Retirement

Infinitely Customizable

March 14, 2010
Azuero Sunset Coast, Panama

ALSO: Caribbean At Heart...The Secret To Getting The Best Deal Even If You're A Gringo...Pok-ta-pok In Antigua...

PLUS: Preponderance Of Offensive Fees...Real Estate Investing As An Early-Retirement Strategy...

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Time For Plan B

In the United States and elsewhere, this is shaping up to be the retirement era of scraping by and making do.

But not everywhere. In some key spots, not only can you maintain the standard of living you enjoyed during your hard-working years...you can improve it!

You can live better than you ever did "back home."

By the sea...in big cities...in small colonial towns...sometimes, even, on the edge of nowhere...

Here's your road map to the world's top Plan B retirement options right now.

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Editor's Note: Kathleen and Lief are incommunicado this weekend, scouting on the Azuero Sunset Coast. They'll report in tomorrow. Meantime, Kathleen left us with these thoughts for this month's issue of her Overseas Retirement Letter.

Not ready to take the retire-overseas plunge? Don't. You can begin this adventure simply by sticking your toes in the water...

Dear Overseas Opportunity Letter Reader,

This doesn't have to be all or nothing. You could "retire overseas" and still spend part or even lots of your time back home.

I make the point in case it hadn't occurred to you already. The idea of moving to a new country, full stop, full time, can be intimidating. Selling your current home...off-loading your car, your furniture, your lawn-care equipment...flying off to a new country where you know no one and where everyone you meet speaks another language? Boiled down like that, this retire overseas agenda can seem foolish, even terrifying.

So don't sell your home. Keep your car if you like it. Lock the lawn mower in the garage. Pack a few bags and head off to someplace that's got your attention for, say, a month or two. Don't even think about buying a house or anything else. Rent small and modest. Or arrange an extended stay in a B&B or guesthouse. Keep it low key and low pressure.

Because this doesn't have to be like jumping off a cliff. You can ease into the idea. Then, if you find the place you take for a test spin disappointing in some way, you can return home (remember, your car's waiting for you in the driveway)...and begin planning your next "retire overseas" holiday. Give someplace else a chance.

You could continue like this for years. You'd be enjoying some of the benefits of a new life in a new country (a reduced cost of living, better weather, cheap medical care, new friends, foreign adventures), but you'd have a safety net. What you'll find is that, with each retire overseas foray, your confidence will build. And your plan will evolve.

Next step, maybe extend the length of each retire overseas vacation. You could spend three or even up to six months at a time in each new place, depending on the jurisdiction's residency restrictions, thereby avoiding the visa issue.

You could begin renting out your place back home when you're not using it. This income would help to subsidize the expense of your retire overseas wanderings.

You could, eventually, invest in new digs in a place you decide you like well enough to want to return to regularly. Again, rent out this apartment or beach house when you're elsewhere to further supplement your retirement income.

Maybe, eventually, you find you're ready to sell your place back home, because, as time passes, your connection there seems less and less important. More interesting are the new places you're discovering, the new friends you're making, the new adventures you're having.

Take it one step at a time and let your retire overseas plan develop organically. Just as there's no one-size-fits-all overseas retirement haven, neither is there a retire-overseas plan that suits everyone. This idea is infinitely customizable.

Earlier this year, Lief and I began offering a Live Overseas Personal Consulting service. Already, I'm struck by the diversity of situations among our clients. One is looking for a place at the beach where he can spend two or three months at a time...then return home to his wife who continues to work and isn't ready to make a move. Another is looking to build a portfolio of second homes to which he could escape now and then but that, important to him, would generate good yields over time. One is interested in snow-birding it in the Tropics. And another wants to clean-slate it, to sell everything she owns right now and to start over, full time, someplace new and exciting.

Each agenda makes sense in context. And none might make sense for you.

My point is that you don't need to make that determination now or before you set out. Keep it simple. Take a trip.

Kathleen Peddicord

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This Ain't Easy

The personal and financial benefits and advantages of a new life in a new country are many and can be extraordinary. You can figure out how to position yourself to enjoy them on your own, in time...or you can get help.

With that in mind, we've created an exclusive opportunity:

Live Overseas Personal Consulting

This is the best offer of help you're ever likely to receive. If you're ready to make your move, we're ready, too. We'll work with you, one-on-one, to get you from where you are now to wherever you're dreaming you'd like to be. It won't always be easy, but, with our help, it'll be far easier than it ever could be otherwise. And a lot of fun, too.

This never-before-made-available, one-of-a-kind, one-on-one hand-holding service could be just what you've been looking for to get you from where you are now to where you dream you'd like to be.

Go Here Now To Learn More

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P.S. What else this week?

"Geographically, Belize is in Central America," writes Correspondent from that country Phil Hahn, "yet its strongest ties are to the English-speaking Caribbean. Similarly, it is a developing country on the path of progress, but boasts a secure foundation with a history of stability. The combination of these unique qualities creates a land of opportunity.

"And nowhere in the country is that opportunity more pronounced right now than in the district known as Cayo.

"This corner of the world avoided the over-speculation that ran rampant last decade in other real estate markets around the globe, including on Belize's own Ambergris Caye, just offshore the mainland coast. This despite the fact that there is relatively little private land available in this part of the country. Most of the land in the Cayo in protected forest reserves, archaeological sites, and national parks. As the Cayo begins to attract attention, arable land and waterfront property are increasingly in high demand.

"Right now, though, this property market remains priced primarily for the Belizean. Yes, there are gringos here, but, for the most part, they arrived decades ago and assimilated into the local culture. They came to Belize as archaeologists, scientists, farmers, and other salt-of-the-earth types. While Cayo was still completely off the world's radar, they settled in to enjoy lives full of Indiana Jones-type adventures.

"Now the next generation of expats is arriving in the Cayo..."

"Whether it's to escape the cold, to get out of the rat race, or to find a new direction in life, you'll find activities and adventures to last a lifetime in the Cayo District of Belize," Phil continues.

"Some people come for a vacation, some for a second home, and others for a new life; Cayo welcomes them all.

"Belize is a schizophrenic little country, both Caribbean and Central American. Generally considered one of the best values in the Caribbean, it is, at the same time, relatively expensive by Central American standards. At least it can appear that way at first.

"However, like anywhere, the cost of living is highly dependent upon your lifestyle. The more time you spend here, the less expensive it can be. All too many expats fall into the trap of living overseas as if they are on vacation--living in a lavish resort-type setting and buying imported wine, food, and other products. After the first few months in their new home, they have blown their budgets and never get settled in.

"The key to maintaining a low cost of living is to get to know the local vendors, farmers, and suppliers. I have Belizean friends who enjoy higher standards of living than many 'First World' residents I know..."

"The flames engulfed the large rubber ball, which was coming toward me, trailing plumes of thick black greasy smoke," writes Central America Correspondent Michael Paladin.

"The warrior with the black and white skull painted on his face followed the burning ovoid, flailing at it with a crudely made Maya version of a hockey stick. The other players chased him, dressed in breech clouts, padded armor, and streaked black make-up.

"Where in the world was this taking place? Antigua, Guatemala. The occasion was the re-enactment of the traditional Maya game, pok-ta-pok, benefiting a local NGO that's trying to preserve the growing and export of cacao in the old ways. The ball, made of native rubber, is about 12 inches in diameter and weighs about 4 pounds. When it's soaked in gasoline (a non-traditional accelerant), the effects are spectacular..."

ALSO THIS WEEK: Intrepid Correspondent Paul Terhorst reports:

"I wrote recently to say that I can see the United States leading the way on increasing offensive visa and similar fees, as soon as some government study or other justifies it," remarks Intrepid Correspondent Paul Terhorst from Buenos Aires this morning, following up on an earlier report.

"Politicians have got to love a fee that only non-voters pay.

"Travel Insider points out that it's already happened. The United States will now charge foreigners US$150, instead of US$131, to get a visa. Reciprocity fees around the world will presumably spiral up, too. The U.S. also raised the price of passports, to US$135 for a first-time passport and to US$110 for a renewal.

"There's more: The U.S. will now charge US$82 to put extra pages in your passport. Until now, consulates around the world provided this service free. So we now pay first to get the new visas and fees stamped in our passports, then US$82 to get additional pages to hold them.

"The government says "the cost of the extra pages themselves, of having the pages placed in the book in a secure manner by trained personnel, and of completing the required security checks results in a cost to the U.S. government of US$82.48..."

AND: Resident global real estate investing expert Lief Simon reports:

A reader wrote this week to express concern at receiving information about buying and investing in international real estate in these dispatches. "It's not relevant to retirement concerns," he pointed out.

In fact, though, I see a direct connection. Diversifying your investment portfolio can be a critical part of maximizing your retirement nest egg. Unless you're retiring on your Social Security or pension income alone, you should be thinking, as early on as possible, about allocating part of your investment portfolio into real estate. And part of that allocation should include some international property assets, for diversification's sake (including, importantly, diversification of currency).

This diversification could be achieved just by buying a second home in Mexico or the Dominican Republic, for example, that you rent out when you're not using it. That rental income, while not likely to provide a huge yield if you use the property for six months a year yourself, still would add some cash flow to help support your retirement, while also providing some security in the form of assets held outside your home country. Then there are always the potential capital gains.

At the other extreme, a friend of mine has funded his "retirement" 100% by trading in international real estate. He buys and sells actively in key markets he has identified, mostly pre-construction. Taking advantage of the leverage pre-construction allows, he has been able to generate profits enough to afford himself a comfortable lifestyle while putting minimal cash at risk. For him, real estate investing is the critical topic in the context of his retirement plan...