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Some of the many beaches are nesting sites for hawksbill and loggerhead turtles.

Getty Images/iStockphoto

Moving to a low-cost, tropical paradise, where $30,000 a year can put a couple into the upper middle class, is fast becoming the dream du jour for fifty-somethings who find themselves short on retirement funds.

It's a vision fuelled by books and websites devoted to the proposition that retirement utopia is just a plane flight away.

A recent article in U.S. News and World Report touts the merits of Loja, Ecuador, and Chiang Rai, Thailand. The website Salon gives a thumbs-up (with caveats) to Panama and the Philippines. "Malaysia is a place where you really can embrace a first world existence for $1,700 [U.S.] a month," according to an article in Forbes.

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But does the reality match the rhetoric? While it's certainly possible to live more cheaply abroad than here, aging boomers should be wary of assuming that a plane ticket is all they need to supplement Canada Pension Plan and Old Age Security.

That's true even if they're headed to destinations like Panama, where English is widely spoken and the U.S. dollar is one of the official currencies.

"Living in Panama can be challenging," says Chris Powers, a U.S. Air Force veteran who runs PanamaForReal.com, one of the more realistic websites on the pros and cons of expat life.

He estimates about half of relocated Americans and Canadians wind up disgruntled with everything from traffic jams in the capital city to the country's omnipresent bugs.

"If you browse through the Panama forums, you're bound to read about all the expats who've packed up and called it quits after a year or two of living here," he writes in an e-mail.

That's not to say that Panama, or any destination, doesn't offer many retirees exactly what they want. Natural beauty and exotic culture – not to mention the absence of winter – can add up to an intoxicating combination.

But before you start packing, here are a few things to consider:

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Beware surveys
The natural place to start your research is with cost-of-living comparisons. The problem? They often produce odd results.

For instance, Numbeo, a website with a popular cost-of-living calculator, says rents in Mexico City rents are 57 per cent cheaper than in Vancouver. But a survey earlier this year by consultants Mercer says that rents for an apartment "of international standards in an appropriate neighbourhood" are nearly identical in the two cities.

This level of discrepancy is nothing unusual. The Overseas Living Price Index, as reported in the Daily Mail in Britain, says that living in Canada costs about 26 per cent more than living in Britain. But Statistics Canada's Foreign Post Indexes, which measure the retail cost of a basket of consumer goods and services in various countries, insist Canada is considerably cheaper.

The moral here? No index can substitute for actually visiting a country and seeing how it suits you.

"It's a very bad idea to just sell everything and move somewhere; it's a very good idea to make multiple long visits to get to know a country before you relocate," says Julia Taylor, a Vancouver Island resident and author of Mexico: The Trick is Living Here, a warts-and-all guide to daily life south of the Rio Grande.

Results will vary
Yes, it is possible for a couple to live well on $30,000 a year in many foreign locations – but that depends on how you define "well."

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If you want to live in an air-conditioned house, drive a car and eat out three times a week at high-end restaurants, you're probably going to be disappointed.

On the other hand, if you're willing to learn a foreign language and live like a local, you can live in some spectacular settings for very reasonable costs.

Mr. Powers's website includes sample budgets for what it would cost a couple to live in various Panamanian locations. They range from $1,415 a month to more than $3,200 – and that doesn't take into account trips home, a car or any large expenditures on clothes or furniture. Remember, too, that those are U.S. dollars.

"Panama City [the capital] is not a place to retire on a shoestring budget," he cautions. By his estimate, an apartment in a desirable area of the city is going to cost at least $1,200 a month; rents rise to $1,500 in trendy areas of the city or in an expat-friendly beach town like Coronado.

The deals get much better in small towns like Aguadulce or David, where two-bedroom homes can rent for as little as $400 a month.

"If you do your homework … you'll find that Panama is an amazing place," Mr. Powers says.

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But he suggests that much depends on your willingness to live like a Panamanian – "meaning you don't demand a ritzy lifestyle." He also suggests that learning Spanish is essential if you want to live in many cheaper locations in the interior of the country.

Brace for a shock
Ms. Taylor cautions that new arrivals in any country are likely to encounter culture shock, when they stumble over everything from how to properly greet someone to where to buy their groceries.

"The first stage in a new country is euphoria, then comes a stage where you feel frustrated and even angry because you don't have the knowledge or the experience to judge what's going on," she says.

Ms. Taylor, who lived in Mexico for several years, says expats should realize it's not just living costs that change when you move countries. You must also adapt to different medical and legal systems, as well as new customs, new holidays and new expectations of polite conduct.

"It's not just a sunnier version of Canada," she says. "It's a different society."

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