Overseas Retirement: the Good, the Bad and the Ugly

Can retirement overseas really be as good as sipping a margarita while the sun sets on fishing boats parked on the pebbles of a palm-lined beach in a Costa Rican village?

Or watching in wonderment as your glowing rice paper lantern rises into the night sky with thousands of others to create a spectacle during Thailand’s Yi Peng festival?

“Yes,” say a growing number of American expats who find that nothing beats the adventure of overseas living while they stretch their retirement budgets further than they can back home.

“No,” say those for whom overseas retirement is a bust. They tell tales of culture clash, red tape, language barriers, disappointment and rip-offs. Or their circumstances change, and they just want to return home.

So, how can you know which camp you might end up in if you try retiring overseas?

Perhaps the best way to learn what might be in store if you retire abroad is to seek out expatriates who have gone before you.

Following is a glimpse of the good, the bad and the ugly encountered by those who have left the U.S. — along with their advice for anyone considering spending their golden years in a foreign land.

Expecting the unexpected

“The key to success is to keep an open mind in all aspects of retiring overseas,” says Kathleen Peddicord, publisher of Live and Invest Overseas and author of the book “How to Retire Overseas.” Her company hosts conferences and publishes reports on overseas opportunities.

You can prepare for all the practical logistics of renting, buying or even building a home in a new country, getting a driver’s license, insuring your property and car, and arranging for health care. But you’re just not going to know what it takes for real until you face it, Peddicord says.

“Leave all your expectations at the border,” she advises. “Nothing will work as expected and everything will be harder and take longer than you can imagine.”

The adventure is still worth the effort for most, says Peddicord’s husband, Lief Simon, real estate editor for Live and Invest Overseas and director of its Overseas Property Alert. Only one or two out of every 10 people who retire overseas are unhappy, he estimates.

And sometimes when it doesn’t work out, the answer isn’t moving back to the U.S., Peddicord says. A friend of hers moved to Spain three years ago but didn’t like it. She checked out neighboring Portugal, moved there and is loving it.

Once you’ve made your first move abroad, the second or third is easier, says Peddicord, an American expat who lives in Panama City, where her company is headquartered, and who previously lived in Ireland and France.

Countering corruption

For Stephen Anderson — author of “Retiring in Mexico: The Good, The Bad, and The Ugly” — the longer he lived in the Chapala area of Mexico, the more he realized “this is a country of crime and corruption, and foreigners are the targets of choice,” he says.

Anderson’s book details “a lot of terrific things about living in Mexico” but also what he calls hidden costs and a lack of consumer protections exemplified by his failed dealings trying to remodel his home.

Corruption is a part of the landscape in some countries, Peddicord acknowledges, but she says you don’t have to buy into it.

Retirees might find an immigration official holding a hand out for an “expediting fee” to handle papers, she says. A cop who stops you for a traffic violation in a hot climate might tell you he would rather take a friend out for a cold drink than write you a ticket, but he has no money.

Once you’re known as a payer, word gets around and others ask for bribes, Peddicord says. Also, if you pay a bribe to get work done and the work does not get done, you have no recourse.

“If you hold your ground, word will get around that you don’t pay,” she advises. Unscrupulous officials will move on to target someone else.

Simon describes being pulled over in Panama. When an officer suggested an alternative to a ticket, they politely told him, “No, go ahead, write the ticket, please.” The cop sent them on their way.

Clashing cultures

Peddicord says she hears complaints by expats from many countries. Cultural clashes are the source of many of these gripes. However, your attitude in a new country can help you cope.

“Remember whether it’s France, Ireland or Argentina, you are not going to change the way they do things,” Peddicord says.

The way residents of a foreign country close on real estate, celebrate birthdays, endure long lines at banks — you have to adapt to them because these quirks are based on long histories of tradition, she says.

You need the mindset that “people are not going to change for me,” or you will be miserable, she says.

While English is spoken to some degree in many places, learning the local language will help you make local friends, deal with government offices and shop in local stores.

“Americans come from the most comfortable, most convenient place to live,” Peddicord says. “If comfort and convenience are most important, stay in the United States.”

But in most places, you won’t be the first expat moving in. You can use the internet or tap into the local expat community in person to get support, information and recommendations.

Also make sure you visit the overseas retirement destinations that you are considering before you move. If possible, visit in the off-season, perhaps during a rainy season. If you like a locale then, the chances will be good that you will like it year-round.

“You have to get out of tourist mode and explore more than what you can see from an airport or dock,” Peddicord says.

Living cheaply

You can live cheaply abroad, whether in France or Colombia, Peddicord says. Doing so is simply a matter of how you live.

You could live with American-style accouterments and buy your Aunt Jemima pancake mix, Jif peanut butter and imported wines and meats in supermarkets catering to expats. But it will cost you.

On the other hand, if you shop locally and enjoy locally grown produce and locally caught fish, grocery prices will be much lower.

Also think about what you buy in terms of whether you truly need it in your new home, Simon says.

“Americans don’t realize how much they spend on crap,” he says. “Living overseas in retirement, you think through every purchase.”

Boomerang retirees

If you’re in your 50s or 60s, you may be feeling fine. But you’re going to age after you retire overseas, and so will friends and family you leave behind.

In 2012, Brad Johnson and his wife left Phoenix for retirement living in Mexico, Money.com reported. A couple of years later, they were back in the U.S. because Johnson’s mother-in-law needed their help.

“It’s not uncommon for people to move back home,” Peddicord says.

You might want to care for your ailing parents yourself. You may get sick and feel more comfortable with health care back in the States. Or you might just find Skype, Zoom and FaceTime are not as fulfilling as being there as your grandchildren grow up.

“Don’t think of your overseas move as a one-way trip,” Peddicord says.

Some people split their time between homes abroad and homes in the U.S.

Jay Cashman and his wife, Christy, spend a week each month at Kilkea Castle, a 12th-century fortress in his ancestral homeland, Ireland, that they turned into a golf resort and their own second home.

“The people are so friendly,” Cashman told Boston.com. “We just fell in love with the place.”