Should You Retire In Costa Rica?

If I could do anything I would…

We’ve all thought about and completed this sentence for ourselves. We’ve probably done so in regard to countless subjects, ranging from the house you might own, where you’d live, the car you’d drive, where you would vacation, job, etc.

Another is where you might retire.

Chances are you thought about this one even years before approaching when you would retire.

Here’s betting you thought about some cool places, such as Florida, California, Arizona, Hawaii, and more in the U.S.

Or internationally, such as Europe, the Caribbean, Fiji, Thailand…anywhere sort of old-worldly or an exotic locale.

Today we are going to examine something many have done over the years – retiring to Costa Rica (CR) in Central America.

Hopefully, this will give you an idea of what that might entail, whether this is something that you are contemplating more immediately, or some years down the road.

Introduction

Most people have day dreamed about one day moving to someplace else, be it for work, adventure, a change of pace…some even to retire.

Pretty normal, as we all get caught up in the “greener grass” syndrome.

But when it comes down to it, many (probably most) actually like or at least prefer to stay where they are – we are animals of habit, after all.

And moving involves a lot of work and planning, as well as uncertainty.

For many, the thought of a move across town in not something they relish, let alone to another nearby city, or worse, across the country. To another country…you must be kidding.

For those who would contemplate such a life-altering move for their retirement , one such place worth considering is Costa Rica. Many Americans have done so and now live as expatriates in this wonderful  Central American locale.

Big picture

Before ever considering any new locale you might want to retire to, it’s best to take a look at the big picture, like location, general climate, population, languages, culture, things the place is known for, and much more.

For starters, when considering Costa Rica, it’s beautiful, sporting some of the best beaches in all the Americas. It is bordered by Guatemala to the north and Panama to the south. It’s boarded to the east by the Caribbean Ocean and to the west by the Pacific Ocean.

There is a dry season which runs December to April and the rainy season (very wet) which runs May to November. Rain is a big issue and the reason the country is so lush.

CR is not very large, roughly the size of West Virginia, with a population just over 5 million residents. Its capital and political, cultural, social and economic center is San Jose.

The currency utilized throughout the country is the Costa Rican Colón (CRC), although the U.S. dollar is accepted in many areas.

The primary languages spoken are Spanish and English (there are others), both of which are spoken throughout most of the country, although less so regarding English in more rural areas.

It is blessed with a year-round tropical climate – the average temperature is 80° to 90° Fahrenheit on the coasts and 75° to 80° in the plains and up into the mountains.

There are both modern cities and many rural areas, as well as plenty of coastline to the west and Caribbean beaches to the east, lush valleys, rugged mountains and rain forests.

It is considered the most stable country in Central America and has a growing, stable economy. According to the U.S. State Department, it is a strong democracy and a key partner, with an attractive trade and investment climate.

Stable is a description often used when discussing CR, due to its culture, populace, economy, government, low crime rate, and more.

Not surprisingly, CR is one of the primary vacation and retirement destinations for U.S. citizens. The U.S. State Department estimates that pre-Covid approximately 120,000 private U.S. citizens resided in the country, many of them retirees. And more than 1.3 million U.S. citizens visited annually, making it one of the favorite travel destinations among Americans.

It’s not just Americans who retire here. In fact, people from many countries choose to retire to this picturesque locale each year.

First things first

This is going to seem like a big “duh,” but visiting a place is nothing compared to actually spending some serious time there.

Given you’re considering Costa Rica as a place you might want to retire to, there’s a good chance you’ve visited. Maybe even multiple times.

But before making the jump, it makes sense to try things out for an extended period, such as up to 90 days. Even a couple times.

This is easy enough to do, as U.S. citizens can do so without obtaining a Visa. All you’ll need is your passport and a return ticket exiting Costa Rica within 90 days of entry, according to the Costa Rican Embassy.

Anything longer than 90 days and you must exit for at least one day and can return again. Otherwise, you are required to file for a longer-term request, such as temporary and eventually permanent residency, which is covered later.

Expatriate community

Let’s face it, moving permanently to another country is probably going to take some serious getting used to.

One thing that can make such a move easier is moving to a place where others like you have already made the jump.

Having a community of U.S. expatriates can definitely make such a big move easier. They’ve been through this themselves and understand what you are likely to experience and encounter.

Such a community can be a tremendous resource in terms of helping you get settled and start to live out your sunset years.

Fortunately, when it comes to U.S. expatriates, Costa Rica is considered one of the best destinations and has one of the largest such groups.

Cost of living

An important consideration when it comes to retiring in general is learning to live on a fixed budget, something we as American’s aren’t always so good at doing.

Doing so in a foreign locale can be even tougher, given you won’t necessarily know the lay of the land and what to expect when it comes to costs that you will encounter and need to consider.

As such, it’s important to gain a good understanding in advance when it comes to the cost of living.

Fortunately, while costs have increased as more people have moved to the country in recent years, Costa Rica remains relatively inexpensive by U.S. standards. According to Christie’s International Real Estate, the cost of living in CR is approximately 30% lower than in the United States.

While your costs will vary based on your spending habits, standard of living and many other factors, a single person can live on $1,600 to $2,000 per month, according to International Living.

They estimate that a couple can live on $2,000 per month, and comfortably so on $3,000, which includes all costs, ranging from housing and transportation to utilities, food, medical care and entertainment.

Housing

When it comes to housing, there are different options ranging from single-family to condos and apartments, according to International Living.

Because it’s pretty cheap compared to the U.S., you can elect to rent or purchase, depending on what makes the most sense to you.

The price for a single-family home ranges between $75,000 to $300,000 upper end, depending on location and amenities you desire.

Renting is very cheap, comparatively. They estimate a furnished two-bedroom apartment will set a couple back $800 monthly, but there are more rural areas where that cost can be almost halved.

You do need to keep in mind that prices do go up some in popular areas, such as in resort areas and the ritzier sections of larger cities, such as San Juan.

Overall, there is plenty of options in terms of where you wish to live, be it laid back and quiet, on the beach, in the city with all kinds of cultural options, etc.

Healthcare

Chances are you may know someone in your family or circle of friends who has actually traveled to CR to have health procedures or dental work performed. It’s actually something that occurs with some frequency.

You can guess the reason – good quality healthcare, and it is cheap, especially compared with what we pay in the U.S.

The Costa Rica healthcare system is rated in the upper 25%  worldwide. Relatively speaking, doctor visits are very inexpensive, as are hospital stays and most treatments.

If  you decide to retire to the country, you’ll probably wish to become a legal resident, which entitles you to the government-run universal healthcare system known as La Caja (CAJA), which is much like our Social Security system in the U.S.

Keep in mind that seeking permanent residency is a process that takes a fair amount of time. Until you are granted residency status you are responsible for your own health insurance. And actually once you do so you are still encouraged to join the CAJA network. Deductibles and costs are based on financial need.

Aside from the public healthcare system, you can elect to utilize the many doctors and facilities offering private treatment, but at a more premium cost.

Regarding private insurance, there are insurers offering international health insurance. The costs can range from as little as $100 per month to more than $1,000, depending on age, benefits, options and the deductible you elect.

According to International Citizens Insurance, you can expect to pay between $200 to $500 per month or $3,000 to $6,000 annually for a private international insurance policy in Costa Rica.

Visa and citizenship

If you have decided you want to live in Costa Rica during your retirement, you can always do so on a tourist Visa, but you are required to leave at least every 90 days, so it can be a hassle and you forgo many of the benefits available to residents.

Potentially the better option if you plan to retire there would be a more permanent status, referred to as the Pensionado residency for retirees.

This requires that you provide quite a bit of documentation, including verification you can sustain yourself financially, e.g., proof you have a minimum of $1,000 monthly income from a retirement fund, permanent pension source, or similar.

(Note – You can continue to draw your U.S. Social Security in Costa Rica)

You will need to file the request for residency through the Department of Immigration in Costa Rica or through a Costa Rican Consular office in the U.S.

After three years you can file to become a permanent citizen. And the good news is that you aren’t required to relinquish your U.S. citizenship – the country allows you to be a duel citizen.

There are other options requiring sizable deposits (renters) or investment (including home purchase) into the country in terms of obtaining residency status.

Food and culture

Given its location, Spanish food is the most predominate in CR. As there are a large number of visitors and expats hailing from across the world, including many from other parts of Central America and the Caribbean, you will find a wide selection of international foods, just as you would in most cities throughout the U.S. `

From a cultural perspective, the country is considered one of the most progressive in terms of eco-stewardship throughout the world, with 25% of the land protected from development, according to CostaRica.Org.

Additionally, the country is actually the largest, oldest democracy in the region, which is a source of national pride.

The majority of the populace is Catholic (approximately 60%), which very much influences the country in terms of values, holidays, traditions and certainly in terms of festivals. In fact, it is considered the state religion.

You can find cultural activities, ranging from theater, arts, music and other types of festivals in most of the cities. And many of the smaller or more rural areas frequently celebrate their own traditions, which you can easily travel to and participate in given the size of the country.

In addition to their beaches, there are many national and local parks throughout the country, so outdoor activities abound. This is evidenced by the country’s reputation as one of the most popular international tourist destinations worldwide.

Travel between Costa Rica and the U.S.

Although located in Central America, the flight times are reasonable in terms of traveling back and forth between the states. The average flight time (direct) from one of the two commercial airports in Costa Rica to Florida is just under three hours, while the average to New York is five hours and to Los Angles is about 6 hours.

Keep in mind that after you become a citizen you must obtain permission from the government to travel outside of the country, but it is fairly simple to do and U.S. expatriates do it all the time.

Most popular regions to retire to among expats

There are a number of popular regions throughout the country where expats tend to congregate, according to International Living.

This is a quick list you should check out and even visit before making a final decision on retiring to Costa Rica:

Central Valley – Notable: San José, Escazu, Santa Ana, Atenas and Grecia. San Jose is the largest city in the country and the Central Valley region, with approximately 3 million of the country’s 5 million population. It has all the conveniences, attractions and other features you’d find in any large city in the U.S.

San Jose is centrally located, evidenced by the fact it’s roughly an hour away from the popular beaches, as well as the mountains, jungles and volcanoes (there are two in the country). This is where the majority of U.S. expat retirees tend to live.

Central Pacific Coast – Notable: Jaco Beach, Quepos, Esterillos Este and Esterillos Oeste. It’s noted for some of the best beaches in CR.

Caribbean Coast – Includes Limon. Great for history (Christopher Columbus landed here) and less crowed, but also somewhat isolated due to a mountain range between it and the Central Valley. Definitely a slower pace.

Also worth considering:

• Southern Pacific Zone – Notable: Dominical, Ojochal and Uvita
• Guanacaste Province – Notable: Playa Flamingo, Playa Del Coco, Playa Tamarindo and Papagayo
• Nicoya Peninsula – Notable: Nosara And Samara

Conclusion

Deciding where you will retire after years of working hard to build your assets during the acquisition phase of your retirement plan is a big decision, involving many issues.

Considering the potential of retiring in a foreign country magnifies the weight of such a decision, especially if you don’t have friends and family there, and you will be leaving people you care about back home.

Yet, many people do “dream the dream.” And some go so far as to seriously consider doing so.

Truth is serious consideration is something that will be required, determining if you (and your partner) can be happy doing so.

Affordability, adapting to other customs, potential language barriers, healthcare, isolation from family back home, etc. The list of considerations is long.

Ultimately, you should visit and spend some serious time wherever you are considering before ever packing up and making the move.

Costa Rica is one such place you may want to consider if you envision retiring abroad in your future, just as have countless U.S. expats.

Keep in mind that any move when you retire should be part of a comprehensive retirement plan.

We can help ensure you are on track with your retirement, including working with you to determine where you wish to retire, here or abroad. This includes creating a customized plan to meet your needs, enabling you to focus on preparing for such an eventual move, as well as doing other things you envision in your retirement. We can certainly help guide and advise you as you navigate retirement.

Our overall approach is to incorporate a holistic model that considers all your assets, tools and accounts, with a goal of providing a comprehensive plan built specific to your needs and goals in retirement.

If you’re ready to take the next step and talk to a team of financial advisors and retirement planners who put your interests first, Schedule a call today!