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ER in Eastern Europe - possible on low income?
Old 07-04-2007, 12:37 AM   #1
Confused about dryer sheets
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ER in Eastern Europe - possible on low income?


Itís great to meet you all, masterminds of FIRE. I have to admit that I am rather embarrassed posting here, after seeing that most people have millions to retire with. Well, I donít have millions, but I donít want to work Ďtill I dropí. I would like to spend time on my numerous hobbies and activities that I love doing.

I thought I would take advantage of the fact that I was born and raised in Eastern Europe and I would like to consider the possibility to retire there, in 7 or 10 years. I am not sure this is achievable, and I am presenting a rough draft of my plan here for you to tear it apart J.

I am 43, single, earning about 35K/year, will be eligible to collect PERS at 60. I am following LBYM strategy and comfortable with it (hmmm, living in Alaska is rather expensive, there are some things that you just have to pay for).

I would like to quit working at 50. How do I finance those 10 years before PERS and 401k kicks in? I'll probably need about 300K to live there, and considering a weak dollar, maybe more. Who knows what will happen 7 years from now. I need to come up with higher yielding investments for emergency fund. What would be the best way to invest the emergency fund so it would grow substantially for the next 7 years? I donít tolerate risk well, but I understand that 5% wonít earn me $$$ any time soon and that I need to look somewhere else. Dollars, euros?

To sum it up:
- 35K/year
- Small condo worth about 100-120k, paid off
- 20K in 401 and contributing 10% (no company match)
- 60K in my emergency fund: ED account and contributing monthly
- 20K in Roth IRA
- 20K in taxable account: VG (index funds)
- PERS payments @60

Is this doable or am I just dreaming? Any thoughts and comments are welcome.

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Old 07-04-2007, 07:41 AM   #2
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Welcome Streams. We have a young poster, Trek, who retired in Estonia where the cost of living is much lower than here. You might review some of his posts, he talks a lot about cost of living. Here is his introductory thread: Retiring overseas at 35


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Curious which country are you planning to retire to
Old 07-08-2007, 03:17 PM   #3
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Curious which country are you planning to retire to

Welcome Streams,
I think you have a reasonable chance to reach your goal at 50.
I'm curious though at your estimate of 300k needed for first ten years.
Unless you are planning to buy real estate there,this would mean 30k yearly living expenses. I would think that if you earn 35k now and can save some of it, you could do much better than 30k yearly budget in most Eastern European countries.
Your assets total 220k, so you are missing 80k to your magic number.
In todays dollars this would mean saving 11k per year. You are already mentioning saving 3.5k in 401k and some additional money in your emergency fund, so it's really less than 11k.
But it would be easier if you can lower your 300k mark a little.
I'm curious what country (and city if you wish share) you are planning to retire to.

who is typing this message from vacations in Eastern Europe.
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Old 07-08-2007, 11:27 PM   #4
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I know plenty of people in WESTERN europe who enjoy a great retirement on less than $24K a year (but their home was paid for. They usually live in small houses or condos in more rural areas). So I would think that you could retire on even less in EASTERN europe where the cost of living is usually lower (unless your hobbies are somewhat expensive). Now the real question about how much you need to save before moving back to Europe is how weak/strong the dollar's gonna be Vs. the Euro in 7-10 years. If you think the dollar's going down you may want to look, for lower risk investments, at CDs denominated in Euros, or Int'l bonds denominated in Euros or other currencies that are likely to appreciate against the dollar.
42 y/o, married, retirement portfolio = 43 x annual expenses
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Old 07-09-2007, 11:27 PM   #5
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Welcome, Streams,

Your goal of $300k by 50 seems very reachable.

I do think that you should try to be comfortable with equities (e.g., index funds) to stay ahead in the long run. It is true that any one particular index might be down for as much as ten years in a row (very unlikely, but it has happened before). Your biggest risk is inflation, not market 'risk'.

This guy has some interesting articles with historical numbers (although relatively recent, the trends hold over longer history) that might help with your confidence (just ignore everything he says about market timing). - Retirement: When your portfolio starts paying you
and - The ultimate buy-and-hold strategy
and - Fine tuning your asset allocation

and so forth. Also Scot Burns' Couch Potato Portfolio or Margarita Portfolio (see AssetBuilder, Inc. ), and The Coffeehouse Investor

Good hunting!
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I am retired.
And I don't care how big your truck is."
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Old 07-10-2007, 10:01 PM   #6
Confused about dryer sheets
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@Martha. Thank you for links to Trek's posts. Estonia is very nice, if I could deal with dark and cold climate, I would consider it myself.

@sailor. I am a rather gloomy person and I think dollar will be weaker as I approach my retirement year. 30k per year would be very comfortable right now, but 10 years down the road, it may be different. So I gave myself a little buffer there. I also would love to travel; that's not a necessary expense, but I would like to have a little money for my trips. Regarding real estate, I will most likely be buying a small flat there. Should I buy now? I don't want to be an overseas landlord, but prices will rise.
What country? I thought about Poland, Czech Republic maybe. Not Prague, that's already too expensive. But nothing is set in stone, and I like warm and sunny weather, so maybe I should look more south.
How is your european vacation going? Would you like to share your experiences?

@FIREdreamer. You are right. I know that I could do it with 20k/year right now, but 10 years from now - I doubt it. Weak dollar worries me.

@Ed_The_Gypsy. I thought about index fiunds. I was going to put about 40k to my Vanguard portfolio and split it between some index funds (already have VTSMX, want to add VEURX, VEIEX, VPACX for now, and start adding bonds later on). Regarding market risk, yes, I fear that market may not do well and funds are perhaps safer in Emigrant Direct, getting 5% with no risk. Too bad that I missed better CD rates with PenFed in January.
Thank you for providing links to FundAdvice etc. Interesting reading.
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Old 07-11-2007, 12:22 AM   #7
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If you worry about the dollar weakening any further, then you should take steps right now to hedge against that. You should start investing in Euro-denominated securities.
I also believe that if you bet the Euro will further appreciate against the dollar in the next 7-10 years, you should consider buying a small condo in the location of your choice as soon as possible. However, do your research carefully as many RE markets in Europe have boomed in the past 5 years. Some are bound to correct in the next few years and it might be worth waiting a bit.
If you like warm and sunny weather, have you considered Slovenia? I've heard a lot of good things about it. It is the most stable and developed country from the former Yugoslavia, and it is a member of the Eurozone. If you are looking for coastal living what about Croatia (not a Eurozone member at this point though)? I've heard the Dalmatian coast has seen significant increases in RE prices over the past few years, but I don't know if it's still affordable or not. I've heard Malta and Cyprus are also good choices. Prague would be one of my top choices but as you said it's already too expensive.
42 y/o, married, retirement portfolio = 43 x annual expenses
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Old 07-11-2007, 02:20 AM   #8
Confused about dryer sheets
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I went to former Yugoslavia several times and I enjoyed my trips. Croatia would be nice. Prices are quite high, expecially in bigger cities, in favorite tourist locations. I think I'll explore this idea next summer when I visit Europe.

Since we are talking about warmer climate, I will throw in one more country -Bulgaria. Friendly people, sea, mountains, prices are ok for now. Something to consider.

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