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Jun 10 2013

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Have a Reserve Fund for Emergencies

If you’re retiring overseas and you have a pension or Social Security, that’s fine. But you better bring a cash reserve as well. How much? I don’t know. Bring what you can. Recently we suggested at least $20,000, but $120,000 would be better, and $220,000 even better. And when I say “bring down” I don’t mean physically bringing a wad of cash. You can leave it in the bank in your home country, or invest it in CDs, or another vehicle that is somewhat liquid. The reserve, of course, would be over and above your Social Security or pension. You may never need it…but you never know. Things happen. (See the article below for an example.)

You may want to buy a car, or you may have some unforeseen medical emergency that requires an operation. Plus, you may not be in the Caja yet, so that healthcare option wouldn’t be available to you. You would need to go the private healthcare route. Your cash reserve might prove to be very handy for whatever the need is. You just never know, and that’s why you need a cash reserve.

Keep Your Medicare B

This is one of those times we tell people to do as we say, not as we did. Keep your Medicare B or other national health care plan, if possible. We opted out because we needed the extra $110 per month that Medicare B would have cost us. At the time, my monthly Social Security check would have gone from $922 to $812/month. It would have put an extra monthly financial strain on us that we couldn’t afford. We feel we made the right decision for us.

So, if you can afford to keep your Medicare B, you probably should. It’s just like the cash reserve. You just never know what’s going to happen, so it’s nice to know you have that medical option open to you. Plus, it covers preexisting conditions. One negative is that, currently, you can only use it in the U.S.

We Came Anyway

When I read or write our own stuff, I realize we weren’t totally ready or prepared financially to come to Costa Rica. We had my Social Security of $922 and a very small cash reserve. Once we made up our minds to move to Costa Rica, we saved like crazy for less than 2 years. During that time, we made four trips, drawing down our cash reserves. I’m so glad we came down those four times, not so much to check out Costa Rica, because I knew we were coming anyway. But more as a break from work. I mean, once we knew we were going to do this thing, we couldn’t do it fast enough. The days seemed like weeks, and the months like years. But, you know what? We’ve never regretted it for a minute. To be fair, it was easier for us, even though we didn’t have a lot of money, because we don’t have kids or grand-kids to consider or hold us back.

So, before you move to Costa Rica, or anywhere internationally, think about the “what ifs” and plan for them the best you can by having a reserve fund and, where possible, a backup for medical care. Because…things happen.

Permanent link to this article: http://retireforlessincostarica.com/have-a-reserve-fund-for-a-rainy-day/