Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Retiring Overseas -- How much does it really cost?
Old 03-30-2008, 01:37 AM   #1
Full time employment: Posting here.
GoodSense's Avatar
 
Join Date: Jul 2007
Posts: 678
Retiring Overseas -- How much does it really cost?

I love traveling (especially overseas) and think it would be the #1 thing for me in ER.

Just thought of a new FIRE scenario and wanted to see if others think it's remotely realistic:

1. Save diligently for the next 10 years or so (I am 29, so will be 39)
2. According to my spreadsheet, we should have $600-800K by then (in today's dollars)
3. Travel for a few years in Central America and Asia, then figure out if we want to do it forever or settle somewhere

If we are only at $600K, DH or I may want to teach English somewhere for a couple of years instead of completely ER, until we are at $800K. I also have a small pension (about $10K) starting when I turn 55.

We will buy a high-deductible catastrophe health insurance.

From traveling and living in Asia and traveling in Central America, I think we should have no problem living on $2000/month + health insurance premium + roundtrip tickets to the US to visit family = $32,000/year.

We don't plan to live in really expensive areas (such as Europe or Japan) unless we find paying j*bs there.

Are there glaring holes in my plan that I am too blinded to see? I know it's cutting it pretty close. If it doesn't pan out, I may be content just teaching English overseas for a few years.

Question for those who retired overseas or are familiar with living overseas: how much does it cost you? (or, if that's too nosy, does my plan sound reasonable?)
__________________

__________________
GoodSense is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

things to consider
Old 03-30-2008, 03:58 AM   #2
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 1,152
things to consider

Hi GoodSense,

I FIREd about one year ago and just got back from a six month trip to southeast Asia, visited 7 countries, and made many new friends. I am probably headed to Colombia in a few weeks. I literally had the time of my life on my trip. I intend to return to Asia again in the Fall.

My intention was originally to teach English after some initial travel. Now I am not so sure. I really enjoyed being overseas and the social life and traveling around and I am not so sure that a low paying full-time job is really compatible with that. For instance, I really liked Chiang Mai, Thailand. But teaching English pays around $600-$700/month there. I am glad that I worked long enough in my regular job that I don't feel compelled to work again, even if I do end up making that choice. Some places pay English teachers well (Korea) but they are not as desirable. It depends on what you like. But I found that I could integrate myself into the culture and with local people without having a job, something that surprised me.

While you are traveling you need to ruthlessly lower your overhead back home. This may mean no car back in the USA and a very minimal storage and certainly no house if you are long term. My USA overhead while I am traveling is something like $150/month, including high deductible health insurance premium. I am considering getting rid of my car, too, since I pay money to store it and insure it when I am not there and a car really deteriorates when it is not used. I can rent a car for $50/day including liability insurance (or $100 for three days over the weekend) so I may just rent a few times a year when I am in the USA. I haven't decided yet.

The people that save the most by being overseas are those who have some kind of issue causing them to have high USA health insurance premiums. Once they are sure they are not coming back to the USA to live before age 65, then they can drop USA coverage and get cheaper coverage in their new country, get an international plan, or go bare.

One can usually buy temporary health insurance (by the day or month) when visiting the USA but it only covers emergencies and stabilization (until you can be shipped back) only. Complications from a pre-existing chronic illness would not be covered by the temporary insurance (i.e., complications of diabetes that show up while visiting the USA), at least not with the temporary insurance that I have seen.

My own very general opinion is that when you include airfare, it is probably not cheaper to live overseas in most places when compared to a lower cost area of the USA (most areas not within 50 miles of the coast or anywhere in California). The exception is the person who has those high health insurance premiums. But the standard of living overseas seems to be higher -- you are eating out much more often, someone else is doing your laundry, you don't have to mess with a car but can just take taxis, etc.

Kramer
__________________

__________________
kramer is offline   Reply With Quote
Old 03-30-2008, 09:21 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,959
Quote:
Originally Posted by GoodSense View Post
...then figure out if we want to do it forever or settle somewhere.
Your plan is doable and if successful you will have lived a life that many of us wish we had, it looks great to me from my rear view mirror. Your plan requires more faith in yourself and the future than most of us can muster, but it's been done - by some people here evidently. I'm simply too cautious to "jump off" on a plan like yours, but I'm jealous of folks who can do it, and succeed. Best of luck whatever you decide...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Old 03-30-2008, 11:04 AM   #4
Dryer sheet aficionado
 
Join Date: Feb 2004
Posts: 29
My two cents:
*You noted that you may work for a couple years if your portfolio is at $600K in 10 years (as a way to get to $800K). You may already know this, but I just want to point out that if you assume a 6% real return (i.e. after inflation) on your assets your $600K would become $800K in five years assuming that you don't touch your nest egg during those years. At a 5.5% real return the time frame moves to out 6 years assuming you don't touch the nest egg.
*Even at $800K, your plan has no financial safety buffer at all. You won't even be 40yo when you stop working, which leaves ALOT of time for things to not go according to plan.

Will your pension be adjusted for the cost of living? How secure is it? Your plan sounds like a great deal of fun, but the financial assumptions look aggressive. How do you feel about teaching English part-time in your countries of choice as a way to slowly build a financial buffer once you've reached $800K?

Saver
__________________
Saver is offline   Reply With Quote
Old 03-30-2008, 11:47 AM   #5
Full time employment: Posting here.
GoodSense's Avatar
 
Join Date: Jul 2007
Posts: 678
Thanks for all your insights and encouragement. Yes, if we pursue this, we'll definitely sell our house. Excellent point about the car. Depending on how long we plan to travel or if we can find a place to store it, it may be better to sell it, too.

The appeal of living in a foreign country is not just the lowered cost of living. I really LOVE traveling to a different culture and exchanging ideas with people on different paths. I love talking to people and learning what took them to where they are today. Everyone has a story. I'd also like to know how people's lives are changing, for better or worse, because of political changes, climate change, and globalization.

Saver, we would be interested in teaching English to supplement our income even when we reach FI. In addition to building a buffer, it will allow us to interact with the local community from a different angle than just a tourist. I may also find a part-time online job doing freelance translation. The pension is adjusted for cost of living. It's pretty secure as it's a government pension.

Kramer, good point about the low wages for some of the locations. DH and I have mostly talked about teaching English in Japan and Taiwan. Both places pay comparatively high wages, although the cost of living in Japan can be very high. I agree it doesn't make sense to work full time and only make $600/month, especially in a gorgeous place.

Thanks again.
__________________
GoodSense is offline   Reply With Quote
Travel Writer?
Old 03-30-2008, 11:21 PM   #6
Full time employment: Posting here.
GoodSense's Avatar
 
Join Date: Jul 2007
Posts: 678
Travel Writer?

I just stumbled upon The Travel Writers Life, Get Paid to Travel!, American Writers & Artists, Inc, AWAI. Hmmm, it sounds almost too good to be true. I wouldn't mind taking photos and writing short articles in exotic locations for a living.
__________________
GoodSense is offline   Reply With Quote
Old 03-31-2008, 06:06 AM   #7
Thinks s/he gets paid by the post
Rambler's Avatar
 
Join Date: Jul 2007
Posts: 2,243
You have to be aware of exchange rate fluctuations as well. The dollar has sunk significantly in the past few months. As an example, the value of a dollar in Japan has gone from 125 yen to 100 yen in just a few months, and in the mid 1990s it went from about 125 to just above 70 in a few months. Yes it goes up and it goes down, but when the value goes down like it has recently, your $32,000 need becomes $40,000...or in the mid 90s scenario, your $32k becomes $57k.

Another thing that I hope you'll appreciate is that most of the students of English (in Asia anyway) tend to be young, and they tend to prefer younger teachers, especially when starting out, and don't always demand qualified teachers. However. the older students seem to be OK wth older teachers, but demand teaching skill, experience and qualifications. If you don't have those, and need a teaching job to survive, I would suggest working a little longer and saving a little more.

By the way, you will find that apartments in the larger cities in Asia are not that cheap (if you like reliable electricity, water, and gas) and if you like air conditioning (many southern areas of Asia are unbearable - especially at night - without AC). For about $1000-1200 per month you could get something reasonably nice, and about 150-220 sq ft. Older apartments will be less, as will those outside of the big cities. Food can be cheap if you can learn to eat like the locals...just don't ask what is in it if you have a strong sense of eeeeeewww!

Bottom line: do your homework, and lots of it. know as much about your target country(s) as you can before you go. Learn about their food, lifestyle, housing, commercial practices, etc, and feel comfortable with those things before you buy the tickets. Have a back-up (bail-out) plan...things might not turn out the way they seem. Finally, you would be very wise to spend your vacation there, a couplke of weeks, living like the locals, before making any decisions. As an example, DW and I have found that we love Hawaii, but as much as we love to visit, we could not live there...it is just not us, even though others love it...but you have to check it out to know one way or another.

Hope this helps, and it is from experience.

R
__________________
Rambler is offline   Reply With Quote
Old 03-31-2008, 07:24 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,633
The only question I have is are you sure you won't want kids a few years down the road? That can change everything. As a side note, it amazes me how many of you young dreamers have seriously thought things through in your 20s. Most of my peers and I were bumbling along without a clue for at least a decade beyond that.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 03-31-2008, 03:03 PM   #9
Recycles dryer sheets
 
Join Date: Oct 2007
Location: Indonesia
Posts: 62
Hey goodsense, there are some really good points mentioned above. I am living in Dubai, working, with at least 30 years ahead of me of saving. Living abroad really has it's upsides and downsides depending on where you live. For example in Dubai, salaries, etc.... are completely tax free, but what is the killer here even though we are paid in Dirhams (dollar pegged) there is a lot of inflation. Year on Year it's running at 12% so I obviously can't imagine retiring here.

These days the dollar is becoming less reliable outside the usa, so if your going to be living outside permanently, I would say consider hedging somehow (easier said then done)...... In the future Asian currencies could be quite strong and actually de-peg from the dollar or re-value.

Good luck on your adventure outside the USA, I am on my fourth country living and plan on moving around as a global worker. There is a great book, by the way, which i would suggest you check out. Getting Out: Your guide to leaving America by Mark Ehrman
__________________
billman is offline   Reply With Quote
Old 03-31-2008, 07:42 PM   #10
Thinks s/he gets paid by the post
Rambler's Avatar
 
Join Date: Jul 2007
Posts: 2,243
Billman, how do you like living in Dubai? I have been there once, for a week, but have trouble envisioning living there.

R
__________________
Rambler is offline   Reply With Quote
Old 04-01-2008, 11:37 AM   #11
Recycles dryer sheets
 
Join Date: Oct 2007
Location: Indonesia
Posts: 62
Hey Rambler, Dubai has it's pluses and it's minuses.

Quite easy to find work here, if you buy an apartment or house you automatically get a residence visa/sunshine every day/and six hours to Asia, six hours to Europe and as I said before no taxes.

Minuses Traffic/construction/summer/ can get boring real quick/no real culture. A lot of the countries that are opening up that have this buy an apartment get residency i.e. Bahrain and Oman. Oman will be a retirement haven, no taxes and really really cheap cost of living/dollar based economy.
__________________
billman is offline   Reply With Quote
Old 04-01-2008, 12:05 PM   #12
Recycles dryer sheets
 
Join Date: Jan 2007
Posts: 284
Even though this is the Early Retirement forum, I think 39 is still pretty early to plan on leaving a career that evidently gives you substantial income. That is, income enough to put aside what sounds like $60K a year. Kramer, above, makes excellent points about the reality of being underemployed after a sucessful career.

I hope your next 10 year plan doesn't exclude a decent lifestyle and living options. There is no great virture in massive sacrifice, extensive work hours, and deprivation in your younger years.

I think easing up on the ambitious savings to do some interim traveling might be a reality check about how your expectations and your ongoing life satisfaction are going.

Unfortunately, life has a way of interferring. Children come along, parents and family get ill, relationships change.
__________________
A854321 is offline   Reply With Quote
Old 04-01-2008, 02:48 PM   #13
Thinks s/he gets paid by the post
BunsGettingFirm's Avatar
 
Join Date: Jan 2004
Posts: 1,502
Quote:
Originally Posted by donheff View Post
The only question I have is are you sure you won't want kids a few years down the road? That can change everything. As a side note, it amazes me how many of you young dreamers have seriously thought things through in your 20s. Most of my peers and I were bumbling along without a clue for at least a decade beyond that.
That's because most people haven't had too many "interesting" experience at work in their 20s. Myself: I got a dream job designing ASICs for a large computer company right after grad school. The company spent the money to move me out to California. After 6 months, the group manager decided that the line of work is not enough value add and punted the entire project to the Bay Area. Then I got another dream job in Colorado only to be harassed by a crazy fat woman who couldn't find a date. (Imagine that, a single woman in a computer company can't find a date. Do you wonder why?) After such fun first year beginning to my career, I decided that I'd better start maxing out my 401(k), my IRA, and put every after-tax dollar to savings because I didn't think that my sanity could stand this kind of continued stress for 30 more years.
__________________
BunsGettingFirm is offline   Reply With Quote
Old 04-01-2008, 02:57 PM   #14
Thinks s/he gets paid by the post
BunsGettingFirm's Avatar
 
Join Date: Jan 2004
Posts: 1,502
As for if it's too early to bail on $800k, I think it may be. I think Billy and his wife did it on that amount, but that was in 1988, so figure in 2-3% inflation for 30 years, and you may need a bit more to feel comfortable. The problem for us younger people is that there are still plenty of adventurous things we haven't done, and those adventures usually require gear, money, and travel, so I'd hate to be locked into a lifestyle in which I can only sit on my very nice Mexican veranda and drink Petron.

However, please don't take this as a vote of no because I'd love to hear how your plan work outs. I'm still trying to figure out if I should bail to Mexico, South Florida, or start a business in the frigid Northeast. (Read 5-7 more years of 12 hour days.)
__________________
BunsGettingFirm is offline   Reply With Quote
Old 04-01-2008, 06:01 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,380
Quote:
Originally Posted by BunsGettingFirm View Post
Then I got another dream job in Colorado only to be harassed by a crazy fat woman who couldn't find a date. (Imagine that, a single woman in a computer company can't find a date. Do you wonder why?) After such fun first year beginning to my career, I decided that I'd better start maxing out my 401(k), my IRA, and put every after-tax dollar to savings because I didn't think that my sanity could stand this kind of continued stress for 30 more years.
Look on the bright side. As you get older, women both fat and thin will be less eager to harass you.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 04-01-2008, 07:49 PM   #16
Full time employment: Posting here.
GoodSense's Avatar
 
Join Date: Jul 2007
Posts: 678
W*rk has kept me busy lately, hence the late response.

I do worry very much about currency issues. With the way the economy is going, I can't see how it would NOT depreciate. I don't really know what an effective hedge can be, especially the stronger currencies (Canadian $, euro, etc.) are so high right now. Although right now a lot of developing countries still have their currencies pegged to the US dollar, more have become "unpegged" or pegged to an index of several major currencies.

My j*b is not high paying for someone with a graduate degree and 8 years of experience (yes, I finished school quickly), but it does pay the bills. It is in the public sector, and it is very draining. Today is a good example. I receive orders from two different elected officials with different agendas, and they don't want to communicate with each other, or with me. Instead, I am supposed to figure out what they each want and broker a deal between them. The worst part is that I see the project as having no real meaning, since either way, it is only used to make the politicians look better. One of them will probably be pissed off in the end, and I am screwed either way.

I also have the distinct feeling that if I stay at my current job past 40, I would not be very employable elsewhere, at least not in the private sector. I have talked to many people at my work and almost everyone feels this way. I don't know if it's because people become complacent at a public sector job, and gradually, they lose all ambition and desire to get ahead. There is very low productivity and efficiency. Maybe all the bull**** they have to put up has just worn them out. Whatever it is, it seems that at my job, you either find another more exciting gig in your 30s, or retire at the agency.

Although neither DH or I have a high income, we definitely LBOM. We save more than half of our income, mostly because we don't really enjoy spending money. I don't feel deprived at all, luckily. I just don't like stuff (with a few exceptions), and we have a small house that's already too big to clean.

I do take a decent amount of vacation--probably more vacation than anyone else at my work. But I'm really a cheapskate when it comes to vacation, too. When I was traveling in Central America, I felt compelled to stay at hostels that cost $7/night as long as they were passable. For 3 nights we stayed at a place that charged $26/night, and I felt a bit guilty for the "extravagance."

I appreciate the advice to keep it flexible and be prepared to work longer. There is no plan for kiddos, but who knows what will happen. After a long day at w*rk, it's just comforting to know that there is light at the end of the tunnel, be it 10 or 15 years.

Thanks for listening, and for all your help.
__________________
GoodSense is offline   Reply With Quote
Old 04-01-2008, 11:17 PM   #17
Thinks s/he gets paid by the post
BunsGettingFirm's Avatar
 
Join Date: Jan 2004
Posts: 1,502
Quote:
Originally Posted by haha View Post
Look on the bright side. As you get older, women both fat and thin will be less eager to harass you.

Ha
Haha, I thought you were my hero living the single guy life in the middle of the city, dancing, and enjoying the night life. Tell me this ain't so. Do I have do another hour of ski machine to keep my buns firm?
__________________
BunsGettingFirm is offline   Reply With Quote
Living overseas
Old 04-03-2008, 12:26 AM   #18
Recycles dryer sheets
 
Join Date: Nov 2004
Posts: 143
Living overseas

When I first went overseas, it was 1970, and I have been overseas since except for being in the States during the summers to get my Masters degree, and about three years teaching in the mid-1980's. I don't know any other life except being overseas.

After being in international education in Liberia, Vietnam, Iran, Korea, Saudi Arabia, Venezuela, Singapore and now Jordan and investing my salaries diligently all the time, I can now FINALLY semi-retire at 61. I'd like to do the reverse of what you are doing, and return to North America, but instead choosing Montreal as my home base for 6 months of the year and venturing off to other countries to teach. I'm amazed at the need for science teachers overseas, and I now will only teach for schools that have a dire need for a science teacher and for short term assignments.

I'm currently a fulltime science teacher in Jordan. It's a wonderful country with the Dead Sea 30 minutes away, and of course, Petra about two hours away. I'd certainly put Jordan on your list of possible countries to work in. They really need English teachers here. However, as with most Middle East countries, the inflation is more than 20%, so I'd check that out before coming here.

I have had no regrets, even during the fall of Saigon in April 1975, the Iranian Revolution in the late 1970's, and the coup attempts in Liberia in the 1980's. It's been an experience! However, I honestly look forward though to a little more stability in my life, and returning to N. America and establishing some roots there will be nice. I am a Permanent Resident (green card holder) in Singapore, however, and definitely call that home (lived there 19 years). I will spend time there, but the housing is really a problem, and am waiting for the market to dip.

Best of luck in your future adventure.

Regards,
Rob
__________________
Rob is offline   Reply With Quote
Old 04-04-2008, 08:44 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 5,693
Send a message via Skype™ to kcowan
I have been retired for 5 years and am currently in our home in Mexico. The idea of working part time at low local wages does not appeal to me. I think the idea of teaching ESL classes is overrated unless you love teaching and are good at it.

But if you can realy LBYM where you are, you will find even greater potential in the 3rd world. Good luck.
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Old 04-04-2008, 03:21 PM   #20
Full time employment: Posting here.
 
Join Date: Feb 2008
Posts: 920
I'd agree with above about planning on continuing work for low pay.

Rising early to take the tuk-tuk to work in your slacks and blue collared shirt would really eat away at you knowing five years of doing that could have been spared by toughing it out one more year working in the states.
__________________

__________________
tuixiu is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Retiring overseas to beat inflation Nanita8140 Young Dreamers 24 01-09-2008 11:23 AM
Retiring overseas at 35 Trek Hi, I am... 19 12-26-2006 11:10 PM
The Cost of Retiring Healthy retire@40 FIRE and Money 37 03-26-2006 07:26 AM
The Cost Of Retiring Late yakers Life after FIRE 12 01-22-2006 09:14 AM
Retiring Overseas otako Life after FIRE 34 08-14-2004 08:58 PM

 

 
All times are GMT -6. The time now is 08:47 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.