Articles and Position Papers
Americans Must Live With Lack of Retirement Planning
February 2010
According to a recent survey of consumer finances, more than half of Americans aren’t saving enough for retirement. People are living longer, healthier lives than ever before, but that means many are outliving their assets.
U.S. firm Ernst & Young, LLP conducted a study on retirement vulnerability, to see how bad the problem has become. The study concluded that even if your retirement income is 60 to 70 percent what you’re currently making, inflation and fluctuations in investment returns would still require you to reduce your standard of living by nearly one third to avoid outliving your funds.
Studies like this one have encouraged more people to explore ways of lowering their cost of living without reducing their quality of life. Mexico and Central America have become very attractive options. The climate is mild, governments are stable, foreigners are welcome, and one can live in the luxury of a vacation resort year round, for less than the cost of maintaining one’s current lifestyle in the U.S.
U.S.-based hospitality and resort advisory firm Panorama International confirms that the trend is increasing, with countries like Mexico, El Salvador, Costa Rica and Panama being especially attractive. “Essentially, Americans are increasingly finding lower costs of living, better climate, and top medical facilities in Mexico and Central America to be a strong draw. Additionally, the time zones are the same as the U.S. and direct flights of about 3 hours duration originate from many major U.S. cities. Even the U.S. dollar is the official currency in countries like El Salvador and Panama” explains Stephen Drechsler, Executive Vice President of Panorama.
Living abroad during retirement is becoming increasingly easy. Social Security allows one to receive and cash checks almost anywhere. Many medical insurance plans are accepted as well. Many Central American countries offer tax incentives for retirees and have no restrictions on land ownership. “Foreigners”, says Drechsler, “have no restrictions on owning property in any country in Central America. Foreigners have the same rights and enjoy the same benefits as local citizens. And title insurance is available from U.S. title insurance companies like Stewart Title to eliminate completely any risk regarding sanctity of title.”
People who transition to the region will enjoy a superior quality of life for less. Labor and domestic help are affordable. A full-time maid costs less than $400 per month in most countries of Central America.
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