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Posted by on Dec 6, 2014 in Costa Rica, Healthcare, Moving to Costa Rica, Residency, Retirement, Uncategorized | 19 comments

Moving to Costa Rica – Things we got wrong

Moving to Costa Rica – Things we got wrong

When we were planning our move to Costa Rica we did quite a bit of research; we read blogs, books, asked questions on forums, and made connections with people. We did this for a full year and a half before our move.

We were prepared when we moved.

But still, there were things that we missed, got wrong, or that we misunderstood.

Your Milage May Vary

This could truly be an unofficial Costa Rican motto. It doesn’t matter if you are talking about a border crossing, opening a bank account, or how long it takes to establish residency – everyone has a different experience. Even so, some things should be chalked up to: not paying attention, or misunderstanding a concept. So, for what ever the reason, here are some of the things we got wrong in our move to Costa Rica.

World Class Hospitals and Affordable Socialized Healthcare

These two concepts are often mentioned at the same time, in the same sentence in blog posts and web articles, but they are standalone statements. Costa Rica does have World Class Medical facilities AND Costa Rica’s Caja system can be affordable healthcare for Costa Rica’s residents.

But

Does Costa Rica have world class, affordable health care? When reading about the affordable’ness of healthcare in Costa Rica online, one is typically reading about Caja – Costa Rica’s compulsory medical and pension plan for residents and citizens.

Some would argue that the private hospitals, in addition to being world class, ARE much more affordable than in the US. That may be true, but it is beside the point. We were looking for healthcare that was complete. We did not want to have the mandatory Caja AND supplemental private health insurance AND why not throw in coverage under the Affordable Care Act… aka ObamaCare.

We were trying to simplify and the reports we read said we could do this, and in style, through Caja. In the year and a half living in Costa Rica we have had 4 friends discover major illnesses and 3 0f those 4 friends went back to the States for treatment even though they were covered under Caja and did not have coverage in the States.

The Cost of Caja

I must admit that the majority of things I got wrong, I got wrong without fully understanding the system. Certainly there are those who “sell” Costa Rica by touting affordable healthcare as a reason to move here. Hell, that was one of our stated reasons for retiring outside the US – cheaper insurance. But we got the Cost of Caja wrong all on our own.

I am not going to argue here that Caja is expensive. However, our costs will be significantly more than what we had budgeted. You see, when we were researching all our sources were saying basically the same thing – we pay about $60 for a couple for Caja.

Two things I got wrong :

First, information online does not have a shelf life. As long as Google’s algorithm finds a site worthy it will rank it in search results without regard to whether or not the information is still accurate. So, you might find yourself, like I did after searching for “Cost of Living Costa Rica,” reading about $2 a gallon gas when it was more like $6 – all because the article came up first in the search results even though it was several years old.

Secondly, I am a different demographic than the typical retiree to Costa Rica. To put it delicately, I am much younger, and for Caja purposes, in a different income category.

Most writers writing about health insurance in Costa Rica are discussing Caja as it relates to someone who is older than 55 and who has established residency via Pensionado status. Caja payments, as I understand them, are based on 2 factors: income and age.

For income, since we are seeking residency based on Rentista status (the only residency type available to us) we are in a much higher category for income than the Pensionado ($1,000 a month versus $2,500 a month). Being in our early 40’s we are also in the category (age wise) that pays the most into the Caja.

How wrong were we? Who knows, we don’t – yet. It is near impossible to get a clear answer from anyone about what our Caja expenditure will be, as we do not yet have our residency and are not yet compulsed to participate. We are expecting it to be between $300 and $400 a month.

Just recently we have heard that the Caja is splitting families and that husband and wife have to participate individually. We are not sure what the landscape will look like once we finally get our Cedulas. Our attorney said we should get them around April, so we should know more about the Caja payments then.

He just didn’t say WHICH April.

Crocs are a Crock

When we first moved to Costa Rica I thought the bland, no style, rubber shoe called Crocs would be the best all-around shoe to wear. They were waterproof, had holes in them for draining and you could wear them as clogs with an open back, or sandals with a rubber strapped back.

All of those things are true. What is also true is that walking in the Central Valley on roads, gravel and uneven sidewalks, the sole wears a hole quite quickly. I imagine if we had chosen a beach area to live the Crocs would be a good fit, if not fashionable.

Bugs at Altitude

If you have had a chance to read the book Jen recently wrote, Costa Rica Chica, you will remember that one of the ways I helped her along with her bug-a-phobia (in moving to one of the most bio-diverse countries on the planet) was to, somewhat, convince her that there were not many bugs at the altitude we were going to be living at.

I had just about convinced myself of that as well.

It is just not true though. There are bugs here, even the dreaded tarantula and scorpion, but we are managing. Overall it is not that bad, I think Jen would agree – A small price to pay for the wonderful climate, views, and experiences we are having here.

Breaking the Mold

During the research of our move to Costa Rica we found multiple reports on blogs and forums of mold problems, especially in the Central Valley where we intended to live. Mold, we were told,  was particularly cruel to all things leather or paper.

So, of course we chose not to pack any leather or paper things in the 9 suitcases. Jen had the brilliant idea to magnetize important photos (Shutterfly) and bring them to Costa Rica as fridge magnets.

The hardest part for me, was selling our library of books. We had a nice little library going and I had quite a few first editions, signed, and collector books. It wasn’t so much selling the books at a good price – we had a year and a half to find buyers – it was my connection to the books.

Needless to say, we sold them – needlessly.

We have been in Costa Rica, in the Central Valley, at a high elevation, with the cloud forest visiting us daily throughout the rainy season, for a year and a half and still  have not battled the mold issues we had read about.

But I know others have. Say to yourself these 2 mantras over and over again, “Micro Climates, Micro Climates, Micro Climates” and “Your Milage will Vary, Your Milage will Vary, Your Mileage will Vary”.

Those that do battle mold take the wetness out of the air with an electric Dehumidifier or many closet sized non-electric dehumidifiers. In our new home, which we moved into 2 months ago, the owner outfitted each closet with the non-electric devices. Originally designed for gun safes these are great for small areas. There is an indicator to let you know the device is saturated. You plug it in to an outlet for a day to dry it out and then it is ready for duty again.

Should you plan your move here with mold in mind? Sure. Will you have to battle mold? Who knows.

Minding the Gap

When we were developing our exit strategy of quitting our jobs and retiring early we knew that we had a gap. We figured we would live off of savings and this would take us through 8 years or so of living in CR, then we would have a gap of  another 12 years, or so, before we could access our 401k retirement funds without penalty. We would fill this gap by finding ways to wisely use our money and by turing passions (that we would now have time for) into income.

The time gap was based on the worst-case assumption that we would not find a way to invest or otherwise strategically use that money to further our early retirement cause.

I am happy to say, that after FINALLY opening an account with a bank here, we were pleasantly surprised to find that interest rates, for accounts in colones, are pretty incredible. We have some of our money in a CD at ScotiaBank and we earn just over 6% paid out every 6 months – enough to cover rent.

From this article it appears that interest rates are going up., as the dollar exchange rate drops. Our gap just got smaller.

Once we establish residency and have our Cedulas in hand, we will be able to avail ourselves to some of the favorable rates available at Costa Rica’s credit unions. The last time I checked rates a five year CD returned 12% (only 11.2% with monthly interest payments – insert sad face).

We were unaware of these tools when we were researching and so they were not a factor. We should be able to cover the part of Caja that we miscalculated and close our gap. This is one item I am ok with getting wrong.

 

The fact of the matter is that things change, words get misinterpreted, one person’s experience is the exact opposite of the next persons, and misunderstandings happen. One thing we did get right when we were deciding what bring? We made sure we packed our sense of adventure, a bit of patience, and a boatload of humor.

So, what did I get wrong about the things we got wrong? I am sure you will let me know in the comments below.

Hasta Pronto,

Gregorio

 

 

 

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Gregorio

Greg Seymour is a quitter. At 41 Greg and his wife Jen quit their jobs, sold damn near everything they owned and became Intentionally Unemployed and retired early to Costa Rica.
In addition to writing on this blog, Greg has written for other online publications and has written two popular books about living in Costa Rica:
Greg Seymour Amazon Author Page

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19 Comments

  1. Hi Greg, I agree with you that dated information can be very misleading. With the changes in the CAJA payment calulations, it could get to be too expensive for rentistas or even pensionados here. People doing online research ALWAYS need to check the dates of when articles were written, or blogs posted last.
    As for the mold issue, we did bring our books, lots of them, and we do have to check for mold a couple times of year, first at the beginning of the rainy season, and again towards the end. I found that wiping off the bindings or covers with a rag sprayed with Lysol works fine.
    Good luck, Dana

    • Thanks for the book tip Dana as well as your perspective on Caja.

  2. Very informative, Greg. Thank you! I knew interest rates were better, but I never heard concrete percentages before. As always, we enjoy your blog!

  3. I agree that references I have seen to World Class Hospitals and Affordable Socialized Healthcare have been very misleading. The socialized healthcare is not “world class”, although by itself it is reasonable cost. It is suitable for some routine healthcare and medications, but I would recommend private healthcare to supplement it. (We joined Caja in July of this year.) Private healthcare can be very good, although we live in Guanacaste and have been told that the best specialist doctors are all in San Jose, a 5 hour drive away. We live full time in CR and are not required or even permitted to buy health insurance under the Affordable Care Act in the USA. But we did purchase a high deductible private healthcare policy in CR that covers care in CR and covers hospitalization in the USA. We likely will not reach the deductible unless hospitalization is required, so we self pay for much of our healthcare. I get prescriptions via Caja and go to private doctors and hospitals for non-routine healthcare. Our combined private insurance plus Caja cost is less than what we were paying per month in the USA, but not as much less as seems to be implied in many articles that try to “sell Costa Rica”. We are still happy we moved to CR – we moved here more for lifestyle vs large cost savings, and we spend close to what we were spending in the USA overall. Some things cost less here (e.g. local fruits and vegetables, fees for doctor’s office visits or medical treatments), but many things cost more (e.g., good cuts of meat, any US brand foods, gasoline, cars, appliances, electricity). If you want to save money, you likely will need to make some sacrifices in lifestyle.

    • Thanks for providing your experience.

      My wife and I are both healthy and are on no meds so the cost of the Caja, something we will not use, is a bit high. Add to that the fact that if some major medical catastrophe hit we would want to be treated in the US, and it is a loser for us.

      The bright side is we love it here. We love the healthier lifestyle we live, we love the weather, the views, and the people. I am not trading it – just giving people my experience versus what I had thought before moving here.

  4. The interest rates cited are for colones accounts only. So when you take into consideration that you have to pay federal tax on it and there is always a risk of the colon dropping further against the dollar even though it trades in a fairly narrow band, your mileage may vary indeed.

    • Thanks Hara.
      I mentioned that those rates are available only for colones accounts. Not sure the tax implications yet – I imagine if I earn money some government entity will want a piece of it – just not sure which one, yet.

      The fluctuation in the dollar vs colón has been pretty consistent over the past 5 years. The reality is no one knows what will happen to the economy in the US or here in CR.

      Everyone needs to do their own research and make their own decision. For us, investing with the colón is working for us when that stops we will do something else.

      • 18% to US fed on “unearned foreign investment income”
        Uncle Sam (the monetary idiot) will always squeeze his children’s piggy bank, even when the children live and earn in a foreign country.

  5. Great article, Greg. Couple of comments — we, too, felt that we didn’t have much of any “mold” problems, in contrast to other friends who also lived in San Ramon but in other parts of town or at higher elevations. And we’d brought a boat-load of books so we were glad of our “non-mold” problem. HOWEVER, when we went to pack up 5+ years later to return to the states, we found that with our complacency about “no-mold” issues, we actually HAD had a lot of damage. Lost tons of original prints and drawings by my artist father to mildew and our books *still* smell after almost 3 years back in a very dry climate in the states, so some things just don’t show up until you’ve got a few years under your belt. SO you might end up being glad you didn’t bring the books after all. We had to throw many away.

    And you gave a great quick analysis of the medical situation. Although this won’t be relevant to you for quite some years, we sure found that once Medicare eligibility fit into it, there was just no comparison. That was certainly one of the factors in our return to the states, and now that my husband has had some serious heart procedures with cutting edge treatments here in the states, we can’t imagine trying to go through that down there.

    We, too, LOVED our years in Costa Rica, but I do think more folks need to hear some “balanced” views. (Hence my next book, Reality Check, coming out soon.) 😉 Not to be discouraging — we’re not sorry about a single moment we spent in CR, nor would we have wished not to do it! — but to help folks make better decisions. Good for you for tackling some of these issues.

    • Arden,

      Thanks for sharing your experiences. I look forward to reading you book when it comes out. I am sure we will learn more the longer we are here and will find other things we got wrong initially as well as find some things we were wrong about the things we thought we got wrong.

      Best of luck with your book.

  6. Hello..great site and content !

    I was reading about the CDS and rates you commented on. I will need to do further research, but one question that seems very important is ‘are the CD’s insured similarly to the FDIC on banks here in the US….I mean, 12% is fantastic, on the other hand I intuitively would think its ‘uninsured !

    Any ideas on this ?
    Thanks

  7. Thanks for another great informamative article. I’m so glad I found your website and book. By far your information about CR has been the most helpful.

    • Thanks for that wonderful compliment!

      I will do my best to keep adding informative info.

  8. Your blog has about the best first-hand and most objective info on CR that I’ve seen. My wife and I will be visiting for about 30 days in Jan-Feb 2016, covering much of the country except the North Pacific part of Gunacaste and Tortuguera. This is mostly tourism, but we will also be keeping an eye out for an area that we may wish to return to for more extended stays. One thing about insects that I’ve seen little about is the flying, biting kinds like mosquitoes, particularly during the evenings. How are these in your area? I’m guessing they would be worse in the central and south Paciific regions. I ask this because we live in Nova Scotia where our summers are short. We start off with blackflies during May and June, followed by deer flies (also known as “psychoflies”) then mosquitoes, horseflies and aggressive wasps. The only way to be outside in the evening is in a screen room and wonder if the situation is similar in CR.

    • Ron,

      Thanks for the kind words regarding my blog. I am glad you are finding it useful. We live in the hills above Grecia at an elevation of 4700 and there are close to zero mosquitoes. That is not true of lower elevations in the central valley nor at the beaches. We do have a bit of a fly problem when rainy season starts as this is when they put pesticides on the coffee plants causing the bugs to bug us. They are non biting flys. Otherwise, I would say we are relatively lucky at our elevation with the flying biters.

      Best of luck with your trip,

      Greg

  9. Planning to visit CR in Jan.2016 for 1-3mths…Is this the “rainy” season??? Best or Worst times to visit??
    How to prepare for Local Bugs and Constant Humidity??
    Looking at staying in Grecia…cleanest town in CR!!
    Is getting their Caja (public) and PrivateMedIns.(SanJose) cost effective for a new pensionado single male seeking retirement in CR??
    Retiring in 2016

    • Hi Ron,

      – Rainy season will pick back up in late April. You should have a couple of great sunny months.
      – Best time really depends on what your goals are. Rainy season May – November is great for lower cost mid-term housing and discounted hotels and tourist things a lot fewer crowds especially at popular beach locatios. Summer is best if you want to be around a lot of other people and want perfect weather.
      – Grecia is the cleanest town in Central America like Atenas has the best climate. It is pure marketing. Although Grecia’s weather, especially up in the mountains above the town. Nice and cool – not too humid here.
      – Bugs, you will learn to ignore. They really are not that bad. My wife hates bugs and handles them very well. You will want something with deet for the mosquitos in beach areas and lower elevations in the Central Valley. Dengue fever is real.
      – Caja is based on income. Since the income requirements for pensionado is only $1000 the payment lower than other types of residency. I have heard anywhere from $60 – $150 a month. You will have to do research for supplemental insurance as I don’t know.

      Best of luck with your research and your retirement next year.
      Greg

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