Renewing Your Passport…Calculating Your Retirement Nest Egg
June 12, 2009
"Kathleen, your passport renewal story reminded me of the time in the 1950s when my dad and stepmom renewed their passports in Calcutta. They got passports number 7 and 8, and for the duration of those passports, they got red carpet treatment everywhere they traveled!"
-- Rosana H., Mexico
"Kathleen, I enjoy your newsletter. With a home in the Philippines and an apartment in Chile, I know firsthand much of your topic.
"However, your e-mail stating that US$500,000 in 1984 is equivalent to US$800,000 today likely needs a re-visit. It is most likely over a US$1 million.
"Note this calculator, based on the consumer price index: www.westegg.com/inflation
"And those figures are for 2008, which, with the coming inflation, will quickly become very conservative.
"At the same time, as retirement becomes less affordable in the United States, those interested in retirement overseas may multiply."
-- Nate M., United States
Correspondent Paul Terhorst, 25 years retired overseas, replies:
"Thanks for the heads-up on inflation. Your e-mail got Vicki and me thinking about increases in our cost of living since we retired in 1984.
"Leading the charge has been gas, less than a dollar a gallon back then.
"Housing costs in the States have increased way more than inflation, although that's correcting now. U.S. food and clothing costs have probably kept pace with inflation. Worldwide, the costs of getting visas and entry permits have skyrocketed, a small part of our overall budget but a sore spot for me.
"Vicki and I spend a lot of time in Thailand. Incredibly, housing, food, and clothing here cost only slightly more than in 1984, mainly because of the massive devaluation of the Thai baht in 1998. When you live overseas, it's not so much that living becomes cheap/expensive as that the local currency becomes cheap/expensive.
"Finally, Vicki and I retired just when deregulation hit the airline industry. Beginning around 1984, airfares plummeted. Today airfares remain very low, which means major carriers have been losing money for decades. We who live and travel abroad benefit. I just wonder how long the low fares can last."
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