• About Us
  • Contact Us
  • Privacy Policy
  • Terms
  • Unsubscribe
No Result
View All Result
Live and Invest Overseas
FREE REPORT
BEST PLACES TO RETIRE
*No spam: We will NEVER give your email address to anyone else.
  • HOME
  • COUNTRIES
    • Top Destinations
      • Portugal
      • Panama
      • Belize
      • France
      • Colombia
      • Dominican Republic
      • Thailand
      • Mexico
      • Spain
      • Argentina
    • Browse All Countries
    • Best For
      • Retire Overseas Index
      • Health Care
      • Cost of Living
      • Investing in Real Estate
      • Editor’s Picks For Retirement
      • Establishing Residency
      • Starting an Online Business
      • Single Women
      • Playing Golf
  • BUDGETS
    • Super Cheap ($)
      • Cuenca, Ecuador
      • Chiang Mai, Thailand
      • The Philippines
      • Las Tablas, Panama
      • Granada, Nicaragua
    • Cheap ($$)
      • Algarve, Portugal
      • Medellin, Colombia
      • Boquete, Panama
      • Carcassone, France
      • Buenos Aires, Argentina
    • Affordable ($$$)
      • Abruzzo, Italy
      • Barcelona, Spain
      • Las Terrenas, Dominican Republic
      • Puerto Vallarta, Mexico
      • Costa de Oro, Uruguay
    • Luxury On A Budget ($$$$)
      • Ambergris Caye, Belize
      • Paris, France
      • Panama City Beach Area
  • Real Estate
  • ARCHIVES
    • Living & Retiring Overseas
    • Raising A Family Abroad
    • Foreign Residency & Citizenship
    • Offshore Diversification
    • Our Latest On Coronavirus ⚠️
  • Making Money
    • International Real Estate
    • Banking
    • Employment
    • Investing
  • CONFERENCES
  • BOOKSTORE
Live and Invest Overseas
  • HOME
  • COUNTRIES
    • Top Destinations
      • Portugal
      • Panama
      • Belize
      • France
      • Colombia
      • Dominican Republic
      • Thailand
      • Mexico
      • Spain
      • Argentina
    • Browse All Countries
    • Best For
      • Retire Overseas Index
      • Health Care
      • Cost of Living
      • Investing in Real Estate
      • Editor’s Picks For Retirement
      • Establishing Residency
      • Starting an Online Business
      • Single Women
      • Playing Golf
  • BUDGETS
    • Super Cheap ($)
      • Cuenca, Ecuador
      • Chiang Mai, Thailand
      • The Philippines
      • Las Tablas, Panama
      • Granada, Nicaragua
    • Cheap ($$)
      • Algarve, Portugal
      • Medellin, Colombia
      • Boquete, Panama
      • Carcassone, France
      • Buenos Aires, Argentina
    • Affordable ($$$)
      • Abruzzo, Italy
      • Barcelona, Spain
      • Las Terrenas, Dominican Republic
      • Puerto Vallarta, Mexico
      • Costa de Oro, Uruguay
    • Luxury On A Budget ($$$$)
      • Ambergris Caye, Belize
      • Paris, France
      • Panama City Beach Area
  • Real Estate
  • ARCHIVES
    • Living & Retiring Overseas
    • Raising A Family Abroad
    • Foreign Residency & Citizenship
    • Offshore Diversification
    • Our Latest On Coronavirus ⚠️
  • Making Money
    • International Real Estate
    • Banking
    • Employment
    • Investing
  • CONFERENCES
  • BOOKSTORE
No Result
View All Result
Live and Invest Overseas
No Result
View All Result
Home Countries Panama

Start Preparing For An Early Retirement Overseas

Live And Invest Overseas by Live And Invest Overseas
Oct 29, 2015
in Panama, Retirement/Living
0
Start-Preparing-For-An-Early-Retirement-Overseas
212
SHARES
3k
VIEWS
Share on FacebookShare on Twitter

Ratchet Down Your Current Life To Retire Better, Freer, Cheaper Overseas

What’s the best way to retire now rather than at some point in the future? Get a handle on how you spend.

If you’re like most of us, you’ll find you spend some 80% to 85% of your income on just three things: housing, transportation (your car), and taxes.

Prove it to yourself. Look at your tax return to see how much money you earned last year. Then break down your spending during those 12 months. Start with housing—your mortgage payments, property taxes, maintenance, cleaning, furniture, and insurance. If you rent, you’ll have expenses for rent, utilities, cleaning, and insurance.

Next move to transportation—car payments, insurance, gas, parking, licenses, registration fees, and repairs. You don’t have to work hard to get exact numbers; estimates will do.

Finally, add up your taxes, including income, Social Security, Medicare, and state and local taxes. Estimate sales taxes you pay.

I predict those three figures will easily add up to 80% of your total income. Work through this exercise, and you’ll begin to wonder how you have money for a cup of coffee, a movie, or a dinner out.

I propose, however, that you look on the bright side of this exercise. You’ve just discovered a way to retire much sooner rather than later if you’re up for it.

Getting rid of taxes becomes the easiest hurdle—just stop working. You eliminate income taxes, payroll taxes, all of it. Join the nearly 40% of working-age Americans who have left the labor force.

Next up: Your car. Just get out from under it. A majority of the world’s population lives without a car. You could become one of them.

Finally (and here’s the real secret), move overseas. Reposition yourself to a low-cost destination where you could retire easily and well without income other than savings and/or Social Security and without a car.

You’re on your way.

I’ve simplified the strategy to make a point. Most of us work and struggle just to pay our housing, vehicle, and tax expenses. Maybe you’re satisfied with this grinding approach to life, but maybe you’re looking for alternatives.

If you’d like to make a change, start by accepting the idea that it is possible for you to live a life that allows you to spend your days however you’d like rather than doing what earns you enough to pay the bills. In other words, it is possible for you to retire now, regardless of your age or retirement nest egg.

But quit work? Where would you get the money to live? Sure, you hate paying 85% of your income just for the privilege of working. Then again you need some money to get by.

If you’re old enough, you could take Social Security. I recommend you consider collecting as soon as you are eligible. Don’t wait for a maximum monthly payout at some point down the road. I’ve known people living some places overseas on as little as US$500 or US$600 per month. In parts of Mexico, Panama, Nicaragua, Ecuador, Thailand, the Philippines, and beyond, it’s possible to rent a small room for as little as US$100 to US$200 a month, all in. Your housing and utilities covered, whatever budget you have left over is for eating and entertaining yourself. We all hope to have more than US$500 or US$600 per month to retire on, but my point is that, even on that very modest budget, it’s possible to live a pretty fair life if you’re willing to consider the whole world of possibilities.

If you’re too young for Social Security, or if you need to supplement those monthly checks, consider an online business. I’ve known people with successful coin, engine parts, travel writing, transcription, and advice businesses online. Getting something like this off the ground can seem daunting but apply a little imagination. You’ll come up with something.

What about transportation? In many places around the world, you could get around as you needed and wanted using public transportation and taxis. In Bangkok, for example, seniors enjoy discounts on buses and the metro and taxis cost a dollar at the flag. A short trip from one neighborhood to another costs only US$3 to US$5. This is one of dozens and dozens of places where transportation costs would be a negligible part of your budget.

It can be easiest and best to take this in steps. Shift from your current, perhaps well-appointed life, to your new, simpler but freer life in stages. Call it the ratchet-down process. You can test your tolerance for a simpler life in a foreign land through a series of trips. Try out destinations as well as accommodation and lifestyle. How basic are you willing to go? The answer to that question will help you to define your budget. In this new life overseas, you’ll have less money than you have now (probably). You’ll also likely have less space and less paraphernalia.

What you’ll have a whole lot more of is freedom and control. It’s a trade-off that you should address directly and honestly. How much stuff are you ok giving up in exchange for newfound absolute control over your time and how you spend your days?

Take transportation. In the beginning, many people find it hard to live without a car. Again, you can ratchet down. You could start out with a rental, for example. Or you could make a deal with a private driver or rent a motorbike. Then ratchet down to using taxis and maybe riding a bicycle. Next step public transportation and walking. If, as you try different transportation strategies on for size, you find that you just don’t like living without a car of your own, then develop a budget for owning one in the place where you’re living. If your current level of retirement income doesn’t support your owning-a-car budget, consider where else in your budget you might make a cut… or ideas for how to generate a little more cash flow each month.

Many people continue working for the privilege of working, spending 80% or more of what they make to pay the bills necessary to supporting a working lifestyle. If that’s your choice, great. However, I recommend you take stock of your life and consider the alternatives for how you could be spending your time and your money. Know that you could ratchet down to a new life in a new country. You could find a dream come true. Certainly, you’ll have an adventure.

Paul Terhorst

Editor’s Note: Paul Terhorst retired at age 35 and has been traveling the world for more than 30 years since. Paul writes a monthly retirement-planning column for our Overseas Retirement Letter, available here.

Continue Reading: Time To Start A New Life Overseas In 2020

Tags: 'how to retire overseas'Paul Terhorstretire earlyretirement planning
Share85Tweet53
Previous Post

Options For Visas And Residency In Panama

Next Post

Figuring The Exit Tax For US Expatriates

Live And Invest Overseas

Live And Invest Overseas

Live and Invest Overseas is the world's savviest source for top opportunities to live better, retire in style, invest for profit, do business, and own real estate overseas. Established in 2008, the Live and Invest Overseas' editors and correspondents have more experience researching and reporting on top opportunities for living well, investing for profit, doing business, and owning real estate around the world than anyone else you'll find.

Related Posts

Thai style garden located in Royal Park Rajapruek, Chiang Mai, Thailand.
Investing

The Best Way To Beat Inflation For Retirees

by Kathleen Peddicord
June 26, 2022
0

Inflation is running at better than 8%... the greatest rate in more than 40 years. Your weekly grocery shop is...

Read more
Guanajuato, scenic city lookout near Pipila

How To Love Your Life Abroad After The Honeymoon Period Is Over

June 24, 2022
Paradise islands with white sands and clear waters in San Blas, Panama

Things You Must Know About The Wonderful San Blas Islands

June 23, 2022
Taipei's City Skyline at sunset with the famous Taipei 101

The Top Affordable Places To Retire In Asia And Live Well

June 19, 2022
Porto, Portugal

Where (And Why) Should You Buy Property Overseas In 2022?

June 15, 2022
Panama City with high skyscrapers and port on the Pacific coast

The Ultimate Panama Second-Hand Shopping Guide For Expats

June 9, 2022
A grid with several Latin American countries

Finding The Best Places To Live In Latin America

June 9, 2022
Next Post
Figuring The Exit Tax For US Expatriates

Figuring The Exit Tax For US Expatriates

Start Your New Life Today, Overseas

A world full of fun, adventure, and profit awaits! Sign up for our free daily e-letter, Overseas Opportunity Letter, and we’ll send you a FREE report on the 10 Best Places To Retire In Style Overseas Today.







Get Your Free Panama Report Today!

​​Simply enter your email address below and we'll send you our FREE REPORT - 101 Things You'll Wish Someone Had Told You About Panama.
 

LIOS Resources


  • New To LIOS
  • Ask An Expert
  • Media Center
  • Contact Us
  • FAQs

Quick Links


  • Best Places To Live
  • Best Places To Retire
  • Finding A Job Overseas
  • Real Estate

Sign up for our free daily e-letter, Overseas Opportunity Letter, and get your FREE report: The 10 Best Places To Retire Overseas In 2022

  • About Us
  • Contact Us
  • Privacy Policy
  • Terms
  • Unsubscribe

© 2008-2021 - Live and Invest Overseas - All Rights Reserved.

No Result
View All Result
  • Home
  • Countries
  • Budgets
  • Archives
  • News
  • Events
  • Bookstore
  • Newsletters
  • About Us
  • Members Area
  • Contact Us

© 2008-2021 - Live and Invest Overseas - All Rights Reserved.

Sign up for FREE and learn how to live the good life on a modest budget, find bargain property, and more. Plus, check out our free report on the 10 BEST PLACES TO RETIRE.

RETIRE OVERSEAS AND LIVE LIKE ROYALTY

The World’s Best Places To Be In 2022?

Discover Them Here…

Get Your Free Panama Report Today!
 

​​Learn more about ​​​PANAMA and other countries in our free, daily Overseas Opportunity Letter​​, as well as our ​In Focus: ​Panama ​newsletter​​​​​​. Simply enter your email address below and we’ll send you our FREE REPORT – ​​​101 Things You'll Wish Someone Had Told You About Panama.