Wonderland For Westerners
A growing number of European retirees are choosing Red Sea coastal towns to live out their years
By Leah Bower
When Austrian Dagmar Maurer first visited the Red Sea coast in 1997, she found never-ending sunshine, warm waters and, most of all, a culture she connected with.
I fell in love, Maurer says. Everyone is patient and friendly. We dont have that in Europe.
Returning from the mountains of Tirol year after year since then, Maurer says her ties to Egypt continued to strengthen. Then her husband died and with no one in the wings to take over the family furniture factory, she sold it to fund her retirement. Then, instead of settling near one of her two daughters to enjoy the proceeds from selling her business, she started going to stay on the Red Sea more and more frequently.
Here, you learn to be divine, says Maurer, who takes a dip in the ocean every morning on the small private beach attached to the cottage she purchased a few years ago in El Gouna, near Hurghada. Now, she and her dog Bijou live most of the year in the resort community. Ive begun to paint again, she adds.
Maurer is one of a growing number of retirees from wealthy western countries who are settling down and starting new lives in foreign lands where their limited incomes stretch much further than would be possible at home. Although the numbers of westerners especially Americans and British who are retiring overseas appear to be growing, exact figures are almost impossible to track since many retain addresses in their home countries or fail to register with the embassy in their host country.
There is no question, however, that the number of countries courting retirees and their sterling pounds, euros or dollars is rising, and there is anecdotal evidence that Egypt could be one of the next hotspots.
Although it is a sector of the tourism industry that is little studied, retirees could bring in long-term funds as they settle into communities, bringing a steady supply of foreign currency to spend.
British financial services group Prudential, which focused on overseas retirement for the first time in its 2004 guide, says there are currently 1 million retired Britons living overseas, a number they estimate will rocket to 5 million by 2020. Well, to start with, quite a lot of it is down to that old saying the world is getting smaller. The advent of mass tourism means were much better traveled than we were even 10 years ago, and this has the knock-on effect of making us more comfortable with, and better able to adapt to, different cultures and lifestyles. Put simply, weve seen folk relaxing in the sun and thought, could I exchange my life for this? the companys report states.
Although it doesnt track retirees who are living abroad, the US Census Bureau says the number of Americans turning 65 each year is expected to jump 73 percent during the next 10 years to 3.95 million in 2011. Those figures only will climb as the bulk of the baby boomer generation hits retirement age.
None of these numbers include the Germans, French, Canadians, Austrians or citizens of other wealthy western nations, which have steadily aging populations coupled with growing day-to-day living costs a recipe that has pensioners taking their monthly payments and moving to countries where they can live at a higher standard for less cash.
Tight race
Egypts popular destinations are going to face a lot of competition for retirees money, however, because several other countries are already pursuing the perceived long-term windfall and offering significant breaks to golden oldies who are willing to bring their currency along for the ride.
Retirees eyeing tropical Thailand are offered a special visa tailored for foreigners who want to spend their twilight years in the land of Siam. All that is needed for the year-long visa, according to the Thai embassy in Washington, DC, is a copy of a statement from a Thai bank showing a deposit of at least 800,000 baht ($19,554), or proof of monthly income of at least 65,000 baht ($1588). Applicants do have to be 50 or older, but only one spouse needs to meet the monetary requirements for a couple to receive the special visas.
Costa Rica, a popular South American hotspot, also offers a special visa for retirees called pensionados, according to retirementamerican.com, an online retirement planning agency. Similar to Thailand, pensionados must receive a minimum of $600 per month from Social Security, a pension or retirement plan, and convert a minimum of $500 a month into colones, the local currency. As an added benefit, there are no capital gains taxes on real estate investments in Costa Rica, high-interest-bearing bank accounts are tax-free and foreign retirees dont pay Costa Rican taxes on income outside of Costa Rica. Even US income is exempt from Costa Rican income taxes.
Both countries offer high-quality medical care and easy access to many pharmaceutical drugs, which are often available in those countries at a fraction of the price and without a doctors prescription.
But few countries benefit packages for foreign retirees compare to what Panama offers. Anyone who qualifies for the pensionado visa is eligible for discounts on everything from movies, concerts, transportation, hotels, hospital bills and prescription medicines. Applicants dont even need to be of traditional retirement age anyone older than 18 can apply, as long as they have a guaranteed income of $500 from the government. Standard pension payouts also are acceptable.
Panama has one of the lowest costs of living in all of Central and South America: A US-style home can be built for about $40 per square foot; unskilled labor costs $6.40 per day; a full-time live-in maid costs $120-160 a month; a cup of coffee is 30 cents; a haircut and shave can cost as little as $1; an afternoon at a beauty salon is $8; electricity is about 10 cents per kilowatt-hour; water bills are $18 per year; telephone service costs roughly $30 a month; internet access is $14 a month; and cable TV will cost you about $30 a month, writes Kathleen Peddicord, who publishes International Living and edited The Worlds Top Retirement Havens.
It is that combination of a low cost of living, cheap and easily available health care, and sunny climes that is drawing pensioners to these countries.
Retiree residents in Costa Rica can even get health insurance from $440-518 year and, as in Thailand, prescription medications are a fraction of what they would cost in America, where skyrocketing drug costs are a political hot potato.
That doesnt mean foreigners can retire wherever they please without encountering some significant problems along the way.
About 350 US retirees lost most of their life savings in 1999 after they built homes on property that was supposed to be theirs for 90 years that was before Mexicos supreme court ruled that theyd leased the land in Baja California from the wrong owners.
And pensioners in Spain, where many British settle to escape the United Kingdoms legendary rain, may lose their property and houses if government plans to seize the land under eminent domain are finalized. Not only will the landowners not be compensated for the land slated to accommodate more development they may even have to cough up part of the cost for the new roads.
While there is little known about foreigners fate of retiring in Egypt, or any problems they might encounter, Orascom Hotel Holdings says its El Gouna sales are governed and enforced by the laws of Egypt. A notary public is involved during registration procedures.
Building potential
Egypts appeal as a retirement destination is much the same as other locations balmy climate, a high level of safety, easy access to prescription medication and skilled doctors, and a low cost of living.
The El Gouna resort community, where Maurers Egyptian-themed hideaway is located, is the only completely planned, self-contained community in Egypt, and is the type of lifestyle marketed to retirees looking for a place to live without a lot of hassles.
Maurer says not only does her money go much further in El Gouna than it ever would in Europe, she feels more secure in Egypt, where violent crime rates are extremely low.
When you live here with the euro it is very cheap, she says. And it is very safe here. I feel, as a woman, very safe here. Look at the security outside. And people are so polite.
Despite fielding a few questions from people back home whose concerns about her choice in retirement locations peaked during the invasion of Iraq, Maurer says she never thought about leaving the country. I just like to be here, she adds.
The features that drew Maurer to the Red Sea coast closely resemble what other retirement destinations tout as their selling points a hospital in the compound, a nearby airport, affordable beachfront property, and a wide variety of activities such as golfing, diving and movie theaters.
The Hurghada International Airport is only 22 miles away and the El Gouna Hospital opened in 1998 with 120 beds and 24-hour surgery and emergency services. There is even a plastic surgery center nearby.
Although Egypt has yet to formalize special benefits for retirees, officials did mention the issue briefly during a discussion about tourism during the Economist conference in Cairo in January. Many foreigners obtain residency permits with little difficulty.
But it is the cost of living that could be the real draw. Living in Egypt for [foreigners] is cheap, especially after the devaluation of the pound, says Yasmine El Narsh, senior marketing executive for real estate at El Gouna resort. A lot of pensioners are playing golf on the 18-hole course. People come here for combination of weather and atmosphere.
Although it is difficult to tell who has moved into the El Gouna resort with a pension check in hand, Maurer says the numbers of other retirees are slowly increasing.
El Gouna grows and grows, she says, rearranging the galabeya that has become her daily uniform between swimming and soaking up the sun. It is like a magnet.
©2005 by Leah Bower