One of my very deepest secret desires is to retire in Costa Rica.

Because I was a stay-at-home mom for 22 years and am now divorced, I have no real retirement except what I’ve saved up the last few years.

When I began to look at what little I’d saved up for retirement, fear crept into every fiber of my being.

I estimated that I would need about $4,000 a month in my golden years to remain in California and live frugally even if my house were completely paid off.

Now I didn’t buy my first home until I was 50 years old. And I bought it with 30-year mortgage like most first time homebuyers. But I’m very proud to say that after only 3 years of home ownership, I was down to a 15-year mortgage.

How did I do it, you ask?

Well, first I refinanced 3 times at a lower interest rate which will save me a lot of money over the course of my loan–over $180,000.

Secondly, I have a commitment to myself to use 10% of any extra money that comes my way (such as a tax refund), towards a principal-only extra mortgage payment.

Hopefully I will have the home paid off by the time I retire. But if I were to retire today and didn’t contribute any more money to my retirement, I would have a grand total of $16,000 a year to live on (which is a far cry from the $4,000/a month I estimate needing).

And I don’t know what the prediction is for what you have, but remember, our government never threatens to run out of welfare, but they do threaten to run out of Social Security. So don’t count on that as a source of income.

But somehow I stumbled on the fact that I could live out of the country quite nicely for a fraction of what it costs to live here in sunny California or most other parts of the United States.

For example, I am told that two people can live very well in Costa Rica for anywhere from $1,400 to $2,000 a month.

That caught my interest.

First I researched Belize. I was impressed that they speak English and that they drive on the right side of the road but decided against it when I read that they have both cholera and gangs.

While I looked at a handful of other countries, like Panama, I found reasons to decide against them as well. Panama has a very nice program for retirees, but the big cities look like Oahu or New York with big tall buildings which just aren’t my style.

Costa Rica is tropical, has many different micro-climates, monkeys and parrots and no standing army which I find fascinating. They have no earthquakes or tsunamis although they do have a volcano. They don’t allow guns but men carry machetes and use them for everything like we use duct tape.

So in the last few months I’ve been studying the process of becoming an expat and all that it means. The greatest resource I have found so far is a magazine called International Living.

They have resource after resource to teach you how to have a portable income, how to manage moving, taxes, whether you should buy or rent in your new home country, and many other helpful articles.

Personal income tax is very high here in California, and I learned that when you’re going to move out of the United States, it’s best to first move to a state such as Texas where they have no state income tax.

You establish state tax residency there and then when you move out of the country, (you still have to file taxes here in the United States), but you won’t owe state tax on your income. Pretty smart I think.

Here’s another great tidbit that is current but may change in years to come, you can earn in the range of $100,000 outside the country without having to pay taxes on it here in the US even though you will need to file your taxes.

International Living offers books and program to go into info like this in great detail so that you don’t get into trouble down the line by not following the right steps in the right order.

I’m still researching other exotic locations like Spain and Italy, and will be visiting Costa Rica next week.

So tell me, would you ever consider retiring in another country?