Why US baby boomers are retiring in Latin America

By: Daniel B. Wood / The Christian Science Monitor

Photo by: Christian Gonzales/CIMA Coffee Farms

Places such as Mexico, Panama, Costa Rica, and Colombia attract record numbers of American seniors as they look for good – and affordable – places to live.

After 20 years in the US military, James Cummiskey was divorced and looking for a change. Relenting to his buddy's request, he flew to Medellín, Colombia, for a visit. He looked, he saw, and, by dinner time, he decided to stay. Permanently.

"After four to five hours, I was immediately captured by everything I saw," says the ex-marine, who has lived in 35 countries. He spent the next four months selling two homes, three vehicles, two motorcycles, and one airplane. He put the money aside and decided to retire early.

Now he lives in a posh section of the mountain city of 3.8 million, surrounded by lush vistas. He married a Colombian woman, started a coffee export business, and seems to get goose bumps every time he thinks about his new life. "I tell you honestly I have had more fun here in the past four years than in the previous 50," he says.

Mr. Cummiskey’s story is being repeated thousands of times – minus perhaps the sale of a personal plane – as more and more Americans retire to countries all over Latin America. Lured by sun-dappled landscapes and cheap living costs, they are settling in culturally vibrant towns in central Mexico, beach communities in Costa Rica, high-rise enclaves in Panama, and mountain retreats in Nicaragua.

Even Medellín, once the drug and murder capital of the world, has transformed itself into something of an urban showcase, attracting baby boomers to a place where cocaine kingpin Pablo Escobar used to carry out his ruthless craft.

Though the phenomenon of Americans retiring in Latin America began 25 years ago, it has accelerated in the past five to 10 years. Call the region America's new "Sun Belt."

"Thirty five years ago, this idea was truly on the far fringe – that if you thought about retiring out of the US, you were labeled 'renegade' or 'strange' or 'weird,' or 'over-adventurous,' " says Jennifer Stevens, editor of International Living magazine. "Now it is much more acceptable, desirable, and even normal to do this. It's a huge trend."

The exodus south is being driven by a confluence of factors. The baby boom generation – the largest in history – is reaching retirement age, and millions are looking for places to spend the next phase of their lives. As the most educated, well-traveled, and adventurous generation in history, many of these boomers are deciding to retire outside the country – including in Latin America.

They're also looking for places that will allow them to stretch their 401(k)s after they lost a lot of money in the last stock market collapse. With the US economy remaining so tentative, and health-care costs so aggressive, retirees want to live where they can afford greens fees and where a trip to the emergency room won't bankrupt them.

"A lot of people are saying, 'I'm tired of worrying about my retirement years,' so they are beginning to ask questions and go in search of great deals ... and they are finding them," says Kathleen Peddicord, founder of the Live and Invest Overseas publishing group and author of "How To Retire Overseas: Everything You Need to Know to Live Well (for Less) Abroad." She says that many are taking advantage of what she calls the "perception gap" – the idea that countries such as Colombia and Nicaragua are still thought of as countries with huge problems of drug violence even though the violence has largely been erased. One other factor: In the age of Skype and FaceTime, meaningful contact with children and friends, no matter where one retires, is now only a finger tap away.

While living in Latin America isn't for everyone – crime, cultural differences, and even phone connections can be problematic – is it any wonder that Naples, Fla., and Flagstaff, Ariz., are no longer America's only leisure-years Shangri-Las?

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Jeanne Mendez was drawn by the views of three volcanoes and the "gentle pace of life." After her husband died in 2004, Ms. Mendez went on a yoga retreat held on the shores of Lake Atitlán in Guatemala. She ended up building a circular home in Santa Cruz, a village that borders the expansive 50-mile lake.

Mendez, who for 20-plus years worked in finance in New York City and then for Microsoft in Seattle, now has to board a small boat to get groceries from a local market, which is part of the charm. "For a person who used Excel spreadsheets for every decision," she says, "it was an unusual decision [to move here], but it was a powerful urge for me."

Mendez represents another dimension of the surge of Americans southward: Many of them are settling in countries other than the usual haunts. For years, Americans have been retiring in Panama, Costa Rica, and parts of Mexico. Many still are. But now a growing number are also exploring Honduras, Nicaragua, Guatemala, and other countries not often mentioned in retirement brochures.

What makes Guatemala attractive to retirees, for instance, is not only its enviable views but its cheap costs, even relative to other Central American countries. A house that would go for half a million dollars in Costa Rica or Panama can be found or built in Guatemala for $250,000, according to Armand Boissy, a real estate agent and developer who has lived in the Lake Atitlán area for the past 25 years.

Patricia and David Bibb, both artists in their 60s, decided to settle near Lake Atitlán after searching for places in Belize, Honduras, and other parts of Guatemala. "It was as beautiful as Hawaii," says Ms. Bibb, who has lived in North Palm Beach, Fla., and Georgia.

The couple renovated an existing home, doing some of the work themselves, since he is a master woodworker and she is a ceramic artist. They have three grown children and three grandchildren in the United States whom they see four or five times a year. But they have no plans of returning. "We consider this our last home," says Ms. Bibb with finality.

To a certain extent, the move south by Americans is just part of a larger trend of retirees settling in places all around the world – from France to Thailand to craggy New Zealand. When Ms. Peddicord launched the Live and Invest Overseas publishing group in 2008, she had 10,000 subscribers the first year. Now she has more than 200,000.

But Latin America is drawing a particularly large number of expatriates, both because of its proximity to the US and because of the relative inexpensiveness of many parts of the region. While no one knows the precise number of retirees living in the area, signs suggest it is substantial – and growing:

•The number of Americans receiving Social Security checks in Central America and the Caribbean – one gauge of how many people live outside the US – rose 26 percent between 2005 and 2012, to 28,126, according to the Social Security Administration. It jumped 112 percent in Panama and 32 percent in Costa Rica.

•The number collecting US Social Security checks in South America increased 48 percent over the same seven-year period, to 22,019. It rose 87 percent in Colombia and 47 percent in Ecuador.

•Mexican officials estimate that more than 1 million US-born citizens now live in Mexico – up from 360,000 in 2000.

"There are 20,000 Americans just here in Lake Chapala and more in Guadalajara," says Thomas Heller, a real estate agent who grew up in Washington State and married a woman from Mexico he met while studying there.

The Mexican states of Jalisco, Guanajuato, and Baja California have traditionally served as destinations both for tourists and retired Americans. But Mexico City has become a magnet for American migrants, too, as security and quality of life have improved in the city.

In Jalisco, the number of US citizens over age 55 more than doubled between 1990 and 2000, increasing from 2,480 to 5,918. The number has expanded far more dramatically over the past decade. "We have the best weather in the world, Wal-Mart, Home Depot, and very good medical care," says Bruce Newby, the president of the American Society in Guadalajara, Jalisco's capital city (READ MORE...)