Countries like these are rolling out the welcome mat to Americans with a variety of financial incentives. The LaFoleys, for instance, are in Panama on a pensionado visa similar to what is available in Honduras, which lets them live there after proving they have $500 a month apiece in income. Panama also lets retirees import a car tax-free every two years, import $10,000 of household items tax-free, and buy property tax-free if it is the owner's only home. In Honduras, those over age 65 receive a card good for discounts on airline tickets, medications and their electric and water bills.
The primary appeal is the cost of living, which can make it possible for retirees to live on nothing more than their Social Security benefits - or live lavishly on a bit more money. Retirees are hiring live-in housekeepers for $150 a month in Panama City.
Countries like Costa Rica have been so successful at luring retirees, it's starting to eliminate some of the perks it once offered to lure Americans. "We used to have incentives, but today there are not many," says Alejandro Cedeno, minister counselor and consul general at the Embassy of Costa Rica in Washington, D.C.
Next door in Nicaragua, real-estate agents say that Costa Rica's cooler reception is partly what is driving some retirees to consider the formerly war-torn country. The expat community is small and residential communities are just getting off the ground. On the Pacific Coast, Rancho Santana is a new beachfront community with pools, tennis courts and a helipad. Two-bedroom houses are selling for prices starting around $99,000. Quarter-acre ocean-view lots begin at $52,900. Some of the tiny islands that dot the coasts are also for sale: A five-acre Caribbean island with a two-bedroom house, a generator and coconut trees is currently being advertised online for $230,000.
One big promoter of retiring in Central America is International Living, a travel newsletter published by Baltimore-based Agora Publishing Inc., and Agora Travel, a related travel agency. International Living acts as a broker for real estate in Panama and is one of the backers of the Rancho Santana development in Nicaragua. Agora Travel runs real-estate tours of Nicaragua, as well as Panama, Honduras and Europe. A few other resources for people considering retiring abroad are ExpatExchange.com, which includes country-specific message boards, and the Web site for the Association of American Residents Overseas (www.aaro.org), an advocacy group that has information on tax and health-insurance issues.
For retirees abroad, the living isn't always easy. For one thing, Medicare doesn't cover medical care received outside the U.S. Many have the added expense of emergency-evacuation insurance, which pays for flights to U.S. hospitals in case of a serious illness.
Shopping can be tricky, too. Mr. LaFoley, the retiree in Boquete, Panama, likes to cook but has trouble finding some ingredients at the markets in Boquete — and even in the Costco nearby. "I had someone bring me horseradish from Miami," he says.
