Retire To The Beach On US$1,400 Per Month
Sept. 5, 2010, Maceió, Brazil: Maceió is our top pick for beachfront retirement in Brazil and one of our top picks anywhere for retiring overseas to the beach on a budget.
AND: Offshore Banking For Virgins...Strategies For A Tax-Free Life...Our Four Favorite Tax-Busting Jurisdictions...World's Top Doing Business Haven...
Congratulations, Karen Salvione-Blain!
Karen is the winner of this week's Facebook Fun Challenge. She has won a US$500 Conference Discount Voucher good toward saving US$500 off our Emergency Offshore Summit Dec. 2-3 in Panama City!
More Facebook Fun soon!
Dear Overseas Opportunity Letter Reader,
"When it comes to making a terrific first impression," writes Contributing Editor Christian MacDonald in the copy he's just submitted for this month's issue of my Overseas Retirement Letter, "the beachfront city of Maceió in Northeast Brazil is hard to beat.
"In fact," Christian continues, "when I crested the hill on my initial approach to the beach, the view to the sea was so impressive that I missed my turn and got lost.
"When I finally hit the beachfront promenade, I was treated to a gleaming, modern city. Of all the places I've visited in the country, with a view on retirement, Maceió now stands the top of the ranks.
"Perhaps the best part is that you can buy a large, three-bedroom apartment here for less than US$75,000.
"And then you could live in it on a budget of less than US$1,400 per month.
"Maceió is modern, clean, and elegant...with miles of brilliant, white-sand beaches studded with colorful umbrellas and bordered by tall, swaying palms. Its warm turquoise waters gently lap the shores as beachgoers from all over enjoy the sun and sand.
"The long beachfront is the main attraction in town, and it's one of the best you'll find in Brazil. It's as naturally beautiful as they come, but without the bothersome vendors, beggars, and obvious sex trade that you'll see in other, better-known capital cities.
"The waterfront drive is wide and pleasant, leading from one neighborhood to the next, each with its own special appeal.
"Along this drive, a well-maintained boardwalk runs beside the beach. It is energetic and bustling, and offers a shady walkway, small kiosks, and fresh-fruit stands, as well as both casual and classy seafood dining. The general look and feel is rustic and low-key, but that appearance belies the quality of some of the restaurants that you'll find here.
"The boardwalk is made even more bright and cheerful by the sunshine and openness it enjoys, thanks to Maceió's eight-story limit on the high rises at the waterfront...and the width of the waterfront drive itself.
"Just offshore, a protective reef keeps Maceió's waters calm, making the beaches--some wide and some narrow--perfect for swimming. The hustle and bustle of the beach slowly changes as you drive to the north, giving way to a quiet, wooded residential area near Maceió's yacht club.
"In the mornings, the waterfront road is partially closed to traffic (some days, fully closed) to allow everyone room to jog, walk, and bike...and sometimes listen to the live music along the boardwalk.
"Home to almost 900,000 people, Maceió offers everything you'll need for full-time living..."
Christian's complete report on retiring to the beach in Maceió is in production now. The guide includes a fully detailed budget of monthly expenses, plus everything you'd need to know about health care, establishing residency, buying property, and banking if you were to decide to make Maceió your new retirement home, either full- or part-time. The report will be fulfilled to all Overseas Retirement Letter subscribers on Sept. 15.
If you don't yet count yourself among them, you can get on board this weekend, during our Labor Day Sale, and save more than 60% off the regular Overseas Retirement Letter subscription price.
Our Labor Day Savings continue until Midnight tomorrow, Monday, Sept. 6. Take advantage of them here now.
Kathleen Peddicord
P.S. What else this week?
Should you rent or buy when you move overseas? And, if you decide to buy, should you invest in something new or a fixer-upper?
An important part of the American Dream is owning your own home. I read an article recently that described what it is to be middle-class in America, and owning your own home was included among the requirements. That makes for a narrow definition that probably doesn't make sense, but it shows how engrained home ownership is in the minds of Americans.
The typical cycle in the States is to buy a starter home as soon as you can afford one and then to trade up as soon as you can afford something bigger. This trading up continues until the kids move out...and then typically reverses itself, with downsizing steps until retirement.
In France, as a point of comparison, people tend to save until they can afford the house or apartment that they believe will suit their needs long term, and then they typically live in that house until they die. Part of the reason for this is the high cost of buying in this country. Transaction costs are not negligible. Part of the reason is cultural. The French would rather keep their housing costs modest and spend their money on other things (like travel, for example).
Most Americans retiring overseas bring their cultural need to own their own home with them. But that isn't always the best idea. There are reasons we say often in these dispatches: Rent before you buy.
One is obvious. You want to make sure you end up in the neighborhood that suits you best. We've lived in three neighborhoods since moving to Panama City. We chose the first for convenience, recognizing that it wouldn't be right long term. We chose the second because we thought it was where we really wanted to live, but our experience there wasn't what we expected. Our current neighborhood, by contrast, has felt like home since the day we moved in. Here in Panama City, for us, third time seems to be the charm.
Renting allows you to try on not only different neighborhoods for size, but the city and country, as well. We know people who moved to Panama City and then decided it wasn't for them within six months. From Panama, they moved to Mexico...and love it.
We've known others who have started out in Panama City but end up in the mountains near the city. And we know one couple who has moved to three different cities in Mexico. They like the Mexican culture, but they can't seem to find the place within the country that fits all their needs. In this case, the couple bought in two of the three cities. In each case, they were able to sell and even made money on the transactions. Still, it made the moving around more complicated than it would have been had they rented along the way instead.
The real benefit of renting is that it leaves you flexible. You can try out different neighborhoods, different regions of a country, or even different countries without tying up large amounts of capital and without having your movements dictated by your ability to find a buyer when you want one.
Once you're sure of where you want to be, then you face the question again. Should you buy? And, if you do, should you choose new or a fixer-upper for renovation? That's a personal decision. The variables to consider include how much effort you want to put into a renovation project, how much initial capital you have, and, to some extent, how handy you are with a tool box. Also note that your local language skills become more important if you undertake a renovation.
That said, buying a fixer-upper with the intention to improve and flip can be a solid serial investment strategy, if you're up for the challenges involved.
One market where I'm considering this strategy personally right now is Medellin. During my visit last month, I met with an American who had bought a small building in an up-and-coming neighborhood to rehab into three separate apartments.
The project, start to finish (from scouting for the building to finishing the renovation work), took him a year. He has sold one of the apartments for as much as he has invested in the entire undertaking. Meantime, he's living in the second, and he has the third currently for sale.
When he sells the third unit, he'll have more than doubled his money. And he'll still own the one he's occupying.
He's begun scouting for his next project. And, as I said, I'm looking, as well, with the same strategy in mind. I'll report in full for my Global Property Investor's Marketwatch members.
Kathie and I will be returning to Medellin within the month. And, yes, we're thinking we'll buy. My complete report on current buy opportunities is forthcoming for Marketwatch Members.
Sept. 5, 2010, Maceió, Brazil: Maceió is our top pick for beachfront retirement in Brazil and one of our top picks anywhere for retiring overseas to the beach on a budget.
AND: Offshore Banking For Virgins...Strategies For A Tax-Free Life...Our Four Favorite Tax-Busting Jurisdictions...World's Top Doing Business Haven...
Congratulations, Karen Salvione-Blain!
Karen is the winner of this week's Facebook Fun Challenge. She has won a US$500 Conference Discount Voucher good toward saving US$500 off our Emergency Offshore Summit Dec. 2-3 in Panama City!
More Facebook Fun soon!
Dear Overseas Opportunity Letter Reader,
"When it comes to making a terrific first impression," writes Contributing Editor Christian MacDonald in the copy he's just submitted for this month's issue of my Overseas Retirement Letter, "the beachfront city of Maceió in Northeast Brazil is hard to beat.
"In fact," Christian continues, "when I crested the hill on my initial approach to the beach, the view to the sea was so impressive that I missed my turn and got lost.
"When I finally hit the beachfront promenade, I was treated to a gleaming, modern city. Of all the places I've visited in the country, with a view on retirement, Maceió now stands the top of the ranks.
"Perhaps the best part is that you can buy a large, three-bedroom apartment here for less than US$75,000.
"And then you could live in it on a budget of less than US$1,400 per month.
"Maceió is modern, clean, and elegant...with miles of brilliant, white-sand beaches studded with colorful umbrellas and bordered by tall, swaying palms. Its warm turquoise waters gently lap the shores as beachgoers from all over enjoy the sun and sand.
"The long beachfront is the main attraction in town, and it's one of the best you'll find in Brazil. It's as naturally beautiful as they come, but without the bothersome vendors, beggars, and obvious sex trade that you'll see in other, better-known capital cities.
"The waterfront drive is wide and pleasant, leading from one neighborhood to the next, each with its own special appeal.
"Along this drive, a well-maintained boardwalk runs beside the beach. It is energetic and bustling, and offers a shady walkway, small kiosks, and fresh-fruit stands, as well as both casual and classy seafood dining. The general look and feel is rustic and low-key, but that appearance belies the quality of some of the restaurants that you'll find here.
"The boardwalk is made even more bright and cheerful by the sunshine and openness it enjoys, thanks to Maceió's eight-story limit on the high rises at the waterfront...and the width of the waterfront drive itself.
"Just offshore, a protective reef keeps Maceió's waters calm, making the beaches--some wide and some narrow--perfect for swimming. The hustle and bustle of the beach slowly changes as you drive to the north, giving way to a quiet, wooded residential area near Maceió's yacht club.
"In the mornings, the waterfront road is partially closed to traffic (some days, fully closed) to allow everyone room to jog, walk, and bike...and sometimes listen to the live music along the boardwalk.
"Home to almost 900,000 people, Maceió offers everything you'll need for full-time living..."
Christian's complete report on retiring to the beach in Maceió is in production now. The guide includes a fully detailed budget of monthly expenses, plus everything you'd need to know about health care, establishing residency, buying property, and banking if you were to decide to make Maceió your new retirement home, either full- or part-time. The report will be fulfilled to all Overseas Retirement Letter subscribers on Sept. 15.
If you don't yet count yourself among them, you can get on board this weekend, during our Labor Day Sale, and save more than 60% off the regular Overseas Retirement Letter subscription price.
Our Labor Day Savings continue until Midnight tomorrow, Monday, Sept. 6. Take advantage of them here now.
Kathleen Peddicord
P.S. What else this week?
- Relocating your assets to another jurisdiction can seem a big, intimidating, even frightening idea.
But it doesn't have to be.
First, what does it mean, exactly...to "go offshore"?
Strictly speaking, it means simply to do something in another country. For an American, going offshore means investing, banking, or doing business outside the United States. If you're British, going offshore means operating beyond the United Kingdom. Etc.
Nothing so scary about that.
The trouble starts when you consider specific "going offshore" strategies--setting up a trust in another jurisdiction, for example, or opening a foreign corporation to hold real estate holdings, say.
Just as I recommend you start small with your retire-overseas thinking and planning, so, too, should you start small and simple when it comes to moving your assets offshore.
You don't have to figure out an umbrella strategy of corporations and holding companies straightaway. In fact, most of the complex structures many offshore attorneys promote aren't necessary for most people, not immediately and not long term.
In fact, maybe all your going-offshore plan will ever require is an overseas bank account. So start there...
- "Most U.S. expats realize that the United States taxes its citizens on their worldwide income," writes international tax guru Chris Rusch.
"They understand, too, that every U.S. citizen must file a U.S. tax return every year, regardless where he chooses to reside.
"What many don't recognize, though, is that an American abroad can use a foreign corporation, in a zero-tax jurisdiction, to legally and legitimately reduce U.S. tax on his business income.
"Your first line of defense as a U.S. expat is the Foreign Earned Income Exclusion (FEIE), which excludes from U.S. income tax the first US$91,500 of wage or self-employment income earned by a U.S. citizen 'residing' in another country. (Technically, you're 'residing' abroad if you're outside the U.S. for at least 330 days during any 365-day period.)
"However, this is only the start of strategies available to you as an American abroad to reduce or even eliminate your annual tax bill..."
- Most countries are relatively tax-friendly when it comes to retirees. That is to say, a foreign resident's pension or Social Security income is often not taxed locally. Remember, though, that, if you're an American, you could owe tax in the United States on your retirement pension income; that tax obligation must always be considered as separate from and in addition to any local tax burden in your new jurisdiction.
In other words, if you're an American retired to Panama, while you'll owe no tax on your pension income in Panama, you could owe tax on it in the United States.
The fundamental point, though, is that, if this is the only income you'll have as a retiree overseas, then tax planning isn't an issue for you. For you, one jurisdiction is as tax-efficient as another.
Things get more complicated when you have passive (investment) or earned (wages or business, including self-employment) income to report. The first thing to understand when considering your tax burden as a retiree overseas is that tax rules vary greatly jurisdiction to jurisdiction and, as well, depending on your nationality, your residency status, what kind of income you're earning, and where that income is sourced...
- In this Internet Age, you could start an international business anywhere. Local business options can be restricted in some jurisdictions (some countries, for example, protect their retail, legal, or medical industries, meaning foreigners can't buy or start businesses in these fields), but you could launch a laptop-based, consulting, or Internet business anywhere on earth where you can get an Internet connection.
Given this, if running a business (and thereby generating an income) is part of your live-overseas plan, where should you consider settling down?
I recommend Panama. That's why I'm here...
Should you rent or buy when you move overseas? And, if you decide to buy, should you invest in something new or a fixer-upper?
An important part of the American Dream is owning your own home. I read an article recently that described what it is to be middle-class in America, and owning your own home was included among the requirements. That makes for a narrow definition that probably doesn't make sense, but it shows how engrained home ownership is in the minds of Americans.
The typical cycle in the States is to buy a starter home as soon as you can afford one and then to trade up as soon as you can afford something bigger. This trading up continues until the kids move out...and then typically reverses itself, with downsizing steps until retirement.
In France, as a point of comparison, people tend to save until they can afford the house or apartment that they believe will suit their needs long term, and then they typically live in that house until they die. Part of the reason for this is the high cost of buying in this country. Transaction costs are not negligible. Part of the reason is cultural. The French would rather keep their housing costs modest and spend their money on other things (like travel, for example).
Most Americans retiring overseas bring their cultural need to own their own home with them. But that isn't always the best idea. There are reasons we say often in these dispatches: Rent before you buy.
One is obvious. You want to make sure you end up in the neighborhood that suits you best. We've lived in three neighborhoods since moving to Panama City. We chose the first for convenience, recognizing that it wouldn't be right long term. We chose the second because we thought it was where we really wanted to live, but our experience there wasn't what we expected. Our current neighborhood, by contrast, has felt like home since the day we moved in. Here in Panama City, for us, third time seems to be the charm.
Renting allows you to try on not only different neighborhoods for size, but the city and country, as well. We know people who moved to Panama City and then decided it wasn't for them within six months. From Panama, they moved to Mexico...and love it.
We've known others who have started out in Panama City but end up in the mountains near the city. And we know one couple who has moved to three different cities in Mexico. They like the Mexican culture, but they can't seem to find the place within the country that fits all their needs. In this case, the couple bought in two of the three cities. In each case, they were able to sell and even made money on the transactions. Still, it made the moving around more complicated than it would have been had they rented along the way instead.
The real benefit of renting is that it leaves you flexible. You can try out different neighborhoods, different regions of a country, or even different countries without tying up large amounts of capital and without having your movements dictated by your ability to find a buyer when you want one.
Once you're sure of where you want to be, then you face the question again. Should you buy? And, if you do, should you choose new or a fixer-upper for renovation? That's a personal decision. The variables to consider include how much effort you want to put into a renovation project, how much initial capital you have, and, to some extent, how handy you are with a tool box. Also note that your local language skills become more important if you undertake a renovation.
That said, buying a fixer-upper with the intention to improve and flip can be a solid serial investment strategy, if you're up for the challenges involved.
One market where I'm considering this strategy personally right now is Medellin. During my visit last month, I met with an American who had bought a small building in an up-and-coming neighborhood to rehab into three separate apartments.
The project, start to finish (from scouting for the building to finishing the renovation work), took him a year. He has sold one of the apartments for as much as he has invested in the entire undertaking. Meantime, he's living in the second, and he has the third currently for sale.
When he sells the third unit, he'll have more than doubled his money. And he'll still own the one he's occupying.
He's begun scouting for his next project. And, as I said, I'm looking, as well, with the same strategy in mind. I'll report in full for my Global Property Investor's Marketwatch members.
Kathie and I will be returning to Medellin within the month. And, yes, we're thinking we'll buy. My complete report on current buy opportunities is forthcoming for Marketwatch Members.
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Kathleen Peddicord
Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter.
Her book, How To Retire Overseas—Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Books.
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