The Baby Boomer’s Guide® to Costa Rica Retirement: The Baby Boomers Retirement Series, #3

By C.B. McGee

How to Settle Down in Costa Rica and Enjoy Your Retirement to the Fullest

Are you done working so hard, taking care of your kids, and saving up for retirement?

Are you now free to get out from behind your office desk and have more fun as you retire?

Do you want to have the best possible option on where to settle down and how to achieve it?

You've got the funds. You've got more free time. You still have plenty of energy to explore more of what life has to offer.

It's living the next stage of your life without worrying about work. Don't let this opportunity slip away — give it your best shot and retire happily.

Remember those summer vacations when you were a kid? Well, that's what your retirement can feel like… but without returning to school anymore.

After a long career and family-oriented lifestyle, it's time to redesign your life in a way that will keep you joyful and your wisdom ever-growing as you age with grace.

Don't feel guilty to use your savings to do as you wish or go wherever you want — the beautiful country of Costa Rica is ready to welcome you.

Be prepared to fall in love with its beauty, fine culture, and other wonders that you wouldn't want to miss out on.

After decades of hard work, you deserve the best retirement. What better place is there than sunny Costa Rica?

In The Baby Boomer's Guide to Costa Rica Retirement, you will discover:

13 crucial factors to consider before you retire abroad

Why you should retire in Costa Rica — there's more to it than meets the eye!

How to plan your retirement based on your preferred lifestyle

3 residency programs offered by Costa Rica for retirees — find out which is the best option for you

How to make your life 10x easier when retiring in a foreign country without spending all of your savings

Why some expats struggle abroad, and what you should do to overcome these challenges from the get-go

The average monthly budget you need to live decently in Costa Rica

How to create an exit plan if you no longer wish to stay in the country

And much more.

The Baby Boomer's Guide to Costa Rica Retirement will show you how to settle down in Costa Rica in a cost-effective way, even if you think you need a hefty savings to afford the cost of living (which you definitely don't!).

With these practical and simple tips to help you fulfill your dream retirement, it won't matter if you've never stepped foot in Costa Rica to adjust quickly.

• Language: English
• Publisher: CLB Global Publishing Ltd
• Release date: Oct 19, 2021
• ISBN: 9781914930119

C.B. McGee

C.B. McGee is one of the first of the Baby Boomer Generation. Born in 1946, he has lived in 44 states and 11 foreign countries. He has been a soldier, mechanic, electrician, contractor, real estate investor, travel agent, cryptocurrency investor and miner, custom motorcycle builder, social media marketing expert and general entrepreneur. He has won awards, managed multiple multi-million dollar businesses, dined with Presidents and had Senators, Congressmen, movie stars and rock stars, that he called friends. C.B. and his wife of 34 years, Lily, retired in 1996 after selling one of their businesses and moved to the Philippines. C.B. soon found that retirement did not suit him, and started working again. C.B. and his wife currently own a finance company, a social media marketing agency, a travel agency, a publishing business and a property business. They currently live outside of London, England, with two of their sons, a daughter-in-law and 2 grandkids. Their 3rd son lives in Florida with his wife and 2 Giant Schnauzers. 

Book preview

Chapter 1: Things to Consider Before You Retire Abroad

When I thumped into the chair, my chest felt tight. It was a stupid fly that made me stumble—a silly fly, flying low.

Blackbird, bye-bye.

There's potential for harm with the little things. Big things I didn’t care as much about. All I could hear was ennui, a hum that rang in my ears.

It whispered, I need to be busy, but I’m too busy. Feeling too busy is feeling tired. I pictured myself back in Costa Rica. I was drinking chilled guaro from a tall frosted glass rimmed with sugar and lime, chewing a toothpick, and letting a fly irritate me.

My thoughts raced. I sat and spaced out and tried to talk myself out of another overwhelming urge to get back on a plane.

What is it about Costa Rica? The retiring. It was a great place to stay, the fond memories of like-minded spirits enjoying tranquil lives.

Still sitting on the chair, I took a deep breath and stood up, no more waiting for things to happen. It’s too late now. What is one silly/fun thing about being in Costa Rica right now?

Knowing Ticos wouldn’t let their country run out of toilet paper. A change of scenery, too, trading being stuck on a mental island, for being free/comfortable in a veritable paradise.

Surrounded by good people/sense of community and the chance to live a little.

Plan? I was too important for that. Just flashed my money and bellowed.

In hindsight with a little patience and a lot less arrogance. I would’ve saved enough money and time.

Impatient and lost. If you’re a gambler, feel free. But you don’t seem to be, so before you make your retirement abroad a reality, start with these 13 tasks.

Should You Retire Abroad? 13 Things to Consider

When you travel, remember that a foreign country is not designed to make you comfortable. It is designed to make its people comfortable. -Clifton Fadiman

Paradise. Yes, it is obtainable. Elusive as it may seem, with the right attitude—enlightened, humble, and realistic—it is achievable, as long as your approach is rational.

Reflect on your life. What are your hobbies? What shows or sports do you need to survive a quiet Sunday afternoon? Keep a daily journal or make a (life) vision board that highlights your daily routine for at least three months.

Now, before you pack your bags and book your flight, consider these 13 things.

Residency

The idea of moving is the easiest part, knowing that it can all be ruined if your documents are not in order (can ruin everything, by ruin, aka significant delay).

Real stories about what can go wrong ie, scams, where to leave luggage or ID, etc.) Facing the trauma of uncertainties with a calmer than you want to be attitude will make all the difference.

Trying to fight the law will only lead to defeat. Organizing your papers will be a hassle. There’s nothing worse than being at the mercy of yet another official when you’re new to a country.

Two weeks ago, you beat all the red tape, but now the gentleman isn't there, and you're stuck with a different official who doesn't seem to care. No convincing arguments are working today

Lesson learned: don't make a scene next time. Tonight, relax, sit down on a patio with your faithful friend, guaro.

Potential Tax Surprises

I spent five wonderful years in Costa Rica; I remember when I first arrived, I never worried about filing taxes.

As a traveling entrepreneur, I was used to only paying taxes back home (I had a steady income stream, so I didn’t have to worry about filing taxes).

Gradually, I started meeting more and more Ticos and expats, and way too many drinks and new ventures later (the dreaded day I had to file taxes came).

Over the years/recently, I have become more and more interested in real estate (and maybe opening a new business or three), a lot has changed.

From tours to transportation, or any other service, there is a new 13% tax called Impuesto de Valor Agregado (IVR). Expect IVR to replace the current 13% sales tax by 2022.

Any property that was purchased before July 2019 is exempt from a 15% capital gains tax. This tax applies to any investment or real estate.

This tax doesn’t apply if you are a resident and the property is considered your primary residence or a non-resident that has spent over 183 days in the country. If you’re still unsure, talk with a local tax expert to prevent any surprises.

Taxes can be complicated for Americans who never travel outside the U.S., so imagine how moving abroad can affect your relationship with the IRS.

While your income earned abroad may be exempt from federal taxes, any unearned income like pensions or distributions from your retirement account will still be subject to Uncle Sam's taxes. That's not the whole story, though. Additionally, you’ll have to be familiar with local regulations.

If there is a U.S. tax treaty with that country, you may be able to benefit from it, but you should consult tax experts before making a move to prevent a mix-up.

Costa Rica and the United States do not have a tax treaty or comprehensive agreement at this time.

Living in Costa Rica is an adventure, so much so that many Americans fail to file their tax returns in the United States—consult with tax experts before making a move to prevent future complications.

You should be able to back file your tax returns in Costa Rica if you forget to file (or even if you didn't file at all).

Under an IRS amnesty program called the Streamlined Procedure, you can catch up on your taxes without facing penalties. It applies to individual taxpayers, including estates of individual taxpayers, only.

Also note, as part of the Offshore Voluntary Disclosure Program (OVDP) guidelines, the IRS will consider requests based on the taxpayer's circumstances and will assess incorporating the streamlined penalty provisions in the OVDP settlement agreement.

Residents and non-residents of Costa Rica are required to pay income taxes on income generated in the country. If you spend more than 183 days in Costa Rica in a year (including part days), you're considered a resident for tax purposes.

Taxes on Costa Rican income are relatively low, with a range of 1% to 25%. Additionally, non-residents (including Americans who spend less than 183 days in Costa Rica every year) are subject to a flat withholding tax of anywhere between 10 to 25%.

A retiree from the United States living in Costa Rica with all their retirement income coming from the United States won't have to pay taxes on their income in Costa Rica, whereas someone who lives and works in Costa Rica will notice that they must pay taxes on their income.

Currency Fluctuations

Flashing around thousands of colones can lead to a false sense of having more money/easier to lose out because of the exchange rate.

It’s okay if you’re shopping at a local soda, but if you’re shopping for property or buying an investment, you stand to lose thousands of dollars.

Search the web or reach out to a wealth adviser who can help you manage your money wisely.

It helps that you can often use the US dollar if you don’t want to deal with the rates - the various new increases in taxes will upset your budget; create a cheat sheet or download an app on your phone to help you quickly figure out what an item will cost, keep your notes until you have a better understanding of the currency.

Recent articles and websites like the U.S. News and World Report advised that expats can reduce the risk of losing money by following these suggestions.

Pay attention to the exchange rate, says John Piershale—of Piershale Financial Group, near Chicago. Some people keep most of their money in U.S. dollar-based assets and then convert to the local currency as needed.

Alternatively, if you think the dollar will weaken, keep most of your assets in the local currency."

Quality of Healthcare

Universal healthcare is accessible to all Costa Rican residents through Caja Costarricense de Seguro Social (C.C.S.S.), commonly referred to as CAJA. Residents pay a monthly fee ranging from $75-$550 per person, depending on age.

These costs will be higher as a temporary resident because they are usually calculated using your pension or other income streams.

This system provides a variety of services, such as routine check-ups, prescriptions, or emergency services. During your first visit, you will consult with a designated provider who will determine what services you require and assign you to a suitable facility.

Suzanne Garber, a co-founder of Gauze—a database of international hospitals, urges retirees to factor in as many variables/factors as possible.

Costs will likely be much lower, and access may or may not be improved in other countries. Quality is a top consideration, and the U.S. ranks 37th on the World Health Organization’s list of global health. American retirees may actually get better care abroad.

Research is critical. You want to be aware of response times for emergency and non-emergency services, ratings of local hospitals, what medications are readily available, and wait times to see a doctor.

Several expats have shared their frustrations at waiting hours in line, only to be turned away and repeat the process for several days (or weeks) before they get their appointment.

You can also consider purchasing supplemental private insurance through agencies like the National Insurance Agency of Costa Rica or an Expat health insurance plan.

Loss of Medicare

When expats leave the U.S., many decide to opt-out and cancel their Medicare since it usually won’t cover health services outside of the country.

"While Social