The concept of living, working, and retiring abroad is such a compelling idea—one that makes so much sense on so many levels—that stories about successful North American expats abound.
I’m a member of that cadre myself. My wife and I have lived and worked abroad for seventeen years now, and we’ve spent almost all that time talking to, and writing about, people successfully living their own happy, affordable lives overseas.
There are certainly challenges involved in the expat lifestyle, and we’ve never tried to minimize that. Adapting to different cultures, currencies, economies, geographies, and governments is a standard feature of expat life.
But recently I’ve noticed another aspect of this adaptation process that is starting to work its way into our conversations with expats around the world.
We’ve been abroad long enough that we’re now hearing from some of those same expats about a new challenge…the challenge of considering a move back home.
As one friend recently confided to me over lunch, “I can’t afford to move back to the U.S.”
And it was the bill that prompted my friend’s comment.
We’d both had a three-course lunch. Mine had been tacos al pastor with refried beans and rice. He’d had the daily special: a chile relleno, an enchilada, and some grilled flank steak, again with refried beans and rice. We’d both had a beer.
Our bill was $12.
That was the combined total for both of us, beers included.
The bill highlighted what my friend had been talking about all through our lunch…the prospect of having to leave his favorite restaurant, his little town, his entire expat lifestyle behind and return to the U.S.
“I know people who have had to make that move, who were forced to go back for family or other reasons,” he said. “I wonder what I’d do if something changed in my life and it wasn’t possible for me to stay here any longer. What if, for some reason, I had to move back north?”
My friend is nearing retirement age, but he still works. He does online consulting for a company in Europe, and he can do his job from anywhere with a good internet connection. He’s lived in this Mexican mountain town for almost six years now.
As good as his life is, he thinks about moving back to the U.S. every now and then. This isn’t unusual…almost every expat we know does the same thing. We do it ourselves occasionally.
Even if you’re happy as a clam in whatever overseas destination you’ve made home, it’s natural to fantasize about being back on the block, spending familiar currency, and speaking in your native language to old friends and family.
My friend is no different from any other expat—he said he’d just done his annual daydreaming about moving back to where he came from, in the U.S. Midwest.
Then he ran the numbers and was reminded that his daydream had a serious downside.
“If I moved back to the States,” he said, “first I’d lose my health insurance through my Mexican insurance provider. Last time I checked, comparable insurance back home would cost triple my current premium.
“Then,” he said, “I’d lose my Foreign Earned Income Exclusion on my taxes. This year the deduction is more than $104,000. If I moved back to the States, I’d lose the deduction, and my taxes would go through the roof.
“On top of that, if I go back to the part of the country I came from, I’d have to start paying for heat and air conditioning again. Right now, my monthly utilities are about $100, all in, for water, electricity, internet, and cooking gas. I literally shudder to think what I’d pay per month up north.”
He said that his monthly bill just for gas during the winters back home was three times his total monthly utilities budget right now. The Midwest gets really cold in winter. Same for his monthly electricity bill in the summers. Because the Midwest also gets really hot in summer. Where he lives right now, the temperature is pretty much perfect, year-round.
“And,” he added, “could I get a lunch like this back home for six bucks, including a beer? Forget it.
“My lifestyle would take a nose dive,” he said, gesturing around at the quaint little town square we sat in, the cobblestone streets, the brightly painted tiendas, and the nearby mountains, lush and green in the rainy season. “The cost of living would kill me. Moving back is an interesting idea every now and then. But even if I could afford it, I don’t know why I’d give up all of this.”
And that’s the thing about looking back. It can remind you that looking forward’s good too. Thinking of the future is what got us, and most of the expats we know, to move abroad in the first place…to better lives than we had when we lived in the States. It doesn’t have to be Mexico either, there’s a wealth of other excellent options.
And while it’s nice to visit friends and family in the States, it’s even better to get back to our upgraded expat life. And at these prices, it can be forever.