The Índice de Confianza del Consumidor (ICC) – Consumer Confidence Index – quartely survey by the Escuela de Estadística de la Universidad de Costa Rica, showed a change after a year of economic downturn. The most recent survey in February 2011 showed a 2.5% increase in consumer trust, bringing the index to 50.3%.

UCR Professor, Johnny Madrigal Pana, who headed the survey, explained that with consumer confidence comes spending and incurring of debt. In contrast, if consumers are pessimistic, they do not spend or get into debt. Pana said that the downward trend that was normal for 2010 changed its course and began to rise moderately, though not as high as the previous year.

Those who answered the survey believe that unemployment will be decrease, though poverty levels will remain the same.

Pana explained that consumers have strengthened their tendency to buy durable goods such as a car of home. The future expectations are very stable compared to previous surveys and current economic conditions tend to show improvement, according to the professor.

Many retirees who moved to Costa Rica because of the economic downturn are pleased by the good news above and happy to be living in a country that wasn’t impacted like the U.S. was by the recession. Costa Rica had no money invested in Wall Street nor in the sub-prime housing market. In fact, sub prime mortgages do not exist here. Also, “The bigger they are, the harder they fall.” All of the counties which were hit hard by the recession have large economies and industries like the U.S. Costa Rica only has 4.3 million people, is virtually self-sufficient because we grow almost everything we eat here and the people are used to living with a lot less than the more materialistic larger nations.

All of this makes retirement here a no-brainer when you also consider the cost of medical care, transportation, utilities and rents.

Retirement, is the beginning of a new stage in one’s life, the start of a second adulthood. Financial planning for retirement is very important because nobody can predict the future because you don’t know what will be return on your savings or what will be the inflation rate when you actually retire. How much money will be available through social security, if social security exists when you retire.

Some are lucky enough to have invested in the right property at the right time and have good retirement programs, affordable health insurance, stocks, bonds or IRAs to ensure a good quality of life during their retirement years. Unfortunately, most of us start thinking about retirement planning when it is too late. Effective retirement planning requires foreseeing the type of life you wish to lead after retirement. Retirement is like playing second and longest innings of one’s life. Enjoying this phase comfortably and peacefully requires certain basics of retirement planning.

In the past, Social Security Benefits, Personal savings and Defined Benefit Pension were considered main resources for leading a comfortable retired life. Now a days, one cannot solely depend on these resources. This is the era of early retirement which could be due to health reasons or layoffs. Thus means that you may have a shorter working career and longer retirement as compared to the earlier generation. When you retire from your job you, stop getting your paychecks. Apart from depending on your savings, you certainly need some regular source of monthly income to take care of your day-to-day expenses. Getting a part-time job or starting a home-based business is good option to help you lead a happy and comfortable retirement life. The only problem with working full-or part time is that you’ll not be able to enjoy your golden years and pursue your hobbies during your second adulthood.

Another major source of funding that people have counted on for retirement is the equity built up in their homes. Many retirees expected to sell their appreciated home asset and use those funds for a new acquisition in a warmer climate and then bank the rest for additional income in the golden years. We all know what has happened to the value of most homes in North America. Retirees planning to free up cash for a retirement purchase will likely find the numbers lacking.

Many people have come to realize that they may have not planned well and may be a little short on money to maintain their present lifestyle. A simple solution is to try to lower their standard of living and be more frugal in their own country to compensate for poor financial planning and/or bad investments. They can downsize to a smaller home, move to a more affordable but less suitable area, give up their yearly vacations, fire the gardener and cut back on other areas of their life to just scrape by. But what if they could move to another country with the same amount of income and improve their lifestyle dramatically instead of reducing it?

Living in the right country outside the United States can make all the difference in the world between just subsisting and maintaining the lifestyle to which you are accustomed. Costa Rica offers a viable retirement alternative. The idea of living overseas is not new. The huge number of Americans due to retire is staggering. Currently almost 40 percent of the population of the United States is over 50. By 2020, half the U.S. population will be over 50. Most Americans ages 41 to 59 say they will move when they retire.

Recently I gathered some statistics about Tax-unfriendly states for retirees in the U.S. California leads the list. The Golden state is a retiree’s tax nightmare. Although Social Security benefits are exempt from state income taxes, all other forms of retirement income are fully taxed. Californians pay some of the highest income taxes in the U.S. State and local sales taxes can reach 10.5% in some cities and towns, although food and prescription drugs are exempt. Real estate is assessed at 100% of cash value, but taxes are capped at 1% of value. In Rhode Island Social Security benefits are taxed just like they are by the federal government. Rhode Island attacks virtually all other sources of retirement income, too. Starting this year, capital gains are taxed as ordinary income, eliminating the lower capital-gains rate in effect before 2010.

The nation’s smallest state also has one of the biggest statewide sales-tax rates — 7% — although it excludes food, medicine, some clothing and precious metal bullion. In Vermont there are no exemptions for retirement income in the Green Mountain State, except for Railroad Retirement benefits (which are exempt in every state). Out-of-state pensions are fully taxed. Vermont exempts medical devices and prescription and nonprescription drugs from its 6% sales tax. But it imposes a 9% tax on prepared foods, restaurant meals and lodging, and a 10% sales tax on alcoholic beverages served in restaurants. Real estate taxes have two components: school property tax and municipal property tax collected by towns and cities where the property is located. There are some other states that are slightly more kinder to retirees but don’t expect bargains. So, some retirees are looking to move abroad to stretch their pensions.

On the other hand you can save on some taxes by moving to Costa Rica. Home taxes are only a quarter of one percent of the declared value. For example, on a home that is assessed at $100,000 you only pay $250 in taxes. I know people whose home is worth more than that and they pay even less. There is also no capital gains tax on real estate.If you go into business your corporation can limit some of your tax liability here. Costa Rican corporations can also reduce your U.S. Taxes. I am not advocating tax avoidance but only stating that there some advantages to doing business here. Really the only taxes which are high here are those on imports and the sales tax. If you don’t buy a lot of imported items you won’t be affected that much by import duties. Sales tax is another matter. It is high here but since many items are less expensive than in the U.S. so you will still be saving money. The government has to get its operating money from some place to provide services so imports and sales are taxed.

I would like to mention that U.S. citizens including retirees are permitted to earn $91,500 tax free on active income (a job) while living abroad.

The gap between the richest and poorest Americans is growing wider according to recent reports by the Census Bureau. The latest stats show the number of Americans in poverty is the highest in more than half a century. Experts say the recession is among the reasons for the growing ranks of the poor. The middle class is being hit the hardest and those on fixed incomes like retirees may be affected even more. One solution for some of these may be to move abroad to a country like Costa Rica to live or retire.

Retirement abroad is a growing option for stretching your dollars and finding affordable health care. The latter is of paramount importance as you grow older. It is important to choose a country that provides not only cheap health care but good quality care. What’s the use of saving money if you don’t get good care.

Costa Rica is a very healthy country. Costa Rica’s health status is comparable to that of developed nations. The country’s private health clinics have international fame and attract people from around the world for everything from dental care and ocular laser surgery to major cosmetic surgery and life extension treatments. Costa Ricans are proud of their nation’s achievements in the field of health care. Their up-to-date, affordable, state-run “cradle to grave” health care system reaches all levels of society by offering the same medical treatment to the poor as to those with greater resources. Hospitals, clinics and complete medical services are available in all major cities and some small towns. More than 90 percent of the population is covered by the Social Security System.

Many international medical authorities rate Costa Rica as having one of the best low-cost medical care systems in the world, when preventive and curative medicines are considered. The United Nations consistently ranks Costa Rica’s public health system as the best in Latin America and one of the top 20 in the world. The world Health Organization (WHO) ranks Costa Rica 36th out of 191 countries with respect to the quality of its health care systems. The United States for example ranks 37th.

Costa Ricans are a healthy people. The infant mortality rate of less than 11 in 100,000 live births is lower than that in the United States. This figure is on par with any industrialized country in the world. Life expectancy is 76.3 years for men and 79.8 years for women. Today, an 80-year-old man has a life expectancy of at least eight (actually, 8.4) years.? This puts Costa Rica in first place in the world for life expectancy from this age up.? Iceland and Japan follow with 7.7 years.?Costa Rican women at age 80 are expected to live longer than men of the same age, 9.5 years, slightly behind the women of Japan and France.

Hospitals have the latest equipment, and laboratories are excellent. You can feel safe having most operations without returning to the United States or Canada. Most surgical procedures cost only a fraction of what they do in the United States. For example, a heart bypass operation costs about a third of what it does in the United States.

It is no wonder a large number of foreigners are attracted to Costa Rica because of its affordable health care. In the United States, for example millions of people do not have health insurance because it is prohibitively expensive. For this reason, Costa Rica attracts many retirees from North America. It doesn’t matter if you are a legal resident or a traveler. Everyone is entitled to emergency care at a government hospital.

A few years ago I wrote an article entitled “Small is Better” where I compare the oversized lifestyle of the United States with that of a smaller Costa Rica. In the article I show that the lifestyle here is much richer in every sense of the word than the grandiose U.S. lifestyle. Now I have decided to ad a new twist to my original story.

Watch out for bigger in Costa Rica, too! Here are some examples of what I mean. The global relocation services that are hyping Costa Rica lately, are really just selling real estate and not concerned with your wellbeing. Because they are international relocation companies they have a large budget and can reach a lot of naïve people. Besides Costa Rica the are promoting such drab and places as Ecuador. Just because these companies are large doesn’t mean their services are good nor forthright.

An example of bigger in Costa Rica are some of the larger and more prestigious law firms like the ones in Escazú and other upscale areas. In my book, “The New Golden Door to Retirement and Living,” I devote a whole section on how to find a good lawyer. I give a lot of tips and the right questions to ask a prospective attorney. One thing I omitted was they fact that many large and prestigious law firms do not offer good service. In most cases customer service is better at smaller law firms. It is my experience that I get things done quicker using lawyers who are not affiliated with larger firms. I find it easier to stay in touch with attorneys from smaller firms and I get much better service.

In addition, I have said that it is important to have a bilingual attorney so you can understand what is going on with your legal affairs. However, remember just because a lawyer is bilingual it doesn’t mean that he or she is competent, honest or that your will receive good service.

Because of the above I now recommend lawyers with smaller practices to the clients on my monthly relocation and retirement tours. That way retirees can get better service which is of paramount importance when it comes to legal matters.

There is a publication which is hyping Ecuador and some of the other less than desirable locations as the new retirement havens. I think people have to open their eyes and not be believe all of the hype about these countries. Cheap real estate and prices are not synonymous with a good lifestyle and stability. One of the most important factors in choosing a country to retire or invest is political stability. Costa Rica has the longest standing democracy in Latin America which makes it an excellent choice for retirement and investment.

Let’s look at what happened in Ecuador yesterday as well as the country’s track record. Ecuador declared a state of emergency as hundreds of police protesting wage cuts blocked roads, shut the airport for several hours and sprayed teargas on President Rafael Correa. The president was taken to a hospital after scuffling with the police and was holed up as officers surrounded the facility, refusing to let his personal security forces escort him out of the building. Looters ransacked banks, supermarkets and shopping malls in the port city of Guayaquil, the country’s largest, and 51 people were injured amid the violence, the Red Cross said.

Ecuador, which has defaulted on $3.2 billion of international debt since 2008, has seen three presidents ousted in the past 13 years. Correa, a 47-year-old economist who took office in 2007, brought a modicum of stability to the politically-tumultuous nation of 14 million. The opposition in recent weeks has stepped up its attacks as economic growth trails its neighbors and Correa’s threats to expropriate assets in the oil industry, the country’s biggest, deter private investment. Correa also angered opponents by pushing through an oil law by decree and ignoring lawmakers’ objections to his plan to broaden the state’s control over universities and local budgets. South America’s seventh-biggest economy grew 1.9 percent in the second quarter from a year earlier, the worst performance except for Venezuela, which is in recession.

Who in their right mind would retire to a country in such bad shape? Nevertheless, a certain publication continues to encourage people to flock there because of the great lifestyle and low cost of living Give me a break!

Recently there has been an air of pessimism regarding the economies of Europe and the United States. European countries are in the process of major cutbacks to try and reduce their deficits. In the U.S. Ben Beranke, the president of the Federal Reserve stated on July 21st that “The economic prospects for the States are uncertain, economic growth would be moderate, and the recovery in the job market would be slow. On the other hand in Latin America things look a lot better.

The World Bank is painting an optimistic picture for Latin America. According to CEPAL (Latin American Economic Commission) the region will experience a 5.2 percent growth in 2010. The rate predicted is double that of the United States and four times that of Europe. At the same time Latin America’s public debt is half that of the United States and Europe. In terms of deficits I would like pointed out that gross national product is an average of 2.3 percent in the region while the GPA in the U.S. Is 10.6 percent and 6.8 percent for Europe.

Using the aforementioned figures Luis Alberto Moreno, the president Of the Interamerican Development Bank (BID), published an article titled, “The Decade of Latin America.” In it he states that, “Our region has a historic opportunity to join the Asian countries in the vanguard of the world economic recovery.” The executive secretary of CEPAL shares the same optimism and emphasizes the vigorous economic and health financial recovery of the region.

During my frequent lectures, private consultations and on my monthly retirement tours I am constantly asked about the safety of investing in Costa Rica. I am quick to emphasize the country’s stability, the fact that we were not hit nearly as hard as the U.S. and Europe by the the economic downturn and that we are actually in better shape as the figures in this article clearly demonstrate.

On my monthly retirement and relocation tours I am always asked questions about Nicaragua. There is no doubt that some parts Nicaragua are more affordable than Costa Rica. However, there are homes in San Juan del Sur which cost almost around a half of a million dollars. I saw them featured on the International Home Finders Channel. So, the country isn’t as cheap as it is made out to be. The bottom line is that prices are not the main factor when considering Nicaragua as a place to live. Nicaragua has been striving for years to become the “next Costa Rica.” However, the country has a long road to travel to even be considered a contender.

Fist and foremost, Nicaragua’s political situation is downright scary. According to the country’s constitution President Daniel Ortega cannot seek re-election next year, but that’s not going to stop the onetime leftist revolutionary. Recently, he won a ruling from a Supreme Court stacked with his supporters that Article 147 of the constitution, which bans the re-election of a sitting president, doesn’t apply to him. Ortega is setting the stage to rule Nicaragua for a long time himself in defiance of the constitution. This is the only country in the world where the court has declared the constitution unconstitutional.

Even more frightening is the fact that Ortega supports dangerous crackpots like Venezuela’s President Hugo Chavez and Iranian leader Mahmoud Ahmadinejad. Ortega’s links to Chavez have been strong and lucrative and they include a juicy deal in which Venezuela sells Nicaragua crude oil at half price, which Ortega can resell, using the profit for whatever he wants. Furthermore, Nicaraguan President Daniel Ortega is accused of dipping into Venezuela-funded coffers to bribe, buy and scatter the weakened opposition as part of his push for a second term.

More and more baby boomers are choosing to relocate or retire in Costa Rica. This should come as no surprise because of the country’s stellar and squeaky-clean international reputation. Costa Rica has more American residents per capita than any other country outside of the U.S. – they can’t be wrong.

Lately there has been a lot of hype by international retirement magazines and private parties promoting Medellín, Colombia and Cuenca Ecuador as as more affordable versions of Costa Rica. Medellín is one of Colombia’s most beautiful cities and does have some things to offer. However, you are comparing one city and a country that has some serious issues including a civil war with peaceful Costa Rica. I have some friends who have moved to Medellín and like it. However, they are people who couldn’t find success and happiness in Costa Rica due to a variety of factors and moved on hoping to improve their lives.

Despite all of the hype Cuenca is not all that it is cracked up to be either. Again you are just looking at one city and not the whole country. If you are an older retiree and have any type of breathing problem you are bound to have problems at 8,200 feet above sea level. I know of several older Americans who had problems in Costa Rica’s Central Valley which is only a few thousand feet above sea level. They would probably drop dead in Cuenca due to the rarefied air. Also, the average temperature is 58 degrees which may make the place too cold for those seeking warm weather. On the other hand, the average year-round temperature in Costa Rica’s Central Valley is around 72 degrees and purportedly one of the best climates in the world according to several publications. Costa Rica has almost any micro climate from which to choose. Which place would you choose to live?

People talk about the affordability of Cuenca and Medellín. The quality of life is much better in Costa Rica. Don’t make the mistake of confusing affordability with quality of life. The bottom line is that you get what you pay for. Furthermore, Costa Rica is the ONLY country in Latin American with a time-tested organization dedicated to help foreigners who want to relocate there. The Association of Residents of Costa Rica offers one-of-a-kind services to help you more here almost seamlessly. That is why I include their informative seminar as part of my popular monthly relocation/retirement tours.

Finally, I talked with a good friend of mine who has the largest Latin American travel agency based in the United States told me that despite what people say Medellín has a serious crime problem and Cuenca is downright depressing. Furthermore both Colombia and Ecuador have standing armies which Costa Rica does not.

My friend’s business is to know all of the tourist destinations in Latin America and be an expert on the subject. I respect his opinion highly and consider him an expert on the subject. In fact, due to his expertise he has been a consultant for the U.S. in Latin America.

Costa Rica doesn’t have the near the number of retirees that Mexico has, but it is 1000 times safer

Mexico currently has around 1,000,000 retirees because of its proximity to the U.S. The Mexican government says that it wants to lure 5,000,000 retirees form the U.S.and Canada in coming years. This is really a “pipe dream” since an epidemic of violence is extending its evil tentacles throughout the country. A battle for control of the profitable drug trade by the cartels has brought the drug war closer to the heart of Mexico, terrifying the city of Cuenravaca. Known for its charming Spanish-colonial downtown and for posh homes with lush gardens and swimming pools, Cuernavaca, “The City of Eternal Spring,” has always been has been a favorite retreat for Mexico’s rich and powerful and U.S. retirees.

Unfortunately drug-gang violence has soared claiming nearly 23,000 lives throughout Mexico, with Cuernavaca becoming the latest front. “We hadn’t seen this violence before,” said Dawn Housand, a 60-year-old Boston native who moved to Cuernavaca to retire more than 10 years ago looking for a quiet place to live. “I don’t have the money to move. If I did, I would leave.”

This is a city that depends on tourism and what violence has done is collapse our economy,” said club owner Andres Remis, president of the Cuernavacan Nightclubs and Bars Association. “The only thing that we can do is to wait for one of the groups to win or for the army to win.”

More than 50 people have been killed this year in Cuernavaca’s gang battles.

As I have mentioned before at the rate things are going in Mexico, the country will be hard press to attract many retirees. On the other, Costa Rica is fast becoming the number one retirement haven in Latin America. When you listen to the news or television and Costa Rica is mentioned, all that you really hear about is the country’s natural wonders and other positive information. The country is not crime free but fortunately doesn’t suffer from the endemic violence that plagues Mexico and some of the other countries in the region.