Where Are The Best Places to Retire in the Caribbean?
The allure of sandy beaches, warm days, and fun in the sea draw tourists by the millions to the Caribbean each year, but most have to return home to careers and mortgages once their vacation time is up. For retirees, however, the lack of these financial pressures make the Caribbean a very compelling region for a permanent or semi-permanent retirement home. In fact, many Caribbean islands are eager to receive retirees and make the process fairly straightforward. If you are retired or close to retirement and thinking about the possibility of retiring in the Caribbean, what should you know about the process?
What is Involved?
In the United States, retirement may require little more than giving your boss that long-awaited letter of resignation and filing for Social Security. When your dream is to retire in another country, however, the process becomes more complicated. No matter what place outside the country you wish to retire to, you will need a retirement visa and proof of financial solvency. You may need to purchase property and/or pay a large tax up front. Depending on your interest in citizenship, some islands make it easy for retirees to become citizens, while others make it much more demanding. The good news is that there are lots of options and lots of choices throughout the Caribbean — and all of them have the same beautiful weather, beaches, and cultures.
Which is the Best Caribbean Island to Retire On?
Your personal preference of an island may determine where you choose to retire; previous vacations or personal connections to the community may dictate the choice. For many retirees, however, a cost-benefit analysis will help to narrow down which island is the most attractive and practical for retirement.
The eastern half of the island of Hispaniola, shared with Haiti, the Dominican Republic (DR) has long been an attractive vacation and retirement destination, especially since it is right next door to an American territory, Puerto Rico, and is all of a two-hour flight from Miami. The most-visited island by tourists overall, the DR is an attractive destination for retirees interested in stability and affordability; the government is strong and capable, while the cost of living is relatively low. The DR’s northern beaches are often considered some of the most attractive in the entire Caribbean Sea with condos that start at about $100,000; the eastern region has advanced development with amenities like gated communities and country clubs; and the western region is largely pristine and maintains a lush rainforest cover that few other Caribbean isles can match. The DR also has a thriving expat community in a region called Las Terranas, where residents shed nationalities and share a vibrant culture. The DR’s pensioners’ visa requires a minimum income of U.S. $1500 per month plus $250 per dependent. The national language is Spanish and while the tourism industry ensures many people speak passable English, retirement applicants are recommended to engage a native attorney to help with paperwork if their command of Spanish is not strong.
Unless you live in southern Florida, it’s easy to forget that there’s another country just fifty miles from the coastline, the Bahamas. With 700 islands to choose from, retirees can pick and choose what landing space appeals best to them: isolated and private, or connected and up-tempo. The national language is English and the heavy influence of U.S. culture means that the Bahamian accent is not nearly as strong as it has been in the past. Retirees who choose the Bahamas do face a larger financial hurdle, however, since permanent residency requires an investment in property amounting to at least $750,000; for twice that amount applicants will be fast-tracked for permanent residency. You don’t need to look far to find these investment properties, as everything from small condos to huge mansions are on the market throughout the country. Retirees can also purchase a property and apply for a $500 Annual Homeowner Card, which gives their entire family the right to live in the Bahamas year-round. Given that there are no direct taxes in the Bahamas, the high property fee may be reasonable for retirees with a high net worth. By contrast, consumption of simple goods like food and clothing is taxed higher, as everything is imported.
Visitors flock to Belize in huge numbers for the majestic natural beauty of the small Caribbean country. The second-largest coral reef in the world (behind only Australia’s Great Barrier Reef) is found on the coast of Belize and fans of scuba diving, snorkeling, or boating should absolutely consider its charms. The national language is English, furthermore, making it attractive to many retirees. Belize is a fairly poor country, meaning the cost of living is low and the financial costs of retirement in the country are not nearly as high as some neighbors. Retirees at least 45 years of age can apply for the Belize Retired Person’s Incentive Program by providing proof of a pension, Social Security, or adequate net worth to live in the country. Applicants must also provide proof of $2000 monthly income moved into a Belize bank account. The fee for the retirement card is $1350 with $750 for each dependent and an annual $25 renewal. Unlike some other Caribbean islands, Belize retirement only demands that you spend 30 consecutive days per year in the country, and allows you to come and go to other places as you please with the rest of the time. Applicants must provide documents such as passports, Social Security cards, marriage certificates, police records, proof of income, and medical examinations. One attractive aspect of Belize’s retirement program is their duty exemptions on one car, boat, and aircraft per person, while there are no income, capital gains, or inheritance taxes on money coming in from outside the country.
Aruba, Bonaire, & Curaçao
The “ABC” islands of the Caribbean, Aruba, Bonaire, and Curaçao are Dutch-speaking isles that are part of the Netherlands’ overseas possessions. Located on the southern regions of the Caribbean, they are popular not only for their beautiful beaches and reefs but also because they are located outside “Hurricane Alley”, minimizing the risk of damage to property and people. While they each have their own benefits and drawbacks, all three isles have high standards of living and easy-to-access residency permits. Aruba is the largest island with the most services and amenities; Bonaire is small and quiet; while Curaçao is the most cosmopolitan and has the most favorable tax incentives. Retirees hoping to live in Aruba must be 55 years of age, have either a pension or an annual investment income of $50,000. Their residency permits must be renewed each year. Bonaire’s threshold is lower, requiring proof of just $1680 per month in income. Retirees interested in Curaçao must purchase a property worth about $250,000, at which point they will have the same rights as native citizens.
A small island off the northern coast of Honduras, Roatan has long been a tourism haven in a country plagued by crime and corruption. While it’s not recommended retiring on mainland Honduras, this island has escaped the country’s major problems, and is an attractive destination for visitors. Roatan has one of the least expensive costs of living, as well as one of the cheapest thresholds for retirement. A pensioner’s visa requires proof of just $1500 in monthly income, with no obligation to purchase property. If you do choose to purchase property, however, the cost of housing is quite low; a two-bedroom beach house on Roatan may cost as little as $200,000. While Spanish is the national language, just about everyone you’ll encounter on the island has learned how lucrative it is to speak English.
St Kitts & Nevis
Two of the smallest islands in the Caribbean are nevertheless two of the most inviting. With an area of just 100 square miles and a population of 50,000, the country of St. Kitts and Nevis is the tiniest in the western hemisphere, yet has long depended on visitors for almost all of its economy. English is the national language and the native Creole language is not hard for an English speaker to understand. St. Kitts and Nevis has some of the best tax structures of any Caribbean island, with no taxes on income, investments, or inheritance from outside the country. This country was also the first in the world to create a “golden passport” where a one-time purchase is enough to secure citizenship; the cost of this passport is either a $150,000 to the national growth fund or an investment of $400,000 in property or business.
Widely known as one of the world’s smoothest and most attractive retirement destinations, Panama has both a cosmopolitan capital city as well as beautiful beaches and untouched rainforests. Their pensioner’s visa requires proof of just $1000 in income per month, or $750 per month for those who have a property investment in the country. A Panamanian attorney must file your application, but worry not — their legal system is efficient and straightforward, allowing a person to fly down on a tourist visa and consult with an attorney as they look for potential properties. Like other visas, the pensioner’s visa requires identification, health, and financial paperwork. The cost of the visa is about $400, while the legal fees for processing are about $2000. There is no annual renewal, while visa holders can immediately begin living in Panama. Tax incentives on everything from utility bills to airline tickets to home loans to dental appointments make the cost of living even more practical.
Puerto Vallarta, Mexico
Although located on the Pacific and not Atlantic coastline, the Mexican city of Puerto Vallarta is nevertheless a retirement haven, especially for Americans. Mexico may be more appealing than many Caribbean islands due to the familiar culture, the strong government and economy, and the proximity to the U.S. border. However, Mexico lacks a pensioner’s visa, and retirees must apply for a four-year residency visa instead, which can become a permanent visa afterwards. The minimum monthly income for this visa is $1400, or the purchase of a property worth about $200,000. Puerto Vallarta in particular is a haven for expats and is renowned for its safety, convenience, and above all its natural beauty. Like many other parts of Mexico visited by foreigners, English is commonly spoken even if the national language is Spanish.
Things to Consider
A dream retirement is easier said than done and choosing to retire in the Caribbean means taking into account many factors that affect the quality of life. To some, a specific factor may be minor, while to others, it may make a choice prohibitive. Here are the largest issues that must be taken into consideration.
Getting a Visa in the Caribbean
No country on Earth lets you stay as long as you want and Caribbean islands are no different. Most will require a visa of one form or another. A tourism visa will not allow you stay longer than a few weeks or a few months, but is a usual first step towards giving you time to scope out the locations, investments, amenities, and benefits of a particular location. The next step is one of three visas, depending on circumstance:
- A permanent resident visa allows a person to stay in another country for a longer period, from several years to a lifetime, and is often renewable
- A pensioner’s visa gives a person the option to spend most or all of their time in a country, but requires specific evidence of financial well-being, such as pension or investment statements
- An investment visa gives a foreigner the option to stay in the country long-term, but has the greatest financial commitment, necessitating an investment of hundreds of thousands of dollars
Which visa you choose depends on your plans, your financial status, and your need for mobility. Luckily, any of the best Caribbean island to retire has streamlined their visa process, and some are even able to grant a permanent residency visa while a person is in the country on vacation.
Cost of Living
The cost of living in the Caribbean varies drastically. Since most island nations have to import outside goods like food, vehicles, fuel, and luxury items, a major mark-up can create sticker shock for first-time visitors. By contrast, the cost of living in poorer nations like Belize may be refreshing to those who would spend far more money on an American house or apartment than their beachfront property; a one-bedroom apartment in Belize City may cost less than $4000 per year.
Housing in the Caribbean
Most Caribbean islands have zoned off beachfront property for development and, especially in the aftermath of the COVID-19 pandemic, have plentiful housing available for retirees to purchase. Even so, the premier housing usually comes with a premier price tag, and anyone hoping to retire on a beach should realize that they’ll be paying the highest costs of housing in the area. Governments may also apply stamp taxes of five to ten percent on property purchases. Even so, housing is often the fastest way towards residency (or even citizenship) in the Caribbean, and is recommended as an investment for anyone looking to retire in the region.
Like other factors, the quality of medical care varies drastically in the Caribbean. Some major cities like Nassau, Santo Domingo, or Panama City have world-class hospitals and doctors. By contrast, St. Kitts and Nevis has just three hospitals. Often an expat may have to leave their adopted country for a home nation or neighboring area to get medical care, especially on more remote islands.
One of the most favorable reasons for many to pursue retirement in Caribbean is the lack of taxes on retirees. Most nations want wealthy foreigners to spend money in their retirement and stimulate their economy, so they withhold taxes on retirement income, investments, and inheritance. This is not always the case, and some retirees may find they need to pay a string of taxes upfront. Furthermore, some nations like the Dominican Republic require residents to pay full tax rates after several years.