Retiring in Costa Rica sounds like the dream. This rugged Central American country is teaming with lush wildlife, idyllic beaches, and its capital San José is home to a wealth of culture. If that wasn’t enough, it boasts a high standard of living without the hefty price tag. No surprise, then, that Costa Rica is topping the 2023 Global Retirement Index as the best place to retire.
However, like all big decisions, retiring to Costa Rica is more than just a dream of paradise. There are plenty of practical considerations to take into account, such as language barriers, residency permits, and finances to name a few.
Luckily for you, we have created this comprehensive list of why retiring in Costa Rica is not only an exciting prospect, but a relatively risk-free decision. We will guide you through all the checkpoints of moving there, including its real estate market, expat community, and way of life, so all you need to do is pack your bags.
The Cost Of Living In Costa Rica
Compared to the USA, the cost of living here is a steal. The biggest saving for the American retiree is their universal health care system called Caja. Residents can benefit from one of the world’s best health care systems for a fraction of the price of US health insurance. Instead of being charged sky-high premiums, all legal residents pay a small sum once per month based on their income, making all medical care, from surgery to prescriptions, free at the point of use.
Many expats also cite the low cost of food and other groceries as a major factor in its affordable cost of living. Here, the Ticos put a greater emphasis on fresh local produce, in the form of regular markets known as feria, than the United States. This means that you can benefit from excellent quality fruit and vegetables at rock bottom prices and take part in the charming community activity of going to market. These markets take place in pretty much every town once a week, but there are also plenty of supermarkets that are open as normal – and still competitively priced.
While touristic parts of the country will inevitably be a bit pricier when it comes to dining out, eating and drinking at restaurants and bars is an affordable hobby for the majority of the country. In fact, many retirees can enjoy their favorite leisure activities, from eating out to playing all the best golf resorts, without breaking the bank.
The biggest expense for retirees here? The cost of utilities. The country’s tropical climate will necessitate a lot of air conditioning, meaning higher electricity bills. Even if you retire to the Caribbean coast, the country’s year-round high temperatures and humidity will make it an absolute must. Still, what extra you spend on bills, you save on the your day-to-day shopping.
Costa Rica’s Accessibility From The United States
Less than 5000 kilometers away from the central point of the USA, and geographically on the continent of North America, Costa Rica is a taste of Latin American culture without having travel too far. In fact, it’s less than a five hour flight away from New York City, making it an easily accessible bit of paradise for retirement.
One-way flights from JFK to Costa Rica can be from as little as $92. Not only is this useful for when you first fly out to start your retirement, but it means that you can always go home and visit family at the drop of a hat. Better yet, your family can come and visit you affordably and quickly, in your own little part of Central America.
Costa Rican Tax Benefits
You don’t want to move to heaven on Earth, but spend your retirement in financial hell. Luckily, the tax system here makes living comfortably a dream for its retired expats. In short, you are only taxed on income made in Costa Rica. This means your pension, savings, and whatever wealth you have amassed back home is protected from the taxman. Even tax on real estate is a low 2.5%.
Not only does the straightforward tax system make retiring here more affordable, but it also grants you a hassle-free way of life. Without having to worry about your finances, you can simply retire in peace and enjoy living.
Language In Costa Rica
It’s natural to be concerned about language barriers when moving to a new country. For expats from the United States, this shouldn’t be a problem when considering a move to Costa Rica. Spanish is the official language, so Spanish speakers are already at an advantage. Things like newspapers, TV shows and public information will be in Spanish, making it a truly immersive experience for those who want to learn a new language during their retirement.
However, if you can’t speak Spanish, English is still one of the most commonly used languages. The majority of Ticos you meet will have a good level of English, and this will especially be the case in the tourist areas. Generally speaking, you shouldn’t encounter too much of a language barrier.
Expat Community In Costa Rica
According to the US State Department, there are upwards of 50,000 Americans living in Costa Rica. The majority of these are retired, opting to spend their golden years in sunnier climes. Not only does this demonstrate just how popular this country is for a blissful retirement lifestyle, but it also means that you’ll feel right at home in your own community of retirees.
Whether you decide to retire on the Central Pacific coast or by Lake Arenal, you will be bound to bump into other like minded retirees who will soon form part of your new life. With such a large community of expats, Costa Rica offers plenty of activities to spice up your social life, as well as events specifically tailored to welcoming retirees into the community.
However, if you’re moving to Costa Rica to experience a new way of life other than what you’re already used to, then these might not be for you. Not to worry: this is no suburban retirement village. Living in such a diverse country means that there are plenty of opportunities to escape into its natural beauty or try your hand at some new activities, such as snorkeling in its crystalline waters.
Costa Rica’s Natural Beauty
The biodiversity and natural beauty of the rugged landscape is reason enough to emigrate to this part of Central America. Offering everything from volcanoes and waterfalls, to beaches and forests, this place is the stuff of dreams if you would like to live alongside mother nature.
There truly is no place like Costa Rica for such an array of nature. Home to six active volcanoes and 61 that are currently lying dormant or extinct, places such as the Poás Volcano National Park and the Arenal volcano are popular tourist destinations – and for good reason. The sites are fantastic spots for a hike, with breathtaking views and an up-close-and-personal encounter with the wild forces of the world.
If you choose to retire here, you’ll also have your pick of beaches. Abundant in seaside fishing villages and rugged coastline, there’s no reason why you can’t spend your entire retirement by the sea. Whether you want to unwind on a pristine beach, witness endangered animals during their nesting season, or try out Costa Rica’s best surf, places like the Guanacaste Beaches are one huge reason to choose to retire here.
If that wasn’t enough, retiring in Costa Rica means you’re never far away from some of the world’s most beautiful and fascinating creatures. National parks and plenty of rainforest make it one of the most biodiverse countries on Earth. Where else would a nature-loving expat like to spend their retirement?
When the discussion on retiring abroad arises, Costa Rica will come up. In fact, about 70,000 US citizens already live there. As with any other country, there’re pros & cons of retiring in Costa Rica. #prosandconsofretiringinCostaRica https://t.co/OYqMqGvVyw pic.twitter.com/9oC2iT78xr
— Retires Great (@RetiresGreat) November 6, 2021
Ease Of Acquiring Residency For Retiring In Costa Rica
Moving to Costa Rica is more than just wildlife, however. As expected, you have to overcome some red tape and bureaucracy. There are a few different ways that you can obtain your green card, but the most common way for retirees is the pensionado route.
When becoming a pensionado, you need to be aware that it needs renewing every two years – and that’s the case for other residency statuses too. You must be in the country when you decide to renew your status.
In order to qualify as a pensionado, you must have at least $1,000 monthly income from either Social Security or another form of pension. You do not need to be any minimum age to qualify for this status but, in order to renew it, you must have lived in Costa Rica for at least four months of the year. Furthermore, if you are out of the country for two consecutive years you will lose your status. With this status, you are not permitted to work as an employee, but you can have your own business or be self-employed.
Alternatively, you could become either a rentista or an inversionista, although both of these residencies require either regular income from investments or for you to invest in Costa Rican assets respectively. However, if you hold any of these Costa Rican residencies for at least three years, you may be eligible to apply for permanent residence in Costa Rica.
Costa Rican Real Estate
Generally speaking, buying property in Costa Rica is more affordable than in the United States. We know that property taxes are low here, which eases the financial burden, but land and property itself is also significantly less if you’re looking to buy. You can purchase a plot for construction from $15,000 in some of the country’s most beautiful areas, with houses for sale from as little as $48,000. Commission for estate agents can run from 5-8% depending on what area of Costa Rica you are looking to relocate to.
Naturally, if you want to live in an area that is more metropolitan, you can expect property prices to be much higher than in its more rural settlements. However, you will find that modern housing with great amenities and stunning views in these locations will still work out cheaper than the US equivalent. Better still, Costa Rica relies heavily on tourism for its income, so buying a property in these popular areas could also work out as a great financial investment if you wanted to rent it out in the high season.
For expats in particular, Costa Rica boasts a large amount of gated communities that prove very popular. If you’re looking at renting or buying in one of these gated communities, you can expect a much higher degree of safety and comfort. More often than not, these settlements also offer access to golf courses, beaches, or marinas. However, be aware that there is a higher price tag for this kind of lifestyle.
Costa Rica’s Pace Of Life
Costa Rica offers the retiree an unparalleled way of life. Known for its mantra of Pura Vida, literally pure life, the Costa Rican culture is renowned for being laidback, peaceful, and appreciative of the small joys in life. So much an integral part of the Costa Rican fabric, when you retire to Costa Rica you will often hear the phrase pura vida used as a greeting, a farewell, or an exclamation of praise.
Unlike some of its neighbors in the rest of Central America, Costa Rica is largely untouched by political instability or war, having abolished its armed forces over 70 years ago to great success. Furthermore, the life expectancy of the average Tico is higher than that in the United States. Thanks to the high quality of their health care system, as well as their pura vida lifestyle, retirees can enjoy a secure and hassle-free retirement in Costa Rica.
In fact, Costa Rica was named the 15th happiest country in the world according to the most recent World Happiness Report. Despite having one of the world’s lowest GDPs, it is home to some of the world’s happiest inhabitants because of its high quality of living, unspoiled natural beauty, availability of renewable resources, and high levels of public funding for education and medical services. Thanks to this, residents are able to enjoy a clean environment and a strong sense of community, making it an idyllic place to spend your retirement.
Is it safe to retire in Costa Rica?
Costa Rica is a safe country, posing potentially less of a threat than the United States when it comes to crime. While it is still important to be vigilant of crime, your biggest safety concerns during your retirement will be due to natural disasters. The country can be prone to volcanic eruptions, as well as earthquakes and riptides. It is also important to be aware of some of the dangerous animals in Costa Rica if you want to move somewhere close to its jungles.
How much money do you need to retire in Costa Rica?
The cost of living in Costa Rica is lower than in the United States, so many retirees may find that they can live a comfortable life for as little as $1500 per month. Generally speaking, your pension or Social Security should be ample money to live on once you have your home there. Your biggest expenses after property will be utilities, but even when taking this into account your lifestyle will likely be less expensive here.
How can an American retire to Costa Rica?
The easiest way for an American to retire here is by becoming a pensionista. If you qualify for this status, all you need to do is open a bank account in Costa Rica and make sure you transfer your income of at least $1,000 per month into it. Then, you are free to live and spend as you please, ensuring that you spend at least four months of the year in the country.
Can a foreigner buy a house in Costa Rica?
Foreigners can buy property in Costa Rica, whether they are a resident of the country or not. The only exception to this right to property is that no non-citizen can own more than 49% of a property in one of the country’s ‘Maritime Zones’. Other than that, foreigners have as much right to buy a house as a native.
Where do most expats live in Costa Rica?
One of the most popular places to live among expats is the suburb of Escazú in the capital of San José, which is perfect if you want to live somewhere well connected to infrastructure and healthcare. The largest settlement in the Central Valley, however, is Alajuela. Boasting a population of over 50,000 people, Alajuela is a great compromise between having a town at your fingertips but escaping the bustle of the big city.
Another large expat community in the Central Valley is the small town of Grecia, which hasbeen named the country’s ‘cleanest town’ for many years, and attracts expats in search of a smaller-town feel.
If you want to move by the ocean, then there are expat communities on the Central Pacific coast that offer the opportunity to spend your entire retirement surfing and sunbathing. While expats are not hard to find in this region, there are considerably fewer here than near the capital.
If you would like to join other like-minded people and spend your retirement in this special place, share this article so you can start planning. The famous pura vida of Costa Rica awaits!