Yes and No - It depends on many things:
Retirees on US Social Security, or Canadians on the Canada Pension Plan, are attracted to moving to Costa Rica. Their biggest issue is that many don’t have any life savings and are living on their pensions. Can those people live on their pensions in Costa Rica?
Living in Costa Rica is not cheap anymore and what it costs an individual depends on their requirements and lifestyle. A lot of Tico families live on less than $800 USD per month, but they usually have lower expectations of their day-to-day necessities than most expats do. If you are a single person and you work hard at finding ways to save money, you can probably live on a smaller amount without any hardship. Keep in mind that moving to Costa Rica is not the same as moving to Corpus Christi, Texas, or Vancouver, B.C. Therefore, to determine the correct answer for you, it is important to do your homework and determine how much your expenses will be – before you move. Here are a few of the many issues to consider before making the decision if moving is right for you.
The move - The cost of the move is something many do not take into account. Those who don’t have any belongings, who hop on a flight and buy new underwear when they arrive, need to remember that every item they need after getting off the plane will cost money. And the price of many of those items may be a surprise; the prices in Costa Rica can be the same, and sometimes more, than they are back home.
Many people have things they need or want to bring with them. The key to what it costs to establish themselves here depends on what they feel they must bring with them. If it is going to be more than a suitcase or two, determine what those additional items will cost to transport. In the extreme, bringing all of your household goods and belongings can run into thousands of dollars (including the import taxes that must be paid).
Read FAQs #29 and #30 for more information about shipping household goods to Costa Rica.
Senior citizen health care - For older retirees, having proper health care can be quite important. US Medicare does NOT pay for treatments or other health needs outside the USA. Costa Rica has some of the finest hospitals and medical care in Latin America, and they are much less expensive than private care back home, but they still aren’t cheap. And without insurance it is, “pay-as-you-go.”
ARCR has dedicated, English-speaking insurance agents on premises who can help MEMBERS determine what kind of private health insurance policy is right for them.
Read FAQs #16, #17, #18, and #19 for more information about health care and insurance.
Housing - Housing in urban locations is much more expensive than in rural areas. Visit different areas of the country before making a final commitment. As you travel around, ask others who are already here for advice to find out which locations offer the lowest cost. Rent for a while before deciding on a particular location; there are many great areas 20 to 30 minutes from San José or the beaches with lower prices.
Read FAQ #25 for a discussion on choosing a living location.
Utilities - Electricity rates are low in Costa Rica (as compared to North American countries) but to live frugally, confine major use to off-peak hours, 10:00 a.m. to 12:30 p.m. and 5:30 p.m. to 8:00 p.m. One caveat, living at the beach and using air conditioning 24/7 can result in electricity bills in the hundreds of dollars per month.
Water systems supply clean, drinkable, and affordable water in Costa Rica and there are many ways of being efficient in using it.
To determine the cost for TV and internet, ask around about which cable company offers the best internet and cable TV packages in the area you are considering for your new home.
Read FAQs #42 and #43 for more information on television cable and internet providers.
Food - To save money on food, adjust to the local food and eat what Ticos eat; lots of fruits and vegetables, rice and beans, and products produced locally in the country and in Central America. Foods prepared and shipped from the US are much more expensive.
Clothing - If you cannot afford to travel and buy your clothing elsewhere, an alternative are the “Ropa Americana” stores. These stores import bulk lots of close-outs, out of season, or unsold inventory clothing, disposed of by the big US stores and chains.
Transportation - It is nice to have your own vehicle, but because every vehicle in Costa Rica has to be imported, and the import taxes are some of the highest in Central America, prices for vehicles are very high; you can expect to pay at least double what the same vehicle would cost in North America. Plus, gasoline and diesel fuel is much more expensive here. Costa Rica has an excellent bus system that provides a good alternative to a privately owned vehicle.
For more information about the various issues regarding transportation and/or buying and owning a vehicle in Costa Rica, read FAQs #31, #32, #33, #34, #35, and #36.
Residency - There are several advantages to being a resident, but keep in mind that the application process can cost several thousand dollars and take many months to be completed. Finding the right attorney is VERY important when it comes to applying for residency.
ARCR has associated English-speaking attorneys who can answer questions and assist MEMBERS with applying for residency.
For more information about applying for residency, read FAQs #13, #14, and #15.
Are Costa Rican Banks safe? Yes - There are two types of banks in Costa Rica – private banks and national banks. Both conform to international standards and are quite safe. The national banks have more branches located throughout the country, and both types have ATM machines which access international banking networks. It is, therefore, easy to obtain cash for daily needs from accounts outside Costa Rica. Many bank ATMs have daily withdrawal limits, some as low as $100 USD per day, even though the home bank’s account withdrawal limits may be considerably higher.
Note: Although a bank in Costa Rica may have the same name, logo, and outward appearance as banks with the same name in another county, there is no corporate connection between them; Costa Rican banks use the name, etc. under franchise agreements with the foreign bank company.
How do I Open a Bank Account - Costa Rican laws define what kind of bank account can be opened by whom. Those on Tourist Visas are restricted to a special type of account specifically designed for non-residents. This type of account has limits on how much can be deposited and the balance which can be maintained, generally $1,000 USD maximum. (If your household consists of two people, you can open an account for each person and legally transfer a total of $2,000/month.) Residents are allowed unlimited accounts, however all large deposits will be subject to close scrutiny with the depositor having to supply positive proof of the origin of the money before it will be accepted by the bank. This rule applies equally to transfers from outside of the country as well as cash deposits.
Upon opening an account some banks will issue the account holder a debit card which can be used to make purchases against the account balance.
Opening a bank account in Costa Rica can be complex with the bank requiring much personal information such as passport data, local utility bills, proof of source of funds, and more.
ARCR offers MEMBERS a service to help them in opening a bank account. The assistance includes translation services and a personal escort to and from the location of a branch of the bank of your choice. (Some geographic limits apply.)
Is Direct Deposit Available? - Yes. Many persons desire to have their pension payments deposited directly to their Costa Rican bank account. Those kinds of automatic payments can be directed to a Costa Rican bank account through an intermediate US bank, which subtracts a small fee for the service. Three Costa Rican banks currently accept direct US deposits: BCR, Banco Nacional, and Scotiabank.
Can I Get a Safe-Deposit Box? - No. Due to Costa Rican laws, banks here do not offer safe deposit boxes to their customers. If you have valuable papers or objects you wish to store securely, a home safe or other device is advised.
Should I keep my bank account in my home country? - This is a personal decision. If you have regular payment or other financial obligations within your home country, it may be advisable to retain your account there. The internet makes access to external bank accounts and accomplishing many routine banking activities easy from abroad. ATMs, which are prolific throughout Costa Rica, allow convenient access for withdrawals from those accounts.
For more information on banking in Costa Rica, read the other questions in this FAQ section.
Major credit cards (Mastercard, Visa, American Express) are widely accepted by businesses throughout Costa Rica.
Should I keep my credit card from my home bank? - Credit cards presented for payment in Costa Rica will be widely accepted, regardless of the geographic location of the issuing bank. If you have already established automatic payments to be made from your existing credit card accounts, it may be simplest to retain those accounts.
Note: Most financial institutions charge the card-holder a fee for the card’s use outside the home country. This may be an “international exchange fee” and/or another transaction fee. In addition, the Costa Rican owner of the ATM or the card processing facility may apply a fee for the card’s use. There are some financial companies who will refund any charges applied by an outside bank or processor.
Note: Using a credit card for large purchases in Costa Rica can be problematic. The home financial institution which issued the credit card will often have multiple layers of consumer protection in place. Costa Rica is a legendary source for fraudulent credit card and bank transactions so, although an approval for a large withdrawal or transfer may have been previously given by a department of that institution, the separate fraud protection department may identify that the money as going to Costa Rica and intervene and freeze the transfer before it is released. Freeing the money for transfer can require numerous complex and difficult steps involving international telephone calls, emails, even a third party, all which must take place within a short time frame, before the money will be transferred.
Costa Rica has insurance companies which offer home, condo, vehicle, and healthcare insurance. Coverage is similar to those policies in North America and rates are generally lower.
For more information on healthcare insurance, see FAQ #16.
ARCR has a dedicated, on-site insurance office which can provide MEMBERS all types of insurance policies at discounted rates. Highly trained, English-speaking agents are on staff and can answer any insurance questions. Automatic payments for insurance can be arranged.
Yes - United States income tax laws apply to all American citizens, no matter where they live in the world. The filing date for those living outside the USA is different, but all other IRS rules, laws, and requirements remain in force. If your financial situation is complex, or if you just need help with filing, there are businesses in Costa Rica which have staff that are trained in US tax law and can assist you.