Am I close?

[Amy T]

I like diversity but that makes calculations complicated. I am approaching 48, debt free, no children or obligations. I want a budget of 25 - 30k per year. I have experienced living on 1k / month in Ecuador. I loved it and is fine for me for day to day living but want to add another 1k+ for travel and entertainment.

Budget 2k per month
Current Income 1k /mo net from rental (150k assets)
1k/mo from cash 100k earning 2.35% (evaluating investment options market vs. rental vs. place to call "home")
Cash to last me to age 60.

60 to 70 1k/mo from Roth (current value 60k)
70 tapping into SS (I anticipate living to 110) hoping for 1k/mo
age 65 will receive around 200 euro/mo Belgium SS
Other assets
165k in traditional IRA and 401k
40k euro defined benefit lump sum age 65 taxed at 50%

My budget is based on living in a country with good health care at reasonable price (100 - 300 /month). I am healthy and hope to never need it but refuse to risk my life savings on US healthcare system. Plus I don't have the budget for it.

Writing all this down makes me think I am there. Feels good to know I don't have to work but will keep working until I figure out what to do next. I am also trying to find a partner for my next stage in life. Hard to find other FI persons at this age. New business idea dating site for FI persons!

 

[HI Bill]

Welcome! Have you calculated your SS benefits using the AnyPIA spreadsheet? You have to use this if you want an accurate estimate of benefits if retiring early. The ROTH $60K likely won’t be able to make 120 $1K payments from age 60 to 70. Your plan seems to lack any contingency funds for the unexpected. Will you rent all of the remainder of your life? Have you considered all taxes?

Overall, this seem a bit thread bare. I’d suggest running this through FIRECALC and consulting a fee-only financial adviser. Best wishes!

 

[Amy T]

Thank you for the feedback. I am not new to saving but new to running the calculations. I have not used a PIA spreadsheet. Where do I find that? I just learned from this site that I will get dinged on my SS because of my Belgium SS.

I plan to roll over IRA to Roth during age 50 to 60 when I will have lower taxes. Currently earning 80k and saving half.

Small slush fund of 20k euro. Also a lot of travel and entertainment in budget that I could cut if times were hard. I like your feedback because I don't really want to cut it too close. That would cause me stress.

 

[njhowie]

1k/mo from cash 100k earning 2.35%

I'm missing something here.

 

[joeea]

Cash to last me to age 60.

What does that mean?

I see $1k/month income coming from a rental unit?
I don't see the other $1k/month you indicate you need. You don't seem to have a fix on your SS benefits. You might want to dig into that a bit.

I'd be worried about inflation and the stability/continuity of the rental unit for such a long term (62 years).

 

[Amy T]

I'm missing something here.

Cash value $0 at the end of 12 years age 60. This means I don't touch any retirement money until I reach 60.

 

[njhowie]

Cash value $0 at the end of 12 years age 60. This means I don't touch any retirement money until I reach 60.

Got it - thanks.

That takes care of joeea as well.

 

[Amy T]

What does that mean?

I see $1k/month income coming from a rental unit?
I don't see the other $1k/month you indicate you need. You don't seem to have a fix on your SS benefits. You might want to dig into that a bit.

I'd be worried about inflation and the stability/continuity of the rental unit for such a long term (62 years).

My biggest concern is between now age 48 and 60. I have enough experience in rentals to know they can be a nightmare and unstable. The other 1k/mo is coming from cash. I am building that up now and looking for investment opportunities. I think we will see a market downturn in the coming year or two. I believe there will be opportunity in the downturn both in the market and in real-estate.

 

[Golden sunsets]

Have you run firecalc to see what your chances of success are? I have a hard time believing that a $24,000 budget has lots of room for entertainment and travel.

 

[Amy T]

Have you run firecalc to see what your chances of success are? I have a hard time believing that a $24,000 budget has lots of room for entertainment and travel.

You are right 24k is not much. I have experience living on 12k. I didn't mind for a year but not what I want long term. I also have done a lot of travel in my life so I have no "bug" to run around the world traveling when I stop working. One big trip every year or two and some regional travel and I'm good.

The way I'm running the numbers the 401k would be on top of the 24k after age 70. I don't know how to anticipate what firecalc number to put in for 22 years into the future?

 

[ivinsfan]

Couple things.. at your income level when retired you can stay in the US and also have free or almost no cost HC at least until you go on Medicare.

You are looking for a life partner. Your life partner might not be comfortable with such a bare bones life style.

A 3rd thing.. living to 110, it's JMO but I would continue to work till around 50, and then lay out a 50 year retirement plan. I think that would give you a much bigger comfort zone...

 

[Amy T]

Couple things.. at your income level when retired you can stay in the US and also have free or almost no cost HC at least until you go on Medicare.

You are looking for a life partner. Your life partner might not be comfortable with such a bare bones life style.

A 3rd thing.. living to 110, it's JMO but I would continue to work till around 50, and then lay out a 50 year retirement plan. I think that would give you a much bigger comfort zone...

My experience a few years ago with the ACA was eye opening. I want nothing to do with it. Horrible from limited doctors etc. etc. I could write pages on my outrage. It is hard to come back to the US after living in a country with good healthcare.

Good point on the life partner. However, housing cost are always a big portion of expenses. Living alone is very inefficient. I'm not looking for a partner for financial reasons, just saying.

Planning to live to 110 is a pain. I don't plan to slow down much till 95 or so. I was hiking in the alps with a 90 year old. She was inspiring. Family history is 100+ plus I live healthier then they did. Looking to buy some annuities around age 80. Probably sell the real-estate.

 

[ivinsfan]

My experience a few years ago with the ACA was eye opening. I want nothing to do with it. Horrible from limited doctors etc. etc. I could write pages on my outrage. It is hard to come back to the US after living in a country with good healthcare.

Good point on the life partner. However, housing cost are always a big portion of expenses. Living alone is very inefficient. I'm not looking for a partner for financial reasons, just saying.

Planning to live to 110 is a pain. I don't plan to slow down much till 95 or so. I was hiking in the alps with a 90 year old. She was inspiring. Family history is 100+ plus I live healthier then they did. Looking to buy some annuities around age 80. Probably sell the real-estate.

OP, the quality of ACA care can be very location dependent in the US. It's too bad but that's the way it is. IMO our area has some of the best healthcare in the world. I didn't say you wanted a partner for money reasons and who knows even when you find a partner nothing says you will share a residence or each other's money. Choose whatever age you wish, Wiki tells me that after you turn 100 you have a 1 in 1000 chance of living to 110...

I'd still keep working to 50 and if you really feel the 110 thing no point delaying on that SS payment...

 

[Teacher Terry]

I would keep working a few more years. I laugh when people run their calculations to 100 yet alone 110.

 

[HI Bill]

I have not used a PIA spreadsheet. Where do I find that?

https://www.ssa.gov/oact/anypia/download.html

This won't tell you about reduced benefits due to other country's benefits, though.

 

[Amy T]

https://www.ssa.gov/oact/anypia/download.html

This won't tell you about reduced benefits due to other country's benefits, though.

Thank you. (My mac of course is not cooperating) I will get it on another computer later. Will it be different than the estimate they send each year? My estimate they sent me was 1200 but it did not change for the ten years that I had no US earnings. This made me question the number. That was before I even knew that they would penalize me for getting a foreign benefit.

I will try to get a person on the phone and see if they can help me with the two country calculation.

 

[HI Bill]

Thank you. (My mac of course is not cooperating) I will get it on another computer later. Will it be different than the estimate they send each year? My estimate they sent me was 1200 but it did not change for the ten years that I had no US earnings. This made me question the number. That was before I even knew that they would penalize me for getting a foreign benefit.

I will try to get a person on the phone and see if they can help me with the two country calculation.

Yes, it should be different, and more accurate, as you won't have continued employment through your full SS retirement age. It may be lower. You can tell it you will have $0 income over which years.

 

[joeea]

My biggest concern is between now age 48 and 60.

I think we will see a market downturn in the coming year or two.

You do?

Do you have predictions regarding inflation over the next 12 years?

 

[joeea]

My experience a few years ago with the ACA was eye opening. I want nothing to do with it. Horrible from limited doctors etc. etc. I could write pages on my outrage. It is hard to come back to the US after living in a country with good healthcare.

Yup. In some parts of the US healthcare sucks, and they rejected the chance to take advantage of the ACA. It's unfortunate that was all you experienced.

That said, it's hard to predict what healthcare will look like for the next 62 years - in the US or anywhere else.

Planning to live to 110 is a pain.

A pain? What part is a pain - the planning part?

I don't plan to slow down much till 95 or so.

It's nice to have plans. But sometimes things don't work out as planned. Most people just slow down when their body forces them to slow down. Plans have little to do with it.

Looking to buy some annuities around age 80. Probably sell the real-estate.

Good luck.

It's an interesting plan.

 

[Vacation4us]

I am definitely missing something. I can’t imagine your anywhere near retiring with your lack of assets or funds. Your plan is to spend down your cash and hope your 401k grows enough to replace what your spending plus hoping your SS will be high even though you worked outside the states for at least 10 years.

I don’t see it.

 

[ivinsfan]

I am definitely missing something. I can’t imagine your anywhere near retiring with your lack of assets or funds. Your plan is to spend down your cash and hope your 401k grows enough to replace what your spending plus hoping your SS will be high even though you worked outside the states for at least 10 years.

I don’t see it.

I don't see it either, OP wants to wait till 70 to take SS but plans for a 110 year life span. If I knew I would make it to 110 I'd pull that SS trigger as early as possible..

 

[njhowie]

I am definitely missing something. I can’t imagine your anywhere near retiring with your lack of assets or funds. Your plan is to spend down your cash and hope your 401k grows enough to replace what your spending plus hoping your SS will be high even though you worked outside the states for at least 10 years.

I don’t see it.

I believe that many folks are way too conservative in their belief of what is necessary to retire. There's no problem being conservative for your own particular situation. However, it's all a matter of what your expenses will be and how you manage your money. OP clearly states her ability to live on $1000 per month, and is then allocating an additional $1000 per month for entertainment and travel. You may not be able to appreciate being able to live on that kind of budget, however, that doesn't mean that others are not capable of living on it and being extremely happy.

Your post here solely focuses on the assets yet doesn't mention liabilities/expenses. OP is building in the extra $1000/month for travel/entertainment. Should things end out being tight or growth does not meet expectations, that $1000/month is fungible - travel/entertainment can be reduced. Living in another country in itself is travel/entertainment - much can be done locally without even "traveling".

After a while, if it appears that things are not working out, going back to work, or taking an easy part-time job could make ends meet.

It's all a matter of priorities. If OP is looking to do this and believes she'll be able to pull it off with an acceptable lifestyle in retirement, that's wonderful. There are plenty of websites and articles showing how Americans can retire abroad on significantly less than what they traditionally believe is necessary and live incredibly well.

 

[njhowie]

I don't see it either, OP wants to wait till 70 to take SS but plans for a 110 year life span. If I knew I would make it to 110 I'd pull that SS trigger as early as possible..

On the contrary - if you know that you'll live to be way above the average/median life expectancy, then it pays to delay SS to the point of where you'd get the maximum annual benefit. You're going to have many years collecting way past the break even point.

 

[joeea]

I don't see it either, OP wants to wait till 70 to take SS but plans for a 110 year life span. If I knew I would make it to 110 I'd pull that SS trigger as early as possible..

I don't understand that strategy. Could you explain why extreme longevity would compel you to claim early and get a lesser amount for an extremely long time?

 

[joeea]

I believe that many folks are way too conservative in their belief of what is necessary to retire.

While I believe that's true for some, I believe many folks (not necessarily folks here) underestimate what they need in order to retire with the lifestyle they imagine.

Lots of folks are eager to leave the jobs they despise and convince themselves that they will be happy living on far less than they ever have.

There's no problem being conservative for your own particular situation.

There's no problem whatsoever, assuming you are willing to live with the consequences of your actions, right or wrong.

After a while, if it appears that things are not working out, going back to work, or taking an easy part-time job could make ends meet.

Maybe. If your health is good enough and the economy is good enough, you might be able to get a part-time job as a cashier or greeter to make ends met.

It's all a matter of priorities. If OP is looking to do this and believes she'll be able to pull it off with an acceptable lifestyle in retirement, that's wonderful. There are plenty of websites and articles showing how Americans can retire abroad on significantly less than what they traditionally believe is necessary and live incredibly well.

Yup, it might work out very well. For some, it's terrific. For others, not so much. A lot depends on each individual's definition of "acceptable lifestyle".

Many years ago, my grandparents planned to move to Florida and live out their life in style, relying solely on his small pension and their Social Security benefits. After a year, they decided "it was too hot" and moved back to New England. She had to go back to being a waitress but he wasn't healthy enough to work. They lived out their lives watching television, mostly. I guess they changed their definition of "acceptable".