Retirement Cost Of Living

But Isn’t It Expensive To Live There?

“But I’d think that France would be more expensive,” remarked my interviewer Friday afternoon.

“More expensive than what?” I had to ask.

Few things in this world are absolutely expensive. Most things are only relatively so, compared with something else.

The gentleman interviewing me on Friday for the book he’s writing was wondering about the reasons an American would think about leaving the United States and living or retiring overseas. Cost, I explained, is a big motivator…the need to escape a high cost of living and the desire to go in search of a more affordable one.

I thought about this a lot during our recent extended tour across America. Over the holidays, when we traveled from Vermont to Baltimore to Chicago to Santa Fe and to Ojo Caliente before returning to Panama City, we couldn’t help but notice something: The United States can be a really cheap place to be. Not in Vermont or Chicago…but in remote, rural New Mexico, where we have some family? In this part of the country? Your dollars go far.

Dinners for eight of us cost less than US$200, including wine, sometimes much less. That’s hard to do even in Panama City these days, and even Lief, who could be described as very careful with his money, was happy to pick up the checks throughout that leg of our journey.

Of course, we were passing through as tourists. Our expenses were limited to hotel rooms, restaurant meals, rental cars, and souvenirs. We weren’t, for example, shopping for health insurance.

Lief had a meeting Friday with a local Panamanian businessman. They spoke about the cost of doing business in this country. One of the big advantages of Panama, compared with any other country that’s a reasonable doing-business choice (with international-standard infrastructure, a varied, educated, English-speaking labor pool, and a pro-business atmosphere), is that the cost of that educated labor force is quite reasonable on a global scale.

Which is to say that salaries in Panama are much lower than salaries for comparable positions in the United States.

The gentleman Lief had lunch with on Friday, who knows lots of other businessmen and business leaders in Panama, explained to Lief that, in recent years, top executives in Panama City have begun to notice this wage disparity between Panama and the United States…and, when positions within their firms for which they were qualified have become available Stateside, they’ve requested transfers.

“Hey, I can go do what I do in the United States,” they’ve thought to themselves, for example, “and make six or seven times as much money.”

Now, these Panamanians are asking to be transferred back to Panama. The biggest reason? The cost of health care and insurance. These things are reasonable parts of a family’s budget in Panama. In the United States, as the transplanted Panamanians have discovered, a couple of hospital stays can wipe out much of the “extra” income compared with Panama.

What are you to take away from these observations?

First, the cost of being a tourist anywhere in the world has nothing to do with the cost of living in that place. Not in Stowe, Chicago, or Santa Fe…and not in Panama City, Paris, Chiang Mai, or anywhere else.

Second, it’s impossible to talk about the cost of living in any country on earth. Is the United States an expensive place to live today? Are we talking about Stowe or Ojo Caliente? The same thin-sliced thinking must be applied when considering any other country, too.

Third, how you live has everything to do with your cost of living. You have to compare your total cost of living in one place versus the total cost of living in another. You can’t try to make a determination as to the relative cost of living somewhere based on the costs of just a few items.

Years ago, when we moved from Ireland to Paris, our overall cost of living remained about the same. How could that be? We had had two cars in Ireland. In Paris, we didn’t need a car. That change alone saved us enough to cover the extra housing cost.

Kathleen Peddicord

Discover The World's Most Affordable And Exotic Places

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