Where to Retire if You Can’t Afford to Live in the States Anymore

“We can’t afford to live in the States anymore.”

We’d just finished dinner with a couple of International Living readers. They’ve decided to buy a house in Merida, where we live, and move here permanently.

“Health care and insurance costs alone are killing us. Add property tax, and it’s too much…especially when you consider that the value of our house in the States is falling fast.”

Suzan and I have heard this a lot lately, from Americans wondering where they can go to retire in style.

Real estate prices in the U.S. are becoming more attractive thanks to the huge dose of reality injected into the market by the mortgage bubble burst.

But people still keep shopping in Mexico, Ecuador, Uruguay, Brazil…throughout Latin America. Throughout the world.

“It doesn’t make any difference if you can now get a great deal on a place in the States,” another friend recently said. “You still can’t afford to live in it. And you sure won’t make any money on it in the near future if you try to sell it.” Not a great option for a retiree on a fixed income.

Outside the States, we’ve seen real estate prices in almost every market appreciating 10, 20, 30, even 50 percent a year for the past decade. I expect that to stop. After all, crashing markets, rising unemployment, inflation…these things won’t be limited to the U.S. during the coming global depression.

It’s a big world, and most things in it are relative. Even if the global cost of living rises 50 percent in the next few years, there will still be places on the globe where the cost of living is 50 percent less than in the States.

And with no real help in sight for rising taxes and health care and insurance costs in the U.S. (does anyone really believe the insurance and medical lobbies will allow universal health care?), smart folks will think about where to retire, do the math, and move to where the money they’ve managed to keep for themselves will go the furthest.

And that, I believe, will help support property prices in the places they want to escape to…places like Mexico, Ecuador, Uruguay, Brazil, and others.

Not that Suzan and I plan to flip our place in Merida anytime soon. We’re having way too much fun here…not the least of which is having dinner with new friends.

But I don’t see the value of our property slipping 30 percent in a year, which is exactly what we’ve seen in markets like Florida and California lately.

I expect the value of our properties abroad to stay steady, especially as the global economy gets worse. We live and have invested in places that make sense from a cost of living, climate, and convenience point of view. And as more and more people finally realize that they have options about where to retire other than just sitting where they are and watching their money drain away, I expect we’ll have many more dinners with new friends shopping for a better life in Merida and other prime locations around the world.

Stay happy and healthy,

Dan Prescher
Publisher, International Living

P.S. No brag, just fact… International Living Magazine has been covering where to retire for nearly 30 years now. If you want to find out about the best places in the world to live, check out the latest issue of the IL magazine.