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Hello from the Cusp... maybe.
Old 10-06-2012, 12:01 AM   #1
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Hello from the Cusp... maybe.

Hi Everyone.

Newcomer to the forum and looking forward to gaining any wisdom or insights possible. Decided in my mid-twenties that early retirement was my goal, and now that I'm closing in on 50 the question is becoming less theoretical and more: when? where? and of course, how much?

I've employed the work, save, and live below my means method for the most part. Had a couple of disasters along the way that set me back several years, but feel I am close to the cusp of retirement.

Everyday I go to work, I ask myself: "why are you still doing this?"

I am 48, a Canadian citizen, but have been living and working in the US for 20+ years. Currently in the SF Bay Area, single, no kids.
Monthly expenses: $3000
Monthly savings: $4000

CURRENT ASSETS
$330,000 - Stocks
$280,000 - 401K
$100,000 - Business Capital
$90,000 - Precious Metals
No Real Estate.

Or right around 800k liquid. Not enough to retire in San Francisco, but my plan relies on relocation. Candidate destinations include: Belize, Costa Rica, Malaysia, Thailand, Ukraine, and Vietnam.

Key factors being: climate, cost of living, culture, and more favorable tax status.

According to some calculators, I could retire with a pretty secure $3000 a month stream of income until my expected time of expiry. It may not be a luxurious amount, but it's what my current expenses are, and "should" be more than adequate living abroad in a low cost country.

So what's holding me back?

With so much of my savings in liquid assets, and the volatility in the world and markets right now, a little more padding in the portfolio would give me a bit more confidence.

My profession favors the young, and making a return to employment a few years from now would be difficult. I don't want to end up feeling like I quit too early. I do have some earning potential in retirement as a consultant, as my work can be done online, but there are no guarantees of course.

Well, anyways, that's where I'm at, if there is anyone out there who has been down, or is on a similar path, would be interested in learning from your experience.

thx
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Old 10-06-2012, 01:00 AM   #2
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Well, as a fellow Canuck, welcome to the forum.
Quote:
Originally Posted by quidjibo View Post
Or right around 800k liquid. Not enough to retire in San Francisco
As a sceptic, I ran your numbers thru Firecalc. Using its default AA, it suggests your $800K has an 82% chance of producing $36K/yr for 30 years. You may get a better result with more specific 'assumptions'.

Quote:
Originally Posted by quidjibo View Post
Candidate destinations include: Belize, Costa Rica, Malaysia, Thailand, Ukraine, and Vietnam. Key factors being: climate, cost of living, culture, and more favorable tax status.
I'd think language might be a big factor. As a Canadian I speak English and passable French. I've found French is similar enough to Spanish that I can read basic notices, newspapers etc. in Mexico and make myself understood (and understand Spanish speakers) better than pure English speakers. So, Belize is fine language wise, Costa Rica might be. Of cource, you may speak one of the languages spoken in the other countries you mention (many of my friends/aquaintences are fluent in Ukrainian). If not, it might be a factor.

If climate is a consideration, I'd wonder if Ukraine is at all comparable to with the other countries you mention. Culture might also be different.

I too worked in a field that favoured the young. When I left I actually had a couple of consulting offers in the first 2 years, not interested. While I'm still not interested, I doubt I'd get an offer after age 60 and 5 years gone.

Best of luck with what you decide.
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Old 10-06-2012, 06:19 AM   #3
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Welcome aboard, quidjibo.

omni
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Old 10-06-2012, 07:14 AM   #4
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Quote:
Originally Posted by quidjibo View Post
Hi Everyone.

Newcomer to the forum and looking forward to gaining any wisdom or insights possible. Decided in my mid-twenties that early retirement was my goal, and now that I'm closing in on 50 the question is becoming less theoretical and more: when? where? and of course, how much?

I've employed the work, save, and live below my means method for the most part. Had a couple of disasters along the way that set me back several years, but feel I am close to the cusp of retirement.

Everyday I go to work, I ask myself: "why are you still doing this?"

I am 48, a Canadian citizen, but have been living and working in the US for 20+ years. Currently in the SF Bay Area, single, no kids.
Monthly expenses: $3000
Monthly savings: $4000

CURRENT ASSETS
$330,000 - Stocks
$280,000 - 401K
$100,000 - Business Capital
$90,000 - Precious Metals
No Real Estate.

Or right around 800k liquid. Not enough to retire in San Francisco, but my plan relies on relocation. Candidate destinations include: Belize, Costa Rica, Malaysia, Thailand, Ukraine, and Vietnam.

Key factors being: climate, cost of living, culture, and more favorable tax status.

According to some calculators, I could retire with a pretty secure $3000 a month stream of income until my expected time of expiry. It may not be a luxurious amount, but it's what my current expenses are, and "should" be more than adequate living abroad in a low cost country.

So what's holding me back?

With so much of my savings in liquid assets, and the volatility in the world and markets right now, a little more padding in the portfolio would give me a bit more confidence.

My profession favors the young, and making a return to employment a few years from now would be difficult. I don't want to end up feeling like I quit too early. I do have some earning potential in retirement as a consultant, as my work can be done online, but there are no guarantees of course.

Well, anyways, that's where I'm at, if there is anyone out there who has been down, or is on a similar path, would be interested in learning from your experience.

thx
Welcome...

Some things to consider.

1. How certain and stable are your expenses? Is $3k/mo actual experience or an estimate? Actual experience is what matters.
2. Same as #1 but, for your new location; except you'll have to have some reliable info here to estimate if you've not yet lived there.
3. How will you change your AA in retirement? Because it probably needs to change from what you now have.
3. What about health care?
4. Ukraine is the only one of your locations I've been to, and I wouldn't pick it for retirement. Too cold and too much Soviet holdover in the culture and lifestyle for me.

Good luck.
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Old 10-06-2012, 07:37 AM   #5
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As others have mentioned, you really need to have your expenses nailed down to a precise number to know if an expected $36k per year will cover them. Also, don't forget about the taxes due when you liquidate investments. You need $36k after tax, which implies a little more than $40k pre-tax. FireCalc does not include any tax effects; you need to adjust the spending amount so that it is pretax. If it were me, I would work a few more years to build a cushion rather than cut it so close.
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Old 10-06-2012, 09:10 AM   #6
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Quote:
Originally Posted by quidjibo View Post

CURRENT ASSETS
$330,000 - Stocks
$280,000 - 401K
$100,000 - Business Capital
$90,000 - Precious Metals
No Real Estate.

Or right around 800k liquid.
Uhh....what exactly is the status of your "business capital" and "precious metals"? Is it a company you own on the side?

Do you have gold bars in a safe deposit box, or are they shares in mining companies or an ETF?

Big difference on the above 2, and could whittle your "liquid" figure down by $200k, and really leave you on shaky ground.
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Old 10-06-2012, 09:21 PM   #7
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Quote:
Originally Posted by quidjibo View Post
I am 48, a Canadian citizen, but have been living and working in the US for 20+ years. Currently in the SF Bay Area, single, no kids.

Or right around 800k liquid. Not enough to retire in San Francisco, but my plan relies on relocation. Candidate destinations include: Belize, Costa Rica, Malaysia, Thailand, Ukraine, and Vietnam.
Have you figured out how much you will get from social security and the canadian equivalent? If you have been paying the max payroll taxes for 20 years, you could have a significant payments when you hit eligibility (62-70).

Also is there a reason you are eliminating Canada/US from possible retirement destinations? In Canada, you won't have healthcare worries and the situation could be similar with PPACA in the US. If you move out of the bay area, there are many places where you can live quite cheaply.
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Old 10-07-2012, 12:17 AM   #8
Confused about dryer sheets
 
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Thanks for the feedback guys. A couple clarifications below:

Besides English, I speak basic French, Ukrainian, and Thai. Ukraine is definitely the odd man out among my favored locations, was thinking of it as a "summer place" only, Odessa in particular.

3K is my actual current expenses. Actually surprised its that high, but a lot of it is work related expenses, parking, bridge tolls, gas, etc.

Have spent quite a bit of time in both Belize and Thailand. Very possible to live a decent lifestyle in Thailand in particular. A nice condo can be had for about $700/mo: Luxurious centrally located condo for sale or rent at Viengping Condo Chiang Mai city
And food, transport, and healthcare is extremely inexpensive.

It is possible to live like a local for much less... This woman is living on $485/mo total. Having been there, I believe it.
How Much to Live in Thailand?

Have also considered Texas, but pretty sure I want to get out of the US. Not likely to return to Canada, I've had enough winter.

My business capital is money just sitting there in my side-business. Precious metals are gold and silver bars.

As far as asset mix, my plan was to utilize the stocks and metals first, until I can tap into my 401k without penalty at age 59 1/2. Assuming it grows by 4% annually it should be close to 450k by then.

If I stop working now, my US social security payments will be $1200/mo at age 62. Not really sure what if any I can expect from Canada SS, I only worked there for 3 years before I moved to the US, and I wasn't paid very much, so it is probably negligible.

I guess the big question for me is would I actually be happy with a relaxed but "modest" retirement lifestyle, or would I regret not putting in some more time at the grindstone for a more "deluxe" lifestyle.

Seems like an unanswerable question... and thus staying at work becomes the default answer...
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Old 10-07-2012, 01:49 AM   #9
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Welcome, quidjibo. Have you entered your numbers in Firecalc ?
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Old 10-07-2012, 03:03 PM   #10
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Quote:
Originally Posted by quidjibo View Post
I am 48, a Canadian citizen, but have been living and working in the US for 20+ years. Currently in the SF Bay Area, single, no kids.
Monthly expenses: $3000
Monthly savings: $4000
Anyone who can live in SF Bay Area on $3000/month, which presumably includes at least $1500 in monthly rent, is sure good at living cheaply. I assume this is spending only, no income tax?

I live in a less expensive city, own my condo outright, try to be careful, but not including taxes I spend about $2600/mo.

So congratulations and welcome.

Ha
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Old 10-07-2012, 06:40 PM   #11
Confused about dryer sheets
 
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Firecalc gives me an 82% success rate, without any post-retirement earnings.
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