Retire To Medellin?
I fear I underestimated you, dear reader. I expected some backlash as a result of my dispatches from Medellin, Colombia, this week. Instead, our e-mailboxes overflow with e-mails of interest, curiosity, and:
“Thanks, Kathleen. Your reporting on Medellin has been great. I was at the concert in this city in 1971 that you mentioned!…”
“Kathleen, just wanted to let you know that I am currently in Medellin, Colombia. Ironic, huh? I leave Thursday, but I will be moving back here to live full-time in about a month…”
“I am a Dutch citizen who has been living in Colombia for more than four years. I have been reading your posts about Medellin with much interest.
“One thought to keep in mind when writing about living costs in this country is that the expenses for electricity, gas, and water vary depending in the neighborhood where you live.
“In Colombia, they divide cities and regions into 6 estratos. Estrato 1 is the cheapest, estrato 6 the most expensive. Poblado and Laureles, for example, in Medellin, are mostly 5 and 6.
“I have lived in Barranquilla, Bogota, and currently in Cartagena. My average monthly water bill for an apartment with my Colombian wife and two kids is 160,000 pesos (right now, that’s US$90). Our electric costs are high due to air conditioning in two bedrooms, used every night. Our monthly payment for this is around 400,000 pesos (currently US$225).”
Live in Medellin, Colombia? Retire to Medellin, Colombia?
As your fellow readers are suggesting, it’s not nearly as nutty a notion as it may sound. Having spent the past week in this city, I’m won over. Medellin has a great deal to recommend it…including:
- A temperate climate year-round. The city is known as a Land of Eternal Spring. I’m not sure I buy that description, for temperatures most days we’ve been here have risen into the 80’s Fahrenheit. But that’s as warm as it gets. Certainly, you could live here with neither heating or air conditioning, if you chose, meaning your utility costs could be well controlled…
- A great diversity of cultural and recreational offerings. Living in Medellin, you’d never want for something fun and interesting to do. On any given day, you could go hiking or bike riding. You could visit a museum or one of the many shopping malls. You could see a tango show or an opera (in season). Come evening, you could dance the night away and sample the local rum in one of the bawdy nightclubs or enjoy a fine meal and white-glove service at one of the many international-standard restaurants…
- Infrastructure that works. This is one thing that I was not prepared for. This city’s infrastructure is more solid than I expected (and, I’ve been told, more developed than in other parts of this country). Here in the City of Flowers, the roadways are wide and well-paved, and wireless Internet is ever-present. Plus there’s a user-friendly Metro that offers service across the city…
- A very affordable cost of living. As I’ve noted, day-to-day costs here seem on par with those in Panama City, with two notable exceptions–utilities (thanks to the climate) and real estate. I’m going to leave the real estate investment reporting to Lief (who is preparing a complete report for his Global Property Investor’s Marketwatch. I’ll say here only that this market today reminds me of the Panama City market when we first began paying close attention to it, about a decade ago…
All that said, this remains an emerging market, not yet very foreign retiree-friendly. Things like establishing residency and opening a local bank account are still in the “workaround stage,” as I think of it. That is, to do these things, you may need to put some workarounds in place. That can be fine, but not everyone is up for the hassle.
In addition, you have the currency risk to remember (the U.S. dollar, for example, has lost about 10% of its buying power in this part of the world in the past 90 days). And there are exchange controls in place, meaning you have to be very careful how you bring money into this country. Report it incorrectly, incompletely, or not at all, and you could have trouble trying to take it back out of the country down the road. This applies to any profits you might reap from any investment here, as well. Again, you may have to put some workarounds in place to succeed in getting all your capital and all your profits from Colombia to wherever you’d like to move them next. Maybe that bothers you, maybe it doesn’t. (Lief will have more on this in his Marketwatch report.)
You also have to remember taxes. Colombia is not a tax haven. Living here, your tax liability could increase (depending on your nationality, where you hold legal residency, etc.). For example, in Colombia (as in Argentina), you could be liable for a wealth tax. You could pay tax of as much as 60% if you purchase a car. Sales tax is 16%.
Finally, you won’t get far in Medellin if you no hablas nada de español. We found some English-speaking Paisas (as the people of Medellin are affectionately known), in the big hotels, for example. And we had a recommendation from a friend in Panama for a taxi driver in Medellin who speaks perfect English (thanks to five years living in the States). Generally speaking, though, people in Medellin speak Spanish. If you don’t, you’ll struggle to get anything done.
As I remind you often, it comes down to your priorities. Maybe, given your personal circumstances, the tax situation living in Colombia wouldn’t be an issue for you. Maybe you’re not looking for a place to retire overseas full-time, so you don’t mind that permanent full-time foreign residency can be complicated to organize.
And maybe you embrace the challenge of communicating day-to-day in a second language.
Maybe, for you, the near-perfect weather, the beauty of the setting and of the city itself, the friendliness of the people, and the great diversity of ways to spend your days and your nights are enough to warrant a closer look at the idea of spending time long term in Medellin.
Or maybe you’re intrigued by the opportunity to rent a comfortable apartment in this appealing city for US$300 per month or less…or to invest in an apartment of your own for US$60,000 or US$70,000.
I understand. For all those reasons, and others, this city has gotten my attention, too.