Those dangerous downsides in retiring overseas
By Jay Brodell
With U.S. housing prices soaring, folks of retirement age may consider cashing in. But what to do then? Some will consider moving overseas on the assumption that they could live well there for less.
The lure of an idyllic life is strong: relaxing on the balcony overlooking the Pacific with glass in hand and a perspiring bottle of a fine white wine within reach. Such a life is possible and maybe cheaper in a handful of nearby countries and even the territory of Puerto Rico. México, Panamá, Costa Rica, Colombia and Ecuador also are possibilities.
Although there are no accurate estimates and the number fluctuates, plenty of U.S. citizens have made this choice. Some have found their dream location. Others regret their decision, and many are in between. The sad fact is people carry their personal problems with them. A failing couple is unlikely to redeem the relationship with a geographical shift. A single individual in search of true love is a target for unscrupulous locals. A greedy investor with hopes of exploiting the Third World is in for a rude surprise.
Surprisingly, language is not the biggest hurdle. A solid minority of those who live in friendly Latin nations are fluent or nearly so in English, thanks in part to tourism. Plus a few months of school can provide survival Spanish abilities. In addition, some countries have a welcoming policy for arrivals with money. Panamá, for example, mandates steep discounts for new foreign residents at hotels, restaurants and even airlines.
The biggest hurdle is crime and the lack of an efficient judicial system. At least in Costa Rica there does not seem to be any shame in defrauding foreigners. And the judicial system hardly ever responds.
That attitude has spawned legions of crooked lawyers who embezzle clients funds and even engage in fraudulent property transfers. The white collar crime is more insidious than street robberies, which can be avoided easily.
One U.S. expat in Costa Rica has been fighting to regain valuable property for 20 years. The law there gives certain property rights to squatters, and crooked businessmen exploit this fact.
A group of U.S. investors was surprised when a lawyer failed to show up to a closing for a hotel purchase. The absent lawyer had just sent the escrowed purchase money to his own account in the States and avoided conviction on a technicality, of which there are many.
A U.S. billionaire died in Costa Rica, and his widow accused their lawyer of stealing $85 million.
Other business operators, both foreign and local, have suffered because contracts are mostly unenforcible without prolonged effort.
Consequently, U.S. citizens who move to a foreign country should delay making major purchases until they become more familiar with their surroundings. They also should experiment on where to live. Many expats in Costa Rica live at the higher elevations in such cities as San Josê instead of the more tropical and hot coastal communities.
Married couples face extra challenges. The temptations of the flesh are many, and a relatively wealthy foreigner will have many admirers. Husbands have been known to abandon their long-term wife in favor of a doe-eyed beauty 30 years younger. Some women have done the same.
In one case, a U.S. woman returned to her hometown in the Midwest to attend to a sick mother. When she returned to the couple’s home in Costa Rica, her belongings were spread out in front, and a woman she did not know announced from the doorway “I am the woman of the house here now.”
Many single men see the Latin countries as a sexual paradise. Prostitution is practiced there in many forms. Just as in the Mexican tourist towns single men repeatedly are hailed by local women. There also are well-known nightspots designed for men to meet women. Such availability encourages U.S. men to move permanently to where they see the action. They might even establish a live-in relationship with the girl of their dreams.
In some cases, the woman becomes the girl of their nightmare. In Costa Rica a woman need only claim that a man struck her, and the local police will remove the man from the house. He still will have to pay for the mortgage and utilities while awaiting a court hearing a long way off. The way this policy can be abused is obvious.
Police ejected one man from his home after a woman he did not know well spread some of her clothes outside and claimed she had been thrown out of the building. That case took many months to establish that the woman was acting on behalf of someone else to exact revenge.
A single man is also vulnerable to crooked landlords. An aging man might arrange to be boarded by a family who then begins to intercept his Social Security or pension checks. In effect, the man is held hostage. U.S. Embassy personnel are called on to make welfare checks of such persons by relatives still in the States. But there is little else they can do.
Although Latin nations overlook many sexual misdeeds, a foreigner caught with an underage women is in big trouble. Never mind if the girl has been plying her trade since she was 12 and was a mother at 13.
The U.S. Federal Bureau of Investigation also has targeted those who seek underage relationships. In the past the federal policing agency has set up fake websites to encourage men in the U.S. to book dates with underage women overseas. When they do, F.B.I. agents move in to make the arrest. These arrests are an international twist of the stings that are set up in the U.S. with fake ads promoting fake personages on chat sites.
Retirees quickly think of medical care. First World care is available in major Latin cities, but the U.S. government does not provide Medicare coverage there. Still, the cost of treatment is far lower than in the U.S.
Younger individuals, not only retirees, also need to tread carefully. Working online might mean working from a Latin beach community. Many already have done this, and the trend is upward. The same dangers apply. Those who work this way overseas receive generous exemptions from U.S. income tax. Puerto Rico also can be a tax haven. The details can be found online.
The benefits of overseas life can be considerable. The wise individual will realize that there can be painful downsides.