Questions to Ask Before Retiring Abroad

It used to be retirees flocked to Florida, Arizona or any place where the sun always shines. But us boomers are taking that a step further and heading to foreign countries.

In my teens and early 20s I was an avid surfer, my buddies and I would surf the beaches in New Jersey during the summer and head to Florida in the winter. Fast forward 50 years, my surfing years are behind me, but my sons have followed in my footsteps and surf all summer and even during the winter with full wet suits.

About 10 years ago they went to Costa Rica for a surfing vacation and that's all it took: they were hooked. Now, the trip has become an annual winter escape. On one of their trips they were staying in a village near the beach and discovered many retired Americans living there. My sons' stories and pictures intrigued me and I began to research this beautiful Central American country.

For any baby boomer considering retiring outside of the U.S., Robert Shannon, director of marketing for Retirement Vacation Properties Costa Rica answered these important questions:

Boomer: How difficult is it for baby boomers to overcome the language barrier? In terms of communications (T.V., internet, telephone) what resources are available to help us adapt to this new language?
Shannon: Most people that come here of retirement age have all the best intentions of learning Spanish, but few learn it sufficiently to deal with these things. However, Costa Rica's education system provides plenty of opportunity for Costa Ricans to learn English and today many of the people holding these service jobs speak pretty fair English to assist the newcomers. If not, the locals are always eager to help foreign residents and usually there is someone within earshot that speaks English.

Costa Rica offers many fine choices for learning Spanish from having someone come to your home, to a wide variety of courses and at any pace you want. They are not that expensive either.

Boomer: What is involved in opening a new bank account and transferring savings?
Shannon: With a handful of state-owned banks and around 19 private commercial banks in Costa Rica, there is no lack of options if you're looking to open an account here. All of these banks offer services to foreigners, whether residents, students or workers. The majority offer accounts in colones or dollars, and in some cases, euros.

State-owned banks guarantee all deposits and have the most branches and locations with ATMs to serve you. State banks have their advantages, but they tend to come with longer lines. On balance with that, they have a lot of tellers and platform service people these days unlike the past.

The private banks will undoubtedly be faster most of the time, but there is not that spread of years ago. Most of these banks will have English-speaking people on staff. All banks require the following to open an account:

1. Identification: A passport if you're not a Costa Rica resident, and they may ask for an additional form of identification, such as a driver's license (from country of origin is acceptable).

2. Utility bill: A copy of a utility bill that provides confirmation of your residence in Costa Rica.

3. Stating your purpose: The requirement varies bank to bank, but if you're retired and are becoming a Costa Rica resident, your residency card, or some document from immigration that indicates you are in the process of obtaining it, may be required.

4. Initial deposit: The amount varies ranging from 3,000 to 25,000 colones ($10 to $500).

5. Letters of reference: Most banks in Costa Rica will require an average of two reference letters. Generally, these are letters from your previous banks. They can also be letters from friends who have accounts in the bank where you are applying.

Transferring savings is not a problem unless it is a large amount of money -- if that is the case, there is some paperwork, but is not an insurmountable task.

Boomer: What is the rate of crime compared to that in the U.S.?

Shannon: The crime rate in Costa Rica is the lowest in Latin America, and Costa Rica is, without a doubt, the safest country in Central America. The crime here is generally much lower and less violent than that in the U.S., and tends to be opportunistic as opposed to violent. In other words, rapes and murders in Costa Rica are very few, almost unheard of, compared to those in the States, but petty theft, car theft, and pick-pocketing are not uncommon here, especially in downtown San Jose and on the beach. In smaller towns, the crime rate is much lower. Murder for the most part is drug or domestically related.

With the single exception of robbery, the crime rate in Costa Rica is very low compared to other countries. For the purpose of comparison, according to the United Nations' Seventh Annual Survey on Crime, crimes recorded in police statistics show that the crime rate for all index crimes (murder, forcible rape, robbery, aggravated assault, burglary, larceny and motor vehicle theft) in Costa Rica was 1,208.2 per 100,000 inhabitants in 1999, comparing very well with 1,529.75 for Japan (a country with a low crime rate) and 4,184.24 for the U.S. (a country with a high crime rate).

Petty crime is still not to be taken for granted when travelling or leaving your home. Don't leave your car parked with a laptop or valuables inside, especially if it is a rental car. Don't leave your home without someone in it if you're going to be gone for a long period of time.

Boomer: With the influx of baby boomers retiring outside of the U.S., are real estate prices still affordable?
Shannon: There are pockets where you will see very little change in pricing -- mainly the Central Valley area and prices are being sustained by the large national companies that move into Costa Rica and this is an upward pressure for the housing market to continue. The local middle class here are big earners and growing every year as the large nationals draw on the services of these people. This has caused a continuation in some areas especially when the developer recognizes the financial model he has to build to capture them.

For the first time in 20 years we are seeing prices dropping. In the north where we had the very high growth rates, we are seeing deals at as much as 35 percent off what they sold for two and a half years ago. The central Pacific is experiencing some real price reductions as well. It doesn't have the inventory the north has. Developers are reluctant to start new projects aimed at the retirement market because of the caution displayed by the people seeking Costa Rica retirement that we have seen in the past two years. We know clearly what the price point is for them and there will be no excesses when it starts again.

Related stories from Fox Business:

Five Questions Every Worker Should Ask Before Retirement

How to Turn Wall Street's Ups and Downs Into Teachable Moments

Coping With the Markets' Maalox Moments

© 2011 Fox Business