Iâ€™m alarmed by the increasing interest in what Iâ€™ll call forced senior migration: that is, American seniors who move abroad in order to ensure they can live less expensively, hoping to prolong their retirement nest eggs.
Writer Max Holleran Hayes recently captured this phenomenon in a thought-provoking rumination in The New Republic on Gringolandia: Lifestyle Migration Under Late Capitalism, a new book by Matthew Hayes. Essentially, he noted that many current social, political and economic policies are driving a reverse caravan of seniors leaving the U.S. for a better life. Many of those believe there is no choice.
The reasons that led to the exodus are among those that drove a shift in my career — I now focus on helping educate seniors, hopefully giving them financial options they may not have known they had. I want to help seniors stay in our countryÂ if they want to.
Why and where are seniors moving abroad?
Travel and adventure in our golden years should be an option, not a refuge for seniors who feel they must embrace international relocation in the face of changes or perceived changes to Social Security and other benefits or the ever-increasing portions of their budgets devoted to health care.
To help ensure seniors understand that they have a choice to live abroad and to lessen the chances of such actually becoming a necessity, those who work with and support seniors — from family members to their caregivers and (myriad) advisors — are increasingly going to have to help those seniors better assess their assets so they can maximize their retirement years at home or abroad.
And just where are U.S. seniors moving in retirement? Perhaps ironic in todayâ€™s political climate, Mexico hosts more than a million U.S. citizens, including large numbers of retirees. In Gringolandia, Hayes specifically looks at U.S. retirees in Cuenca, Ecuador. Other countries where U.S. citizens are retiring are as varied as Colombia, Italy, Belize, France, Malaysia, Thailand, Cambodia, Spain, Portugal and South Africa.
A Crucial Insight: Longevity
Part of better understanding assets is a solid and transparent perspective on mortality, and that can be a difficult discussion to have. But ignoring your projected longevity is an unnecessary gamble; maybe even more so if you are doing so in unknown territory abroad.
The mortality talk is tough if you or your loved one has clear factors that will shorten life expectancy. Still, in my work I have found it can be almost as tough to have the money-longevity conversation along the lines of, â€śMom, you are likely going to live another 20 years, so dipping into your investments for [insert purchase of choice here] probably is not the best idea right now.â€ť
What can you do to help?
If you or a senior you care about is already at or near the retirement threshold, itâ€™s all the more important to get a variety of perspectives on your assets and their allocation. Increasingly, I find itâ€™s not as straightforward an assessment as many imagine. Seniors and their well-meaning families and advisors often ignore or overlook assets and opportunities to leverage those assets, therefore leaving money on the figurative table.
At the very least, seniors can have honest discussions with their family physicians. What does life expectancy look like for you, and what health care (including mental health care) aspects should be taken under consideration if you move to X country?
In short, perform an honest review of health and lifestyle choices: Which ones could determine a longer life? The upside: you live longer. The downside (or, really, just a realistic assessment): The longer you live, the more funds you will need in retirement or the more judicious you will need to be in using them. Again, your advisors (financial, insurance, accounting, legal, health, spiritual and others) should be involved in your financial and health assessments, but there are simple tools, too, like life expectancy calculators on the internet.
If you are farther from retirement, you of course have the opportunity to make changes to your life, lifestyle and health. But eating right and getting enough sleep should not be your only approaches.
Begin to focus on the longevity of your assets. This means, for instance, not just asking, â€śIs this the right financial product for me right now?â€ť but also, â€śIf this asset is not the best choice in the long run, is there an alternative one I should choose or an exit strategy and replacement when this asset has run its course?â€ť
Knowing the facts provides options.
The current political and socioeconomic climate may have a silver lining if it drives seniors and their families and advisors to forthrightly discuss longevity. Thatâ€™s an immensely better result than having them feel as if they are being driven to leave the country.