I’m a Retirement Expert: How You Can Save Money in Your Costa Rica Retirement
There are so many financial questions that come with retirement. How much can you live on a fixed income? Do you need to downsize your lifestyle in order to be able to afford it? Where should you live, and can you fulfill your post-work dreams in that location?
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For many retirees, the cost of living in the United States has become way too expensive. The basic everyday items that are available at the grocery store have gone through the roof, and seniors are struggling to keep up with the costs.
If this sounds all too familiar in your retired life, there is a country you might want to consider moving to where your American dollars can stretch in retirement: Costa Rica. The Central American nation has a lot of appealing aspects for U.S. retirees to move there and spend their golden years saving money instead of spending it.
Banking
Richard Bexon is the managing director at Costa Rica Investments, a lifestyle and financial consulting company that helps people invest and relocate to Costa Rica. Based on 20 years of experience in the industry, Bexon’s advice started with checking out the banks in Costa Rica to get retirees set up financially.
“Use Wise or Revolut or a similar international bank that won’t charge transfer fees, currency conversion fees, etc. when living in Costa Rica,” suggested Bexon. “$30 international wire transfer fees and 1%-2% exchange rates fees sum up over a year.”
Bexon shared that if you are able to open a local bank account, definitely do that, so you can establish yourself as a customer who banks within Costa Rica.
“Not the easiest process, but once you are settled and own or rent a property, it makes the process easier,” admitted Bexon. “This way you can send one transfer a month and not pay multiple international fees.”
“Do not close down the bank accounts or credit cards in your own country,” Bexon advised. “We have seen many people do this and then require them later.”
Saving money in retirement while living in Costa Rica requires that you have a financial footing in the country. It does not have to be your entire life savings, but keeping some liquid cash and lines of credit within the country’s borders gives you a leg up to start retirement off on the right financial footing.
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Cost of Living
“Find out when your local market is, as you can save up to 50% on the price of fruit and vegetables, and normally, they are much better quality,” offered Bexon, who noted that most of these markets are typically set up on Saturdays and Sundays in Costa Rica.
“Buying meat and fish in the supermarket is expensive here, typically up to 2 [times] that in North America,” Bexon went on. “In order to save money, the best thing is to buy your meat in bulk from Pricesmart — our Costco — and find a local fisherman to source your fish.”
“Your most expensive household bill in Costa Rica will be electricity, and if you are used to AC, this will cause it to be anywhere from $300-$500 a month if you use it all the time,” Bexon said. “Therefore, try to only use it at night when electricity rates are lower, and your bill will be closer to $100-$150.”
Transportation Costs
Most people need a car when relocating to Costa Rica, according to Bexon. This is especially true for retirees who might be experiencing health or mobility issues that could prevent them from walking or taking public transportation.
“Many people ask about importing their car, and this can be a great option, as long as there are good parts in Costa Rica,” Bexon reported, recommending Toyota, Nissan, Mitsubishi and Hyundai as the best cars to get around the country’s unique terrain.
“The roads here are not as smooth as most of the world, so expect heavier repairs,” Bexon said. “If you do decide to import a car, you should expect to pay 50% of the value on import taxes and transport.”
He also pointed out that it’s important to retrieve it from customs as quickly as possible once it arrives, as “there are heavy daily fees. We suggest using an import specialist.”
Healthcare Expenses
“If you become a resident, you can pay into the local social security system,” Bexon explained. “They will ask how much you earn, and you can decide on the amount you tell them. If you have $1,000 a month income, you can expect to pay $150 a month for healthcare.”
“If you are looking for private healthcare, we have found it to be more cost effective getting an international plan that covers Costa Rica from a company like Blue Cross Blue Shield or Pan American Healthcare,” said Bexon, who noted that rates usually start at around $1,500 per person for these kinds of plans.
Investing In Local Property
“Costa Rica’s property market is very buoyant in some areas, but reselling property in other areas takes a long time,” Bexon pointed out. “Investing in the right property in the right location is key.”
A typical mistake made by American retirees who have just moved to Costa Rica is sinking a significant investment into a piece of property only to find out it does not fit their needs. By that time, the money is spent and retirees find themselves in a jam of whether to sell or head back to the United States.
“We suggest to rent a property for the first year,” Bexon explained. This ensures that retirees like the area and helps them to further understand the real estate and investment market in each area.
“Typically, property demand and supply are governed by tourism to the area,” added Bexon. “Therefore, understanding the tourism season and demand is vital.”
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