Retirement Planning Dreams

In this article we explore 5 reasons why an increasing number of US baby boomers are considering an overseas retirement in Nicaragua.  And it’s not just Nicaragua, the growing movement to retire abroad is impacting the entire Latin American region and beyond.  In fact according to data published by the Social Security Administration, the number of retired Americans receiving benefit payments overseas has risen by 32% since 2002.  Here are some of the reasons why Nicaragua is one of the top destinations of interest.

1) Cost of living – Nicaragua has one of the lowest living costs in Latin America, and the lowest in Central America according to RevealRealEstate.com.  It’s easy to afford many of the luxuries in life such as having a full time maid, gardener, cook or driver.  Eating out and entertainment costs are also inexpensive.  How does a beach-side fish dinner for two with a glass of wine for under $15 sound, a chilled beer at a popular bar for $1, or a cinema ticket to the latest blockbuster for $3.  It’s no wonder baby boomers are attracted to this dollar-stretching country.

2) Affordable real estate – For many baby boomers the dream of an oceanfront or golf-front retirement home is out of reach in the US.  That’s why a few enterprising investors are looking further south at Nicaragua where it’s possible to fund that dream piece of real estate for a fraction of what it would cost in the US.  Nicaragua is significantly less expensive that Costa Rica its neighbor to the south.

3) The weather – Nicaragua has a warm, tropical climate year round.   Surfers are evangelical about the countries warm waters and world-class surf breaks.  It can get a little humid for a couple of months running up to the rainy season starts in May, but that can just be an excuse to head to the cooler, coffee-growing highlands.

4) Tax friendly environment – In Nicaragua foreigners are not taxed on their world income, even if the funds are received in the country.  And for those who take up local residency, a whole array of extra tax incentives and benefits are available.  See more details here.

5) Investment legal basis – Foreigners have equal rights as local citizens to own property and businesses in the country.  (There is only a restriction on real estate, located close to the national borders).  Major US title insurance companies, including Stuart Title and First American offer polices in Nicaragua.  As noted in this New York Times article around 3/4 of foreign buyers take out title insurance on their property purchases.

Filed under: Retiree Lifestyle on September 4th, 2011