Retiring in Costa Rica

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Retiring in Costa Rica

Are you ready for a new lifestyle? Then look no further than Costa Rica, where you’ll enjoy simple things that truly make a happy life. 

  • Beautiful mountains, 
  • Sunny beaches, 
  • Excellent seafood, 
  • Charming villages,
  • Pristine nature,

All at a reasonable cost. These are reasons why Costa Rica was positioned on the top list by International Living’s annual Global Retirement Index in 2021, after ranking third in 2020 and second in 2019. 

It would be a fair estimate to say approximately $1,000-$2,000 a month will be enough to live a comfortable life even in the biggest cities of Costa Rica like San Jose, Puerto Limon, or Alajuela. 

Retiring in Costa Rica: Applying for a Residence

It is quite easy to retire in Costa Rica. According to the U.S. Department of State, around 70,000 expatriates live in this country of Central America, and many of them are retirees. There are three popular residence options: 

  • Pensionado Program. To qualify for the program, you need to show proof of at least $1,000 a month from a Social Security or retirement plan that covers the rest of your life. Under this pathway, you won’t be able to work in Costa Rica. However, if you own a business, you are allowed to receive payment from it. Remote or freelancer work outside the country is also possible. If you are moving to Costa Rica with your spouse, one of you will be considered a principal applicant and the other a dependent. 
  • The Rentista Program is intended for people ineligible for the Pensionado program but who can demonstrate evidence of $2,500 monthly income for two years or a $60,000 deposit on a Costa Rican bank account confirmed by immigration policies. 
  • Investment Program. Foreigners who can invest at least $200,000 in Costa Rica can easily become residents. This rule applies only to investors and not their family members. 

After three years of residence, you can apply for permanent residency.

Retirement Taxes in Costa Rica 

Costa Rican tax laws are very appealing to foreigners. For example, you won’t need to pay tax on your Social Security income, pension, or investment income. And if you work online for a company abroad, own a business, or rent property in the U.S., you won’t have to pay income tax. However, as a U.S. citizen, you will have to pay taxes on your worldwide income. Therefore, it’s better to consult a tax expert on both ends (in the U.S. and Costa Rica) to be aware of the income tax regulations. 

Moving Retirement Funds 

It is straightforward for U.S. citizens to transfer their contributions from any country in Costa Rica. Once you have a local bank account, your money will be exchanged into local currency. Then you can withdraw them at any time. 

Healthcare for Retirees in Costa Rica

The country’s health care system, Caja, offers universal coverage for visits, medicines, surgeries, and more. We’ve heard back from some of our clients holding permanent resident status in Costa Rica, and they say that they pay about $90 monthly to participate in the healthcare system. Residents usually pay a monthly fee based on their income. Overall, the medical service is very good, yet, the quality of care depends on where you get it.

Inheritance Law for Retirees in Costa Rica

The good news is that Costa Rica doesn’t apply tax on inheritance real estate property. The inheritance process will only involve some minor administrative fees. 

If a foreigner dies in Costa Rica, his foreign Will will still be valid. However, to avoid a lengthy recognition process, it is advisable that a person obtains a Costa Rican Will at a Notario Publico. In case of no will in place, it will be divided among family members. 

Retiring in Costa Rica: Cost of Living and Housing

The cost of living in Costa Rica is 26.6% lower than that of the U.S., according to Numbeo. 

A couple can live comfortably for $2,000 a month. 35% of this budget would go towards accommodation costs. According to April 2022 data from Numbeo, the average living cost without rent equals $600 a month. This covers basic groceries, water and electricity, internet, phone and cable T.V., and basic leisure like eating out twice a week. 

The monthly rents range from $500 to $1,200 for small homes and $1,200 to $3,000 for large houses that include a spacious yard. 

But as in any market, the cost of a home or apartment depends on its location, type, and size. So whether you rent or buy property, a home in San Jose will undoubtedly cost more than a home in a suburban area. 

Food in Costa Rica 

Each country boasts its cuisine, and Costa Rica is no exception. Costa Rican food is known for its fresh ingredients, like fruits and vegetables but doesn’t confuse it with Latin American food. 

Meals in Costa Rica have rice, and black beans often flavored with locally grown exotic fruits. Apart from this, local gastronomy also offers some exciting desserts. Arroz con Leche, rice mixed with milk or Flan, is another sweet treat that tastes like home, no matter where you are from. 

Lunch and Dinner Costs in Costa Rica

Dinner in a local restaurant, if your order “Casada meal” would cost each person around $6. A dinner meal such as a steak or fresh fish with a couple of sides is around $12.Restaurants geared towards tourists will cost more. The average lunch with a sandwich, fries, and drink 

will cost around $10. European dinner may be between $15-and $20. The prices go up depending on how fancy the restaurant is. 

Wine, Beer, and Coffee 

Costa Ricans pride themselves on homegrown wines because, despite the unfavorable climate for the production of wine grapes, they still managed to establish wineries. 

A bottle of mid-range wine costs $8. Domestic beer or rum brands like Imperial and Cacique Guaro will cost $1.70 per 0.5-liter bottle. Imported beer will cost more, $2.30 per 0.33-liter bottle. 

Coffee is very popular here, and Costa Rica is one of the world’s coffee suppliers. The cheapest cup of coffee can be priced only at $2.50 (and quality is still excellent) and even less, while prime quality can cost you $15. 

Internet Access 

A high-speed internet connection and 4G is available almost everywhere in Costa Rica. Nevertheless, it is worth finding more information on the service providers in the region you are moving to. Despite great internet service, it may be different in remote locations. Besides, almost all restaurants, cafes, and hotels have public Wi-Fi in Costa Rica. 

Entertainment 

Movie theaters in Costa Rica often play English-language films with Spanish subtitles. A movie ticket typically is around $5 for adults. For a 3-D experience, you will pay $7. 

Netflix is also available in Costa Rica so you can opt for a great choice. Its plans range from $8 to $15 a month.

If you are into nightlife or clubbing, expect to pay $7 to $15 per cocktail.

Gym membership is generally around $55 per month. In addition, there is a wide selection of courses in tennis, golf, etc. And, of course, we cannot mention beautiful nature spots for yoga and meditation. 

Transportation in Costa Rica 

San Jose is the main transportation hub in Costa Rica. The most affordable way to get around would be a public bus. Although there isn’t one central bus network, the buses can take you to every major destination in the country. Bus ticket costs are usually no more than $1. 

Taxes or cabs are also affordable ways to get around the country. Every two-thirds of a mile traveled is charged at $1 approximately. To be safe and avoid overcharging, use only licensed cabs and always ask the driver to turn on the meter (“Ia Maria”) before taking the ride. If you hit a long road, we advise that you agree on a specific rate to avoid arguing upon arrival. Also, note that tipping is uncommon but always welcome. 

Another popular transportation option is a shared shuttle. It is an air-conditioned minibus that covers most of the country. They pick up passengers from any place and drop them off at many popular hotels. 

Owning a Car in Costa Rica

If you plan to settle in the Central Valley, we recommend sticking to easily accessible and convenient public transport because driving a car in San Jose or other metropolitan centers can be overwhelming and even dangerous. 

If you consider moving to a more rural area or the coast, having a vehicle makes sense. You have three options: buy a car in Costa Rica, rent it when needed, or ship it from the USA. If you can afford to purchase a vehicle, owning it is not expensive. On the other hand, renting a car often comes with hidden costs, but it’s a great way to explore the country and try the roads before buying your own auto. 

If you can afford to ship a car from the USA and pay exorbitant fees, we can arrange that. But in our opinion, it’s preferable to sell your car in your home and buy another one in Costa Rica. 

Gas costs around $1.25 per liter. Diesel or LPG will cost even less. The hourly parking price in San Jose is mostly $2. 

Economy car rentals are  $5 per day, standard $7-$8, and a minivan for five adults that can fit three bags will cost between $10 to $34. 

Retiring in Costa Rica: Best Places 

Costa Rica’s regions and cities are diverse, and each has its own charm. So what are the top five retirement destinations in Costa Rica?

Retire in Montezuma 

Montezuma, situated on Costa Rica’s Pacific coast at the southern tip of the Nicoya Peninsula, offers privacy, off the beaten tracks in dense jungles and long miles of sunny and sandy beaches. It is home to the country’s Cabo Blanco Absolute Natural Reserve with lots of unique animals to see. Retiring on this coast means many fun activities like diving, snorkeling, and fishing. Besides, it doesn’t lack restaurants, cafes, and supermarkets. 

Retire in Santa Teresa and Mal Pais

These two cities connected by a stretch are also nested on the Nicoya Peninsula. They boast the most beautiful beaches globally, and it’s a special place for surfers. Thanks to the well-developed surfing sector, Santa Teresa and Mal Pais became real local and international cuisine havens. 

Retiring in this part of Costa Rica is very advantageous as $1,500 per month is more than enough to live a comfortable life for two persons. 

Retire in the Guanacaste Coast 

You can find everything in Guanacaste Province – mountain ranges, rain forests, jungles, top beaches, restaurants, and bars. Retirees love this region because of trekking, deep-sea excursions, and luxury coastal neighborhoods. It also has an excellent infrastructure and international airport, contributing to the broad domestic and international access. 

Retire in Monteverde 

This town is located in northwestern Costa Rica. Its cool climate and elevation above the sea (4,662 feet) have created a unique ecosystem with hundreds of bird and mammal species, including 2,500 plants. It is one of the top agricultural regions in Costa Rica that produces dairy and cheese products, garlic, coffee, etc. If you are looking into retiring in a quiet place in Costa Rica, Monteverde is your bet. 

Retire in Puerto Viejo

Isolated until 1979, Puerto Viejo today remains a community where life is very slow-paced. The primary transportation mode is the bicycle. As a retiree, you will enjoy the peacefulness and Jamaican origin music known as reggae often heard from beach bars and homes. Expats took a fancy to this place by starting building homes and opening businesses accommodating the needs of their fellows. 

SDC International Tips for Retiring in Costa Rica 

  • If you can afford to move abroad, take the time to fine-tune the details of relocation. The most important aspects are sorting out finances and taxes. 
  • You can comfortably retire in Costa Rica with an income between $1,300-2,000 per month. For the most part, your Social Security benefit alone should be ample to afford the cost of living. 
  • Come and spend time in Costa Rica before making the permanent move 
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