Research Critical for U.S. Expatriates Retiring Abroad
December 4, 2007
New York — As the baby boomer generation ages, many Americans are likely to retire to the historically popular U.S. southern or coastal regions, while those who’ve traveled more extensively abroad may look beyond U.S. borders. A variety of factors – safety, climate, medical facilities, political stability, taxes, the cost of living, and others – becomes critical to the decision. For example, ORC Worldwide’s Location Evaluation Reports cite the following conditions, among others, as problematic for locals and visitors:
- Pollution in Mexico City ranks among the worst in the world. When the daily air quality goes above 150 points, authorities warn residents to stay inside and avoid strenuous exercise.
- A serious concern in Kingston, Jamaica is the high rate of violent crime and political violence – including murder, rape, shootings, and armed robbery – so that the security situation in many areas effectively limits where one can go.
- Residents in Panama City face the high risk of earthquakes, as the country sits close to the junction of two Pacific tectonic plates.
In addition, the status of the U.S. dollar (if it continues to weaken) and higher prices abroad may adversely impact the choice of destinations. Consider the French Riviera, whose allure has always drawn attention as a retirement haven. “Despite the glamorous setting, retirees are likely to experience as much as a 60 percent increase in the cost of goods and services,” explains Geoffrey W. Latta, Executive Vice President for ORC. “The good news is that once the retiree becomes familiar with local products and outlets, better bargains usually result.” To illustrate sample prices for a leisurely day of retirement, Chart 1 compares seven locations, including Mexico City, Kingston, and Panama City.
“Unless a potential retiree has lived in a foreign location for an extended period, it is easy to be drawn in by the ambiance of many vacation destinations, which may disguise serious problems from the casual tourist,” Latta adds. “Armed with information from as many diverse sources as possible, retirees should take the next step with optimism, intelligence, and, above all, common sense.”
| Item | Mexico City, Mexico | Kingston, Jamaica | Hamilton, Bermuda | Grand, Cayman | Panama City, Panama | Miami, Florida | Nice, France |
|---|---|---|---|---|---|---|---|
| Golf balls | 62.20 | 26.35 | 37.19 | 26.84 | 33.60 | 23.71 | 94.71 |
| Movie tickets | 8.66 | 11.31 | 11.76 | 20.12 | 6.00 | 16.00 | 34.15 |
| Gifts for grandkids | 75.88 | 120.95 | 66.48 | 84.76 | 89.35 | 50.66 | 154.23 |
| Paperback | 12.31 | 8.23 | 9.44 | 7.82 | 11.01 | 8.55 | 24.10 |
| Newspaper | 1.35 | 1.05 | 1.30 | 1.35 | 0.90 | 0.60 | 2.46 |
| Ladies' haircut/ style | 47.65 | 24.10 | 72.02 | 70.43 | 37.95 | 69.00 | 93.72 |
| Dinner & wine for 2 | 132.55 | 57.14 | 110.02 | 112.88 | 72.98 | 110.82 | 282.29 |
| Taxi | 3.19 | 4.66 | 8.26 | 6.71 | 1.82 | 5.25 | 13.40 |
| Total US$ | 343.80 | 253.77 | 316.47 | 330.90 | 253.61 | 284.59 | 699.05 |
| FX per US$ | 10.97 Mex$ | 70.75J$ | 1BD$ | 0.82CI$ | 1B | 1US$ | 0.67€ |
Source: ORC Worldwide (Fall 2007)