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How To Budget Your New Life In Paradise

“I read your current issue on retiring to Languedoc, France” writes an Overseas Retirement Letter subscriber, “and I was struck by the budget you put forward. We just returned after living in the Uzes area for three years. Our monthly costs were less than in the U.S. but much more than your Languedoc budget of US$1,394.

“We have a family of three, and we found that, to live comfortably and to be able to do anything, our budget was 3,000 euro a month.

“Even if I allow for the fact that your budget is based on a couple, not a family of three, that’s a big difference.

“Our EDF bill, averaged out over 12 months, was 133 euro a month, not what you indicate. Our phone bill was higher, too (granted, maybe you can reduce this cost using Orange).

“Our car insurance was 900 euro a year, plus we had property taxes and house insurance.

“Plus, this does not include any additional travel that one would want to take from the area.”

Contributing Editor Lucy Culpepper, who prepared the Languedoc retirement report and who has herself settled in this southwest region of France, replies:

“You’re comparing apples and pears, dear reader.

“As you explain, you have a family of three, and the budget we’ve detailed in our report is for a couple.

“Plus, as you know, there are so many variables to consider that you just can’t factor them all in. What we’ve done is to provide a kind of starter-budget. It is accurate and current and includes all basic living expenses. In fact, a couple could live in this region of France on about US$1,500 a month, as our numbers indicate.

“Or you could spend two times as much or more to live in the same place.

“Start with our budget and then add and subtract from it, according to your lifestyle, your priorities, and your preferences.

“For example, our budget indicates US$100 once a week for entertainment, or US$400 a month. Frankly, I don’t think that, living in Languedoc, you’d spend that much on entertainment. Depending what you like to do with your leisure time, you could see a savings here.

“A couple in a small house/apartment probably wouldn’t need home help. Our budget includes US$120 a month for a maid, so that could be another savings.

“You can spend as much or as little as you want on food, especially in a place like Languedoc, where there is such an abundance of very affordable local produce, especially in summer, for example.

“One important expense that is not included in our budget is health care. This is tricky to budget. Some people we know choose to go without health insurance. That may sound crazy to you, but this can make sense, especially in a place like France, where world-class health care is more affordable than you’d imagine.

“Health care and health insurance are personal things that merit serious consideration. We can’t budget these for you. You’ve got to decide: Do you want to arrange local health insurance? An international health insurance policy?

“Or do you want to go without insurance at all and pay your medical expenses as you go?

“Once you’ve made your decision, then, right, that’s an additional cost to add to your annual budget.

“To help you think this through, we provide current costs in every Overseas Retirement Letter report for everything from blood work to physiotherapy.

“Another big variable, as you suggest, is travel.

“Maybe this is a big part of an annual budget…or maybe not.

“Maybe you want to travel all over Europe and to and from the States regularly.

“Or maybe you’re content taking more low-key trips–by car to Barcelona, Spain, for example (which costs about 150 euro in a gas-guzzling old car, including fuel and tolls).

“I consider a good day out to be a walk through the vineyards with a picnic and a local bottle of wine. In Languedoc, you can do that as often as you like without breaking even a modest living budget.

“Our budget includes monthly rent. If you’re paying this…you’re not paying property taxes (which are nearly negligible in France). On the other hand, if you own your own home, you’re not paying rent.

“Regarding phone expense: Frankly, if you paid more than we detail in our report, you paid more than you needed to. Our figure of US$38 a month includes TV, Internet, and local phone service, as well as free calls to land-line numbers in the United States and elsewhere. It’s a nearly unbelievably good rate, but it’s the real deal. And it’s one of the benefits of life in France–excellent infrastructure at super-bargain prices.”

Kathleen Peddicord

P.S. You can read Lucy’s full report on retirement in Languedoc, France, in the current issue of the Overseas Retirement Letter. If you’re not a subscriber, become one here now.

MAILBAG:

“Kathleen, why did you not include Ireland on your list of the world’s 20 top retirement havens?

“Would you provide an update on what’s going on currently in Ireland in your next letter?”

— Eileen M., United States

As The Economist reported last week regarding Ireland’s economy, “The party is definitely over.”

“Ireland is having a deeper recession than any other euro country. The country’s economy probably shrank by 2.5% in 2008 and may contract by another 6.5% this year.”

However, that’s not why I didn’t include the Emerald Isle on my list of the world’s top 20 retirement havens.

I stopped recommending Ireland as a place to think about living or retiring six or seven years ago. By that time, both the cost of living and of real estate had risen to the point where they didn’t make sense for the would-be retiree.

Plus, the face of Ireland has changed. The charming villages have become surrounded by cardboard-cut-out housing developments (they call them “estates”). The pubs are staffed these days by East European opportunity-seekers. And every bad American idea, from 100%+ financing for property purchase to fast-food dining, has been imported and embraced countrywide.

We were living and doing business in Ireland from the tail end of the Celtic Tiger (1998) until the pre-dawn hours of the day-after hangover that the country is currently suffering through. We came to Ireland for affordable English-speaking labor and a low cost of doing business. By the time we left, these things no longer existed.

Fast forward five years, and Ireland today…post-party Ireland…just might make sense again for the retiree looking for country living on the cheap. In fact, the situation is so dramatically changed (and changing) that we’ve decided to add Ireland to this year’s editorial calendar for the Overseas Retirement Letter.

As Overseas Retirement Letter Editor-in-Chief Lynn Mulvihill, a native of Waterford, Ireland, puts it, “Ireland is not somewhere you’d want to come today looking for a job…or to invest in property. But for the retiree, it still has its charms. And there are bargains to be had right now from houses to cars to day-to-day groceries. I’m loving the slashed prices!”

Overseas Retirement Letter subscribers can look forward to Lynn’s full report later this year.

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“I’ve just read the letter from the British couple, and my question is this: Have they considered South Africa?

“Lots of British people looking for the same things as this couple have found that South Africa provides the lifestyle they are looking for at the right price.

“I am British and have been living here for 20 years. We were in Malaysia last year and found it to be more expensive than South Africa. In fact, everywhere seems to be more expensive than here!

“Plus, of course, the climate is better here. We found Malaysia to be very humid, and I guess Panama would be the same. South Africa is arguably one of the most beautiful countries in the world. It has a fantastic climate, First World infrastructure, incredible restaurants, wine estates, beaches, the people are welcoming, and everyone speaks English.

“Lots of people are put off because of the publicity about crime and violence; however, like many other places in the world, this all depends on where you live. Our advice would be to avoid Johannesburg.

“We live on a golf estate near Cape Town, and more than half the residents here are from Europe. Safety and security is not an issue at all. We go out at night regularly, live with our doors and windows open, and, like virtually everyone else we know, have never had a problem or felt threatened in any way.

“If you are looking for a fabulous lifestyle at a fantastic price, this country, in our view, offers the best option.”

— Jenny W., South Africa

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