The number of Americans who are heading overseas to retire leapt by 40% between 2007 and 2017, according to Social Security Administration data, and the trend is expected to continue, as growing numbers of Baby Boomers are discovering they didn’t save enough to maintain their standard of living at home, a CBS News report has revealed.
The report, which is headlined “American ‘economic refugees’ are increasingly retiring abroad,” notes that although the median amount Americans hitting age 65 currently have set aside for their retirements is US$152,000 – “the highest of any working generation” – “one in five say they haven’t yet recovered from the recession” and might never do so, according to the Transamerica Center for Retirement Studies.
Currently some 413,000 Americans are drawing their Social Security benefits from outside the U.S. Although this is a fraction of the nation’s 42 million retirees, the growth in that number in recent years “reflects the financial realities for a growing number of Baby Boomers,” the article points out.
What’s more, although the U.S. government health system known as Medicare pays certain out-of-pocket costs for those aged 65 or over, it doesn’t cover such things as most dental work or long-term care, and it can come with co-pays and other out-of-pocket expenses, the CBS News article points out.
The article quotes retired Americans living in Mexico – the country with the largest number of American citizens outside the U.S. – and Ecuador, both of which are popular with Americans looking for affordable, safe and agreeable places to live out their final days. In Ecuador, for example, Americans are able to join the country’s national health system for only around US$80 a month; and “a dental crown costs about US$200, compared with more than US$1,000 in the U.S.”
As reported here last month, exactly how many Americans live outside the U.S., and where, is something of a mystery, as the U.S. government has not made tracking this number a priority. What estimates do exist tend to be based on such data as the numbers of Americans drawing benefits abroad or paying taxes from abroad, and consequently often vary widely.
One of the best lists appears to be one published on Wikipedia, which indicates that the number of American expats living in Mexico is estimated at between 738,000 and 1 million.
Canada comes in in second place for having the largest number of American expat residents, with some 316,350 to 1 million; Germany in third place, with around 324,000; the Philippines is ranked fourth, with 220,000 to 600,000; Israel is fifth, with 200,000; and the United Kingdom, with, according to UK Office for National Statistics data, 20,000 to 156,000.
‘Little-noticed surge across
the U.S.-Mexico border’
When it comes to Mexico, it’s not just retirees who are pouring in from the States, a Washington Post article noted in May.
If you include “digital natives who can work just as easily from Puerto Vallarta as Palo Alto…U.S.-born kids – nearly 600,000 of them – who’ve returned with their Mexican-born parents…[and] retirees,” plus “the thousands of Mexicans moving home” from a stint in the U.S., “the flow of migrants from the United States to Mexico is probably larger than the flow of Mexicans to the United States,” the article noted.
The article said that this “little-noticed surge across the U.S.-Mexico border” of “Americans heading south” had resulted in the U.S.-born population in the country reaching 799,000, “a roughly four-fold increase since 1990, according to Mexico’s statistics institute, though the U.S. Embassy in Mexico City estimates the real number at 1.5 million or more.”
To read the CBS News article, which is accompanied by a video, click here.
Source: American Expat Finance
