Planning Your Costa Rica Retirement
Costa Rica Retirement Basics
Looking to get away from the old neighborhood and retire to somewhere tropical, where the people are friendly, the cost of living low, and the scenery breathtakingly beautiful? Consider joining the large numbers of American and Canadian citizens spending their golden years in Costa Rica. Retirement there can be carefree, affordable, interesting, and an adventure.
Cost of Living
For people used to prices in the United States and Canada, particularly the northeastern United States, a Costa Rica retirement can be bargain. Housing in middle-class Costa Rica neighborhoods is substantially less than comparable housing in the U.S., with rents starting at around $300 per month. What’s more: hiring a maid or a cook to help around the house is very affordable, with a full-time maid costing around $200 per month. Utilities, too, are relatively inexpensive, about 30 percent less than in North America. Costa Rica’s temperate climate eliminates the need for expensive winter fuel bills and the mountain air and sea breezes mean less air conditioning. Transportation is very affordable, with a cross-town bus in San Jose costing just 25 – 50 cents. Bus fares from San Jose to the provinces cost no more than $10.
Learning to live as the Costa Ricans do, such as buying local produce and drinking local beer, can reduce expenses even more. Costa Rica’s middle class families earn between $500 and $2000 per month, with anyone earning more than that considered upper class. A retired couple making $3000 per month can live in style in Costa Rica.
A Taxing Situation
An American citizen can stay up to three months in Costa Rica without applying for residency status. There are two main residency designations that apply to those opting for a Costa Rica retirement. To qualify as a “pensionado,” or retired status, you must receive a minimum of $600 a month income. The “rentista” status requires that you earn a minimum of $1000 a month for at least five years. In both cases, status cards must be renewed every two years at a cost of around $100. Both categories allow you to own and draw income from a business inside the country, but prohibit working for anyone else without a special permit.
Foreign residents living in Costa Rica are not taxed on income that’s earned outside of the country. Municipal taxes, levied on your property’s street frontage, vary from one municipality to another, but are never over $10 per month per residence. If you earn money in Costa Rica, either from your own business or from working for someone else, you will pay Costa Rican income tax. Significantly simpler than the U.S. tax system, the Costa Rican tax is based on a two tiered, 10 percent and 15 percent, systems with minimum deductions.
Nature surrounds you in Costa Rica. A leader in preserving its natural beauty, Costa Rica has set aside over 19 percent of her land as National Park. Whether you enjoy hiking, windsurfing, sportsfishing, or golf, there’s an activity amidst a beautiful setting right for you. Beautiful, uncrowded beaches dot both the Pacific and the Caribbean coasts and a wide variety of cultural activities, such as theater, art exhibits, and music concerts abound, especially in San Jose.
A Costa Rica retirement is not like retiring in Palm Springs or Phoenix, but then you probably didn’t want it to be. Spanish is the national language and it is advisable to learn the language if you plan to live there. The residents will help you. They’re friendly and welcoming to foreigners. Costa Rica is affordable, beautiful, and lush, and, before you know it, it just might be home.
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