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54 and selling everything..........
Old 09-22-2017, 12:36 PM   #1
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54 and selling everything..........

Hey, I'm Kris, 53, and next spring plan to liquidate all of my belongings and travel the US and World for the next several years. I'm single and my financial situation looks like this: The market in my area is pretty good, so I plan to sell my house and liquidate most personal items, so should have around $ 550K cash which I will need to invest, with zero debts. I have $ 685K in a 401K, $ 100K in a mutual fund account, and $ 18K in Prudential stock, for a total of just over $ 800K currently in what I consider retirement accounts.

My plan is to invest most all of the $ 550K and live off the gains and whatever I may need to draw down for the next 10 years while letting my retirement accounts grow until I reach somewhere in the 62 to 67 age range. I gather from extensive internet research (dangerous, I know) that backpack type slow budget world travel, especially to LA, SA, and SEA can be done for much less than $ 35K per year. With that, FIREcalc is giving me 83% probability at $ 45K withdrawal per year over 10 years. I can live with that. (If it does not work, I stop traveling and get a job part time some years). FWIW, FIREcalc shows 100% success of retirement at the 12 year mark with 100K per year withdrawal for 20 additional years assuming the $ 550K is gone, and the $ 800K goes untouched to grow until 2030 (the 12 year mark). I have not included SS in my calcs.

So, a big key is obviously keeping close watch on first 3 or 4 years to make sure plan is working. While I can build roads and bridges, and am very adept at budgeting and estimating, I know practically nothing of investing in the stock market. My options are to turn over my portfolio to a manager (yuck at 1% per year!), or do it my self, which fits my personality. I will be traveling out of the country 80% to 90% of the time, so internet security concerns me, and I don't want to spend 10 hours a week on a computer trying to manage my money anyway. I would like to set up accounts where a set amount is automatically deposited monthly into an account(s) I can use via ATM's. How do I do this? Advice is welcome please!
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Old 09-22-2017, 12:55 PM   #2
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Hey Kris, Welcome!
I'm sorta in the same position as you, at least in the ready to travel the world. I don't think I'll be selling my home, but renting part of it.
Been certainly looking at the automating and locking down accounts for longer term travel.
I assume you read the book named after your username?
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Old 09-22-2017, 12:58 PM   #3
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This 35K includes health insurance? A nice dental implant is 4k. Ill formulate more questions and answers, but this is a start.


Welcome to the forum.

You can build bridges and roads, but cant set up a monthly deposit to your account for ATM access. Interesting.

[mod edit]

But Im giving your more problems than answers. So here is one answer. When you select your financial broker(we mostly all suggest Vanguard or Fidelity), tell them I want 3000 bucks a month deposited into my checkbook every month. They may offer you some options like, "you want your dividends or capital gains sent too". Ask them what that means, and then decide.
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Old 09-22-2017, 01:04 PM   #4
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Yes, I read the book! Very inspiring.


I think my budget for the first 3 to 4 years will be around 25K actually, so 35K should be heavy. Therefore, yes, the 45K I am budgeting for included HI. And if I understand what I have read about the ACA, I should qualify for subsidies after a year.
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Old 09-22-2017, 01:18 PM   #5
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As far as investing, Vanguard and others have a wide variety of balanced funds and target-date retirement funds.... just pick a fund that jives with your risk tolerance and you're done. Vanguard's Life Strategy Moderate Growth might be a good choice if you want a 60/40 fund... if any rebalancing is needed then they will do it for you and the ER is a whopping 0.14%.

You can then set up a monthly automatic redemption of $x and have it go to a bank account so you can withdraw funds from ATMs.

One the Obamacare subsidies... just be aware that there is some risk that they may no longer be around.
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Old 09-22-2017, 01:38 PM   #6
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Hi Vagabonding, welcome to our community. Remember this is the interwebs, so a thick skin is a definite advantage.

We have some members that are permanent global travelers. One that comes to mind is Kramer (see his profile here). I'm sure if you browse his posts you will find quite a few that address specific questions you may have.
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Old 09-22-2017, 07:04 PM   #7
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Sounds good to me
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Old 09-22-2017, 07:48 PM   #8
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Welcome, Vaga.
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Old 09-23-2017, 07:43 AM   #9
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Originally Posted by vagabonding View Post
Yes, I read the book! Very inspiring.


I think my budget for the first 3 to 4 years will be around 25K actually, so 35K should be heavy. Therefore, yes, the 45K I am budgeting for included HI. And if I understand what I have read about the ACA, I should qualify for subsidies after a year.
Will Obamacare be of much use if you are traveling 80% to 90% outside the USA?
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Old 09-23-2017, 08:31 AM   #10
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This 35K includes health insurance? A nice dental implant is 4k. Ill formulate more questions and answers, but this is a start.


Welcome to the forum.

You can build bridges and roads, but cant set up a monthly deposit to your account for ATM access. Interesting.

It wasn't the Kutai Kartanegara Bridge was it? https://en.wikipedia.org/wiki/Kutai_Kartanegara_Bridge

But Im giving your more problems than answers. So here is one answer. When you select your financial broker(we mostly all suggest Vanguard or Fidelity), tell them I want 3000 bucks a month deposited into my checkbook every month. They may offer you some options like, "you want your dividends or capital gains sent too". Ask them what that means, and then decide.


I guess I missed the $4,000 nice implant. Mine were just a tad higher plus costs of extractions
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Old 09-23-2017, 08:42 AM   #11
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Remember you will need to file a US tax return for the Feds, and you can be sure your State will consider they want their share as well, so perhaps you will need to set up residency in a tax free state before leaving the Country ?

You could probably get travel insurance for medical stuff as it would be good for the first 2 months, every country is going to have it's own rules about health insurance.

Your idea of working, do you mean back in the US ? because again, unless you want to work for low cash wage jobs, you will be the foreigner in most other countries, with the poor language skills.

I'm guessing you already have a credit care with zero foreign transaction fees, and a debit card that charges no fee to withdraw at foreign ATM's. Otherwise you will be spending nearly $500 in fees each year. ($5 atm fee x 52 weeks + $15,000 x 3% FT).
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Old 09-23-2017, 11:45 AM   #12
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I gather from extensive internet research (dangerous, I know) that backpack type slow budget world travel, especially to LA, SA, and SEA can be done for much less than $ 35K per year.
If you manage to spend $35k living the backpacker life in SEA you must be living pretty high on the horse. If all you want todo is sit on the beach in Thailand, drink Chang and eat noodles all day you can pull that off for <$1000/mo.
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Old 09-24-2017, 06:21 AM   #13
Confused about dryer sheets
 
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Thanks for all of the replies. It's really quite scary contemplating becoming homeless; on the other hand, the world will be my oyster.

To reply to some of the comments:

I have never had dental insurance, and most of the people that I know do not either. But the cost of an implant in Costa Rica or Ecuador runs $ 1,000 to $ 1,500.

I want to maintain health insurance in the US because I have an elderly mother and do not know when I may have to return to help care for her. Also, at some point, part of my plan is to see a lot of the national parks in the US, and to do a good bit of long distance hiking. I will be living off-grid in a camper, or backpacking. I understand that a budget of $25K per year would be quite high for backpacker travel in LA, SA, and SEA, and I can't imagine spending that for off-grid living here either. So, if health insurance costs me $12K, that's in my budget. FWIW, I set my budget of $45k by reverse FIREcalc to give me an 83% probability over 10 years. If the markets hold their own over the next 3 to 4 years, I plan to up my budget and start to travel to more expensive countries.

Travel insurance is in my budget and will cover health (including emergency dental), belongings, missed flights, etc. Also, I do intend to change my residence to South Dakota for tax purposes, and I will be opening a Schwab account for no ATM fee withdrawal worldwide.

Pb4uski, thank you for the advice on Vanguard funds. It appears much more simple than I have been led to believe. Financial advisers obviously have their own agenda.

Blue Collar Guy, thank you for pointing out my shortcomings. That's why I posted my plan here in the first place. But I cannot imagine a rewarding life wherein I retire, and 9 years later my hobby is to sit on retirement websites and criticize someone contemplating retirement.

I do have lots more questions about managing my portfolio, such as should I convert my 401K to an IRA upon retirement, should I sell my Prudential shares and re-invest to my IRA, diversification of investments, whether to start some withdrawals from pretax savings at 59 1/2 etc., but that may be better asked on another forum. Anyway, it seems that this site is mostly full of well meaning, knowledgeable people, and thank you all for your advice and suggestions! Carpe diem!
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Old 09-24-2017, 07:17 AM   #14
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My universal question is always: what do I tell governments about how to reach me, and where I live?

Still haven't found a clear answer on that one. I don't want to lie and 'live' at an address of a relative, and P.O. boxes aren't allowed where I'm from.

Financially speaking: budget sounds rather high, especially for cheaper Asian countries.
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Old 09-24-2017, 07:41 AM   #15
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My universal question is always: what do I tell governments about how to reach me, and where I live?

Still haven't found a clear answer on that one. I don't want to lie and 'live' at an address of a relative, and P.O. boxes aren't allowed where I'm from.
This is all from memory:

Revenue Canada, (the Canadian tax arm), has/had the philosophy that "Everyone must live somewhere", and P.O. boxes aren't/weren't considered acceptable here either.

When my late wife & I were fulltime Rving we used Mail Boxes Etc. https://en.wikipedia.org/wiki/Mail_Boxes_Etc. for a time. They provided a 'Unit Number' (yeah, it's just semantics, and I haven't checked on its acceptance for almost two decades).

We then used another 'loophole' to the effect that "A friend/relative kept a 'designated area' (seems it could've been in the basement with all the junk for all that anyone cared) available for us to live" (in our case my late wife's mother)......nobody ever followed up, or registered concern; it seemed to be sufficient that 'all the appropriate boxes were checked off'.

Bottom line it appeared that, as long as the Tax people got their cut, and the forms were filled out, nobody actually gave a damn.
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Old 09-24-2017, 10:38 AM   #16
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Blue Collar Guy, thank you for pointing out my shortcomings. That's why I posted my plan here in the first place. But I cannot imagine a rewarding life wherein I retire, and 9 years later my hobby is to sit on retirement websites and criticize someone contemplating retirement.
Your very welcome. I see you solved your ATM question, any further questions feel free to post, Ill help you work your way thru them.

If the time comes and you need to care for your elderly mother and you decide to interrupt your travels to help her you will also enjoy this forum as a hobby.

Your spending budget will drop like a rock. A couple of boxes of rubber gloves, and some take out menus and your all set.
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Old 09-24-2017, 10:39 AM   #17
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.....

I do have lots more questions about managing my portfolio, such as should I convert my 401K to an IRA upon retirement, should I sell my Prudential shares and re-invest to my IRA, diversification of investments, ....

Yes to 401K to IRA so you have control and put it where there are no account fees,
Yes to sell Prudential shares unless you want to continually monitor it for years..
Yes to auto drip reinvestment in your IRA.
Diversify your stock holdings before you leave to 70/30 mix in very broad ETF's like:
VTI, BND, VEA as a simple example.
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Old 09-24-2017, 04:46 PM   #18
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But I cannot imagine a rewarding life wherein I retire, and 9 years later my hobby is to sit on retirement websites and criticize someone contemplating retirement.
Most are trying to help. Please don't take it personally.

They offer constructive advice, are retired accountants, attorneys, and financial advisors so they know a lot about preparing and executing retirement.
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Old 09-24-2017, 09:43 PM   #19
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Will you own any federal income taxes (capital gains) on the sale of the house or have you already taken that into account in the total $$ you will have available after the sale?
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Old 09-26-2017, 04:37 AM   #20
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Will you own any federal income taxes (capital gains) on the sale of the house or have you already taken that into account in the total $$ you will have available after the sale?

I don't think I will have to pay capitol gains, but it will probably be close. Thank you for pointing this out though.
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