Figuring Your Retire Overseas Budget

Figuring Your Retire Overseas Budget

“Kathleen, in your latest e-mail, you don’t make any sense. Previously you’ve talked about living on US$1,000 or US$1,200 a month or less. In this e-mail, you talk about a nest egg of US$500,000 to US$1 million. So which is it, Kathleen? I don’t understand.”

— Martin G., United States

It’s both, dear reader. The US$1,000 or US$1,200 per month is a good benchmark retire overseas budget. This would buy you a comfortable life many appealing places around the world. The US$500,000 or US$1 million nest egg I referenced could be the source of the monthly income to support that US$1,000 or US$1,200 budget.

If you’ve got Social Security or pension income of US$1,000 a month or more, you’re golden. If you don’t, you need another source of revenue (from investment yields or dividends, etc.) to cover your retirement life. In yesterday’s issue, I walked through some calculations to help you figure how much nest egg you’d need to generate enough revenue to cover you all the way to the end of your retirement, and I recommended a website called that my friend Paul Terhorst turned me on to as providing a good tool (called Firecalc) to help you do your own figuring.

Bottom line, if you don’t have Social Security or pension income to rely on, you need US$300,000 to US$400,000 of liquid capital, placed in yield- and dividend-producing investments, to enjoy a minimum-level retirement. Realistically, you’re going to need a bit more than that, maybe as much as US$500,000 to US$1 million, depending on your age and the standard of retirement living you want to enjoy.