Life At 50+
I’m preparing for my presentation tomorrow at AARP’s national convention here in D.C. this week. My part of the Life@50+ program has to do with (you guessed it) retiring overseas. They sent sample questions to help ready me for the panel discussion:
1. What do you think is the main reason Americans are choosing to retire overseas?
You could answer this question as well as I, dear reader. It’s the economy…the cost of living…the cost of health care… The truth is, more and more would-be retirees in these United States are finding they can’t afford not to retire abroad. Retiring in the States, you risk outliving your nest egg…working many more years than you intended…and scaling back and reducing your standard of living during this important phase of your life.
In the States today, retirement is increasingly about getting by and making do…and worrying that everything will come out ok in the end. In a dozen places outside the States, retirement is about starting over…maybe even living better than you did during your hard-working years.
2. Are retirees abroad looking for a permanent vacation?
Maybe…some of them…but, more than a vacation, I believe the retiree abroad is in search of a new chance. Sure, retiring overseas, you’re looking to live well and comfortably on a budget that guarantees your retirement nest egg will last at least as long as you do.
But you also want to live with a purpose. You want a reason to get out of bed in the morning. You decide what that is, of course. Maybe you pursue an interest you had to set aside until now, as you raised a family or made a living. What did you want to be when you grew up? Be it now.
Maybe you’d like to start a new business…learn a new language…take up the tango…write a book…
Or maybe you want to give something back, as they say. Volunteer at an orphanage (I’m planning to do this in Panama City, at the Fatima Parish in Casco Viejo). Did you teach in your previous life? Were you a health care professional? Maybe help out in a local school or at a children’s hospital.
3. Do retirees abroad leave for good or do they make trips back and forth, spending half the year outside the States and half the year back home with family?
Retirees abroad do both things and everything in between. I know many retirees abroad who haven’t been “back home” for years. Maybe their families come to visit them…maybe their families eventually join them living outside the States!
I know many retirees abroad who divide their time, spending so many months a year at a U.S. home base and so many months a year elsewhere.
And I know many retirees abroad who are perpetually on the move. Correspondents Vicki and Paul Terhorst, for example, move around among a handful of places they’ve identified, after 25 years of scouting, as most appealing and most suitable for them…including Paris, Buenos Aires, Chiang Mai…
This is Lief’s and my plan. We’re working toward being able to spend time each year in the places we most enjoy—France, Argentina, Croatia, Panama, Nicaragua…
4. Do people change their minds and come back for good?
I’m sure this must happen, but, in 24 years covering this beat and speaking with retirees abroad in all corners of the globe, I haven’t met one who decided to return home and give up on the idea of retiring overseas altogether.
I’ve met people who weren’t happy with their first choice of retirement haven…and who sought out a second Paradise. I’ve met people who’ve realized one retirement haven wasn’t enough…and decided to join Paul and Vicki Terhorst in serial retirement.
But I’ve not met anyone who regretted the move so much he (or she) retreated.
Once you’ve made the first step, a new world opens up for you. You realize your options for living better and well are many. You don’t look back. You don’t have time. You’re too busy considering all the chances in front of you.
5. What marching orders would you give to anyone considering this idea right now?
Get on a plane.
P.S. Other possible topics for the panel discussion tomorrow:
When is a good time to begin investing in real estate overseas?
Right now. There’s always opportunity somewhere. Look today to the western Pacific coast of Panama’s Azuero Peninsula, for example; to land buys in Argentina; to a second home on the coast of Uruguay; to turn-key retirement with a condo in Nicaragua; to a light leaseback in France (this can be an ideal retirement play); to Abruzzo, an affordable and delightful corner of Italy…
How much is enough? That is, how much should you have saved in a retirement account before thinking about retiring overseas?
You can live safe, well, and comfortable right now in Ecuador on as little as $1,240 per month. This amount would allow you to rent, meaning you wouldn’t have to come up with the capital to invest in your own home.
In other words, if you’re receiving a pension or Social Security of more than $1,240 a month, you could retire to Ecuador today even if your retirement savings are zero.
Otherwise, use the 4% rule. Figure 4% of your retirement funds…and that’s your annual budget for retirement living. If you have $500,000 (in retirement accounts…equity in your home…etc.), you’re looking at an annual retirement living budget of $20,000…or about $1,700 per month.
And, yes, that’s enough.