I asked where they would have ended up, if they couldn’t settle in Mexico. “At one point we were set on Nicaragua, but the political situation there has changed so much. There’s no way I’d retire there now. Another place we considered was the south of France. Not the French Riviera, which is very expensive, but other parts of France. Costa Rica was also a good possibility.”
The issues of being retired abroad during the pandemic
The value of your retirement income
“Retiring abroad is still very feasible both financially and practically in a post-COVID world,” says Bob Lai, publisher of the popular FIRE blog Tawcan, where he writes extensively on geo-arbitrage. “It is certainly going to be cheaper to live in places like Southeast Asia or some Western European countries. … Instead of needing $65,000 a year in retirement, you may be able to get away with say $40,000 a year,” says Lai. “This would accelerate your retirement timeline and give you more margin of safety.”
Retirement abroad is still financially possible in the COVID-19 era, but “it depends on what retiring abroad means to you,” says wealth advisor Matthew Ardrey, of Toronto-based TriDelta Financial. Some seek warmer climes or a return to their country of birth, but any analysis of financial feasibility may not be able to account for unique negative financial surprises, such as the rate of inflation reaching 50% in Argentina.
How long you can stay abroad
The biggest uncertainty, Lai says, is the limitations that different countries can impose. If you have permanent resident status in the country you aim to retire in, that might be OK. But if you have an extended stay as a visitor, you can be forced to leave. For example, visitors used to be able to stay in Panama for 180 days: then the clock resets once you’re out of the country for 30 days. Panama just imposed a 90-day stay limit for visitors.
Accessible health care
Another important factor is healthcare. “With COVID-19, you’re better off staying in Canada and relying on Canadian healthcare,” says Lai. And there’s the pandemic to consider, too. “Who knows what would happen to your healthcare coverage if you’re staying in Malaysia, Vietnam or Thailand and there’s a huge case spike? If you are relying on self-bought travel health insurance, the insurance company may change their policy so that you’re no longer covered if you were to get COVID-19.”
Mark Seed, who runs the myownadvisor blog, suspects COVID-19 has caused some considering geoarbitrage to rethink their healthcare needs. He doesn’t think the dream of retiring abroad is over but believes health may trump other considerations.
“I don’t see any happy semi-retirement, retirement or dreams of living abroad of value without your health,” says Seed. “It’s important to consider any ‘exit’ strategy should folks need to leave a country for any reason in short order.” He encourages anyone living aboard to develop strong local ties to expat community groups, as a support network should they need it.
The ability for family to visit
Adrian Mastracci, portfolio manager with Vancouver-based Lycos Asset Management Inc., says the dream of retiring abroad is “still alive and well” but the reality of COVID-19 and its constantly-changing rules affect anyone brave enough to venture abroad.