs? Finding that balance between the old and the new will keep you on your toes.

The change will bring a new step into your life — stretching again to make new friends, understand another culture, taste new foods and smells, a sense of adventure and maybe if you are lucky a bit of romance.

You could have unbelievable wildlife in your backyard — no, I am not talking about just the occasional spiders and critters eating away at any breadcrumbs.

Pretty soon you will be spending part of your day talking to your new found friends about that strange type of mushroom you found growing in your backyard or the colorful bird flying above your hammock. Could it have been a Toucan?

You could take up hobbies or activities that you either had long ago given up on or maybe never tried due to a lack of time. Bird watching anybody? Yoga? Maybe surfing if you are looking for a more vigorous workout.

According to the National Institute On Aging staying mentally engaged and continuing learning is vital for maintaining cognitive health. Retiring abroad just might do the trick!

#4. Your Health will improve as you simplify your life.

Life abroad tends to be simpler than back in the US. In fact many ex-pats refer to living abroad as something out of the 1950’s.

Healthcare is a big concern for many people moving abroad. People worry that you won’t be able to have access to the same quality of medicine as back at home.

For many retirees this is a real issue but thankfully health care in many parts of the world has improved dramatically. In a recent survey by Bestplacesintheworldtoretire.com 18% of retirees actually indicated that the quality of health care abroad was much better than at home with 30% stating that it was about the same.

People also worry about the cost of health care. Not a huge surprise there as for many of us healthcare is a large expense. Here the news gets really encouraging for anybody looking to retire abroad.

By most accounts, healthcare is a bargain abroad! Again based on surveys, 36% of retirees living abroad believe that their health care costs are less than a quarter of what it cost at home with a further 38% of respondents indicating that costs were between one quarter and half.

Many countries favored by ex-pats have nationalized health care systems available at very low monthly premiums. This option is great for taking care of the basics (health checkups, allergies, a broken toe) but there are often also private medical care options again at a fraction of the cost available in the US. Many of these facilities are staffed by personnel trained in the US and Europe and the equipment is often state of the art. Have you ever seen ads for medical tourism?

Beside health care cost and quality there is an additional benefit and it relates to something in your control. By that I mean what happens to you as you change your surroundings and adopt a simpler lifestyle.

Often you have no choice — things move slower abroad, the roads are narrower, there are fewer cars on the road, you are often closer to nature, people walk a lot more, and information overload is not as prevalent.

But the biggest change is often internal. Something changes in people when they retire abroad. Maybe it is by necessity as you get used to your new environment or that changing your habits is easier when you get a new lease on life.

Among retirees, surveys show that 43% of them believe that they now have a much healthier life style than at home. Another 31% think that they have a slightly healthier life style. For most people retiring abroad a less stressful life leads often to healthier living.

#5. It will give you a chance to reinvent yourself and that may be the biggest reason for taking a chance.

No, retirement abroad will not make you look like Gisele Bunchen or Tom Brady but it will give you the ability to re-define what you want out of the rest of your life.

There are four main reasons for this according to retirement expert Chuck Bolotin of BestPlacesInTheWorldToRetire.com. One is the shock from experiencing unfamiliar settings.

Maybe you never saw yourself as a nature lover but waking up every morning to a band of singing birds might trigger the Steve Irwin in you.

Another is simply being around new people. New friends, fresh conversations, different social norms? Throw in there a new language and I hope you get the point.

Yet another reason and one we alluded to before is the lower cost of living allows you to do more with your budget which, of course, has the side benefit of lowering your stress.

Maybe your budget will now allow for a couple of adventure trips a month. Imagine white water rafting the Reventazon River in Costa Rica or hiking Ecuador’s Chimborazo Mountain? Both would surely get your juices flowing!

Finally, being around people with a different perspective of life will force you to re-examine your beliefs. Not everybody views life the same way as your peers back home.

Some of your core principles will no doubt be re-enforced but you might end up seeing shades of color in areas of your life where once upon a time you only saw black and white.

Remember, living does not stop with the last paycheck. Retiring abroad could be the shock you need to restore your identity and purpose in life.

Try it and if it does not work for you come back. But whatever you do, re-inventing yourself is key to finding a life of adventure, new learning and meaning.

Retiring abroad will not cure all ills. Running away from problems will never work, but an open mind and a desire to lead life on your terms could yield a steady stream of dividends.

Retiring abroad is not for everyone, of course. But if you want that extra adrenalin rush and feel empowered again to lead a life of purpose at a discount price, retiring abroad might just do the trick

Thank you for reading!

About the author

Eric Weigel

My goal is to share my experience as an investment manager to help people make more informed buy and sell decisions. While we would all like to think that we act rationally all investors succumb to periods of greed and fear that cloud our judgment. My hope is that my approach based on fundamental insights, robust quantitative techniques and 30+ years of real-markets experience will help you navigate both your emotions as well as the daily noise of capital markets.


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