Foreign Intrigue

Kiplinger's Personal Finance Magazine, May, 2000 by Mary Beth Franklin

RETIREMENT | Your search for the PERFECT SPOT needn't stop at the U.S. border.

AN attractive early-retirement offer and the desire to leave winter weather behind launched Len and Sue Breitfeller's quest for the perfect retirement haven. After a methodical yearlong search, they sold their house in suburban PPhiladelphia and headed south--south of the border, that is.

Two years later the Breitfellers, both 60, are relishing life in the thriving expatriate community of Ajijic, Mexico, a picturesque village on the shores of Lake Chapala. The biggest draw of this central Mexican retirement haven is its ideal climate: perpetual spring with average temperatures in the mid 70s. Residents claim that, as in the mythical Camelot, it rains only at night.

But perfect weather isn't the only draw of Ajijic (pronounced ah-hee-heek). Retirees can also take advantage of a furnished home, frequent meals out, bargain-priced tickets to the English-speaking community's numerous musical and theatrical performances, and the part-time services of a maid and gardener--all for less than $2,000 a month. The powerful combination of savings and sunshine has attracted more than 30,000 American and Canadian "gringos"--as they refer to themselves--to the central lake district alone. Throughout the country, more than one million Americans now call Mexico home.

While Mexico is one of the most popular destinations, plenty of other countries beckon retirees. "Returning to the country of your family's origins or to where you once worked are other major factors in determining an overseas retirement location," says Dorothy van Schooneveld, executive director of American Citizens Abroad (www.aca .ch), based in Geneva, Switzerland.

France, Greece and Ireland are popular overseas destinations, while Belize and Costa Rica are favorite retiree havens in Central America for those looking to stretch their dollars.

North of the border, however, foreign retirees can expect an icy reception. Canada has adopted a no-retiree visa policy similar to that of the U.S.

Exact figures are difficult to obtain, but the U.S. State Department estimates that nearly four million Americans are living overseas, not including military and embassy personnel. About 380,000 social security retirement checks go to beneficiaries outside the U.S. each month, but that understates the number of retirees living abroad. Some are too young to get benefits, and those who do receive checks often have them deposited directly into U.S. bank accounts.

Phase I of your retirement

THE EARLY YEARS of retirement are ideal for an adventure overseas, says Rosanne Knorr, author of the Grown-Up's Guide to Running Away From Home (Ten Speed Press, $11.95). Your kids are grown, your job is behind you. Why not consider a cottage in France instead of a condo in Florida? Certainly, the expatriate life isn't for everyone. But if you are flexible and open to new ideas, enjoy meeting new people and possess a sense of adventure--and your spouse does, too--you may be a good candidate for running away.

Your decision to live abroad isn't irrevocable. Think of it as the first phase of your retirement. If you don't like it, you can go home again. Perhaps the biggest obstacle to retiring abroad is leaving children and grand-children behind. But e-mail allows you to stay in touch daily and, if you relocate near an international airport, you can be home in a matter of hours--perhaps as fast as if you lived in Tampa or Tucson. And with an exotic address, your family may be more than willing to visit you.

Retiring abroad--even temporarily-requires detailed planning. First you have to decide where you want to go. Then you have to research the cost of living, tax rules and visa requirements. Warning: Some of the popular "retire abroad" titles in bookstores contain obsolete information. Check with the embassy of the country you are thinking about moving to for the latest visa regulations, but don't expect much help on questions of taxes, cost of living and health care. Expatriates who live there may be a better source of information. Numerous Web sites, such as Escape Artist (www .escapeartist.com), Transitions Abroad (www.transitionsabroad.com) and Living Abroad (www.liveabroad.com), specialize in life overseas, and some host forums where you can get advice from Americans living in dozens of countries around the world. At our Web site (www.kiplinger.com), you will find a list of links to more sites that offer valuable information.

Although social security checks will follow you to most countries, medicare doesn't cross U.S. borders. If you have retiree health coverage from a former employer, you might be covered overseas. If you don't, you can purchase a policy from a global health insurance company, such as Bupu International and Lloyds Expatriate Protection Plans, or through the Association of Americans Resident Overseas (www.aaro-intl.org), an organization that lobbies Congress on behalf of U.S. citizens living abroad on such issues as medicare coverage.