Central America, Off the Radar Screen for Retirees

Thinking of retiring? With the general economic news in the US less than favorable for the foreseeable future, perhaps it's time to consider moving south. The weather is favorable and the dollar goes a lot further. If this is something that you've thought about, maybe here's a few ideas worth considering.

There are four Central American countries that share common borders, known as the C4 Countries, which refers to a treaty signed in June of 2006. Gautemala, Honduras, El Salvador and Honduras then established the right of free movement for their respective citizens as well as foreign nationals who can travel to any of the other signatory states without a need for visas. Here's a short overview of the political situation and relative costs for each country.

Gautemala

The current President, Alvaro Colom, is reeling from fresh disasters, both natural and political. The government is stable, aside from the usual corruption typical in Latin America. His term expires in 2011 and it's been said that his wife may run for his office.

Guatemala has several areas of interest for those considering retiring: Guatemala City is not one of them. The American Embassy has registered 25000 retirees from the US within Gautemala and they estimate there is another 25000 unwilling to sign up. The country has over 13 million people, the largest population of the C4 group.

Top Four Choices for Retiring:

Antigua: 16th century ex-capital, magnificent architecture, world-famed tourist destination and expensive. $1500 month minimum. At 4500 ft in altitude, there's perfect weather year-round. A moderately sized community of expats.

Rio Dulce: inland river port, once a pirate stronghold, on the Caribbean side. A large boating community of ex-pats from all over the world. Inexpensive living, especially on a boat. $800 month minimum, somewhat isolated, with hot and humid weather the norm.

Quetzaltenango: northern Guatemala, located at 7500 ft altitude. An older city, built over Mayan ruins, Excellent architecture, a small community of ex-pats and a good choice for those who like cooler weather. $1000 month minimum.

Lake Atitlan: southwest of Guatemala City and a long time magnet for world travelers. It consists of several villages, each with their own flavor and with a small mixture of expats from all over the world. $900 month living expenses. The weather is similar to Antigua.

El Salvador

Mauricio Funes, El Salvador's first elected leader of the FMLN Party, has just completed his first year in office. Initially it was feared that the existing right-wing echelons would create chaos, but Funes is proving to be one of the best leaders of the C4 group. Some of the FMLN people were brought in to run various ministries but they've recently been removed and sent to schools.

Lonely Planet Guidebooks named El Salvador as the #1 travel destination for 2010. El Salvador is the smallest country in Central America, and the only one without both Caribbean and Pacific shores.

The nicest capital in Central America is San Salvador. The shopping malls are the largest in Central America and the highways are the best of the C4 group. The US Embassy estimates that there's roughly a thousand US retirees living in El Salvador, and there's a sizeable ex-pat community from other parts of the world. The US has a large military and aid presence in the country, another source of stability. A reasonable monthly budget for the city is $1000, with a lesser amount for living by the beaches. If city living is on your radar screen, San Salvador is the place to be.

Puerto Libertad, half an hour from the city, is home to world class beaches and surfing. Playa Tunco and others northward are served by excellent roads.

Nicaragua

With almost 6 million people, Nicaragua is the poorest country of the C4 group. The current president, Daniel Ortega would like to be re-elected in November 2011 but the Constitution bars a second term if it's consecutive. His less than unanimous 38% of the vote in 2006 does not bode well for his political future and rumors from within the country are saying that the bankers aren't happy with him.

It's the largest country in Central America, and the country is bordered by Honduras to the north and Costa Rica to the south.

As do all of the C4 countries, Nicaragua depends heavily on remittances from Nicaraguans living abroad, which have been accounting for 15% of the Nicaraguan GDP.

According to the World Bank, Nicaragua ranked as the second best Central American country for starting a new business, after Panama.

The Three Best Places to Retire:

Granada, the colonial gem and the oldest city in Central America.

There's a sizeable ex-pat group, mostly from the US. Real estate values have been dropping since 2008 and more than a few second-home owners would love to ease their debt load. Being located close to Lake Nicaragua, the weather can be hot and humid for most of the year. A monthly budget of $1100 is reasonable.

San Juan Del Sur

Located on the Pacific coast near the Costa Rica border, San Juan is a seafront village with charm: there's a smaller contingent of ex-pats, usually connected with the restaurant/bar business, tourism and beach sports. The real estate market has taken a hit and deals are waiting. A monthly budget of $900 would provide a comfortable life-style.

Leon:

The other axis of power in Colonial days, it competed with Granada for prestige: the architecture is classic Spanish and the ambience is more agricultural than tourist oriented. There's a small group of ex-pats and it's possibly a sleeper for long-term real estate goals. A monthly budget of $900 will go a long ways.

Honduras

With the conclusion of last year's debacle of having two presidents, one in exile and the other in power, the political situation is far from calm. The Organization of American States still refuses to recognize the existing president, Porfirio Lobo Sosa. Until memories fade or a political solution is worked out, Honduras is the pariah of Central America.

With an estimated 3000 expats ( US Embassy figures) the island of Roatan is the only bright spot for retirees at the present. All development on the island has stopped, except for the recently completed $62 million USD cruise ship terminal, and a Guatemalan-financed golf course. Over 200 cruise ships are scheduled to arrive in 2010, bringing an estimated 500000 passengers.

Tourism was down by 80% last year (2009) and it's estimated to bounce back with the cruise ship traffic, plus some 230000 airline passengers landing in Roatan. For the immediate future, businesses are for sale, prices are soft and off-shore over-leveraged owners are anxious to unload their dreams.

A reasonable monthly budget for the West End is +/- $1200 a month.

The only place to retire:

The West End is the jewel of the island, with white sandy beaches and streets, quaint boutique hotels and superb restaurants.

Sources: US Embassy, Guatemala, US Embassy, Honduras, US Embassy, El Salvador, Prensa Libre, Re-Max Realty (Antigua, Guatemala)ReMax Realty (Granada, Nicaragua)Bamboo Group Realty, Antigua, Guatemala, Treasure Island Realty, Roatan, Honduras,