Personal finance blog for Millennials

Why I want to retire in Central America

First and foremost I need to get this out of the way, you wont be hearing from me for a little while! I know, I know, you are saying to yourself, Drew you just started this blog, I need my weekly fix of personal financial goodness!  Well what is the benefit of being financially responsible if you never spend any of the money that you save up?

I am Nicaragua bound with my lovely fiancée Hilana for 10 days; we are heading down there this weekend.  The itinerary includes volcano boarding, swimming in a crater, and examining ancient petroglyphs.  As much as I love keeping up with this blog and embracing the support that I have received from the Money Cash Prose readers, it will be nice to completely disconnect for a week and a half.

For those of you that know me well, you know that I have been bitten hard by the Central America bug.  I have been lucky enough to check Belize, Panama, and Guatemala off my list and I am so excited to add Nicaragua. From the rich cultures to the laid back lifestyle and reasonable cost of living, Central America offers many of the same immersive benefits that can be gained from travelling Europe and other parts of the world for a fraction of the cost.

As great as visiting Central America for vacation is, Hilana and I have also been doing some scouting for potential retirement spots.  When we were touring the beautiful coffee plantations of Boquete, Panama or embracing the laid back feel of Caye Caulker, Belize we realized that each country and destination has its own magnetic pull.

Now there is a personal finance tie in here! Im not going to simply ramble about these warm locales as we live amongst the snow banks.

Many of these countries have made a concerted effort over the last few decades to attract expatriates to retire within their borders.  I will use Panama as the example here because their Pensionado program is globally renowned.

In order to be eligible for Panamas Pensionado program, US expats have to meet the following qualifications per Panama Immigration Services :

1. Prove a lifetime minimum payment of $1,000 USD per month.  This can be accomplished through a number of means including Social Security, 401K, IRA, or pension.
2. This minimum monthly amount can be reduced to $750 USD per month if the Pensionado applicant purchases real estate in Panama valued at least $100,000.
3. Typically the benefits start at 55 for women and 60 for men, unless you are able to provide some type of documented need for an early retirement.

There are a number of administrative steps that individuals have to take to qualify for the program, but proving the payment stream is really the most critical.  Once youve established the monthly monetary distribution, the benefits are pretty impressive. The list  of discounts as laid out by the Panamanian consulate in Toronto is mind boggling:

• Minimum discount off the regular prices of hotels, motels and pensions:

• 50% from Monday to Thursday
• 30% on Friday, Saturday, and Sunday

And the highlights above are simply scratching the surface of the retirement benefits of this program. Now do you understand why I want to retire to Central America?

The other key consideration for this program is that you cannot lose Pensionado status.  Other countries that have attracted significant retiree populations have occasionally passed laws that have affected existing programs. According to International Living . Panamas government has kept its pledge to grandfather in Pensionado residents. That means that even if future laws change the Pensionado requirements, your status will never change!

As always I want to get the readers of Money Cash Prose  thinking about how to change their personal financial situation. Retiring to a different part of the world can have a significant impact on your quality of life and cost of living if you research and implement that move effectively.

As I mentioned at the beginning of the post, the blog will be on pause until at least March 19th.  I will miss the Money Cash Prose  readers but Ill be back in only a week and a half!

Have you ever considered retiring outside of the United States? Where would you go? Would you retire early or wait until traditional retirement age?