Expat Retirement Vs Staying Put

A reader asks follow up questions, I answer

The other day I posted an article about problem happening in Nicaragua that could be problematic for any expats that have retired there one way or another. I cross posted it to Seeking Alpha and it drew some good comments including the following comment and my reply;

Comment from teddie43;

So how does living "at the end of a road in forested area on top of a mountain" in the USA compare with living in Nicaraqua? Let's say your retired and have a pension, collect some social security, blog some, have rental income and an investment portfolio. Taken all together your expenses are less than your income. Sounds better and safer than some 3rd world country where even your children get confiscated as mentioned above. So even if social security goes broke by 2030 (how would you like to be the politician who brings that to an end?) is your life over? I think not, you just make adjustments. Retired living in the USA still remains the best.

My reply;

Great question. I think expat living in certain places could be cheaper than where/how my wife and I live just outside Prescott, AZ but we do live in an inexpensive area in terms of property tax and income tax. We've been here for a while and bought cheap so we have been lucky to a point but set out to build this circumstance when I was in my early 30's (wife was late 20's).

Anyone lucky enough to create a living situation where multiple streams of income exceeds income is clearly in a great position regardless of whether they live someplace cheap or expensive, obviously it is easier in a place that is cheap and many foreign countries can be very cheap but as you allude it is not for everyone.

To clear one thing up if I am reading your comment correctly, living overseas does not interrupt your Social Security, you still get it. Health care for the basics in many of these places is good and much cheaper than anywhere in the US.

My father moved to Spain in his early 50's until he died three years ago at 88 (different circumstance than the context of this post). His SS was about $1100/mo, he got some sort of Spanish pension of about €325/mo. The Spanish pension covered the rent and the SS exceeded his spending needs. The health care was good until he got very sick and then it was lousy, he chose not to come back to the US for care but he could have.

There are absolutely circumstances where this can work but of course there are circumstance that it would not and clearly this is not for everyone. It is not something I plan on doing (for financial reasons, but going to live in some interesting European city for a year is intriguing to me) but it can be an option for folks.

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