Why do old American retirees tend to move out and go to 3rd world or foreign countries like Mexico or Vietnam or Dominican republic or some parts of south america? and sometimes europe.
Is there a meaning or a reason behind it? and how does it help or work? this is a common thing or not a thing anymore?
38 comments
Because it’s cheap.
>Why do old American retirees tend to move out and go to 3rd world or foreign countries like Mexico or Puerto rico
Puerto Rico is part of the US lol
Some people move abroad because it’s cheaper and these places have nice weather
They have a fixed income. It goes further in a foreign country.
>Puerto rico
Have I got news for you.
They’re warm. They’re inexpensive. Ex-patting isn’t just an American thing. Honeslty I more closely associate it with Brits, so go figure.
warm and cheap
It is because of exchange rates. Your money stretches further.
A person in a retirement community (for some reason, “retirement home” is too blunt now) rarely, if ever, leaves the grounds. So, it could just as well be in America, Belize or Mexico. Especially if they don’t expect many visitors.
The only real “contact” they’d have with the local culture is through the staff, who are going to be English-speaking (its in the marketing) and not really hanging out socially much.
(My old hometown is slowly taking on retirement facilities as its main industry, because its steady money, quiet, and has basically no ‘industrial’ downside. Not even traffic issues you’d see if it was stores. I personally find it strange being around it- there’s hardly anyone “around” town now, and when I was *30*, people were still calling me “kid” due to the age differential- but in really populous places that shouldn’t be an issue.)
Because you can live elsewhere like a king on your Social Security check.
It’s common for retirees of any country to move to a less expensive country. They’re on a fixed income and want to enjoy themselves.
Cheaper to live out their retirement.
> Why do some American retirees tend to move out of the United States?
It’s a lot less expensive than staying in the US.
> and how does it help or work?
It significantly reduces monthly expenses for essentially the same standard of living. There’s a certain base level of wealth required to do it though.
It also means traveling to see family is more expensive and time co aiming.
Cheap and if they are parents, unlike when they were younger, they don’t have to worry about finding good school systems, sports leagues, staying near friends, etc.
Kind of like how retired folks move to Florida and Arizona, which have low tax rates, low cost of living, good weather, and some of the absolute worst school systems in the country.
It’s cheaper so your retirement dollar goes farther.
It’s cheap and they don’t have to worry about earning a salary.
I’m movin to Thailand one day.. $3 massages? See ya
Because it sucks to be a retiree in America. It’s too expensive for people who no longer have a salary or wages so they move somewhere less expensive and with better healthcare. Vietnam is a huge destination for retirees right now for those reasons.
The same reason many move to Florida and Arizona. Less expensive and warm year round.
1st if all Puerto Rico isn’t “out of the country.”
It’s called Fixed income arbitrage. You earn your pension in a high wage high cost of living area and then you spend your money in a low cost of living area.
Generally, as everyone said, 1) better weather and 2) further stretching of their limited dollars.
In terms of Puerto Rico, though, the local government there has implemented some extremely generous tax incentives over the past decade in an attempt to get more wealthy individuals to move there from the “mainland” U.S., in some cases allowing of some or **all** of that person’s investment income to be **exempted from Federal income tax**. Because of Puerto Rico’s unique role as a U.S. possession, their tax system actually *replaces* the U.S. Federal tax for qualified residents, allowing them to give crazy tax breaks not available to U.S. States (who can’t just override/replace the U.S. Federal Tax system like possessions can; the U.S. Virgin Islands have a similar setup but it’s not nearly as generous). Therefore, since American retirees primarily rely on private investments for their retirement income, all of that falls under the umbrella of excludable investment income under this strategy.
The following CPA firm webpage provides a more comprehensive overview of the system:
[https://www.pf-cpa.com/income_tax_incentives_for_individual_investors.html](https://www.pf-cpa.com/income_tax_incentives_for_individual_investors.html)
Low cost of living, because they can now live wherever they want free of work concerns, and they want to have fun.
3rd world country like Mexico or Puerto Rico… bruh
I think it’s usually marginally wealthy people who relocate because they can buy a much more lavish home that wouldn’t be affordable to them in the US due to the high prices of real estate especially in warm coastal areas.
Lower cost of living.
They can live in a tropical paradise because they don’t have to work, thanks to their monthly retirement check.
Because Mexico with US salary money makes you the king of any city you choose to live in
It’s cheaper.
Look, according to the statements I’m getting from Social Security, when I retire I should get a check for around $2,200/month. Now fortunately my wife and I have significant savings–but say we didn’t. Say all we had was that $2,200/month social security check, perhaps another $1,200/month from investment income (that’s about what I’d expect from $250,000-$300,000 saved in a 401K, give or take), and perhaps $200,000 in equity in a house I’m still paying mortgage on.
Do I move to Los Angeles?
Or do I move somewhere where the equity allows me to buy a nice house with cash, and where $3,400/month allows me to pay the bills and eat out and enjoy the periodic movie and trip to the bar, and do day trips once in a while?
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It’s a very small percentage of retirees who do it, but even a small percentage can be a lot in numbers. Probably more common among immigrants who have close family in the country they move to.
Most retirees remain in the US near their kids and grandkids, as well as their friends. Some move to warmer or cheaper parts of the US. I know lots of seniors who’ve stayed near their adult kids or moved to be near their adult kids, a few who moved to Florida or Nevada, and none who moved abroad.
Do they?
It’s not super common, but I can imagine the combination of warm weather and a lower cost of living is attractive. Those individuals probably wanted to move there for a long time but were limited by the availability of jobs. Once they’re retired, that’s no longer a factor.
Plus some countries have policies to make it easy for Americans to live there and live there basically permanently for cheap. Belize is an example of this. It is relatively inexpensive for Americans to relocate there in terms of visas or permits.
…or within the U.S. Half of New Yorkers move to FL, NC,SC, DE after they retire. The total tax burden in NY is the highest in the country.
Retirees with lower retirement income can live a modest life in the US or a very nice life in a foreign country like Mexico or Vietnam. $25 or 30k a year in Social Security or pension payments goes a lot farther in a 3rd world country. Also, considerations like weather, access to cheaper healthcare, having an opportunity to explore new places and cultures make it attractive.
They don’t “tend” to do this. I don’t know anyone who’s done this and I’ve had a lot of older and retired people in my life.
Americans over the last few generations “tend” to retire in the house they lived in when raising their families and then downsize to a condo or an assisted living facility.
Moving out of the US is not “common” at all. Common: widespread, general, appearing frequently, everyday, familiar, routine, usual, ubiquitous.
People are on fixed incomes, pensions, etc. It’s cheap to live in Belize. The same reason Brits or anyone else does it. It’s not an extremely popular option. It’s estimated that about 500,000 people collect social security from outside the US. There are nearly 70 million people drawing SS. That’s one out of every 140.
Some low-cost nations, like Costa Rica, offer permanent residence to anyone who sets up a direct deposit of a certain amount into a Costa Rican bank. That amount happens to coincide nicely with a Social Security pension. So Americans with Social Security can move to a lovely, warm, reasonably safe place with a low cost of living, and enjoy the benefits of permanent residence.
Existing in America is expensive as fuck, even for old folks who have significantly more access to govt benefits than most of us. Once folks retire they’re detached from work, one of the core things that keeps people here, this frees them up not only to explore and live, but also to take advantage of benefits that much of the rest of the world just offers more cheaply if not freely.
Healthcare
I’m planning on it when I retire.
I plan to retire when I’m 40-45. Make a very good living. Why not go somewhere tropical, and just enjoy life, especially when my money stretches 10 times further?
First, Puerto Rico is part of the United States. And Puerto Rico and Mexico are not third-world countries.
Also, only about 500,000 retired Americans live outside the US. It’s not as common as the news media makes it seem.
Retires do not *tend* to move out of the United States.
The percent of Americans who will retire then move to Mexico or Vietnam is extremely small.