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Costa Rica Retirement:You Can Retire in Paradise!

Why Should I Consider a Costa Rica Retirement?

Costa Rica Retirement on a Catamaran

Have you ever dreamed of getting away? Perhaps you have worked your whole life and feel as though it is time that you did something for yourself? Or, maybe you just want to do something different, escape from your day-to-day life to somewhere exotic and beautiful, where the pace of life is a little bit slower and the weather is warm and sunny.

Or with today's economy, you're looking to stretch your pension, social security, or IRA (i.e., money!) as far as it will go. Either way, Costa Rica retirement might be the right solution for you.

Costa Rica is a beautiful Central American country. It spans from the Caribbean Sea in the East to the Pacific Ocean in the west. Between these two coasts -- with their beautiful beaches and gorgeous sunrises and sunsets -- lie a world of jungles and mountains.

And as I mentioned before, Costa Rica weather is great. There are only two seasons, wet and dry, and both are still filled with sunshine. In fact, the Central valley around San Jose has quite temperate weather. The town of Grecia, about 45min from San Jose, boasts some of the most perfect weather in the world - how about weather in the 70's year-round? This means lower utilities costs because you're not constantly cooling or heating your house.

Although a relatively small country, Costa Rica retirement can offer a wide range of activities. San Jose, the capital, is an international city of over 300,000 people with a wide range of dining and entertainment options, not to mention excellent hospitals and healthcare -- it's already a mecca for first-rate plastic surgery.

For those who love the beach and beach resorts, a Costa Rica retirement means you have two fantastic coasts to choose from. If you are interested in nature or eco-tourism, Costa Rica offers world-class opportunities both on the coasts and throughout the interior, like in Monteverde, around Arenal Volcano, and numerous other national parks. Costa Rica has a lot to offer any retirees or those considering early retirement.

Retire in Costa Rica to Stretch Your Dollar, Pound, or Euro...

With the economy the way it is, your money may not stretch as far as you'd like it to in your home country. If you're on a limited income, or worried about quitting your job and having enough money in your golden years, cheap cost-of-living means that a Costa Rica retirement is quite an attractive option. Not to mention, if you do have a bit of money you can live like a king (or queen ;-).

To give you a better idea, Costa Rican families making between $500-2000 per month are considered part of the middle class. Anyone making $2000+ per month really can live a life of an upper-class citizen during his or her Costa Rica retirement, especially in San Jose. Coastal towns cost more, but I survived on $500 per month, and if I were making $1000 per month I could have been living in a modern one-bedroom condo. In general I'd say $1200-1500 per month per person would provide you a very comfortable lifestyle, with $3000+ taking you into the luxury segment.

The relative cost of living makes a Costa Rica retirement truly attractive. Food, utilities, healthcare, and entertainment all cost significantly less than in the States. Surgery and other medical procedures costs anywhere from 50-70% less than back home and you can even have a full-time maid for around $50-60 a week. Imagine trying to afford that back in Europe, the US or Canada.

While I have read arguments in favor of cheaper locations, like Honduras or Nicaragua, this perceived cheapness does not take into account other considerations. Poverty is more rampant in both locales, and Honduras is notorious for crime while infrastructure is poor in Nicaragua.

What's more, studies show San Jose (Costa Rica's capital) to be one of the cheapest cities in the Americas, with Panama City and Guatemala City both reporting higher costs of living. I was amazed how cheap some rentals are around San Jose, where you can rent basic multi-room house for $500/month.

What if I want to work during my Costa Rica retirement?

People often wonder if they'd be able to work during their Costa Rica retirement. It is legal for retirees to work from their homes as a telecommuter, but they require a permit if they wish to work at company or branch of a company in Costa Rica. Unfortunately, this permit is difficult to get.

If telecommuting is not an option, many find work as English teachers or casual work at a local foreigner-run hotel. Another option is working as a real estate agent, I know some retirees who do this part time in retirement communities to supplement their income. I have another friend who started selling condos in Playas del Coco.

Another option is to start your own businesses, be it bike rentals or tours or a restaurant, etc. I knew a lot of people who have launched businesses in Costa Rica, the main reason being that it's so easy. Running your own little B&B could make for a perfectly lovely Costa Rica retirement.

The government encourages foreign investment and many incentives exist to help foreign investors to get their business up and running. For instance, certain enterprises can even qualify for a ten-year tax exemption. There are numerous other programs, but to get a better idea of what your potential business might qualify for, and how to go about applying, you need to contact a well-informed and experienced lawyer.

The cherry-on-top of working in Costa Rica is that the first $80,000 of your earnings are exempt if you have residency abroad for 330 days of a year. To qualify for this though, you need to speak with an accountant in the States to make sure you follow the correct procedures.

What will my residency status be?

Good news about your legal status during your Costa Rica retirement: As long as you receive 600 dollars per month, you qualify for residency as a "pensionado" (pensioner). This money can come from a private or public source, such as a privately administered IRA or a government pension. Every month, this amount needs to be deposited into a local bank in colones.

In the case of a married couple, either spouse may provide the $600, but it may not be a combination of both spouses income. If you're short on the $600 per month requirement, you can make up for this by depositing five years worth of the difference in a Costa Rican bank. (Example: Your pension pays $550/month so you need to deposit the difference, $50 per month, over five years. $50 x 12 months x 5 years = $3,000 deposit) As a pensionado you must spend at least four months a year in Costa Rica, though it need not be continuous.

There is also a "rentista" status that requires $1000 per month income for five years from investments, designed for those without a pension. This is for people not yet of retirement age. Like pensionados, you must spend at least four months a year in Costa Rica, though the time doesn't have to be consecutive.

Finally there is an "inversionista" classification for people investing in a business or other sectors of the economy. This requires substantially more investment: $50,000 for priority business investments, $100,000 for non-priority reforestation, and $200,000 or more for non-priority industries. You need to stay in Costa Rica six months out of the year as well.

These are all legal resident classifications that you need to renew every two years for $100 and allow you to live in the country. Otherwise, you need to leave the country every three months for 72 hrs, which is what I did. It wasn't so bad, as I always went to Nicaragua for a mini-vacation.

After living in Costa Rica for two years under one of the above classifications, you are eligible for permanent residency. As a permanent resident, you're entitled to all the rights of a Costa Rican citizen, including the right to work, except you cannot vote.

Some Basic Information About Costa Rica

The official language of Costa Rica is Spanish. It's helpful to know a few phrases and basics, but don't worry if you don't speak the language. Costa Rica has a thriving tourism industry and is well equipped to accommodate those for whom Spanish is not their first language -- besides, more American expats live here per capita than any other country in the world. On the positive side, this is a great opportunity to learn Spanish and experience a different culture first hand.

Your Costa Rica retirement would be a much richer experience if you learned to speak some Spanish, besides lessons are cheap and it will give you something to do in your newfound free time. My language skills increased exponentially the year I lived in Costa Rica, just by interacting with the locals on a daily basis.

As for money, the official currency of Costa Rica is the colon -- colones (co-lo-nays) is the plural form. As of June 18, 2008, the colon was valued at around 530 to one US dollar -- check my Costa Rica currency page for more up to date rates. And although Costa Rica is more expensive than some other countries in Central America, if you are coming from the United States or Europe you will find that your dollars or euros can still stretch a long way. Also, there are many ATMs that dispense both Dollars and Colones. As a side note, VISA is more widely accepted.

For peace of mind about moving to Costa Rica, it is one of the safest and most stable countries in Central America. For some, Central America has a negative reputation for being dangerous. Although this may be true for certain parts of Central America, Costa Rica is generally safe. However, like anywhere in the world, Costa Rica has its less safe areas -- no different than bad neighbourhoods in New York, London or Toronto. Know where you are going and be careful if you are traveling alone at night. Common sense is key. I had very few problems in my year living there.

Another common concern regarding Costa Rica retirement is health care. San Jose is home to the world-renowned CIMA Hospital, which treats patients on medical vacations from around the globe. Top-notch physicians perform routine and complicated surgeries, including stellar plastic and cosmetic surgery. Quality dentists abound, available for checkups, root canals, and cosmetic dentistry. I had a filling done in San Jose for a third of what it would have cost me in the US, in a dental office with brand new equipment and dentists certified by the American Dental Association.

Adjusting to a Costa Rica Retirement

Costa Rica is a vibrant country that attracts tourists from around the world. However, it is still a country in Central America -- this is not Florida.

Many people worry they cannot adjust to living such a different lifestyle. One thing I know is that Hyper Type-A personalities may have trouble here, as punctuality and efficiency are more lax in Costa Rica. Government bureaucracy is lumbering often unresponsive, roads aren't always maintained, and public transportation can be unreliable.

But then again, you're living in beautiful Costa Rica where things are running at a slower pace, so you just need to relax. Remember, patience and a sense of humor are the keys to living in paradise and truly enjoying a Costa Rica retirement.

A good way of figuring out whether or not you can adjust is by giving Costa Rica a trial run before making the final move. I recommend that you spend at least six months, and preferably a year, perhaps living in a couple different locations. Find a great Costa Rica vacation rental and see how life here suits you -- pay for it by renting your house back in your home country.

Where to Retire in Costa Rica

One of the most important decisions you will have to make with Costa Rica retirement is deciding on a place. Though small, Costa Rica offers a variety of locales that differ both in geography and climate, but also in proximity to attractions and services.

For those with health concerns, or that may need treatment at a hospital, you should stay around San Jose and its outlying towns like Alajuela and Heredia. Escazu, just minutes outside of the capital, is also an excellent option, popular among both expatriates and well-off Costa Ricans.  Options for shopping and cultural outings are much more readily available around San Jose than in other parts of the country.

Geographically, San Jose et al are the Central valley where the climate is much more temperate than the coast due to the elevation. In fact, mornings and evenings can actually get a little chilly here; a nice surprise for those interested in Costa Rica but not in the muggy weather you so often associate with the tropics.

Living around San Jose provides the added benefit of being close to Juan Santamaria International airport, should you need to leave the country quickly or if you are expecting guests.

Liberia, in Guanacaste, offers another option for living in proximity to an international airport. Additionally, there are plans to construct a new hospital in Liberia in the near future, which will add to the town's appeal. In terms of weather, the province of Guanacaste in the Northwest is generally drier than the rest of Costa Rica offering plenty of beautiful, sunny days. And even though it's not on the coast, beautiful beaches are just a half hour away.

Another option, besides looking for a specific town, is to look for a retirement community. This Costa Rica retirement option is growing in popularity and there are communities popping up in many desirable areas of the country.

Know yourself, decide on what type of place you would like to retire to and then see what Costa Rica has to offer. Take advantage of bustling, multi-cultural San Jose. Explore Costa Rica's wild interior. Explore Pacific Coastal towns such as Tambor, Tamarindo or Jaco. Or, experience the Caribbean Coast in Puerto Viejo.

My best advice if you are seriously considering a Costa Rica retirement is just to try living there before you buy property. Look into Costa Rica vacation rentals and try living for a few months in different areas of the country. This is the only true way to know where you might want to retire in Costa Rica, based on location and access to amenities and general 'vibe' of the area. A great way to finance your stay is by renting your house or apartment back in the States - just a $1000/mth from your property in the States will get you into a lot of great Costa Rica rentals.

Getting There and Getting Away

Getting to Costa Rica is incredibly easy. Most people choose to fly directly into Juan Santamaria (SJO), Costa Rica's international airport, which is located directly outside of San Jose in the middle of the country. Or, you there are many direct flights to Liberia for those looking to stay in Guanacaste or explore the beaches of the beautiful Nicoya Peninsula.

Another option, for those with a little more time, is to drive or take buses through Mexico and Central America. This option, which takes significantly longer, allows you to see not only Costa Rica, but also those countries around it. Retiring to Costa Rica means you not only have access to everything in Costa Rica, but also to nearby countries like Panama, Belize and Mexico. 

So come on down and celebrate the Pura Vida lifestyle, it may mark the first step on your journey towards a Costa Rica retirement.

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