03/25/2013 08:09 am ET Updated May 25, 2013

Retire Overseas Telecom 101

One concern as you plan for retirement overseas? How you will continue to communicate with family, friends, credit card companies, online shopping sites and your favorite phone sex service (just making sure you're paying attention) back home. The key is some set-up in advance of your move. In today's world, it's ever-easier to stay in regular touch with anyone anywhere. Still, your international communications expense living overseas can be a significant part of your budget... or a negligible one, depending how effectively you organize things.

First, you should probably ditch your current cell phone and its accompanying monthly plan. Even if you intend to return home often, it's probably cheaper to switch to a pay-as-you-go phone to use when you're "back home." Assuming you're on a contract now, this could take some planning to make sure you don't pay penalties for opting out early.

Your new pay-as-you-go phone will not only save you money (maybe a lot of money) compared with the cost of your current cell phone contract, but it has another benefit, as well. You should be able to use that same phone in your new country(ies) of residence simply by switching out the chip.

Unlike in much of the world, a cell phone you buy on contract in the United States is typically locked, meaning you can use the phone only with the service provider who sold it to you. You're supposed to be given the code to unlock the phone when you buy it, but this doesn't always work. However, a pay-as-you-go phone comes unlocked, meaning you can change the chip inside it. As you can buy a pay-as-you-go cell phone or the chip on its own to use in one in most countries around the world at this point, your new pay-as-you-go phone can be your key to local communications anywhere. You can invest in a library of chips (as we have done), one for each of the countries where you spend time. This way, your one phone works anywhere you need it to work.

We have chips for Panama, the United States, Colombia, and France, the four countries where we currently spend time regularly. When we arrive in one of the other countries, we simply switch the chip, usually in the airport while we're waiting for our luggage to be delivered.

The bigger telecommunication complication when you move overseas is staying in touch with people back home. Maybe you'll be able to dial internationally with your pay-as-you-go cell phone, but, if you have this capability at all, it will come at a cost. Probably you won't have a local land line in your new country of residence, as they are increasingly unnecessary and an added expense that isn't really worth it. Again, though, if you do have a land line, the cost of making international calls from it will be expensive.

The solution is to set up some kind of VOIP (voice over internet protocol) service. In the United States, the big carrier is Vonage, but there are at least a dozen other similar services. In addition to the Vonage-type service (whereby you get an Internet modem that you plug into your phone), systems are also available that work from your computer.

The Vonage-type service is generally more convenient if you will be staying put, more or less, in one place. You plug the modem box provided for you into your Internet connection in your house, and then you plug a regular phone into the modem box. You can then call anyone in the United States just as you do now, as though you were dialing long distance from elsewhere in the country. You'd dial 1, the area code, and then the number.

Because the modem is programmed with a U.S. number (this is your new phone number, the one you'll give out for people to use to call you; in fact, you can even port your current number to your new service if you want, so your "U.S." number won't change after you've moved overseas), you don't pay international rates.

Depending on the plan you sign up for, you can even get unlimited calls to Europe and elsewhere.

The main caveat with these services is that you have to arrange for them in advance of your move, as you must place an order for the modem box in time for it to be delivered to you before you depart for your new life. These outfits don't ship overseas. Note that, when you place your order, the service provider will caution you to check with the internet service provider in the country where you'll be using the box to make sure there are no local regulations restricting against it. In fact, Belize's internet company (which is also the phone company) tries to block VOIP services. People in Belize, being the independent, resourceful folks they tend to be, have figured out workarounds, including signing up for virtual IP services (which I'll talk about in a minute).

Options to a Vonage-type system include Skype and Magic Jack. Skype started as a computer-based program you could use to call other Skype users... free. That part of the service still exists, but you can now also make outbound calls to regular telephone numbers. You can get a Skype-In number, on which people can call you from a normal phone line. And you can even now get a Skype phone, for use independent from your computer; you just plug the Skype phone into your internet connection (in the way you might plug a Vonage modem box into your internet connection).

Magic Jack also uses your computer, but it works with a regular phone. You plug Magic Jack into a USB port on your computer and then plug the phone into Magic Jack. Magic Jack is supposed to be portable, but you have to carry around a regular phone with you to use with it. I don't find that super-portable.

You can use Skype directly out of your laptop, using your computer's microphone and speakers, but that can make for difficult conversations. It's better to use a headset with a built-in microphone. You can also get a phone to plug into your laptop's USB port; again, though, this means something else to tote around in your computer bag.

The cost of these services varies depending on the plan you sign up for... or don't. To call out with Skype, you don't need a plan. This works like a pay-as-you-go cell phone; you simply charge your account (online, using a credit or debit card) whenever it gets low. But whether you sign up for a plan or pay as you go with Skype, your telephone expense will be a fraction what it would be were you to make international calls from your new country the old-fashioned way.

For reference, here is a website that compares VOIP services: This is a marketing site, so it features services that earn it a referral fee and doesn't include Vonage ( Skype and Magic Jack are easy to find: and

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