Inexpensive living draws American retirees to Central America

High in a downtown hotel, Nicaraguan folk dancers twirl in lacy white dresses, their bare feet tapping intricate rhythms on the wooden stage, giving their buttoned-down audience a bit of tropical warmth on a foggy afternoon.

Their flounce and easy smiles before this roomful of travel experts are part of an effort to promote Nicaragua to Americans who might choose to retire there, attracted by its pristine beaches and colorful culture.

And then there are the tax breaks and other incentives that baby boomers are likely to find even sweeter than the tropical fruits the dancers carefully balance in baskets on their heads.

"They're a growing market with disposable income looking for a place to live, and Nicaragua has that," says the country's young minister of tourism, Maria Rivas. She's putting her Harvard-honed business skills to work highlighting the country's safety, its modernizing infrastructure, and the laws enacted to attract foreign investment and retirees.

Rivas takes the crowd on a PowerPoint tour of Nicaragua: the perfect waves that attract surfers to the Pacific coast, the isolated beaches where sea turtles lay eggs by moonlight, and the bird and orchid species that thrive in its dense forests.

In spite of the country's gorgeous coastline and undisturbed forests, Rivas' job has its challenges.

Mention of Nicaragua and other Central American countries is still more likely to conjure images of dictators and guerrilla warfare than of cozy retirement homes. And glitches remain, such as uncertainty over upcoming elections and occasional power outages.

Rivas says this negative image is part of the past, and tremendous growth has taken place in recent years under the democratic government.

Local residents seem to welcome Americans, who create jobs and invest in infrastructure. The U.S. State Department's says that the judicial system may suffer from corruption, but violent crime is minimal.

"It's an adventure, not just the United States transferred," said Lynn Mangum, a retired executive. He and his wife split their time between homes in New York, New Jersey and Nicaragua.

Seeking a warm and inexpensive place to retire is nothing new to Americans. Costa Rica and Mexico have long laid out a welcome mat to retirees.

But as tens of thousands of American expats settled there, home prices began to rival those of stateside retirement magnets like Florida and Arizona. Still-affordable Central American countries like Nicaragua, Panama and Honduras are now jostling to become the new hot spot for retirement abroad.

Several have sought to increase their appeal by passing laws meant to attract retirees, investors, and others who can pump cash into the economy.

In Nicaragua, anyone over 45 who earns at least $400 a month can import their out-of-coutry earnings and household goods tax-free. A car can be brought in every five years, then resold, without a sales tax deduction.

It's even easier to invest. Those willing to put money into the country's tourism industry, such as setting up a beach-side cafe or resort, qualify for tax breaks of up to 100 percent on everything from construction materials to furniture for up to 10 years.

Honduras and Belize have passed similar measures. Panama sweetens the deal by throwing in discounts of up to 50 percent on all the comforts an American abroad could desire: movies, restaurants, airline tickets, even prescription medication, doctor's visits and hospital stays.

"What these countries are realizing is the tremendous value in this baby boomer market," said Jeff Hornberger, international development manager for the National Association of Realtors.

The influx of cash benefits the country, which gets jobs and investment. And the retirees can buy a lifestyle that would be beyond their means in the United States.

"You can have a gardener, a cook, a maid you can live like a millionaire without a millionaire budget," Hornberger said.

There are still some inherent risks with life in some of the poorest nations in the hemisphere, some retirees said.

"Things can change fairly quickly: the law, how it's interpreted. Nothing's set in stone," said John Edwards, a Canadian who recently finished building a house overlooking the Pacific in Rancho Santana, one of the biggest planned communities in Nicaragua.

Within the gated community, roads, services and the infrastructure are up to American standards, but the gravel road to the closest town, Rivas, is a bumpy 14-mile ride.

Also, buying property in foreign countries can be intimidating and tricky, and those who are not familiar with local practices can fall prey to swindlers or demands for graft. Many countries don't regulate real estate agents, and the buying process can involve translators, lawyers, and unfamiliar negotiating tactics.

"Investing in real estate abroad is not for the faint of heart," Hornberger said.

Still, the numbers show Americans are increasingly willing to take their chances.

The number of Social Security checks drawn abroad has risen steadily, from 188,000 in 1992 to 255,000 in 2004.

And a growing number of retirees have been seeking out Central America and the Caribbean. More than 15,000 Americans drew their Social Security checks there in 2004. And the number of people who spend part of the year in the region is probably much greater, experts said.

"We have seen an enormous amount of interest more growth in the last two years than in the last 10," said Gail Geerling, a real estate agent in Nicaragua who has lived in Central America for 10 years.

And as more baby boomers approach retirement age, chances are Central America's appeal will only grow.

"I'm working full time, and I'm not sure I can buy a house here," said Lynn Rothman-Venus, who works for a community college in Florida, long considered a prime retirement spot.

She's 54 and hoping that by the time she's ready to retire six years from now, she'll be able to trade her rented condo in the Tampa Bay suburbs for oceanfront property somewhere like Panama.

"Unless you're pretty affluent, you're going to struggle here as a retiree," she said of life in the U.S. "You might as well go somewhere else and live better. The world is out there."

Also, when she is kidnapped, guess whose husband will be pounding on the U.S. Embassy's door?

You might want to read up on CA, specifically Panama and Honduras. Panama is becoming more and more cosmopolitan every year and their northern coast both on the Atlantic and Pacific sides is wide open for purchasing property and very, very American and European friendly!

My cousin just bought 50 acres on an island in the archipelagos on the Eastern side of northern Panama and I am looking at property in Honduras. While there is problems in Honduras, it is mainly internal but nothing in the realm of political uprisings. At least in Honduras you can get a permit to carry a firearm and if you are a foreigner, its unlikely it will be held against you if you dont have the permit. Washington DC on the other hand is more dangerous than Honduras......

Don't believe everything you read in the U.S. papers..........

Sorry to be late getting back. I bought furniture slides for our bed and you wouldn't believe what was under it...

She had a traumatic brain injury in the hinterlands of Bolivia but was with her Peace Corp boyfriend and that group had had two horrible accidents that year and knew what to do. They had her transported to Santa Cruz by air.

Thankfully there was an American Army doctor at the village for the day giving immunizations so he was able to give her immediate care and stabilize her. The surgeon who owned the clinica (his wife's home) but really a hospital was a resident in the US army and board certified. The care was quite excellent but unbelievable by our standards. Actual oxygen tanks, no MRI in the country and she had to be transported across town for cat scans. Not easy for a coma patient. This hospital catered to the elite (drug money, etc.).
Her bill for 17 days, plane transport with medical personnel, transport 4-5 times, ICU etc. was in the $12,000 range. I would say dirt cheap. To get her home was $40,000. Many, many stories and miracles.

Really, it's pretty logical.

They want to move here because they are poor over there, and there are jobs here.

Retirees want to move there because they want a low cost of living, which they can get because most people are poor there.

It can work out well for everyone because more desperately needed jobs wind up down there, and so fewer people will want to come up here, which is what many of you seem to want.

I plan to move to the Philippines for exactly the reasons cited above. I have a community web site that I'd like to make my primary source of income. I can't stand to live in Pittsburgh, where I am. If I can earn $2k a month I can live like a king in the Philippines, instead of just getting by (and suffering through frigid winters) here.

It's the same logic: If your income doesn't depend on geography, and you can tough out cultural adjustments like unique food and different cultures, then you're probably better off in the third world than in the US, because life is so expensive here.

Leveraging a first world income with a third-world lifestyle gives me a live-in maid ($30-40 a month) who will do my laundry, take out my trash and generally do everything domestic that I hate to do in the US. I could also afford a waterfront house in a tropical climate, which would cost over half a million in the cheapest warm-water parts of the US, and $3,500,000 plus in the nice parts.

As a special bonus, the supply and demand equation between single men and women is, well, different. There is a major shortage of responsible, affluent men over there. You are talking about a ratio of around 100 women seeking an affluent man for every affluent man seeking a woman. So someone like me, who is basically thrown out with the trash in the romantic stakes here, is suddenly solid gold.

My saying is simple: Go where you're wanted. I'd say I'm more wanted and likely to have a far better life in the third than the first.

Sure, the United States is a great country and it does many great things. But that doesn't mean that it's in everyone's interest to stay, when it has a high cost of living, and comfortable climates like Florida or California are outrageously expensive.

D

I visited Nicaragua in May of this year. Drop dead gorgeous country.

I believe I was the first Freeper to make a post from there. It won't be my last.

You can live like a king in Central America off of Social Security alone.

I'm not sure I'd retire in Nicaragua. The infrastructure still needs some improvement in order to compare to the US. But Costa Rica is close. It's much more like America than, say, Laredo.

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