Budget For Living Or Retiring Overseas

How Much Does It Cost To Launch A New Life Overseas?

Dec. 3, 2012, Panama City, Panama: Here’s how to figure a start-up capital budget for launching your live or retire overseas adventures.

Dear Live and Invest Overseas Reader,

We write regularly about how much it costs to live overseas, providing detailed budgets for expenses in different locations we recommend around the world.

But...what does it cost to get there in the first place?

"This is all very enticing," a reader wrote recently, "but what about the getting-started bundle? How much does one need to launch this kind of an adventure? Will it cost me US$5,000...US$10,000...US$25,000?"

As with any budget, there's no one-size-fits-all live-overseas capital budget. The variables are great. Bottom line, though, your up-front investment in a new life overseas can be very controlled.

If you know you want to move full-time, you'll have to invest in a residency visa. This can cost US$1,000 to US$2,500 per person, depending on the country and whether or not you engage the help of an attorney or manage the process yourself. Note that, in some countries, Panama, for example, an attorney is required. You can't submit a residency visa application without one.

If, though, you want only to dip a toe...to take living overseas for a test run before you commit...you can forgo both the cost and the hassle of the visa application process. Spend only up to six months in your overseas retirement Shangri-la and no need to invest in formalizing your residency status.

I recommend always that you rent first. To do this most places in the world, you'll need your first month's rent and another month's rent for a security deposit. Some places may ask for a third month's rent (the final month) in advance, as well. You can figure this expense, depending on how much it's going to cost you to rent the kind of place you want in the neighborhood where you want to be living in the country where you're looking to move.

If you want to bring all the comforts of home with you, you'll have to pay for shipping. This can be a big expense (shipping a container-load of furniture across the Atlantic costs about US$10,000, for example)...or a small one (if you simply check two or three extra suitcases or packed boxes on the plane with you).

Rent furnished, however, and you can avoid this expense, perhaps indefinitely but for sure at least until you're certain you're ready to settle in long term.

I don't recommend shipping a car with you wherever you're going. Often, you'll find that the car you've shipped is inappropriate for use in your new home. Friends years ago shipped a van from Canada to Nicaragua and regretted the decision almost immediately. Nicaragua's roadways chewed that van up and spit it out in pieces in a matter of months.

You might also find that it's hard to find parts or experienced labor for repairs and maintenance for your imported vehicle, depending what you import where. And, depending on the country and your residency (or non-residency) status, the import duty for a car can be significant. Better, if you need a car in your new home, to buy it locally.

We lived in Panama City for a year before investing in a car here. When we finally did, we bought a four-year-old Toyota Prado. Our experience in Panama has taught us two things related to owning a vehicle in this country:

First, any car you drive here is going to sustain regular damage. Traffic on the crowded streets of Panama City is a free-for-all, and fender-benders are everyday occurrences. We have been involved in seven. You can't avoid them, because, frankly, Panamanians drive like lunatics.

Second, if you intend to travel in Panama beyond the capital, you need a four-wheel-drive SUV. Anything else is silly. Thus the pre-owned Prado. Buying new seemed foolish, as no vehicle stays like-new for long. Buying Prado made sense, as they're common. Any guy in any garage across the country can manage a repair in an emergency.

Best case, of course, if possible, would be to avoid car ownership altogether.

In that case--assuming you're relocating part-time at first, to try a place on for size...renting rather than investing in the purchase of a new home of your own...not bothering to import anything other than what you can carry in your checked luggage...and moving someplace where you won't have to invest in a car--what does your total Getting Started Overseas budget amount to?

Your rental deposit...and your plane ticket. A matter of a few thousand dollars.

You can keep this really simple.

Kathleen PeddicordContinue Reading: