Cynthia and Edd Staton are thoroughly enjoying retirement in their 3,000 square-foot penthouse apartment. They have a housekeeper, eat out frequently, never fret about health care costs, and indulge in yoga classes and visits to the gym. It’s a fine way to spend their golden years — in Ecuador.
The Statons said the decision to retire outside the U.S. came in the wake of the financial crisis a decade ago, when their retirement nest egg lost value and they were faced with retiring at a lower standard of living than they had expected. More Americans have followed their lead. The number of retirees who draw Social Security outside the U.S. jumped 40%, to more than 413,000, between 2007 to 2017, according to the Social Security Administration.
To be sure, that’s a fraction of the nation’s 42 million retirees. But it reflects the financial realities for a growing number of baby boomers who are hitting 65 without enough money stashed away to maintain their standard of living. The median retirement savings for people in that age group is $152,000 — the highest of any working generation — but 1 in 5 say they haven’t yet recovered from the recession and never may, according to the Transamerica Center for Retirement Studies.
“It’s a slow-motion train wreck, and we are in the first car of the train,” said Edd Staton, who lived in Las Vegas before moving to Cuenca, Ecuador, in 2010 and now with his wife blogs about retiring abroad. “It takes a long time to get to the caboose. There is nothing in place that will make this go away.”
He believes more retirees may be living outside the U.S. than reflected in the Social Security Administration statistics because some, like him, deposit their Social Security checks in U.S. bank accounts. ATMs make it easy to withdraw cash in Ecuador, Staton noted.
Asia, Europe, and Central and South America are proving to be popular locations for American retirees who want to bail from the U.S. The decision often boils down to such factors as cost of living, health care options and whether there’s an expatriate community.
Americans who opt to retire outside the U.S. are driven by different motivations, said Dan Prescher, senior editor at International Living, a publication geared to people who want to live or retire abroad. Prescher and his wife, originally from Nebraska, now live in Mexico, where they were drawn because of the better weather.
Some are baby boomers who “now can have that great adventure they always wanted,” he said. Others are what the Statons describe as “economic refugees,” or Americans who are worried about managing retirement on a limited budget.