The What Ifs of International Geoarbitrage And Early Retirement

If you’re not familiar with it, geoarbitrage is a lifestyle design that means relocating to an LCOL (Low Cost of Living) area in order to reduce living expenses and potentially retire early. Geoarbitrage can be implemented at the domestic or international level, however, the international flavor has been making huge internet waves lately with early retirees moving from the US to countries like Panama, Portugal, and beyond. When I see these stories I am usually amazed, intrigued, and a little skeptical all at the same time. So for the purposes of this post, let’s have a discussion all about the What Ifs of international geoarbitrage. 

As a happy wife, mother, and scientist hanging out in the suburbs of the US, I don’t foresee international geoarbitrage in my family’s future but I’m always interested to follow along on others’ journeys throughout the process.

Whenever an early retirement story involving international geoarbitrage pops up in the media it undoubtedly sparks a detailed discussion between my husband and me that ultimately leaves us with more questions than answers. So I thought I’d detail those 15 questions (in no particular order) here to spark a discussion among people who might actually have the answers. Here we go.

1. What If The Healthcare Isn’t What You Expected?

I know this is a big reason early retirees reference as a reason for packing up and moving abroad, but what if the quality of healthcare and the associated response times aren’t as good as expected in reality?

Also, healthcare is something many people won’t have major experience with until they grow older and need more attention. In which case, how does an aging expat deal with healthcare that doesn’t live up to expectations?

2. What If You Change Your Mind?

This one goes without saying but I just have to ask it anyway. We as humans are extremely fickle. As much as we’d like to think we’re consistent in our thoughts and actions, that just simply isn’t the case. Therefore, what if you change your mind after relocating? Do you simply move back? Is it that simple?

3. What If The Economic And/Or Political Stability Deteriorates?

Obviously, the opposite could also occur and the US certainly isn’t above economic or political instability. Some would argue we’re seeing it now in this country. However, the question remains, what do you do if the country you relocated to undergoes swift economic or political deterioration?

4. What If Your Personal Safety And Security Aren’t What You Expected?

My friend Jim over at Route to Retire recently relocated his family to Panama and has stated that the local economy is cash-based. That was something I never considered before reading his post on 10 reasons not to live in Panama, but after reading it, I’m not surprised.

I know it must be extremely difficult to not stick out as an expat in another country, especially one where you need to pay for everything in cash. Therefore, do you become a big target for a (violent) robbery? What about human trafficking?

Again, I know these things happen in the States, but are you more at risk in a different country as an expat with plenty of money in the bank?

5. What If A Loved One Back Home Gets Sick And Needs Assistance?

Since my husband had to deal with his mother getting gravely ill and ultimately dying, he knows firsthand what it’s like to assist a parent with daily living activities during the end stages.

I, too, had to help my father with daily activities and mobility for years before he died. We’re both currently helping my mother as she ages in place, but it’s not easy. So this one hits close to home.

What happens if you’re living abroad and a loved one gets ill back home? I’m not talking about the flu. I’m talking about end-of-life; something terminal. Do you relocate back to the States to help them? Do you visit more frequently, significantly increasing your cost of living? What is the plan for such an occurrence that is, unfortunately, a high probability?

Obviously, living in an LCOL country isn’t the only reason you might live far from loved ones and this often occurs in the US with family and friends living in different parts of the country, but when you’re in a different country altogether, are there more barriers to dealing with this inevitable issue?

6. What If Your Kids Hate It But You Love It?

If you have kids, depending on their ages, the possibility exists that they will absolutely hate moving to a different country for the sake of your early retirement. So what happens if your kids hate it and you love it?

Do you continue on and hope that everyone adjusts? And how long do you allot for adjustment before deciding it’s not going to work?

7. What If You Hate It But Your Kids Love It?

The opposite could also turn out to be true. What happens if you hate living abroad but your children love it?

Do you continue on to give your children the opportunity to reach their full potential in a new location? If so, how long do you stay? Long enough for them to become adults and establish their lives and potential families? At which point, do you return to the States and leave them behind? Or do you tough it out in a place you don’t love so you can remain close to your children and potential grandchildren?

8. What If You Have To Leave The Country Often To Maintain Your Visa

In some countries, it’s a requirement that you periodically leave to maintain your visa. How do you handle this as an aging expat? For example, what if you’re in the twilight of your life with major health and/or mobility issues? Are you still expected to leave the country to maintain your status or are exceptions made?

9. What If It Becomes A HCOL Area Due To Popularity?

It’s not out of the realm of possibility that your new paradise becomes an expat hotspot thanks to constant news coverage, driving prices up. Do you then move to another LCOL area to keep expenses down and your nest egg safe?

10. What If The Locals Don’t Want You There?

Depending on where you go, I’m sure there are locals that aren’t thrilled with rich Americans moving to their country to live on the cheap. How do ensure your safety?

11. What If You Decide Early Retirement Isn’t For You?

What if, after some time, you decide that early retirement bites and you want to return to the workforce?

Can you take up a job in the local market in your previous field of study? And if so, is the pay comparable and, if not, are you okay with a reduced income? If you’re not, can you just move back to the States and hop back into the job market?

Related: 

• Episode 24: The What Ifs Of Domestic And International Geoarbitrage
• Tiny House Living: 7 Things You Need To Consider Today
• The 7 Reasons I Love Living In Panama As An Expat
• Why We Refuse To Buy A Bigger House For Occasional Guests
• Retiring Early And Moving Abroad: How One Couple Made It Happen
• Episode 11: Our Failed Attempt At Van Life

12. What If Your New Reality Doesn’t Match Your Previous Expectations?

What if you just don’t like it as much as you thought you would? I know a lot of numbers look good on a spreadsheet and a lot of things sound good when discussing them but turn out to be a much different experience in reality (listen to our failed attempt at Van Life here).

Do you give yourself a certain amount of time to adjust and make a decision whether or not to continue with your new path? Or is it not as simple as deciding to just move back?

13. What If You Determine Living As An Expat Just Isn’t Worth It?

This goes along with changing your mind and reality not matching previous expectations, but what if you determine that living as an expat just isn’t worth an early retirement? Do you embrace the right to change your mind or do you feel pressure to push on to live a previous dream that might become enjoyable one day?

14. What If It’s Not THAT Much Cheaper?

I’ve been reading a lot about the cost of living abroad and it seems like the going rate is anywhere between $1,500 and $2,500 US dollars each month. Considering my family is able to keep expenses in the $3,500 ish range each month including a mortgage, that range doesn’t seem all that inexpensive to me.

Granted, our monthly expenses don’t include my employer-sponsored healthcare for our family of 3, but if we paid off our mortgage we could use that money to buy healthcare in the US and still be at the same number. Oh, and just for reference, we’re in a popular bedroom MCOL community about 90 minutes outside of Philadelphia. From what I’ve seen, the cost of family homes is anywhere between $250,000 – $500,000 with annual taxes ranging from $4,000 – $10,000+.

So, taking into consideration the average cost of living for an expat, is moving abroad that much cheaper? Are there comparable options within the States that would satisfy an LCOL?

15. What If You Have Pets?

This is a big one for my husband and I. We have 4 pets total (2 Mad Money Pups and 2 Mad Money Cats) that we absolutely adore. We treat them as members of the family and just wonder if people with pets can move them abroad with them?

We also wonder about quarantine requirements and what veterinary care is like in countries popular with early retirees. Obviously, this will likely run the gamut, but I’d love to hear from someone who has either done the research or has experience.

UPDATE: My friend Jim over at Route to Retire wrote a response post to this one! Check out his take on international geoarbitrage. Psst…he retired early and moved with his family to Panama!

And there you have it. An extensive list of questions my husband and I typically debate whenever we see a story about early retirement and international geoarbitrage. We’re obviously looking at it and questioning it from our US-based, suburban standpoint and would love to hear the opinions of others and especially those who have thought about doing it or are doing it!