Monthly Archives: September 2013

Retiring in France


Living in France

Recently, International Living hosted an interesting “membership contest” to determine whether their readers thought France or Italy was the better country for permanent living/retirement. Apparently Italy won by a nose but France was a very close follow-up.

The more interesting question, in my opinion, is “how difficult or risky is it to move/live permanently to/in either France or Italy”?

Lise and I have frequently considered retiring in France (before we moved to Panama) since we both love France and speak French fluently. I have also worked in France as a consultant for several pharmaceutical companies.

Our background qualifications would theoretically be ideal as we are both Canadian citizens. Lise grew up in Quebec (a former French colony) and has a university degree in Fine Arts. I have a university degree in International Economics. We receive adequate pensions from the Canadian and American governments and our cash assets would be sufficient for entry from everything I have read.

But that is apparently the easy part.

Long Term Health Insurance

The main stumbling block at our age is adequate long term health insurance. The only sensible way to ensure adequate health insurance in France is to obtain French citizenship. Putting yourself in the hands of a private insurer after age 65 is a recipe for disaster. I know, because I have been there and done that. They will promise to keep on insuring you but you will go broke on the premiums charged many years before you die. Of course without proper health insurance you cannot stay in France (or Italy presumably).

For France, one must apply for a “long term visa” (outside of France) before one can apply for a “residency permit” of which there are several types. You must be a permanent resident of France for five full years before it is possible to apply for French citizenship which often takes another 2+ years.

To apply for a “long term visa” one MUST obtain adequate private health insurance to prove that you will not become a burden on the French Social Security system. The only problem is that after age 65 it is virtually impossible to obtain adequate health insurance coverage without a huge “co-pay” and after age 70 you might just as well forget about it unless money is no problem.

Once you have proof of adequate health insurance you can obtain a long term visa given that the other requirements are met (financial resources, criminal record etc.). With your long term visa you can apply for a resident visa when you arrive in France.

Micro Enterprise

Once you have your residency permit you can even apply to set up for example a “micro enterprise” (if qualified by 3 years of experience) that will allow you to make monthly payments to the social security system (about $300/month) giving you full access to the French health care system. This step would allow you to cancel your more expensive private health care insurance as it would be redundant.

This all sounds great, again in theory but there still remain some serious obstacles if you are on the road to French citizenship. One option is to operate your “micro-enterprise” until you die so that your health insurance is never an issue then a French passport is not important. If you don’t continue your micro enterprise you cannot pay into the social security system and you will not be legally able to stay in France unless you switch to a private health insurance which will not be available due to age restrictions.

Primary Income must be French Based

To obtain French citizenship, the way I understand it, is that you must live permanently in France for 5 years and that additionally YOUR PRIMARY SOURCE OF INCOME FOR THIS PERIOD OF TIME MUST BE BASED IN FRANCE!

A pension received from Canada or the USA is clearly NOT French based. This requirement would appear to mean that your “micro enterprise” must generate more after tax income for your five year period of residency than your pension plan. And/or you could make an additional investment in say French real estate that together with your income from your micro-enterprise would exceed your net revenues from your pension (and any other non-French based income) for the five year period.

At no time during the five year period of “residency” can you permit your health insurance coverage to fall below the norm established by the French social security system or you will be penalized for this lapse and that time will not count towards the 5 year residency. There are other considerations in terms of total days per year that you must reside in France not to mention that legally speaking you may be required to converse in French at a level equal to that of a 15 year old French teenager.

The path to long term residency in France compared to Panama is definitely not a “welcome mat”. It can be accomplished but the risks/costs are very high. Remember that the cost of living in France is about 65% more expensive than in Panama (see www.numbeo.com).

Comparison with Panama

Just for the record, if Lise and I were to apply for a similar status in Panama today (under the professional or business person law) with a five year wait for full Panamanian citizenship our cost in legal fees would be about $3000 and we would only have to maintain a local bank account balance of $5000 at all times. Our new business (or job) would have to be Panama based. The processing time would probably be 2-3 months. We could obtain relatively similar health insurance (as in France) at a cost of less than $2000 per year total with no age limits on signing up and no precondition exemptions after two years.

Your Asset Category and Offshore Retirement Options


Your Asset Category and Offshore Retirement Options

At the most simplistic level, there are three categories of people based primarily on assets. The focus is on baby boomers living in developed countries such as North America, Europe etc.

The division line between each category is not scientific or that precise but most people can quickly identify their category. Each category has its own unique issues/problems for retirement and living in general. The question this posting considers is “how, and to what extent is it possible to change your current asset category?”

Category “A”

Category “A” couples/people are considered to be in the top 5 percentile based on total assets and net worth. Such couples have an absolute minimum of $1,000,000 in highly “liquid assets” plus considerable additional equity and assets in their personal residence(s), businesses and other investments.

Such people, clearly, have few if any difficulties enjoying their desired lifestyle virtually anywhere in the world. What has been somewhat surprising to me is the very large number of such people who have chosen Panama at the end of their careers.

Wealthy people move offshore for a wide variety of reasons. They are always looking for “best value for dollar” wherever it might exist including asset protection. Major corporations have been doing the same thing for generations to enhance profits and pay lower taxes. It would appear that Panama offers many of these advantages for such people.

Category “B” People

Category “B” people are probably in the 60th to 94th percentile of net worth/assets. They are typically well educated and have generally spent their careers working in the public sector with a generous pension plan or for a large corporation with a “defined” pension plan. Such pension plans will provide them with a substantial extra income on retirement and are additional to the normal government social security and/or old age plans available to citizens of most developed countries.

Including home equity, the average Category “B” couple as of 2013 might have accumulated liquid assets, beyond home equity, in the $100,000 to $400,000 range. Since 2007, home equity for the average American and European has typically declined significantly and remains about 20-25% less as of today. Canadians were a bit more lucky in terms of housing values.

Such couples can expect to retire in reasonable comfort with relatively few long-term lifestyle concerns primarily because of their enhanced pension plans. However, for most, there will always remain a certain caution in terms of cash flow and a reluctance to splurge.

Of the approximate 100 million baby boomers and “post boomers” just in North America, probably 35% are Category “B” types. They tend to be well-traveled and well-informed. These individuals are prime candidates for the “offshore solution” because it potentially offers them an instant doubling or even trebling of their quality of lifestyle while stretching their relatively limited savings following the “Great Recession”.

Category “C” People

The Category “C” couple/person has the least interesting retirement options once the last paycheck is cashed which for the USA is about age 59. Category “C” people occupy the bottom 60th percentile based on net worth and liquid assets. With only a modest Social Security check on retirement and other minimal income supplements they understand that they could be looking at a steady decline in lifestyle and possibly even a “relapse” unless, of course, they keep on working which is what many have decided to do.

This category of person/couple typically pays higher than average medical costs because of long term minimal health maintenance, particularly in the USA where so many have been under-insured for so long. This person is probably aware that her retirement years may be subject to financial and health care risks beyond her control.

Most books on financial and retirement planning never even mention this category because Financial Planners cannot afford to spend time with anyone having liquid assets of less than say $250,000. Often $1,000,000 of liquid assets is the minimal trigger point for receiving serious consultation services from these professionals.

It seems like a bad dream, but there are always options ….

Why not just Change Your Category?

A well-planned move offshore for many people has the potential to instantly and permanently change their “category” …. for all intents and purposes. “C” category people can easily become “B” types. “B” types can easily convert to an “A” category. Even “A” types can double or triple their quality of life and still put money in the bank.  What a concept!

Your “category” was never set in concrete except if you decide it is so. A dramatic category “makeover” can be accomplished in as little as three months although one year or more is the typical planning/doing time .

I have personally witnessed many such changes for a number of North American couples since writing my eBook entitled “Panama Your Best Value for Offshore Living” Ebook1018 (click for a free copy).  This caterpillar to butterfly makeover was NEVER accomplished using tedious frugality or brilliant investment strategy … at least not of the normal sort.

Offshore Investment Paying 300% Annually


An Offshore Investment that pays 300% Annually

What if you were offered the opportunity to put your hard earned retirement nest egg into a tax free, mutual fund that paid you 300% per year every year guaranteed? Would you stop and consider such an offer? Can you imagine how such a deviously clever investment could change your life and probably make you insufferable around your old friends?

In reality the “offshore solution” such as moving to Panama does represent such an investment. Many millions of expats of all ages and ethnic backgrounds are currently enjoying these 300% returns compared to their cost of living back home while still maintaining a similar lifestyle. Continue reading

Frugal Living in the Coronado Area

Frugal Living in the Coronado Area

(This is an abridged version of my answer to a recent email question as to whether it would be possible to live in Panama on $600 per month including rent) Hi Kathy, good to hear from you and please say hello to our common friend. Your question about whether one could live/retire in Panama as a single person for $600 per month (or 25% of your North American budget) is intriguing so I have decided to check it out a bit more closely.

Things have changed dramatically in the Coronado area since publishing my original 2006 eBook “Panama Your Best Value for Offshore Living” although this book still serves as an interesting reference and comparative study as to why living in Panama makes a lot of sense. Incidentally, I now have an updated version published in 2007 which you can download here.Ebook1018

I would say that prices have moved up a bit Continue reading

Coronado Supermarkets


Coronado Supermarkets

Coronado now has 4 large supermarkets offering a full line of food products with the largest one offering electronics, clothing, furniture, major appliances and sports equipment among other things.

Machetazo

Machetazo is currently my favorite super market. You can find everything there at a good price with a reasonable selection of all food types, meats, fish & seafood, wines, cheeses, freshly baked  breads,  cereals, spaghetti sauces etc.

It is open from 8:00 AM until 8:00 PM during the week and until 9:30 or 10:00 on the weekend. This is very large store with three levels each level approaching one acre in size. Continue reading