Life With A View

By VALERIE MARCHANT

Who has not fantasized while traveling in a foreign country of snapping up some irresistible piece of real estate--a Tuscan farmhouse, Scottish castle or Argentine ranch--and beginning a whole new life that combines just the right mix of adventure and tranquility? If I lived here, you say to yourself, I could enjoy myself so much that I would stay young forever. Of course, returning home usually brings you back to reality: early retirement seems so far off, family and friends are too dear to desert, the logistics are unmanageable.

Yet the dream need not disappear, as more and more Americans are realizing. Boomers can anticipate living 20 to 30 years after they retire, much longer than the meager eight years an American who retired in 1960 could expect. Many of the 76 million American boomers are more likely than their parents to consider retiring to a foreign land, because they have traveled more, have higher hopes for retirement and tend to be more active and adventuresome.

Where to go? What retirees tend to want most is--no surprise--a pleasant climate. Fortunately, they can find sunny skies in countries where the cost of living is low, such as Belize, Costa Rica, Panama, Nicaragua and Ecuador. Some retirees feel comfortable with a large expatriate community, which they can find in nearby Mexico. Many are lured back to places they have worked or visited--or to the land of their ancestors, say, France, Italy or Greece. Some Americans are braving the Irish weather or escaping to the wide-open spaces of countries like Canada or New Zealand. John Howells, an author of retirement books who spends five months of the year in Playas de Nosara in Costa Rica, has noticed too that lots of boomers want to go back to the pastimes of their youth. "Some dozen people have retired near my home near the beach in Costa Rica," he observes, "just so they can surf!"

What does it take to retire in a foreign country? The first step is to research your move very carefully. Kathleen Peddicord, the publisher of International Living, which produces a newsletter on living abroad, advises asking yourself such questions as: What kind of people do I like and what kind of weather? How important is it that I can easily return to my family or doctors? To find out what life is like, read local newspapers or those produced for expats. As more Americans retire abroad, an increasing number of books and websites are available to provide answers (see box). The Internet has simplified moving abroad, since not only can you chat with expats online; once away, you can manage your investments and pay bills.

Obtaining a visa in many countries, such as Italy and Costa Rica, can be quite easy, since American retirees bring in dollars and are known for their philanthropy. Other nations, such as Canada, don't really welcome permanent retirees but allow foreigners to stay part of the year. A country's embassy will help you find out the type of visa that might suit you. Be prepared to offer proof of good conduct and health as well as medical insurance. Some countries also demand a certain level of income. "There will be some bureaucracy to go through," warns Rosanne Knorr, author of The Grown-Up's Guide to Running Away from Home, "but it's all manageable."

Taxes don't go away just because you have left the U.S. Wherever you reside and for however long, you must file and pay taxes to the IRS. In general, you won't be paying double tax on most kinds of income, because the U.S. has treaties with 61 countries to protect you. But your situation may easily become complicated: on income earned abroad, you may qualify to exclude income from U.S. tax or take a foreign tax credit; you could owe state taxes in the U.S.; in some countries you may owe a wealth tax. Jane Bruno, a tax attorney with Florida-based Relocation Tax Services and author of the Expat's Guide to U.S. Taxes, says, "It is very important that you consult with a tax expert who will research all the tax implications of your move."

Once you choose a country, spend six months there--including time when the weather is at its worst--before making any major decisions. Be prepared to experience some culture shock, however well you thought you knew a country and its people. And make sure you have learned at least the rudiments of the language. "When you know the language of your neighbors, you'll find many doors open to you," says Howells.

Even when convinced that the Tuscan hills or a British Columbia cove is just the place for you, never buy a house on impulse. Before even considering such a commitment, rent for a while. You may find that you much prefer another area of the country or that you are better off renting. If you choose to buy, find a good attorney who can explain everything from financing options to clarity of title.

Once you have settled on a place, find out what you can bring into the country without paying duty. International Living's Peddicord advises against shipping all your belongings, though, because "it's a whole lot of hassle and a huge expense."

While abroad you can count on receiving Social Security (unless you move to some communist countries). If it is automatically deposited into a U.S. bank account, you can use an ATM card to withdraw it. Once you are abroad, Medicare will not pay for any medical expenses. In some countries expats are able to participate in the national insurance plan or health system. Many retirees simply pay local doctors as they go and return to the U.S. for any serious problem. A number of companies, like BUPA International, will provide coverage to expats; organizations like American Citizens Abroad can help them find a plan.

All this may seem like a lot of work, even to make such an appealing dream come true. Those who have done it, though, say it's worth the trouble. "Retiring abroad is a way of revitalizing yourself," says Knorr. "You are reborn, seeing the world with fresh eyes." ACA's executive director Dorothy van Schooneveld has even experienced an unexpected bonus: "You appreciate your own country much more when you come back to it." For when you retire abroad, you're not giving up your homeland--you're gaining another.