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Old 02-02-2015, 08:55 PM   #21
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$16,000 medical expense before Medicare kicked in.
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Old 02-02-2015, 09:18 PM   #22
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Quote:
Originally Posted by David1961 View Post
What has been your biggest "unexpected" expense since ER? Either something that you just did not see coming or something you thought could wait for a few years. How did this affect your budget or plan for the year? Feel free to list more than one expense if you'd like.
Although they haven't been major, my medical expenses have sure been a lot more than they were before I retired. For example I didn't expect my prescriptions would be almost three times as expensive after just five years. And then, I never expected that I would be paying for a dental implant instead of a bridge - - but to me it was SO worth the cost.

This hasn't presented a problem for me, I guess because I had a lot of slop in the budget.
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Old 02-04-2015, 06:24 PM   #23
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Not quite retired yet, but we were 2-3 years from ER. Got pregnant (planned), baby has major birth defect (spina bifida). Thankfully, there are a lot of medical interventions for this disability, but they're expensive - a minimum of 4-5 neurosurgeries from birth til age 18, extensive physical therapy, seeing 4-6 different specialists 2-4x a year, medical supplies for daily catheterizing etc.

Currently our out-of-pocket max is capped at 6k/year, but it's gone up 2k in the past 2 years, so I expect it to continue to rise, and we'll likely hit this amount every year. In addition, one of us has to stay home with the little one, since no local daycares will do catheters (and he'll need one every 4-5 hours). ER is off the radar screen for now, but I am so glad we got on the path and cut our expenses way down, paid off a good chunk of the mortgage on our cheap house, learned to cook etc. Otherwise, we'd be in much tighter financial straits.
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Old 02-05-2015, 01:00 PM   #24
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I'm more familiar with living in countries other than the country in which your income is derived. That means you always have to be aware of the potential affect of exchange rates.

For example, a grea many Brits who retired to Spain and then saw their income in UK pounds sterling drastically affected by the exchange rate with the Euro have been moving back to the UK because they could no longer afford their 'villa with a pool' in Spain. Most of them got into trouble because they were living on or near 100% of their income and had no 'cushion' of income to absord any major fluctuations in currency exchange rates. They went from comfortable to poor in a relatively short time.

Another example is the exchange rate of the UK pound to the Canadian dollar. My wife's employee pension got her $2 CAD per pound when we moved to Canada 8 years ago. It has been down as low as $1.58 and only recently started moving back up. So she saw a reduction of almost 25%. Fortunately, it is an index linked pension and that made up for it each year to some extent. It's a bit frustrating though when you get a 'raise' in your pension and all it does more or less is keeps your 'local' income at the same level.

We are also fortunate in that I have Canadian generated income, our entire income is therefore not affected by exchange rates. But mine was when I lived in other countries.

My point then is that if someone plans to move to another country after retirement, they need to realize that exchange rates is something they are always going to have to deal with and plan for. You can't control it so I would not plan on living on more than 75% of your income at most initially.

Another factor that can affect early retirees who leave their home country is the impact on government pensions. I don't know about the US but in Canada for example, the government OAS (Old Age Security) pension is based on years of living in Canada after age 18. To get the full pension you must have 40 years of residence. Someone retiring at 50 and moving to say Costa Rica(example only) will not get a full pension when they reach age 65 as they could only have a maximum of 32 years residence after age 18 if they moved at age 50. That comes as a big surprise to some people who have never looked into the consequences of leaving the country.

The UK is similar in needing a certain number of years of contributions to qualify for a full government pension.

Health care is another factor when considering retiring in another country. In the US you are used to paying through the nose for healthcare. In the UK, it's free and in Canada it's next to free. A family living in British Columbia gets full health coverage for $130 (2 people) $144(3 or more) CAD per month. Someone retiring to another country needs to take that into account. I've seen retirees complaining bitterly about how much healthcare is costing them as if they didn't know beforehand what it was going to cost.
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Old 02-05-2015, 02:06 PM   #25
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Excellent insights! When we lived in the UK, our dollars were worth only 50 pence on the local economy - even when using credit cards that charged little or no foreign exchange fee. I'll observe that many U.S. Government employees spend virtually their entire working lives in other countries. Federal pension benefits, at least, do not depend on residency.

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Quote:
Originally Posted by Sojourning View Post
I'm more familiar with living in countries other than the country in which your income is derived. That means you always have to be aware of the potential affect of exchange rates.

For example, a grea many Brits who retired to Spain and then saw their income in UK pounds sterling drastically affected by the exchange rate with the Euro have been moving back to the UK because they could no longer afford their 'villa with a pool' in Spain. Most of them got into trouble because they were living on or near 100% of their income and had no 'cushion' of income to absord any major fluctuations in currency exchange rates. They went from comfortable to poor in a relatively short time.

Another example is the exchange rate of the UK pound to the Canadian dollar. My wife's employee pension got her $2 CAD per pound when we moved to Canada 8 years ago. It has been down as low as $1.58 and only recently started moving back up. So she saw a reduction of almost 25%. Fortunately, it is an index linked pension and that made up for it each year to some extent. It's a bit frustrating though when you get a 'raise' in your pension and all it does more or less is keeps your 'local' income at the same level.

We are also fortunate in that I have Canadian generated income, our entire income is therefore not affected by exchange rates. But mine was when I lived in other countries.

My point then is that if someone plans to move to another country after retirement, they need to realize that exchange rates is something they are always going to have to deal with and plan for. You can't control it so I would not plan on living on more than 75% of your income at most initially.

Another factor that can affect early retirees who leave their home country is the impact on government pensions. I don't know about the US but in Canada for example, the government OAS (Old Age Security) pension is based on years of living in Canada after age 18. To get the full pension you must have 40 years of residence. Someone retiring at 50 and moving to say Costa Rica(example only) will not get a full pension when they reach age 65 as they could only have a maximum of 32 years residence after age 18 if they moved at age 50. That comes as a big surprise to some people who have never looked into the consequences of leaving the country.

The UK is similar in needing a certain number of years of contributions to qualify for a full government pension.

Health care is another factor when considering retiring in another country. In the US you are used to paying through the nose for healthcare. In the UK, it's free and in Canada it's next to free. A family living in British Columbia gets full health coverage for $130 (2 people) $144(3 or more) CAD per month. Someone retiring to another country needs to take that into account. I've seen retirees complaining bitterly about how much healthcare is costing them as if they didn't know beforehand what it was going to cost.
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Old 02-05-2015, 02:17 PM   #26
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DS is not going to be able to graduate in May, so a few more expenses--fortunately not bad. Not his fault. He can't squeeze a required lab gen ed class into his schedule, even though it's only 1 unit, so he's going to sign up for a summer class--it will all be done in one week and per unit cost isn't too bad. Next, he has to repeat a portion of student teaching, so 6 weeks in the fall. We've decided to spring for an extended stay hotel rather than try to find a sublet--it will be way less stressful and he'll get cleaning once a week.

OTOH, I'll have unexpected income--I'll probably fill in a couple of days per month through the late summer. I figure two work days will pay for the hotel for DS and about 10 should pay for the tuition, since it's only 7 units.
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Old 02-05-2015, 06:57 PM   #27
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I believe most countries if not all, consider time in government service as time in residence Amethyst. The military being the most obvious one.

Another factor with retiring in another country is taxes. Specifically income tax. There are some serious ramifications to that as well.

Canadians for example are taxed on their world wide income if they are 'deemed to be resident' in Canada. For the tax department to 'deem you resident' only requires as little as maintaining a bank account in the country or owning a piece of property. When I left Canada to live/travel elsewhere, it took me 3 years to achieve 'non-resident status' in Canada and stop having to pay income tax there. Once they gotcha they don't wanna let you go. I had to move everything 'off-shore' (we won't go into that), sell property and close all bank accounts.

Once out though the trick is to never become a 'resident' anywhere else. Do that and you fall into limbo. No one to tax anything. All legal but not that easy to do.

Unfortunately, you can't stay in limbo forever. Once you are old enough to collect a government pension, you have to declare that income and file tax returns in your home country for that income. I now have to declare income once again in Canada on my 2 Canadian government pensions. But they don't total enough to require me to pay any tax after I use the exemptions I am entitled to. Something like 40% of Canadians pay no income tax!

When we moved to Canada after my wife retired (52), she had the choice to either pay income tax in the UK or in Canada. The exemptions and tax rate in Canada were lower and so she opted for paying tax in Canada.

Which brings us to another biggie regarding tax. Retirees from the UK who retire overseas have to consider what country they willl retire in as it may result in them losing all cost of living increases in their pension.

While Canada will pay government pensions to any country you want and those pensions are index linked, the same is not true for UK state pensions. If the UK does not have a tax treaty with a country the pension you receive when you first apply for it is FIXED at that amount forever. The ridiculous thing is that it is generally the Commonwealth countries to which this applies.

So when my wife starts getting here UK state pension next year, whatever amount she gets in GBP will be fixed at that amount forever. If she chose to stay in the UK or live in the USA or any one of dozens of other countries, it would increase every year according to the cost of living index in the UK. No fairness in that is there. Some people maintain a UK address (of a relative) and lie about not being resident in order to keep their pension index linked. They have it paid into a UK bank and just use ATMs to withdraw in whatever country they are actually in. That is of course illegal and I am not suggesting anyone do it.

Governments don't always seem to think about what makes sense or is fair. Retirees living overseas aren't voters any more. That they lived all their working life in a country and contributed for all those years just like anyone else doesn't matter. I consider the UK pension problem (for retirees) one of the biggest cases of punishing retirees there is.

That's why we feel no compunction in taking advantage of another UK pension situation which exists (but is due to be taken away in a year, we will just make it under the wire). They have a 'spouse pension'. It was intended to provide a housewife with her own pension after a lifetime spent as a housewife who paid in no National Insurance contributions of her own. Canada's OAS pension based only on residency does the same. It made sense. However, it was yet another case of government not thinking something through properly.

To qualify for a 'spouse pension' you need to be married to someone who will qualify for a UK State Pension at the time that they claim their pension. Some years ago they even changed the rule to apply to any 'spouse', not just women. Can't have sex discrimination can we.

So I will be eligible to apply for a spouse's pension which is 2/3s of whatever my wife's State Pension will be. Anyone who married a Brit who will claim their pension before they do away with it next year, can do the same. You do not have to have ever even stepped foot in the UK! That means they are going to pay me around $8k CAD per year. We see that as making up for freezing my wife's State Pension. You can see why they now want to stop it.

Lesson here, marry a Brit quick who will claim before the cut-off date. But you've got to be 65 or older yourself.
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Old 02-07-2015, 12:42 AM   #28
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I dropped about 32K on a new vehicle, and then found out I'll be supporting a relative's move to assisted living to the tune of about 10K / yr.
It is not something I had planned in my retirement (the support part) so it has caused a bit of a stir, as it could go on for decades..
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