Looking into expatriation

Thinking of retiring in Costa Rica in 5 to 7 years (or earlier if possible), Looking for info, places to live, taxation on income from US (social security, 401K and rental ). Taxation in Costa Rica. Life in general.

gy_expat wrote:

Thinking of retiring in Costa Rica in 5 to 7 years (or earlier if possible), Looking for info, places to live, taxation on income from US (social security, 401K and rental ). Taxation in Costa Rica. Life in general.

Hola gy,

Welcome to Expat.com!

I would suggest first reading through the various forums here.  They will give you a lot of information and answer many if not most of your questions.

As to taxes, you are not taxed on Social Security and your 401(k) will be taxed at the same rate by the long arm of the U.S. government the same as if you were in the States.  Property taxes are MUCH LESS here than in the States.  Importation taxes are high, i.e., on a vehicle and goods.  At the same time that vehicle and those goods will sell for much more here so the high taxation is offset by this.

You need to visit and spend as much time here as possible before deciding to actually move down.  With this said, you need to look at it as a place to live rather than a vacation spot.  That would be two different worlds.

Life in general is much different here than North America.  And unfortunately it can't really be explained as it's a different experience for each individual.  I like and enjoy my life here.  For others it is a struggle to assimilate.  I myself cannot imagine living back in the U.S.  Too fast paced, too many angry people and the lack of compassion is not something I would enjoy.  Each person has to find what makes them happy and content.

Best of luck to you on your search.

- Expat Dave
Expat.com Team Member

Thank you for kind words. I grew up in ester Europe with a lot more compassion and probably a slower pace than hare in the US. With all that said I enjoy my life here but looking for a more relaxed retirement or reduced workload.

I looked into taxation and understand most of it including exceptions and such. I am planning my first visit in 2019 for a month or so and will try to meet people who expatriated from here and get some real answers about how to transfer money, rent, buy, living expenses, work opportunity (if needed)  etc.

I am also interested in a place where I can continue to bike,  swim,  run etc. in order to keep active and in shape.

As I am looking forward to the future beyond 55 years I would like an active life around mountain and hiking (more towards Central Valley) 

I perfectly understand your statement about the difference between visiting and living in one place. I tell many people who visit my birthplace,  Hungary it is a beautiful place ... to visit.

Thank you again for your reply and looking forward finding out more on this forum .

Taxes will be  the same as they would be if you lived in  the USA, except for obviously your foreign address. And if you have a corporation or bank account here with over $9,999 in one or more accounts (totaled)  you will have to report those, at least you're supposed to or risk fines.

Social Security is taxed by the USA and you will not pay taxes here except for sales tax, vehicle regisitration and property tax if you own a car or property.
Some people do pay social security tax, it depends on whatever outside income you may have going along with it I think (don't quote me, I'm not a tax attorney or CPA but I think I remember reading that). But it won't matter if you live in Costa Rica or U.S. or anywhere else, the tax will be the same as long as you're a U.S. citizen.

I'd recommend researching where you think you might like to live and plan to rent a house there for a month if you can. Longer would be a lot better, and come in the rainy season (May or so through Oct or so) so you see it at its worst, or in some places the windy season (Dec Jan Feb or March). 

There are weather sites or maps online that show rainfall and wind for various months in various areas so you can get an idea.

There are many things about living here, as Dave said above, that you can only "get" while living here. Even if you read about it all, it's different experiencing it for yourself and in the area you live in here.

Ideally (and I know this is not easy to do for many people; I could not do it myself), one should come here for much more than a month before deciding to "move" here. Maybe a month here, a month there, or two months here, 3 months there, something like that. The more the better because sometimes people can take the weather for a month but after 3-4 months , or 6 months of, say, hard rains, you might think otherwise...

Or you may know heat, but not Central American-near-the-equator heat... or humidity. Not to discourage anyone, but just sayin'... it's different than the US here. If you live in a humid area like Georgia or Florida it's kind of like that, but it rains much more here.