More people retiring abroad
The economic downturn is causing some retirees to pick up and move out of the United States in search of a lower cost of living. Reporter Karen Weise journeyed to Panama where she met a retired parole officer originally from Detroit.
Panama City's skyline has exploded over the past decade with high-rise residential developments, many targeting expats. (Karen Weise)
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Retired parole officer Carl Haskins loves his new retirement life in Panama. He pays just $300 a month for rent, so he has disposable income to visit his kids back in the U.S.
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Tess Vigeland: The United States has lost a cumulative $2.8 trillion of retirement savings in the downturn. While some retirees are scratching their heads, others are picking up their passports. Mexico and Costa Rica are popular, but there's a new "it" place: Panama, where last year, despite all of the global turmoil, the economy still grew nine percent. Reporter Karen Weise went to Panama, where she met a retired parole officer from Detroit.
Karen Weise: I met 60-year-old Carl Haskins at an expat party in Panama City. There were two things I couldn't miss about him -- his bright Panama Canal baseball cap, and his huge smile.
Carl Haskins: Here I am. I love it too. Wow. Oh man. This place is wonderful. The people, the people make the country.
Carl moved from Detroit to Florida in 2002 after his wife died. But there, he started feeling squeezed.
Haskins: I saw that my income, or my ability to pay for different things, was diminishing each year. And I said, well, at this rate, I'm going to be in trouble in five years.
Carl's one of thousands of American retirees who chose to move south. He visited Panama twice. He says you always need to do things twice. In the end, Carl chose to live in David, a city near the Costa Rican border.
Haskins: As a matter of fact, I moved up country. I'm not in the city. And God I love it even more. It's everything I ever wanted. I get to see cows and horses like when I was a kid.
Carl said back in Florida, he paid $1,400 a month for rent. In David, he pays less than a quarter of that for a two bedroom apartment that's fully furnished. TV, sofa, bed, everything.
Haskins: Holy mackerel! And that's $300 a month. I say give it to me! Hurry up!
Though Carl is renting for now, many expats are laying down permanent roots. Some even build their own homes, often coming in around $60 to $70 a square foot. Though, they warn, it takes patience. As several people told me, you've got to get used to "manana."
Mario Vilar is a go-to guy for beating back the bureaucracy in Panama. His company, called Move to Panama, helps with filling out visa applications, bringing pets into the country, finding real estate.
Mario says the tanking U.S. economy has slowed down the flow a bit.
Mario Vilar: Many people that are planning to move to Panama, they are ready to do it but they cannot do it or are just waiting to sell their houses. That is the biggest delay, selling their houses.
Mario says people might come a few months later, but they're still coming. In part, that's because the government kicks in some sweet incentives. New construction is exempt from property taxes for 20 years. And retiring expats can live on a visa that gives them the same perks as local retirees, with discounts on everything from movies to utility bills.
But this growth comes at a cost. Farmland is being plowed under for gated communities. And most Panamanians cannot buy homes, let alone groceries, in popular expat areas. And, let's be clear, retiring in Panama is not like retiring in the U.S. It's chaotic, like you'd expect to see in a country growing so quickly. Unpaved roads. Sporadic trash collection. And illogical bureaucracies.
Bob Adams: You look into your own heart, so to speak, before you move down, and ask yourself how flexible am I, because you are going to have to adapt to a different culture.
Bob Adams threw the party where I met Carl, from Detroit. Bob runs the website RetirementWave.com. He says baby boomers retiring now find living in Phoenix or Boca to be a bit, well, boring.
Adams: They're not their parents, and they're not just expecting to settle down and die a few years later or something of that sort.
Weise: And what about being far from family?
Adams: Their attitude is if we don't get over to the grandchildren this month, we will the next time. It's a whole different mindset.
Panama has high speed internet, so everyone emails, Skypes, and video chats with their families. And Carl, from Detroit, he said he now has disposable income that he never would've had if he stayed in Florida.
Haskins: (So) As far as costs, there's no way I can beat this, and plus, it gives me the opportunity, this will be my third trip home in six months. It just gives me a sense of ability that I had before. And I can go forward, and I can still be a help, rather than a burden to my children.
Carl hopes to buy a place in the next few years and sees it as a family retreat of sorts. He wants his grand kids to visit and experience life in the countryside, just like he had as a kid in rural Michigan, a half century ago.
This is Karen Weise for Marketplace Money.
Comments
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From Tehachapi, CA, 10/19/2009
I'm 61, my husband is 62. We have some savings..but if we get sick that will be gone...we don't have medical insurance...and won't get 'medicare' until we're 65. I understand that there's good medicine in CR and Panama..for a very reasonable cost...true?
From Long Beach, CA, 08/05/2009
Someone commented about the "Ugly American beating the system," well, it seems like the American system is "beating down" its citizens. The retired parole officer is likely presenting a much more kindly face of America than a typical tourist might.
However, one of the photos showed homes displacing coffee bean farms with some American's need for "super-sizing" the ideal of an American home with marbled kitchened Mediterranean styled homes in a country where many citizens are struggling with their economics.
Also, not to mention global warming. If it's bad to build more than what we need in America, it's also bad anywhere else. If you have to move to stretch out your retirement money to have a decent living, great! Just don't export American consumerism with you. We, the citizens of Earth, don't need it.
From Nashville, TN, 03/09/2009
It has always been my goal to retire in Costa Rica. It is a very different culture. The pace is much slower than our chaotic lives in the U.S. Costa Rica is a pure democracy. I like their politics. The happiest people in the world live in Costa rica. I am afraid the global economy is going to have a negative impact on the low cost of living there. Also, being the single mother of an only child I feel I will need to maintain a home in th U.S. in case my daughter decides her future lies in the states. This has been a great desire for many years and I have made many trips there. (Almost every vacation of my life.) I just can't foresee that the outcome of my dwindling retirement fund will be able to sustain the lifestyle I want to lead. My plans are not grandiose but I do want to be able to live not just exist.
03/09/2009
I was stationed in Panama for four years witht he USAF. My father and grandmother were Panamanian. I have put lots of thought into retiring in Panama myself. It is too expensive to retire in the USA.
From jonesboro, TN, 03/08/2009
better than living in portland.
From Portland, OR, 03/06/2009
Another UGLY American bent on beaying the system, UGH!
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