Jun 05 2014

Retire for Less Newsletter – June 5, 2014

Welcome to our RetireForLessInCostaRica.com Newsletter!

Gloria, Paul, & “Machito” – Yes, that’s a MONKEY on my head!

 

In This Issue:

 

 

Notes from the Road: Mexico

As we send you this newsletter, we are “on the road,” traveling through Mexico. Like last year, we were invited to speak about our lives in Costa Rica at International Living’s Ultimate Conference, held this year in Puerto Vallerta, Mexico. And like last year, we have taken advantage of the opportunity of being in Mexico to explore this amazing country.

San Miguel de Allende

San Miguel de Allende

So far this trip, we have spent time in Mexico City, San Miguel de Allende, Guanajuato, and now, Puerto Vallerta. After the conference, we plan to spend about eight days in one of our favorite cities, Oaxaca. We’ll tell you more about our trip in our next newsletter.

To those of you who are wondering if we plan to relocate here, the answer is no. We both love Mexico (Paul went to college here) and would like to spend at least a month here every year. But we love our lives in Costa Rica and have no plans to move.

Thanks so much to our wonderful house- and cat-sitters, Anne and Andre, for taking such good care of things during our absence and making it possible for us to relax and just have fun.

 

Adventures in Shipping: Transporting 13 Boxes to Costa Rica (AKA: Our Big Move – Part IV)

When we originally moved from Baltimore to Costa Rica five years ago, we came with eight checked suitcases and four carry-ons (including our cat, Cleo). We weren’t ready to ship, nor were we ready to sell our house. So, for five years we rented our house in Baltimore to a series of upwardly-mobile couples and stored all of our belonging in the basement (which we wrote into each rental contract).

Jump ahead five years and the time was finally right to sell the house and ship our stuff to Costa Rica. Before our move in 2009, we had sorted through everything and gave away, sold, or threw out what we knew we wouldn’t eventually ship. But five years in Costa Rica changed our perspective and we, once again, had to cull through everything and get rid of a lot of “stuff.”

Shipping.5There are two schools of thought about shipping your stuff when you move overseas. One school says to ship everything you own. What you don’t end up using you can easily find someone who CAN use it. Shipping a full container is more cost effective than shipping a partial container. The other school says to ship just what you need. It is less expensive overall because you aren’t shipping as much volume.

For us, the second school of thought seemed to make the most sense. Not only are we on a budget, we like the idea of traveling more lightly. What was stored in the basement would have fit nicely into a 40 ft. container. But we decided to bring only those items that either had sentimental value to us or were things that we could use but, perhaps, couldn’t get in Costa Rica. We ended up shipping 13 large boxes.

Before we left for Baltimore, I researched shipping companies. The only ones I knew of here in Costa Rica shipped full containers – either 20 ft. or 40 ft. I found out that there is something referred to LCS – less than container shipping. Those were the companies I focused on.

I looked at companies like UPS and Federal Express but they seemed too expensive. In the end, the following are the companies to which I narrowed down my research and from which I requested price quotes:

  • UBox Worldwide: Their website states, “Whether you are moving to Costa Rica for work, or are a returning citizen, we make shipping to port cities in Costa Rica easy and worry free. Our service is warehouse to warehouse. This means that you deliver to one of our 26 drop off warehouses in the United States, Canada or Puerto Rico and pick up at the local warehouse in your destination city. This method of shipping saves you money. Pick up at your residence and door delivery can sometimes be arranged at additional costs.”

Note: Their price does not include transportation/logistics from the arrival port in Costa Rica, clearing your cargo through customs, or customs duty or taxes. This option had the most unknowns for us on the Costa Rica end of the process.

  • International Sea & Air Shipping: They offered the option of Door to Door service, Door to Port service, and Port to Door service which are priced separately and include specific itemized services.

Note: None of their plans include port charges or customs duties and taxes.Shipping.4

  • N.V.O.C.C. LCL Ocean Consolidations to Costa Rica: They can pick up any size box from a residence or from a business address and also deliver the cargo overseas. You can ship as many boxes as you like. They charge by the total volume of your cargo once it is palletized or crated. They have a 25 to 45 day transit time and sail weekly to Costa Rica.

Note: This was, by far, the most expensive option we found among the LCL shippers.

Our friends had used ABC movers and highly recommended them. Their website states that they are a full service company and strive to make international movers as easy as possible. They will come to your home to evaluate your needs, provide you with packing materials, and even pack and unpack for you. “Ocean shipping rates are based on the cubic volume of the shipment because you are paying for the space your shipment takes up in the container. So, to get an accurate rate quote you will need to know the L” x W” x H” of each box. Multiply the L” x W” x H” and divide by 1728 to get the cubic foot volume of each box and add the sums together for the total cubic volume.”

Note: They could not give us an estimate of shipping charges as we didn’t have the dimensions of our boxes. We didn’t even know how many boxes we would have until the last minute. And we had to remove the boxes from our house (which had been sold) on the same day they were packed and ready. We had received an email in response to our request for a quote which read, ”Our agent  needs to schedule a survey, so let us  know when you are returning to perform the visit.” We just didn’t have the time available to go this route.

What we chose to do and what it cost.

We elected to use UBox Worldwide to ship our 13 boxes. Their initial price quote was the lowest; in addition, the deciding factor was based on the limited window of time we had to work with. UBox Worldwide allowed us to put our 13 boxes in a truck on that last day in our home and drive them to a warehouse at the port of Baltimore, just 30 minutes away. Though this option offered the most “unknowns” on the Costa Rica end of things, it provided the easiest solution for us on the Baltimore end of the process.

Here is what we ended up shipping.

Shipping1

 And this is what it cost:

Shipping2

Our initial quote from UBox for our boxes was $682.80, not including $75 for insurance. We knew that the price would increase as we chose to put our boxes on a pallet and have them sent as one unit instead of 13 separate units. When you palletize, the cost is greater because you are paying for the volume of the boxes, plus the pallet, plus any empty space the overall package takes up. So, at $11 per cubic foot, our cost to actually ship our boxes went up to $1168.75 (about 66%). Other costs included a documentation fee of $25, the fee for the pallet of $45, and marine insurance of $75. We were also given a volume discount of $175.

Ubox had arranged for Vanguard Logistics Services (VLS) in Costa Rica to pick up our cargo at Puerto Limon, un-palletize them, and bring them to a warehouse in Heredia where we could pick them up. The cost for this service was not included in UBox’s estimate and came to $200.

"Customs" in Spanish is "Aduana"

“Customs” in Spanish is “Aduana”

But here is where the difficulty started. We were told that we could not, in fact, clear our cargo through customs ourselves. We had to hire a customs broker to take care of this. You would think that you could just check the Internet or open the “yellow pages” to find a customs broker, but it wasn’t that easy. UBox couldn’t give me a referral to a broker in Costa Rica and suggested I contact VLS. No one at VLS spoke English and, while Paul and I can speak some Spanish, there is a whole different terminology involved with shipping. After several calls and emails, we finally got our request communicated and they gave me the name and phone number of a customs broker who “speaks English.” I left multiple messages for him and never received a call back. Once, I actually got an answer and the man I spoke with told me to call back that afternoon to speak to his assistant who did speak English. After two weeks of this, and worried about extra warehouse charges for not picking up our shipment promptly, I contact our friend who is in the business of shipping whole containers. Her boss contacted his customs broker who cleared it through customs, paid the duty, and then he delivered the boxes to our house. Cost: $720.

What it would have cost had we chosen another option.

Once we knew the volume and weight of what we shipped, we went back to the other companies from which we had requested quotes and asked for a new quote for service similar to what we had paid for with UBox Worldwide. Here is what we got:

  • International Sea & Air Shipping:                $2092.46

This quote did not include destination handling charges, port charges, customs duties nor taxes.

  • N.V.O.C.C. LCL Ocean Consolidations:      $6611.96

This quote did not include customs duties or taxes.

  • ABC Movers

They did not respond to our email.

We also looked at what it would have cost us to just put our boxes on the airplane with us. Since we were already checking two bags each, our boxes would have all been charged the excess baggage fee. Additionally, many of them were oversized and/or overweight. Here is what that option would have cost:

Shipping3

Conclusion

Turns out, we went with the most economical option for shipping after all. But if we had it to do all over again, we would pay attention to the lessons learned and probably make some different choices.

Related Articles:

 

Costa Rica is Still the Best Country for Retirement

by Christopher Howard

Note: the following Letter to the Editor originally appeared in A.M. Costa Rica on April 29, 2014. We reprint it with the permission of both A.M. Costa Rica and the writer of the letter. The letter is a response to Garland Baker’s article entitled, “Can Costa Rica make a turnaround for its expats?” which was published by A.M. Costa Rica on April 28th. A link to the original article is provided.

Dear A.M. Costa Rica:

Upon reading today’s A. M. Costa Rica article titled “Can Costa Rica make a turnaround for its expats?” I feel compelled to offer a more moderate and representative point of view. All things considered, Costa Rica is still the best destination for expatriate retirement in the world today even though Panamá may offer higher real estate commissions and more sales action and so garner higher ratings from some quarters. Consider the source.

Surely it would be better for Costa Rica’s new regime to avoid taxing the expat population any more than natives. It would be better to not tax or control the people, in general, any more than can be reasonably justified. Times are getting tougher all around, internationally. Our government is feeling the squeeze. It’s not easy to walk this fence.

The new regime needs to carefully apply good business planning and attract more foreign interests rather than lose more of them. Yet the contributions made by tourism and the more lasting, large retired population need to be valued and sustained. Too much pressure on these folks may result in seeing them return home, which is the usual pattern when a retiree gets fed up. Very few go to Panamá with good reason.

Barriers to open bank accounts result from U.S. government restrictions on personal financial freedom. Uncle Sam swings a big club throughout the Americas. We are told this intervention is meant to control financial activity and cash flow associated with drug dealing and terrorism. Some factions consider this a general assault on everyone’s personal freedom supposedly excused as “security measures.” The many innocent are restricted in order to control the guilty few. These same rules apply in Panamá and everywhere U.S. influence has sway. This lazy form of policing is bigger picture stuff.

According to Charles Zeller of Ship to Costa Rica, “Panamá is no heaven to move to. Importing to Panama is not cheap. Just obtaining the tax exemption costs hundreds of dollars and the customs clearance process is expensive. Except for importing a car and household goods to Panama, the costs are similar to Costa Rica, including paying the duties in Costa Rica. ”

“With regard to the exemption on cars in Panama, they are not totally exempt either. The exemption is for up to $10,000. Anything above that pays taxes. Cheaper cars over 3 years old pay a fine of $1,500.00. If you import a new car, taxes are lower than Costa Rica. If you import an older car, it might be not so.” The net result is Panamá digs into your pockets whether your car is newer and more expensive or older and cheaper.”

Costa Rica offers many more good places to live than Panamá. Panama City is expensive and too hectic for most retirees. Besides, the climate is extremely hot and humid. Your air conditioning bills will be high. Coronado is like a retirement community two hours away from Panama City. It’s just living with other Americans.

As Mr. Zeller states, “Some people I moved to that location ended moving away because they hated it.” Boquete is far away from Panama City and downright boring. The only nearby town is David, and there is not much to do there. Bocas is the armpit of the world. I have moved many people there and most of them moved out again. Very expensive and isolated. Hot and foul weather most of the time. People have little education and live in the middle of the drug corridor.”

Panama’s crime rate is higher than Costa Rica’s. For example, Panama’s homicide rate is 17.2 per 100,000 while Costa Rica’s is half of that — 8 per 100,000, according to a recent United Nations report.

No matter what happens in the world, Costa Rica will become cheaper because the colón will take a dive. If a government has a big deficit, like Costa Rica has, there is no way it can keep their currency from devaluing. This is good for expats that receive foreign currency (dollars or euros.) Imported goods will remain expensive but local products will be cheaper when you receive dollars and pay in colons.

You can’t find better weather or friendlier Ticos and expats than in Costa Rica.

We do not have racial tensions like those in any other country in Latin America. Even the more developed countries are not exempt — Argentina and Chile. All of the countries where the Spanish subjugated large indigenous populations are still plagued by social injustice and cultural rifts.

Examples of this are México with its drug war; Colombia with its decades-long guerrilla movement; Venezuela with its failed socialist experiment; and Guatemala, el Salvador and Honduras, which are the most violent countries in the world according to statistics. If not Costa Rica, and considering Panamá is so blah, where do you retire abroad and feel safe?

We have a large, educated middle class. Many of them speak English. There is nothing worse than dealing with the ignorance that you encounter in some other Latin American countries.

Costa Rica is still the best place to retire if you do not have to make a living here. If you need supplemental income, an Internet based business in the U.S. will help.

Christopher Howard, Heredia

 

Questions and Answers: June 5, 2014

QuestionsandAnswersIf you are thinking about moving to Costa Rica (or anywhere unfamiliar, for that matter), you have lots of questions and are searching for the answers. We get a lot of questions here at Retire for Less in Costa Rica, and often, we get the same questions more than once. Here are this month’s questions:

Q-graphic

Greg writes, “Hi Paul & Gloria. I could not help but notice the healthcare domination in your newsletter. Is this garnering added interest from your readers? If so, it is rather sad evidence that the marketing bombardment of the elderly in US is being as effective as ever at causing worry. Good luck with your project in any event. Cheers Greg”

A-graphic

Hi Greg. There are three questions that we get the most from people who read our website:

  • What’s does it cost to live in Costa Rica?
  • What’s the healthcare like?
  • What do you do all day?

Since most of our readers are, or will soon be, retirees, I think that they are natural questions. We try to hit on topics that are of concern to our readers — they are usually the same issues we deal with as expats living in Costa Rica. That issue had more on healthcare because we are starting our Healthcare Tour. And we are starting the healthcare tour because most expats living here or thinking about living here, are mystified about the public health system and how to use it. As legal residents, we are obligated to join and pay for the Caja. So why not learn to use it? Hope that explains things. And thanks so much for writing.

Q-graphic

Bonnie writes, “We sure enjoy receiving your monthly newsletter. It is always interesting and informative. My husband, myself and another couple have made one visit to Costa Rica and plan to return soon.

The four of us are very uncomfortable with the U.S. Government and are seriously considering leaving here. However, we have no idea how we would be able to transfer our life savings to Costa Rica. Do you have any information on this? Can you just wire transfer money to a bank there? If you can’t answer this personally, just include it in one of your monthly newsletters. Sure would be a big help to us.

If we moved to Costa Rica, we would all like to be involved with both Ticos and Ex-pats. Seems like you two have done a good job of this. I also think we would rent houses and stay a while before considering purchasing a place. Thank you for your help. Clarence and Bonnie”

A-graphic

Hi Clarence and Bonnie, When we brought savings down several years ago, we deposited the money in our U.S. saving account and wrote a check to our Costa Rica bank (actually, it’s a credit union). The check took one month to clear, but Coopenae, where we invested in Certificates of Deposit, gave us interest from the day we filled out the paperwork, even though they didn’t get the cash for 30 days. Incredible!

Two months ago, we sold our house in Baltimore after five years of renting it out. After paying off the mortgage, we deposited the proceeds into our U.S. saving account and then wrote a check for that amount to our account at Coopenae and invested it in a CD. And just like before, they gave us interest from the day we took out the CD.

piggybank-money_croppedThere were two differences, however, from the previous time we brought money down. The first thing that was different was that we had to show proof of where the money came from. This is a result of the Foreign Account Tax Compliance Act (FATCA) and anti-money-laundering legislation in both the United States and Costa Rica. We simply gave them a copy of our settlement document which showed our net proceeds.

The second thing that was different was that we chose to take out a CD in US dollars instead of another CD in colones. The reason is that the dollar is strengthening which affects the exchange rate between dollars and colones. We felt that a 12 month CD in dollars at 3% interest would protect our investment better at this time than a 9.5% CD in colones for the same time frame. But remember, this is what we chose to do; we are not financial consultants so please don’t take this as advice about what you should do. You can read more about Coopenae and view their corporate presentation here.

 

Paul’s Monthly Tip to Live for Less in Costa Rica: Live Where You Don’t Need Heat or Air-Conditioning

(Reprint, Originally published 12/4/2012)

This is a no-brainer; you can save an easy $200/month.

Our house in Baltimore, Maryland

One of the biggest reasons we came to Costa Rica was to “live outside.” This meant no need for air-conditioning or heat. We lived in Baltimore, Maryland before moving here and had high heating and air conditioning bills (over $300 per month during the winters). But it wasn’t just the expense – Gloria wanted to enjoy the outdoors. Back in Baltimore, we could rarely open our windows. Those days and nights when we could were a delight, but they were few and far between. We could go outside, but the mosquitoes and too-hot or too-cold temperatures prevented us from truly living in the fresh air.

Living here in the Central Valley, we are usually able to keep at least one window open until around 9:00 pm. If we’re cold, we put on sweatshirts; if we’re hot (almost never) we put on shorts. And no more shoveling snow like we had to do in Baltimore!

We like the fact that living without a heater, air-conditioner, and de-humidifier is easier on the environment. All three are large energy consumers and are largely unnecessary in the Central Valley of Costa Rica.

If we had our druthers, we’d probably move a thousand feel lower to around 3,000 ft. elevation which, to us, seems ideal. But in the 3 ½ years we’ve been in the cabina at almost 4,000 ft., we’ve gradually gotten used to the cooler temperatures.

We love living this way – no heater, no air-conditioner, less expense, less energy usage, and doors and windows wide open!

Related Articles:

 

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