#186 – The Expat Files: Latin America for Retirees and Beyond

Automatically transcribed from the original recording; names and wording may contain errors.

[00:03] Hi everybody, I'm Johnny Mueller and you're listening to the expat files living in Latin America. The show that tells you what it's really like to live, work, play and or retire in Latin America. I tell it just like it is, not the version they give you in those glossy travel magazines or the picture they paint for you in those international traveler websites where they're only trying to sell you something. What's it really like for expats living in Latin America? Well if you stick around a while you'll find out. So, let's get started. Now I'd like to get to a kind of an interesting email. One of my listeners says, dear Johnny, I'm 70 years of age and I'm unsure of whether it's worth it for me to go down to Latin America as an expat. Though I would sure love to do it.

[00:48] Sometimes I think I'm a bit too old to accomplish what you're talking about. I'm in good physical health and all but I just don't think I have that many years left in me or the drive to start up a business and keep on trucking. I mean a guy's gotta make money to live, right? Even in Latin America where it's a lot cheaper from what you say. Now as for my situation, I have a total asset base of about $300,000 and a social security income of about $1,500 a month. Gosh I'd really like to relocate to Latin America but I just don't know. Sure I see things deteriorating around me daily just like you talk about. My problem is, amongst other things, finding a country to go down to that I can live where my funds will go the furthest. Now I am on social security but how long do you think I could last on my $300,000?

[01:36] Because since I don't know Spanish I have my doubts about starting up a brand new business. Talk about teaching an old dog new tricks. How does a guy 70 years old learn Spanish? I can't even learn Skype. And that internet business stuff you talk about, well that's for younger guys. And another thing, in one of your shows you talked about the fact that you could get your residency down in a Latin American country, then you sit it out for five years and finally get a passport. I'm 70 now, that means I'll be 75 before I even get a second passport. What do you think about that? It sounds like getting another passport is a younger man's game too. I wonder if it's worth it. I wonder when I'm 75 if I'm going to be in good health. I wonder if I'm going to be alive when I'm 75.

[02:23] So that's my story and it would be a big help to me if you could give me some guidance. Signed Remington. Wow Remington, that's a name for you huh? Let me take his issues one at a time. In your case Mr. Remington, you are rightly concerned that people over 75, even 65, might not be in the best position to wait that five years that it generally takes to get a second passport through the usual and customary residency process, though you could get on the fast track with that passport in about two years if you're married a Latin girl. Though at 70 years old you might think that's out of the question too, but maybe not. Because down here September spring romances are very common, especially with gringo expats. Like I mentioned in previous shows, you have the gringo advantage going for you in all

[03:11] walks of life, business and social, and that includes love and romance too. But here's the thing, you see many older folks like you who are living just on social security alone without the benefit of that 300,000 nest egg that you have, they choose to locate in Latin American countries specifically because they're on a fixed income. And most often they do apply for residency just so they don't have to go in and out of the country every 90 days to get their visa renewed. But many older retired folks for example are quite indifferent as to whether or not they actually get that second passport or not. For them, temporary or permanent residency is enough. They just settle in as expats and live out their lives as happy as clams, just totally

[03:58] relieved to be out of the first world rat race and in a warm, beautiful, comfortable, low stress environment, you know? In fact, every retired expat of limited means that I've ever met is just ever so thankful to have had the luck or the foresight to move to a third world country where they can live a first world lifestyle on a social security check. They're just really happy there's a few places left on earth that you can still do that. Don't think they don't know what a sad, degrading experience that others have trying to get by on that $12 or $1500 a month check up in the states. They've all got retired friends up north and they know what it's like. They hear the stories about turning your thermostat down to 60 and eating cat food, believe me. And it sounds to me you're saying you're unsure what you can accomplish by coming down

[04:45] to Latin America at the age of 70. Well, for starters, if you incorporate offshore with one of those anonymous essay corporations and move your assets there, then you can ensure that your survivors up north won't pay any of the hefty first world death or estate taxes. That alone makes it worth coming down here, believe me. Unless of course you don't mind the US government taking a third to a half of everything you've worked for all your life. And about that question that you're asking, how far will $300,000 go if you're living down here in Latin America? How long can you expect it to last? Well now I'm going to ask you, how long do you think your $300,000 is going to last you living in Cleveland or Chicago? Now I assume you're getting about zero to one and a half percent interest on your money like everyone else these days.

[05:32] And by the way, you should consider yourself very lucky to have $300,000 in savings. That kind of nest egg is five times what the average retired American has. Right now the average retirement savings in the United States is only $56,000. So even with your social security checks, according to insurance statistics and tables that you can look up right on the internet, a single person can live maybe 10 years on that kind of money in the states and that's barring any unforeseen medical problems. So to say that that would last you 10 years might be stretching it. And even if it does, you're going to be 80 then right? Well what if you live to be 85 or 90? That's very common these days you know. Then your $300,000 will be gone and you'll be down to that social security check alone.

[06:18] So unless you've acquired a taste for cat food, then it's time to come down to Latin America. So what would a $300,000 nest egg be like down here? Fact is you'd be sitting pretty believe me. You can make that $300,000 go for 30 years in today's financial climate and still live like a first world person down here. And of course you have to remember when I mention that kind of money will last 10 years in the first world, that'll only happen if the financial markets stay relatively stable and the economy maintains itself kind of limping along like it is right now. You know and not take another turn for the worse. And we know that's not going to happen. In the next couple years there's going to be another collapse. We're looking at a nice big financial and economic blowout and you know it.

[07:04] Everyone who listens to Gary Nell, me, Richard Martin or PRN knows that. It's absolutely inevitable. So the question is, whatever age you are, where do you want to be? In Cleveland or Latin America when that happens? Because when the next financial collapse happens, and it will, and it'll be much worse than anything before it, just remember that everything's relative and things will still be 3 to 4 times less expensive down here in Latin America than they will be up in the first world when the next shoe drops. So if it takes 4 wheelbarrows full of $20 bills to buy a loaf of bread in the States, you'll only need one wheelbarrow down here. Still kind of sucks, doesn't it? But if you're here and have just a little bit of land, enough for a small garden, you could easily grow a huge percentage of your own food.

[07:51] Because you're looking at 3 or 4 growing seasons throughout Latin America. And that's something you'll never be able to accomplish up in the first world. So again, where would you rather be? In Chicago, Cleveland or in Latin America? And to address that email more specifically, you for one at 70 years old should remember this. When you get on in years, you may well need some kind of a home visiting nursing care or you might have to live in an actual nursing facility. And up in the States, if you do end up in a nursing home, unless you're very wealthy and can afford that kind of care out of your pocket, you'll have to turn over all of your assets to the government to get their so-called free care. You know, get them to pay for nursing home coverage with Medicaid. And that's in those horrible second rate Medicaid approved homes too.

[08:40] Not the good ones. Not those expensive ones that are kind of like Florida retirement communities. You know, a nursing home where you have your own private apartment. Those kind of places are for wealthy people. And the average yearly cost for one of those, close to $100,000. So a 300 grand nest egg will last about 3 years in a place like that. Bottom line, to live out your years comfortably like that is not for people on social security or people with a $300,000 nest egg. And yes, even to stay in one of the smelliest, crappiest nursing homes in the USA, of course. You heard right. You have to turn all of your assets over to them. But down here in Latin America, you can have a 24-7 live-in nurse or nurse's aide for as

[09:25] little as $300 a month. Which means you're not checking into a scummy nursing home at all, but you're living in your own house. And isn't it everybody's dream to live out the last years of their life in the privacy of their own homes? And by the way, a lot of people have asked me about the nursing home situation down here in Latin America. I'll do a show on that in the future. It's a big subject, so stay tuned for that. Now, when speaking about old age, nursing homes and disabilities, I know none of us wants to think about that. But imagine being stuck in a wheelchair, for example. Where would you rather be in a Medicaid-sanctioned nursing home that stinks of, well, sweat and urine to be precise? How would you like to be stuck there 24-7, eating tasteless hospital food where you and

[10:11] all your fellow inmates are medicated to the point that you don't have the will to complain about it? Or would you rather be living in your own house with your own healthcare aide 24-7 at your beck and call? Well, that's a no-brainer, huh? But you're only going to be able to do that down here in Latin America. Oh, and don't forget, down here, healthcare is genuinely first world and at a quarter or less than what you pay up there. And HMO healthcare insurance is readily available at any age for less than $1,000 a year. Not per month. So considering just the few things I've mentioned, it's obvious that no matter how big, small, or even non-existent your nest egg is, if you're just on Social Security, it's never too late to start thinking about moving down here to Latin America.

[10:59] And the worst thing that can happen? You could do nothing because Obama's going to fix everything in his second term. Haven't you heard? I mean, look at Obamacare. What a brilliant piece of legislation that was. You guys up north are witnessing right now the second biggest entitlement program of all time and the biggest tax increase of all time. Yep, whether you know it or not, that's what Obamacare is. Oh, and by the way, if you do have experience with friends, family, and relatives that have gone into nursing homes up in the first world and after their personal savings were depleted, they had to get Medicaid to pay for their nursing home, you might know that you can't try to hide your assets beforehand because you know they're going to take them. The fact is, a lot of people have tried, for example, to switch their assets into a company

[11:46] or a trust or turn over their assets to younger members of their family. And guess what? That doesn't work. They won't fall for that one. For example, if someone in the family has Alzheimer's but not yet ready for the nursing home, that eventuality not coming down the line for a year or two yet, well, a lot of families will get sneaky and start shifting assets around. But the fact is, when you're forced to turn over your assets and show that the patient has nothing, virtually no resources, so that Medicaid will pay and kick in for the nursing home costs, basically what the vast majority of Americans don't know because they're not old enough to be thinking about such things, is that Medicaid will not cover nursing home expenses until you're down to your last 2,000 bucks. That's the law.

[12:33] And they'll look at your last couple of years of tax returns, too, to see if you had any assets that were generating income or if you were reporting interest income, which would signify you had assets somewhere, or if you were taking a home mortgage deduction, which means you had real estate assets. So it's basically impossible at the last minute to switch assets around in other people's names. When you apply for Medicaid nursing home coverage, if you were really sneaky when transferring money around, and it happened a long time ago, then you might get away with it. But everything's on computers these days. So if you do get caught, there'll be some huge fines and penalties. And they could disqualify you from benefits completely. Then what are you going to do? Are your kids or your grandkids going to take you in?

[13:18] Don't count on it. So the bottom line is, if you end up in a nursing home, you'll have to spend all your money first, and I mean all of it. And if you have a pension or certain kinds of trusts, or social security, or any type of annuity, you'll have to turn all of it over every month to the nursing home. All except, get this, $30 to $60 a month for your own personal expenses. $30 to $60 a month, that's a buck or two a day. Not even candy money for a grade school kid. And by the way, the process of depleting your assets so you can qualify for Medicaid nursing home coverage is called spending down of your assets. Yet another great reason to leave the states and live down in Latin America. And let me give you a couple of good, solid reasons why.

[14:07] Now suppose you're in a nursing home and you spent all your own assets and you're down to your last $2,000 bucks, at which point Medicaid is supposed to kick in and pay for your remaining time in that nursing home. Guess what? That $2,000 bucks can pay for three quarters of a year for a full time live-in nurses aid or health care assistant, but of course that can only happen if you're living in Latin America. Oh, and I should mention that at that price range, she'll speak Spanish of course. But for an extra $50 bucks a month, you could easily find one that speaks English. But it's really to your advantage to have a nurses aid that does not speak English because in a few months, her Spanish will rub off on you and that's what you want. Even if your brain is ossified, you're bound to pick up at least a little bit.

[14:55] You know, what we call kitchen Spanish here. And even though that's only two to three hundred words, it's plenty enough Spanish to get around. So my advice if you have a live-in or part-time nurses aid, get one that doesn't speak English. Sure, the first couple of weeks of communicating might be a little tricky. But the side benefit is, you'll have free, full immersion classes 24-7. Oh, and I should mention she'll double as your maid and cook too. Try to get a nurse or nurses aid to do that up in the States. Forget about it. Chances are up there, she'll walk out on you. But down here with a live-in nurse or nurses aid, they're glad to cook, do shopping, and basically clean your house if you want them to. After all, even though it's a full-time job for them to be with you, they'll have a lot of time on their hands and they just can't sit around watching soap operas all day.

[15:45] She'll be glad to cook and clean and do all that. And chances are you won't even have to ask her, she'll just start right in. And like I said, because it costs about $300 to $400 a month for one of these ladies, anyone with the average $1200 to $1600 a month Social Security check could well afford a live-in health care aid like that, which is completely out of the realm of possibility if you live up in the first world. And yes, about 98% of all the nurses and nurses aids down here are women. And the only male nurses I've ever seen are ones working in the hospital where some heavy lifting is involved. As you might imagine, they're needed to do gurney transfers and stuff and move big equipment around. So when you do put an ad in the paper looking for a nurse's aid, or you put a posting on the bulletin board in one of the local hospitals,

[16:32] you're going to get females answering the request, just in case you're wondering. Which is in fact in your favor because if you get a male nurse looking after you, he's not going to clean, shop, or cook or do your housekeeping because, you know, this is a macho society. And males, no matter what social class, leave that kind of work to the women. And when you get down here, you'll see exactly what I mean. Men and their sons are truly kings and princes of their little castles, which means women and their daughters are the backbone of Latin society, really. They're the unsung heroes, or heroines, doing all the grunt work. It's kind of like pre-1960s United States when women and their daughters were pretty much homebound housekeepers. Man, how things have changed. Anyway, the legacy of the macho society

[17:17] is just another example of the lag time down here. Equal opportunity and women's lib are right around the corner, really. But there's still huge resistance from the traditional macho man, especially in the poor, lower, and middle classes, which make up about 70% of the society. And as for the upper classes, well, they have a lot more money so they can be sexist and hide it better. Not to mention, women in the upper classes tolerate macho man antics that first world women never would. And that's because, no matter how educated these women are, they were brought up in households with macho man fathers and brothers. Fathers and brothers, I might add, that constantly cheated on their wives and girlfriends, and almost never suffered the consequences for it. Nothing like the consequences first world guys suffer when they're in that kind of circumstance.

[18:05] Now I'd like to get to an email that I've been promising to answer for some time. Dear Johnny, I have a few questions I hope that you can help me with. Number one, where can I find older expat file podcasts that are no longer on iTunes? I'm addicted to the Johnny shows and need more. Feed the beast, you know? Do you have any in a zip file or a website I can download the older episodes? Well, I can answer that. First, I can say that I've got over 180 shows out there now. And yes, they're all available in the archives on PRN. Just go to prn.fm. Hit the archives link on the top of the page and go to the expat files. And you can see obviously that they don't all fit on one page. So you have to kind of scroll through them all.

[18:51] But they are there all the way back to day one, which was November or December of 2010. And they're all there with the topics and show descriptions too. So if any of you want to click on some old shows, just go to prn.fm and hit the archives. So let's move on. And our next email question is this. Johnny, how is the best way to move household goods to Latin America? For example, what if someone puts all of their stuff into storage in the States for six months or a year? Then they move and establish themselves in Latin America. How is the best way to move that stuff? Is a shipping container the best way? After having moved twice in the last six months, I was able to just whittle my stuff down to a few bags.

[19:40] A bag of clothes and another bag of electronics, snacks, medical kit, water bottle, etc. But I still have two garages full of stuff. Needless to say, is it better to load the car with all that moldy stuff or are there less smelly ways to go? Well, in response to that, I did touch on to that subject a couple of times in past shows. But things change and here's how the moving thing sits right now. I advise that you should really whittle your stuff down to a few suitcases and some boxes maybe. Because you see, you can get practically 99% of everything you need down here except maybe those very special items. One-of-a-kind or custom things that might have to do with an obsessive hobby, for example. Like collecting Lionel trains or Beetle memorabilia or Pez dispensers from the 60s or something like that.

[20:29] And still, what are you going to do with all that stuff when you get it here? You're better off selling it on the internet. Then, once you get settled, if you're really homesick for that Herman Munster Pez dispenser, then just get right back on the internet and buy one again. It's not like you can't live without it or it's lost forever. Internet shopping is just as easy down here as it is up north. The few things I recommend you bring down are, of course, a water purifier, your computers and technical stuff. Some, but not a lot of clothes because they're made down here and are very cheap. And, of course, personal things that have a lot of sentimental value. Like maybe your 9th grade or high school yearbook. Then you could prove to people down here that there was a time long ago when you actually had some hair.

[21:15] But even stuff like that, you could scan and put on a USB or a little hard drive. So, skip the books, files and paperwork. Just scan the stuff, get e-books and bring anything else made of pulp and paper down on a flash drive. So, what about all that great junk you've been collecting all these years? The stuff in your basement, your garage and your attic? Well, my suggestion is, bite the bullet. Take a nice ad out in the Cleveland Sunday newspaper and have yourself a couple of big ass rummage sales. And don't be greedy, price your stuff to sell. And put up a big sign that says you'll take any reasonable or even unreasonable offer. And here's the point, what might not seem like a reasonable offer, in fact, more like an insult, might not seem bad at all two days before you're ready to move and you're in a crunch.

[22:01] So, have a pad and a pencil on hand and put the name and number down to those person or persons that insulted you. Two days before you take off to Peru, you might need the money. And don't forget the internet and Craigslist, they're great for dumping stuff. And of course, you can ship your stuff down in a container. No problem with that if you have the money. But these days, the minimum of full container a 40 footer is going to cost is 3000 bucks. Plus, you're going to have to pay the import duties. On whatever junkiest stuffed in that container. Which, depending on a lot of things, could cost anywhere from six or seven hundred to three or four grand, too. The fact is, there's a lot of tricks to knocking down that import tax number to even around a thousand bucks or less. A lot of that depends on how connected your lawyer is. But most green expats and newbies coming down here tend to get stuck on the high end because those Adwana guys see you coming.

[22:51] Most especially in those tourist areas like Costa Rica and Panama. And lawyers in those tourist areas, they don't do you any favors either. They've all got gringo clients and are used to the gringo dollar and know that gringos are happy to pay anything less than first world prices. So even if their prices are double of what they are off the tourist trail, the average gringo is going to be more than happy with that. But it doesn't have to be that way at all. Just stay clear of those gringo tourist areas. Or not, it's your call, of course. When you're moving to a place that's on the tourist trail, or kind of on the tourist trail, those government types in charge of assessing import taxes can smell a green gringo coming ten kilometers away. That's why you need a good lawyer and should never do any of that stuff yourself. I said they could smell you ten kilometers away, didn't I?

[23:40] And notice how I use the metric system here because that's what they use down here, so you better get used to it too. And by the way, just about the only measurements that are not in the metric system are liquids. They use gallons for things like milk and gasoline and juice and stuff like that. Though for some reason, beer and liquor comes both ways. They use quartz gallons, pints and ounces, and liters and half liters and milliliters. So go figure. And speaking of measurements, there's that odd case of little Belize. Just like a lot of Caribbean island countries, Belize uses miles on its street signs, not kilometers. Any country in the world that was or is a British colony, like Belize, uses the English system, just like we do in the States. But I assure you, little by little, everybody and everything is changing over to the metric system.

[24:29] And the part of the metric system that seems most confusing to gringos when they get down here is that kilometer thing when they're driving a car and when they try to figure distances in general. And the second biggest problem gringos have with the metric system is that all land measurements are in square meters or square kilometers and most all volume measurements are in cubic meters, not square feet or cubic feet, like in the States. Like for example, if there's an apartment for rent, the ad might say that it's 142 square meters. Well, when gringos first get down here, they don't know what the hell that means. Especially first world females, gringas. Not to be sexist here, it just seems that they have a harder time converting square meters to square feet in their heads at first. But eventually they get it. Anyway, an apartment that's 142 square meters is approximately 1500 square feet.

[25:20] So the best and easiest way to ballpark anything that's in square meters, like a house, an apartment, a yard or a garage or anything like that, just multiply the square meters by 10 and you'll be close enough in square feet to have a general idea. Now, as in that apartment example with 142 square meters, multiply that times 10 and you get 1420 square feet, which is very close to the calculated correct number, 1500 square feet. A very good ballpark figure. If you find square feet in your head that way by multiplying square meters by 10, you're going to be within 95% of the correct number. Oh and by the way, like I said, volumes are measured in cubic feet down here too. Like for example, a volume of water in a cistern or the volume that a container holds or a warehouse or garage will hold.

[26:12] And as you might imagine, it's a little trickier to do that conversion in your head. But if you have a few extra neurons in your brain that are still firing, maybe you can file this away. One cubic meter of water or any liquid equals about 260 gallons. And I'll bet 95% of you forgot that already. Anyway, let's get back to that idea that you have to pay import taxes when you ship anything in by container. Well, the fact is the amount of import taxes you'll pay depends on a lot. The tax could be all over the board depending what country you enter and which port you enter within that country. And the people at the customs office inspecting the stuff. That's why I said in a long past show that it's even a good idea to bring a good looking woman or two along with you when you go down to the port and have to crack open that container seal for the first time.

[27:00] It is a thoroughly macho society down here, you know, and thoroughly sexist. And a trick like that always leaves the customs boys smiling. And because it is such a macho paternal society, if you take a walk around any port down to the customs office, you'll notice where the containers are loaded and unloaded and you check in and out, it's almost 100% mail. Mails I might add with the average of about a sixth or seventh grade education. So that's what you're dealing with. Whoops, we're closing in on the end of the show here, so I'll continue this next time. So stay tuned. Once again, the expat files at gmail.com. See you next time.