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Best Caribbean or Central America location to retire? (Now with South America!)
My mother in law is naturalized US citizen, and lived a significant potion of her life in the US. She collects her full SS, despite the fact she lives in Canada, and has since 1994. She applied for and started to receive her SS after she was no longer a US resident. And she also collects Old Age Security and Canada Pension Plan and Soul Survivor Benefits from Canada, as her total residency in canada allowed her to qualify for the OAS. (She made the deadline by 2 months, and it works out to 500 a month for life, not much to be sure, but not bad, to be sure.) CCP is the plan Canadians pay into, like Social Security.
Personal experience. I helped her with her application.
Thanks guys. So this would cover her disability as well as 'normal' social security I suppose. I guess that means all she would lose is her medical coverage (medicare/medicaid).
As for moving prior to January 2013, yes I wish... but unfortunately I won't be ready yet by that time. I recently turned 34 and I plan to be down there and retired by 40.
Here is some more info about being an expat. I was one for 12 years.
If you are a US citizen that passes the physical presence test in a country that has a tax treaty with the US, you can exempt up to $80K of income that is made in that country. And of course that is taxable net, not gross.
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Big Mike great topic, I've done some extensive research and I believe Freeport, Grand Bahama Island is the best for a variety of reasons:
What I'm looking for:
- Warm climate- east of Fort Lauderdale, Fla, advantage over Fla is lower humidity,(Island breezes) - High speed reliable internet- for the most part
- Reliable power for most part (I can get a generator)- for the most part
These 2 topics go together it would be good to have a generator plus a back up satiliite internet for a security blanket.
- English spoken is a big plus- yes part of British Commonwealth
- Low taxes on income from trading- No income taxes. All taxes are customs duties and a small tax on banking transactions. No property taxes on real estate. As in Bermuda taxes are customs duties.
- Stable currency as much as possible- on par with U.S. Dollar
- Easy Citizenship requirements, - not a problem, however not necessary. For U.S. income tax purposes if you are e.g. trying to establish the "physical presence" for the "earned income exclusion" even residency is not required. When you are coming onto the Island there are diffent exemptions from duties based on if you are a "resident" or a visitor so you may not even want to establish residency.
- home ownership, etc- Is easy if you can pay cash for your house. Unlike, Bermuda, housing prices are more reasonable than in Florida for a comparable home. Housing prices are reasonable because it is difficult for Bahamians to get a mortgage. They require a large down payment or if you build a house you cannot get a construction loan until you pay for the land and have about 40% of the house built. There is a local who makes his living building houses and selling them rent to own. A little trick he uses is he lets his purchasers "skip" their December payment which is folded into the principle and ends up extending the mortgage. As a financial decision it may be better to just rent. Keep in mind that if you tie up your capital in real estate you have less money to trade with. Much better idea to put your 110 to 200 grand in a trading account and generate the income to pay your rent and probably keep adding to the value of your account. Rents are reasonable and right now the economy there is depressed so you will not have a problem negotiating a lower rent especailly if you are going to be a long term tenant.
- People are happy and friendly- yes yes yes, the locals are extremely freindly and great people.
It would also be helpful if I could afford to live there yes i will elaborate on all these topics as folows: Grand Bahama Island The Bahamas - Home to Freeport, Lucaya, and West End
Grand Bahama Island is the best place for a trader to live. When The Bahamas were given their independence from Great Britan the Queen kept a large portion of Grand Bahama Island for herself. The result is that this portion of the Island is a tax haven with in a tax haven. She leased this part of the Island to a wealthy american businessman to develop for her. This part of the island is ran by what is called the "Port Authority" I have made friends with locals who have educated me on the usefulness of this dicotomy for people like us who want to live in the Caribbean and trade for a living.
The Island itself is not as touresty as Nasaua.
The rest of the island is owned by owned by the locals and it is unlikely it will ever be developed because the people own it like Native American reservations and can't get clear title to the land to sell it to developers so it is just passed on to family members.
Because of it's proximity to Florida you can get back and forth fairly cheaply by plane and you can also take a small cruise ship called the "Discovery". It goes back and forth to Ft. Luaderdale daily. You can go there once a month and go to Costco, Wal-mart and other stores to do your shopping. The other advantage is that if you are suffering from "island fever" it is easy to go to florida for a break. News flash, just went to get the link for the discovery Cruise and they've gone out of business. There is another cruise ship out of Palm Beach called the Celelebration. So that option is still available.
Also, the close proximity is helpful so your mom can use her medical insurance in Florida.
There are a lot of day traders there for this reason.
I met someone who had a trading business located there. He had day traders and swing traders that were his employees and were prop traders.
He relocated his business to the U.S. Virgin Islands because the U.S. tax incentives for corps that employ 10 or more locals only have to pay 5% corporate tax. He hates it there and so does his wife, they want to move back to Freeport.
Since they were paid income for doing their jobs they qualified for the foreign income exclusion. ( unlikely day trading would not be exempt, however there are ways to legally shelter this income while you are "physically present " in the Bahamas. see Foreign Earned Income Exclusion - What is Foreign Earned Income So if you can establish a business ther you can exclude 80k in income plus 24k for living expenses from you US income taxes.
It's laughable that someone sent a link about tech Tycoon William Millard as an example of were tp reside to get favorable tax treatment. He may have been briliiant at computers but he didn't know how to avoid taxes legally or he wouldn't have the IRS on his tail. Obviously he was illegally evading taxes.
Sir John Templeton (Templeton growth funds) knew exactly what to do. When he decided to retire he moved to the Bahamas, renounced his US citizenship, then he sold all his holdings completely tax free. He legally avoided all taxes on his huge fortune.
In honor of this fine man our great Senator, Carl Levin sponsered an amendment to a bill that anyone who moved out of the US and renounced their citizenship wouild be charged 30% tax on their wealth (called an exit fee) and would not be able to visit the US for more than 30 days per year.
Big Mike, I have alot more info that I don't want to spend the time typing here since I hate typing. If you want to contact me by email i will be more that happy ro provide you with more info.
good point about children, that really changes the equation. There was a time I wanted to live and work(tele-commute) from Costa Rica, looked into schools and medical care, both are much better than the carribbean. I believe Costa Rica is much better choice than the caribbean, more diversity ot terrian, mountains, forests, beaches etc. and for you single guys, the women in San Juan are very friendly -
I know couple of people(both traders) who moved to the US Virgin Islands, one actually from TX. However their stint lasted less than two years. There is something to be said about the isolation of the Islands that is hard to overcome.
