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Retire in Costa Rica with $200,000 of Savings?

Author: Andrew Jackson

Who wouldn't want to live where the people greet you with pura vida! (life is good!) and the nation ranks as the happiest country on earth? That's Costa Rica. Its beautiful scenery and low cost of living (see Retirement Funds Too Little? Retire Abroad) make it an expat's dream, but does that mean you should pack your bags and join the roughly 50,000 U.S. emigrés already living there? Let's see if it's possible to retire in Costa Rica with $200,000 in savings.

Geography and Climate

First, a rundown on the country itself. Costa Rica is a Central American nation situated between Nicaragua to the north and Panama to the south. The west coast borders the Pacific Ocean and the east coast sits on the Caribbean Sea. At 19,700 square miles, the entire country is slightly smaller than the U.S. state of West Virginia.

Early attempts to colonize the area in the 16th century proved impossible in part because of the hot and humid climate of the coasts, where the temperatures range between 70 to 81 degrees F – all year round. Go to the city of Monteverde, situated in the highlands, and you'll find cooler temperatures, mist and fog. The country has a rainy season from May to November that accounts for much of the average rainfall of 100 inches, but some of the mountainous regions receive up to 25 feet of water annually.

Costa Rica is earthquake-prone, experiences hurricanes along the east coast and, due to the heavy rains, has some flooding and landslides.

People

The happiest country on Earth must have the happiest people, right? Could be true. Before you go, learn Spanish, the official language, and the word tico. Costa Ricans call themselves ticos because they add an ending ico to many of their words, as in, Un momentico, por favor ("just a little minute, please").

Like many countries in the Central and South America regions, ticos are passionate about their opinions and take part in protests, strikes and rallies, but they're nonviolent. In general, people are polite, easygoing and possessed of that uniquely Latin American laid-back charm.

Ticos are family-oriented and have a small-town view of family life. Children often live at home well into their 20s and 30s and may not move out even after getting married.

The country is about 76% Catholic and nearly 9% of its 4.8 million people are foreign-born.

Cost of Living

Expect to find a lower cost of living in Costa Rica. Comparing the city of San Jose to Tampa, Fla. (a popular retirement destination of similar size), you can expect to pay about 18% less overall in the Costa Rican location, with housing being about 44% cheaper and food 9% cheaper. Clothes are significantly more expensive, though (about 53% higher) and you'll pay 31% more for other personal items. Many expats buy clothes from outside the country and have visitors deliver them.

Only $500 a month will land you a furnished condo. You have to pay for utilities, but that's only about $170 for everything, including Internet, phone, water and electricity. Expect to pay about $400 for groceries. If you enjoy eating out, dinner for two at a modest restaurant will run $15 to $20. You and a spouse probably won't have any problem living comfortably on less than $2,000 per month.

If you're looking for a more luxurious lifestyle, add a couple of hundred dollars onto your housing costs. When you're budgeting, don't forget Social Security: The average retirement benefit in 2015 was $1,328/month. Add that benefit to $700 a month from your savings and you have just over $2,000 a month to spend, enabling that $200,000 pot to last almost 24 years.

Security

The U.S. Department of State rates Costa Rica's crime rate as high, but there's very little instance of violent crime. Most petty thefts happen in highly populated and tourist areas at certain times of the year – Christmas, for example. Tourists are routinely victimized by passport theft, as well as pickpocketing, mugging and purse-snatching. Still, compared to some other countries in South and Central America, Costa Rica is safe and stable. The State Department has no travel alert or travel warnings for it.

As you become more familiar with the country and talk to other expats, you'll quickly learn the high-crime areas to avoid, which dramatically lowers your chances of being a victim. Even so, U.S. citizens traveling to or residing in Costa Rica are encouraged to enroll in the State Department's Smart Traveler Enrollment Program (STEP), which provides security updates and makes it easier for the nearest U.S. embassy or consulate to contact you in case of an emergency.

Healthcare

Medical services in Costa Rica aren't just the best in Latin America, they run a third to a fifth cheaper than what you would pay in the U.S. As an expat, you have access to the government-run universal healthcare system or private care. Many doctors, especially in the private system, speak English and have received their raining in North America or Europe. There are three high-quality hospitals around the capital city of San Jose that most expats use.

Expect to pay about $60 per visit to see a general, family doctor and $80 to $100 to see a specialist. It's no wonder that the World Health Organization rates Costa Rica near the top in terms of life expectancy.

Visa Information

You don't need a visa to enter visitor-friendly Costa Rica if you're traveling from the United States, though of course you need a current passport. You can stay for up to 90 days, providing your visa is valid at least one day beyond the date you enter the country and you possess a pre-paid ticket to leave the country.

If you plan to live there for all or part of the year, there are two types of residency. The Pensionado program requires proof that you're getting at least $1,000 per month from a pension or retirement plan. Under this program, you can't work as an employee for any local company – but you can own a company here, if you want to invest in the local economy.

The Rentista program is for people who don't have a fixed retirement income. You have to provide proof of at least $2,500 in income per month for two years or make a $60,000 deposit in a Costa Rican bank approved by immigration authorities.

Whichever program works for you, most experts advise starting the immigration process in your home country.

In general, Costa Rican authorities prefer immigrants who will bring money into the country. The country has a good supply of well-educated, skilled workers, so getting any type of work visa is difficult.

The Bottom Line

Of course, settling permanently in a foreign land is a complicated decision (for some general advice on the topic, see Plan Your Retirement Abroad and Retirement: U.S. Vs. Abroad). But Costa Rica consistently ranks high on all surveys and reviews for expats. The country is safe, friendly and clean, with a healthy and well-educated population. The cost of living is low and healthcare is top-notch. Try taking an extended vacation there; it's the best way to determine if becoming a tico is how you want to live out your retirement years.

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