ACA and the idea of expatriation as an alternative

[rodiy2k]

I just read a thread on the ACA as it applies to potential expatriation as an option due to potential cost issues. Like almost all posts anywhere in America regarding this topic, the responses were overwhelmingly against the idea and made various comments that are simply incorrect and probably based on patriotism rather than research. In the interest of fairness since the thread is too old to reply to, I am offering an alternative reply.

In general, it sure appears that 90% of everyone on this forum appears to be very against expatriation. Since there are over eight million Americans living in over 150 nations arund the globe, many of which are by choice, I gather the following as reasons:
a) people are way too close minded to ever consider expatriation (a shame)
b) people have family in the USA and therefore would never consider expatriation (a better reason)
c) people believe everything we are told about the entire planet longing to live in the USA because we are the greatest nation on Earth (even though statistically speaking, we rank quite low somewhere in virtually everything considered relevant to quality of life like education, crime, healthcare costs, technology advances, etc).

If there is anyone willing to consider otherwise, let me chime in. First, don't pay much attention to Kathleen Peddicor or International Living; They are a for-profit organization aimed at taking your money for service you don't need should you actually wish to expatriate

Having said that, I can attest that all those claiming that nobody who has been laid off or fired has left America are sadly mistaken. There is an enormous influx of Americans into Ecuador, Panama and several other Latin American options by those that could not find work at age 40/50/60 and realize there is no human way possible to stay in America without depleting whatever savings they may have, never mind healthcare costs. I know this because I've met many of them and are one of those caught in the same situation. (Just found out my position in the financial services industry is being eliminated). Fortunately, unlike most, my wife and I have an emergency fund, an almost paid-off mortgage, 750K in tax sheltered retirement income and a plan for living comfortably outside the USA for 10 to 15 years until those funds are accessible and we can get SS or use the funds without penalty

As to the medical issue: My wife's employer sponsored plan with Kaiser which covers both of us costs $23,000 per year and we are relatively young and healthy; (ages 48 and 42. The employer pays 75% of this. (We are not leaving until 2015 and are going to Malaysia when I reach age 50). Since I have just been laid off, there is virtually no way I would get similar full time work at age 48 in the industry that caused the recession and is planning on laying off 40% of its workforce next year worldwide. So it's either deplete the savings that we have worked hard for or sell the house, use the proceeds and try the adventure of expatriation (my wife is Chinese so Asia appeals to us)

Onto the healthcare: If we stayed in California, the ACA now forces us to purchase something; With no chances of a subsidy, this would probably eat into 20% or more of all the money we planned on using during the early retirement. In Malaysia, the healthcare is very first world, provided by mostly European and American educated physicians, dentists and eye care specialists at about one twentieth the cost. Should you even choose an insurance policy, you can go to Axa, Allianz, AIG or a hand of other reputable companies and purchase a policy that will cover virtually the same thing as any policy that would more than comply with ACA minimum standards. The cost for a family plan runs between $225 and $500 USD PER YEAR. Or you can just pay as you go if you are relatively healthy.

These are the facts.

So expatriation is not only an interesting choice, it is so economically practical that simply writing it off like so many do seems foolish to me. Just my two cents. OK feel free to criticize me now

[bondi688]

Where do you go to get information on buying health insurance coverage when you live outside the country? The rate you referred to is very cheap for a family. What sort of coverage do you get? Is that for catastrophic coverage or cover your mundane everyday health problems?

[rodiy2k]

Quote:

Originally Posted by bondi688 Where do you go to get information on buying health insurance coverage when you live outside the country? The rate you referred to is very cheap for a family. What sort of coverage do you get? Is that for catastrophic coverage or cover your mundane everyday health problems?

Here are links to options offered by AXA and Allianz in Malaysia. If you obtain an MM2H status, (a social visit pass valid for 10 years allowing unlimited entry and exit), you should be able to qualify. The details of what is covered is in the brochures. The point is this: If something catsatrophic were to happen, you don't need several millions of dollars to pay for taretment, drugs, etc. That's not to say that an American would choose to stay in a foreign country if you had some tragic diagnosis like cancer or something very serious. But you probably could afford to if you wanted to

http://www.axa.com.my/132/en/Health-Insurance/Personal/SmartCare-Optimum

https://www.allianz.com.my/web/ltl/10014/10007

[bondi688]

I was not thinking of Malaysia, but maybe Thailand. Your links gave me somewhere to begin the search though, thanks.

[RunningBum]

You seem to be itching for a fight, but why does it matter what a few other people think? It's your plan, you can do what you want without anyone's permission. I see a number of people here who are ex-pats or plan to be, with very little resistance here. I read your intro thread and it looked like people were very accepting of your plan. A couple people suggested cheaper places in the US but I don't think anyone said you should do that as an American.

For me, it's family, and familiarity with our culture. I've enjoyed a few international trips but I'm not an adventurous eater so I like getting home to foods I'm familiar with, and to the language and customs I know. You can fault me for that, but I know who I am and what I'm comfortable with. If things totally go to hell in the US I'd consider moving abroad, and I know some people think they've already gone to hell, but I'm not there yet.

Is $23K really the best you can do with ACA in California? I find that hard to believe, but you've either done the research or made up your mind already.

Emigration numbers don't seem to be officially kept in the US but wikipedia doesn't even list Ecuador in it's article, and Panama is at #31 with 25,000. I know Wikipedia isn't a reliable source, but what is yours for this "enormous" influx into those countries?

Good luck with your plans.

[rodiy2k]

Quote:

Originally Posted by bondi688 I was not thinking of Malaysia, but maybe Thailand. Your links gave me somewhere to begin the search though, thanks.

No problem. We love Thailand. However, there are some things to be aware of: Language can be a barrier in Thailand although most signage is in both English and Thai. Be aware that the country is much less developed than Malaysia, the banking system is inferior and the currency is thinly traded and more succeptible to large swings and even devaluation.

On the plus side, there is an enormous expat community scattered throughout the entire country. All the big cities like Chaig Mai, Bangkok and Hua Hin have nice gated communities similar to American suburnban hosuing, But you will be living mostly among other expats as opposed to being part of the culture, much like they do in Ecuador and Panama. There are throngs of Americans in the Phuket and Koh Sumai areas (not really a plus for me) And there are thousnands of dropot hippie types (also not for me). The food is very spicy and the Wstern food is not as good as Malaysia. But getting a residency visa is easy but is only good for one year, kind of a royal pain. The people are gentle, mostly Buddhist and the service can be slower than you are used to. Customs need to be learned if you want to be accepted as a resident unlike in Malayisa where the style is more Westernish (excluding the Muslim traditions).

[daylatedollarshort]

Many people who post here are ex-pats. I have never noticed any negative comments. We plan to explore other countries for potential retirement locations, either full time or part time.

The ACA is based on MAGI. Based on our projections, our health care premiums will be $119 a month next year. It is modified adjustable gross income, not assets, that count for getting subsidies. If you want to save money and live in the U.S., you could work on a plan to get your MAGI low, max out on subsidies and move to Sacramento or even some place like Missouri to cut your housing costs and there you go. But if you want to travel, sure there are lots of nice places to retire to. The world is a big place, and the U.S. is only one of many countries.

We have been having fun just watching House Hunters International enjoying all the places we could afford to live in and are looking forward to checking them out some day.

Added -

And the $119 premium is tax deductible for us because of our hobby businesses and it will be an HSA policy.

If you have a paid for house in Walnut Creek, you could sell it, maybe exclude $500K in capital gains, rent a house or buy some place cheaper like Benicia or Green Valley for less than Walnut Creek and only be 20 minutes away, and live off the proceeds for a long time. Then your income taxes might be zero and you can max out your ACA subsidies.

Start a business, go back to school for something low stress, or develop a hobby job for a side income. Read forums like this one, permies and Mr. MM for ideas on how to live well for very little money and you're set, even living in an extra pricey part of California or wherever you want to live.

[AllDone]

I would love, love, love to live in a non-English speaking country, but my hobby is language learning. Unfortunately, my DH is monolingual and not at all interested, so it's House Hunters International for me too.

I'm not sure where you are getting your ACA figures. The two of us are older than you and we do not qualify for a subsidy. Our monthly payment is $850 in CA.

[haha]

Quote:

Originally Posted by AllDone I'm not sure where you are getting your ACA figures. The two of us are older than you and we do not qualify for a subsidy. Our monthly payment is $850 in CA.

This is similar to what it will be under Medicare, with the needed add-ons.

Ha

[audreyh1]

Quote:

Originally Posted by RunningBum Is $23K really the best you can do with ACA in California? I find that hard to believe, but you've either done the research or made up your mind already.

Sounds like expatriation to another state would also be an option.

DH and I are 58 and 54 and we will be paying just under $650 a month with no subsidy which comes out to $7,800 a year in premiums. That's about a third of the $23K quoted by the OP, and we are more than 10 years older!

And you can do a lot better if your annual income is low enough to qualify for a subsidy.

[Katsmeow]

Quote:

Originally Posted by audreyh1 Sounds like expatriation to another state would also be an option. DH and I are 58 and 54 and we will be paying just under $650 a month with no subsidy which comes out to $7,800 a year in premiums. That's about a third of the $23K quoted by the OP, and we are more than 10 years older! And you can do a lot better if your annual income is low enough to qualify for a subsidy.

Expatriation to Canada is also an option for him as his wife is Canadian.

[rodiy2k]

Quote:

Originally Posted by daylatedollarshort Many people who post here are ex-pats. I have never noticed any negative comments. We plan to explore other countries for potential retirement locations, either full time or part time.

I guess I was thrown by that one thread because the question posed was "Could the ACA make expatriation an option". The implication was that due to healthcare costs, would some be forced to choose another country? As I read through I saw a lot of "no", "nope", "nobody would do that", "expats are a small part of retirees". Just seemed to me that the answers were simply incorrect. Granted, we have always planned to expatriate so we are not really being forced out. But having recently been to Ecuador, one of the top destinations, I wanted to share the idea that there are most certainly many couples who expatriated due to job loss and lack of enough savings to not make leaving a good option. I met many of these people in Ecuador and have first hand knowledge that healthcare concerns are a large part of the decision.

Quote:

Originally Posted by daylatedollarshort The ACA is based on MAGI. Based on our projections, our health care premiums will be $119 a month next year. It is modified adjustable gross income, not assets, that count for getting subsidies. If you want to save money and live in the U.S., you could work on a plan to get your MAGI low, max out on subsidies and move to Sacramento or even some place like Missouri to cut your housing costs and there you go. But if you want to travel, sure there are lots of nice places to retire to. The world is a big place, and the U.S. is only one of many countries.

I apologize because my wording was confusing. The $23K policy I referred to is our current employer based policy from my wife's company, not an ACA policy. We have not checked out the website for CA. Living anywhere in California is too pricey based on our situation. Plus, we enjoy traveling. If we were to stay in the USA and just retire a few years earlier than planned due to my job loss, we'd only be interested in warm to hot places which leaves FL, NM and AZ, none of which appeal to us.

Quote:

Originally Posted by daylatedollarshort We have been having fun just watching House Hunters International enjoying all the places we could afford to live in and are looking forward to checking them out some day.

We've watched over 100 episodes, especially those countries that have appeal. Gives you a very basic viewpoint but it is fun to watch.

Quote:

Originally Posted by daylatedollarshort If you have a paid for house in Walnut Creek, you could sell it, maybe exclude $500K in capital gains, rent a house or buy some place cheaper like Benicia or Green Valley for less than Walnut Creek and only be 20 minutes away, and live off the proceeds for a long time. Then your income taxes might be zero and you can max out your ACA subsidies. Start a business, go back to school for something low stress, or develop a hobby job for a side income. Read forums like this one, permies and Mr. MM for ideas on how to live well for very little money and you're set, even living in an extra pricey part of California or wherever you want to live.

We plan on selling the house as soon as I turn 50, the earliest age to get the MM2H visa at a reasonable cost. We hope to get the mortgage down to about 150K by then. The original plan was to pay it in full but that was counting on two incomes until 2016 or 2017. We will not have any capital gain as we paid $738K. AT the moment, we could get about 625 to 650 and that's only due to the 35% rise in prices in zip code 94598, one of the highest in America over the last year. The Bay Area holds no interest for us; we have no ties here and houses in other towns would not leave much cash if you bought it outright. California is insanely overpriced and that is a reality. However, 40K per year, the anticipated amount we hope to budget for ER, is enough to live a good middle class lifestyle and have enough to travel all over SE Asia so that's why we are opting for that option. If Canada was warmer, we'd go back to Alberta where all my wife's family is.

Starting a business is the last thing I'd ever do; don't want the pressure, not willing to part with the capital outlay and not my idea of what ER is. Worked blase jobs in the financial industry that kept me employed for 32 years. That's enough; We believe in experiencing all the other things life can offer that are rewarding besides "work". A blog will be one hobby and we belong to another forum that has already helped us establish a large core of other expats whow e can meet and exchange ideas with once we get there

[rodiy2k]

Quote:

Originally Posted by RunningBum You seem to be itching for a fight, but why does it matter what a few other people think? It's your plan, you can do what you want without anyone's permission. I see a number of people here who are ex-pats or plan to be, with very little resistance here. I read your intro thread and it looked like people were very accepting of your plan. A couple people suggested cheaper places in the US but I don't think anyone said you should do that as an American.

No, not looking to fight; I do, however, wish to point out that those bunches of posters that said nobody would even think about expatriation as an option because of healthcare cost concerns are simply incorrect. You can't know this by using your opinion; you would have to actually visit other countries, talk to those that are there, read a lot of blogs, follow up on some what is written in Peddicord's publications and probably be one who is willing to try it. It just irritates me when I see comments that are way of base so I wanted to offer what I know from experience.

Quote:

Originally Posted by RunningBum Is $23K really the best you can do with ACA in California? I find that hard to believe, but you've either done the research or made up your mind already. Emigration numbers don't seem to be officially kept in the US but wikipedia doesn't even list Ecuador in it's article, and Panama is at #31 with 25,000. I know Wikipedia isn't a reliable source, but what is yours for this "enormous" influx into those countries? Good luck with your plans.

I think I misworded. The 23K policy is our current employer based policy with my wife's employer, not an ACA policy.

Emigration numbers are not kept because our media has little interest in encouraging the idea due to American bias. (With the exception of for-profit companies like International Living and the like). I have been to the top cities for US expat retirees in Ecuador; was researching if a Spanish country might be a place for us (it's not). If you read some non US websites about the topics you'll find that as much as 20 to 35% of some cities like Cuenca are occupied by US expats. This is not necessarily appreciated by the locals. Malaysia is nothing like that, however.

If Wikapedia lists Panama as 31st, someone with no knowledge whatsoever of current emigration wrote that article. I am also not referring to expats who work in other countries; I am talking only of retirement; for work, I can see where Panama might be low on the list.

[haha]

Quote:

Originally Posted by rodiy2k The Bay Area holds no interest for us; we have no ties here and houses in other towns would not leave much cash if you bought it outright. California is insanely overpriced and that is a reality.

The Bay area is expensive, that is a reality. I would say that "it is insanely overpriced" is an opinion, perhaps a correct opinion, perhaps an incorrect one. Even to assert that it is overpriced is an opinion, and I would say compared to what? Certainly the price tag is higher than Omaha, or Kansas City and likely also Ecuador. But being overpriced is a market judgment, and also implies a valuation process. To me, all things considered, most of the Bay Area (not south of Oakland) presents some of the most attractive living in America. And equally attractive destinations worldwide, all things considered, are not likely to be markedly cheaper.

The world is full of well to do people today. Most of them like relatively stable, very attractive surroundings with an attractive cultural and civic life, and quality educational and employment opportunities There is a limited supply of such places. Therefore well to do or very well employed people will migrate to these places, and bid up property prices. This does not make these places overpriced. California has sold at a premium to much of America for a very long time, and until the killer quake, it will likely continue to do so. And after the killer quake, it will not take long to come back.

Ha

[rodiy2k]

Quote:

Originally Posted by AllDone I would love, love, love to live in a non-English speaking country, but my hobby is language learning. Unfortunately, my DH is monolingual and not at all interested, so it's House Hunters International for me too. I'm not sure where you are getting your ACA figures. The two of us are older than you and we do not qualify for a subsidy. Our monthly payment is $850 in CA.

The policy I referred to was our current employer based policy, not an ACA policy. However, as an example, you pay $10,200 annually for what is now the law of the land, the fact that you MUST purchase insurance. Not that anyone over 50 should be without insurance in America. But that is mainly because what we pay is astronomically insane compared to the rest of the developed world. Our friends on the MM2H visa blog who are mostly Brits, Aussies and other Europeans simply laugh at the concept of having to spend such an enormous chunk of your life savings to get quality health care.

The point of my post was that ACA has now added just another dimension to the healthcare cost problems in America. I guess none of us think it's a problem because unless you've lived in another country with social care (I lived in Canada for 6 years), you have nothing to base as a comparison. Yes I am totally aware that countries like England deny a lot of expensive procedures to some of the older population and that Canadians wait longer for MRI's, hip replacements etc.

But there are a handful of nations on Earth that utilize social healthcare very successfully. Granted nobody can afford to live in Switzerland and hardly anyone wants to live in a cold Nordic country or even South Korea. But countries like Malaysia have first rate healthcare at affordable prices with no waits. In fact, you can opt for a government hospital and have no insurance or pay less than $500 USD a year and get quality healthcare at a private hospital

We worked to hard to spend upwards of $100K over the course of an ER (until retirement funds and pension kick in) when there are other alternatives, That 100K is a lifetime of travel, sailing, volunteering and adventure which is what we choose in an ER. Others choose familiarity, new careers and other endeavors closer to home. And that is great ! But I just hate when I see incorrect responses to a question about costs and ER due to the insanity that is US healthcare costs so I wanted others to know there are options that will not require 10% of your nest egg or the privilege of healthcare

[rodiy2k]

Quote:

Originally Posted by haha The Bay area is expensive, that is a reality. I would say that "it is insanely overpriced" is an opinion, perhaps a correct opinion, perhaps an incorrect one. Even to assert that it is overpriced is an opinion, and I would say compared to what? Certainly the price tag is higher than Omaha, or Kansas City and likely also Ecuador. But being overpriced is a market judgment, and also implies a valuation process. To me, all things considered, most of the Bay Area (not south of Oakland) presents some of the most attractive living in America. And equally attractive destinations worldwide, all things considered, are not likely to be markedly cheaper. The world is full of well to do people today. Most of them like relatively stable, very attractive surroundings with an attractive cultural and civic life, and quality educational and employment opportunities There is a limited supply of such places. Therefore well to do or very well employed people will migrate to these places, and bid up property prices. This does not make these places overpriced. California has sold at a premium to much of America for a very long time, and until the killer quake, it will likely continue to do so. And after the killer quake, it will not take long to come back. Ha

I do not disagree with anything you said. Overpriced for a couple with the means we currently have would have been a better choice of words. For what it's worth, Malaysia has Grand Prix, many concerts by well known western artists, dozens of internationally acclaimed film festivals, opportunities for quality education and world class beaches. In fact, most of Asia has everything California has minus the aged infrastructure. But some countries are not as expensive as Hong Kong or Tokyo. MY is a viable alternative without settling for a lifestyle sans culture and civic life. In my opinion, of course

[RunningBum]

I think you'd be better off talking about expatriation in general and not blaming ACA. It's clearly not a factor in your case since you haven't even looked at ACA costs. Whether it's a factor for other people, I have no idea. You may have a better idea since you probably engage with more people who are considering expatriation. But I wonder how many of them were, like you, leaving anyway, and how many talk of leaving and will continue to just talk with no action even with ACA as a factor.

No argument with the rest of your points.

[rodiy2k]

Quote:

Originally Posted by RunningBum I think you'd be better off talking about expatriation in general and not blaming ACA. It's clearly not a factor in your case since you haven't even looked at ACA costs. Whether it's a factor for other people, I have no idea. You may have a better idea since you probably engage with more people who are considering expatriation. But I wonder how many of them were, like you, leaving anyway, and how many talk of leaving and will continue to just talk with no action even with ACA as a factor. No argument with the rest of your points.

It is not my intention to blame or even judge ACA. That is too political for this forum. I was presenting an opinion that was based on several responses to a thread relating to ACA and ER. Perhaps there are some that may have been thinking about expatriation but we're not aware of inexpensive options outside the US, like the person who thanked me for the links to some
policies offered by multi nationals in MY

I suppose almost everyone who reads this forum has the appropriate means for an ER to begin with so maybe I'm barking up the wrong tree

[AllDone]

I was actually using the ACA in the opposite direction for a while. My plan was that if we didn't get the ACA, then we could move out of the country. I was almost making a little headway with Mr. Careful on the subject, but then the SC ruled in its favor and I was foiled again.

You should move to Malaysia only because you both want to live in Malaysia. Otherwise I would think you are setting yourself up for disaster. I sure wouldn't do it just because I was disappointed by electoral results.

[daylatedollarshort]

Quote:

Originally Posted by rodiy2k It is not my intention to blame or even judge ACA. That is too political for this forum. I was presenting an opinion that was based on several responses to a thread relating to ACA and ER. Perhaps there are some that may have been thinking about expatriation but we're not aware of inexpensive options outside the US, like the person who thanked me for the links to some policies offered by multi nationals in MY I suppose almost everyone who reads this forum has the appropriate means for an ER to begin with so maybe I'm barking up the wrong tree

I am not sure about barking up the wrong tree, but I think you are making some incorrect assumptions. If you have a paid for house and now can get insurance on the exchanges, it doesn't cost that much to live in the Bay Area compared to other parts of the U.S.

I have retired friends in the Bay Area with mortgage free homes who qualify for Medicare and they live quite well on modest incomes. Most of the difference is in the housing costs. And even then, you could drop your house price in half if you moved outside the mega corp job commute zone to some place like Green Valley and still be just 20 minutes away from where you live now.

You can look up cost of living numbers at -

Best Places to Live | Compare cost of living, crime, cities, schools and more. Sperling's BestPlaces

The cost of living difference in your zip code compared to the rest of the U.S. is mainly in the housing costs.

And on the cost saving side, in the Bay Area there are a lot of free and low cost entertainment options in the public parks, museums, hike and bike trails, and beaches. You could probably go to a free park, garden or museum every day for a year and not run out of unique places to go.