Expat working in Abu Dhabi

[Puentin]

I have been here 3 years already working the electric utilities sector. The reason for coming here was to cut retirement down to as soon as possible, instead of 59.5 or worse.

Married with 5 kids (2 left under 18; 13 and 16 years old). I’ve been known to peruse this site and take in the wisdom periodically, especially on who pays off their homes completely before retiring and FIRE.

Salary 200,000 annually with a nice little exception of Foreign Earned Income Exclusion from the IRS of 107600, adjusted for inflation each year. If I stay outside the US for 35 days or less, I only pay about 11k in taxes combined State/Fed.

Wife works part time in the US and earns 10K. Eligible for a 403b but haven’t started it yet.

NW is approximately 400k (300K in IRAs, 50k cash, 50k taxable investments)

I have two previous utility pensions that will pay me 12k total annually. SS will kick in at 62 @ 1445 a month and obviously scales up from there.
Home will be paid off in October 2021 (31k left) and is valued at 280k. I am paying an extra 10k a month to finish it off until then. I want a place to lay my head first and foremost.

No credit card debts, both cars owned. Monthly bills are 2800 before food and gas, which will lower to just 2000 in October once mortgage is done. Current budget for US household is 5k per month maximum spending. The rest will go to our taxable accounts, IRAs (12k annually) and some travel expenses I normally incur, plus family trip. Private insurance for wife and 2 littles is 900 a month currently, although this could be eliminated mostly if she went full time. In the UAE, health insurance is mandatorily provided by your employer at no cost to you.

My food, housing, health insurance and transportation covered by the company. I only have to pay for my phone bill and incidentals.

The plan is to do a few more years here at this salary or higher, with no mortgage, until I can’t take the desert anymore.

I run FireCalc all the time as well as several other projections. Based off the simulations, if I do 3 more years here, there is pretty much a 100% success rate of early retirement at 48, based off the spending and savings/investing goals.

TLDR version:
45 years old / DW is 40
200,000 salary / DW 10,000 salary PT
31,000 left on home (value 280,000)
300,000 in IRAs
Two utility pensions (12000 per year combined@55)
SS@62 est. 1445 / month / SS@67 est. 2045
50,000 cash
50,000 in taxable funds (AA is Mutual Funds in S&P, Tech, Medical, Dividends, 529 and AAPL stock)
Projected spending in retirement 40,000 annually

Will be investing 10,000 per month in various positions after October 2021 until I decide I don’t want to be here anymore. Plan A is 2024. Plan B is 2025.

Feedback always welcome and appreciated. Any other expats out there looking to FIRE?

 

[levindb]

I would encourage you to expand your retirement thinking a bit. You will probably have 50 years of retirement and may need 1 or 2 replacement cars in that time. House may need some updating, repairs and maintenance as well (HVAC, roof, appliances, etc.)

Think about what you will be retiring to...what will you do the Monday after you are retired? The activities of your later life may require funds to do stuff...

Overall, I think your monthly budget seems light, even though it is much more than you are currently spending. Think through the chunky expenses, the trips, the hobbies, the joy that you and your wife will experience as you two grow older together.

 

[Puentin]

Appreciate the feedback. Honestly, we're fairly frugal for a family of our size. DW mostly cooks at home so most of the monthly budget is trips to the grocery store (Costco, Sam's and Walmart). Need bulk with these mouths to feed.

We've certainly thought about the purchasing of replacement vehicles. Downsizing the house is definitely happening, as we won't need the 4 bedrooms after the youngest ones depart. Insurance is the biggie down the road and the US is absolutely one of the worst when it comes to cost. I've actually considered living abroad just to avoid the costs. The Cleveland Clinic is literally up the road and would cost me nothing while I am here in Abu Dhabi, but that is only applicable to while I am here.

My activities are largely fishing. It's really all I care about in retirement hobby-wise. Being outdoors with my DW.

Travel is being done now, even with the COVID impacts. We've previously done Dubai 2x, Mexico and Canada. Mediterranean this week for me; Italy for me and DW in the near future. California is always on a 2 year cycle to see family.

With 2 grandsons so far, we will have plenty to do. It's the getting there that's the hard part. I see us spending okay in our late 40s and 50s, to not much after that. After we see the world, the grandkids will drive our migration.

 

[Dash man]

Remember to include other big expenses like HVAC and roof replacement, healthcare premiums, deductibles and coinsurance when back in the states, property taxes and the unknown unknowns.
Seems to me you’re planning retirement on a shoestring. I’d be uncomfortable living that way, but I’m not you.

 

[Puentin]

Excellent points. I appreciate it.

HVAC already redone 2 years ago. I think we will be out of this home before the roof is our issue, but I certainly have it in mind. Healthcare is the thing that gets us wound up. Trying to mitigate this through fitness and eating healthy, but it's always going to be there.

Property taxes in Louisiana are more than reasonable. That's already factored into my numbers. Currently about 2400 per year, but I have a homestead exemption of 75000 on my assessed value that never expires.

Wouldn't say I am planning it on a shoestring, but I think that wanting less and being richer for it is something I keep in mind. If I budget for 40K and I can spend more like 60K, there's flexibility there. Not going to spend more on just the two of us once the kids are out. Just need beer and something to grill. Quality time with grandkids and DW are free mostly.

I am in peak earnings for my age and way over market for my field, so I am strategizing a very high savings rate of 65-70 percent after the house is paid off. Hopefully the market is kind, but I won't be leaving it ever. Perhaps I am more Coast FIRE?

 

[Dash man]

Excellent points. I appreciate it.

HVAC already redone 2 years ago. I think we will be out of this home before the roof is our issue, but I certainly have it in mind. Healthcare is the thing that gets us wound up. Trying to mitigate this through fitness and eating healthy, but it's always going to be there.

Property taxes in Louisiana are more than reasonable. That's already factored into my numbers. Currently about 2400 per year, but I have a homestead exemption of 75000 on my assessed value that never expires.

Wouldn't say I am planning it on a shoestring, but I think that wanting less and being richer for it is something I keep in mind. If I budget for 40K and I can spend more like 60K, there's flexibility there. Not going to spend more on just the two of us once the kids are out. Just need beer and something to grill. Quality time with grandkids and DW are free mostly.

I am in peak earnings for my age and way over market for my field, so I am strategizing a very high savings rate of 65-70 percent after the house is paid off. Hopefully the market is kind, but I won't be leaving it ever. Perhaps I am more Coast FIRE?

One thing we didn’t plan on was elder care. My father-in-law lives with us, which isn’t a financial burden, but definitely a lifestyle burden. He has a union pension and social security totaling about $2,500/month. At 88, he can’t live by himself. His wife is in a nursing home on Medicaid. He can’t afford an Assisted Living facility or even Independent Living, and other family are too far from where his wife is and can’t help anyways. Our travel plans are nil because we can’t leave him. We don’t want to be a burden to our kids, if we can possibly avoid it. So we have LTC insurance and other funds to ensure all levels of care can be paid for.
You mentioned a pension. Does it have a COLA? If not, inflation will eat it away over time.

 

[Puentin]

My father passed in April. My mom and DWs parents are still going but this is definitely a cause for concern over which of kids will help or not. I am in the same line of thinking as you on LTC. I don't want us to be a burden on our kids either. I need to do more research on LTC options.

I have two pensions with two very big electrical utilities. I need to verify the COLA aspects but both funding reports for them have been very solid.

 

[gamboolman]

Puentin
Neighbor from Texas here....
I'm responding from Coushatta as ms gamboolgal and I are over here playing the Pokersszzz on a Road Trip - ha !

I think you need to Pile it Higher and Deeper a good bit.

Your projected expenses seem extremely low to me. Is your $40K Gross? You need to include Taxes in your Spend number in Firecalc?

Going at age 48 with your estimated projected Portfolio value and basing your expenses of $40K just seems a helluva stretch to me.

Just sayin.....

I too went international when I was 44 year old in 2003 and worked in West Africa as married accompanied permanent resident basis - I retired at 61 after 43 year in the Oilpatch.

I can tell you from experience that being away from home and wife is hard. That is why ms gamboolgal came over to Africa with me in 2008 and lived there with me until I retired this year. She was able to do that as soon as the kids were off to college. I would not have been able to make it overseas for almost 18 year without her with me - that's the honest truth.
And we were able to come home to Texas roughly twice per year for 3 to 4 weeks each time to see the kids and take care of Doctors appointments and business, etc.

I also ran hundreds of Firecalc and other calculators and of course the home made spreadsheets.

I appreciate and understand the desire to be able to retire, but honestly I can't see how you can go as early as you want to.

The key is expenses and being honest and realistic in identifying everything.

Perhaps ms gamboolgal and I are extravagant and overly conservative but we based our retirement on spending ~$12k to $15K net per month. I'm really struggling with $40K per year expenses......for yawl.

Suggest you take your plan and review it with a paid consultant. We did this afew times as we neared to pulling the plug.

We used Mr. Rick Ferri and we highly recommend him.

We also use Vanguard and had their Personal Advisor Service review our criteria - and of course they made the Pitch for us to use them (we self manage our Portfolio) and megacorp had Retirement Calculators, and also had Voya to review our plan(s) at megacorp. And we had several Financial management companies to review our criteria and listen to their pitch to manage our portfolio.

It is good to get Cold Eyes to review your plan.

I think you need to plan on several more years of making hay while the sun shines....

All the best in your FIRE pursuit. Please keep us posted !

gamboolman.....

 

[Puentin]

Excellent advice and I had definitely planned on a paid review in the future. I will self manage for the long term though.

The wife would join me but not until the youngest is 18. It is no question the most difficult part of being an expat who is married. Not for everyone. However, the desert is no place to be for an extended period of time.

As far as taxes go, I will review again to make sure I am being thorough. This part is always the area where there's too many rules to navigate for the US.

On the item of expenses, yeah, you and the Mrs. are way outta my league. I don't spend 6K on 4 mouths right now. I am pretty confident on the bills and spending having done quite a bit of analysis using our statements for the past several years. It's not that it can't change, it obviously will, but even aggressive forecasting based on our hobbies and travel don't get us very high.

If I have to work past 48, to maybe 53 or 55, it won't be that devastating. I'd prefer not to. I am going to keep piling it on though. I really appreciate hearing from another expat. There's a lot of us out there trying to make it happen.

 

[Puentin]

Just checked on pensions, neither are COLA.

 

[Puentin]

House paid off yesterday, paid it off in a year and 20 years early. Now the fun begins!

 

[Vacation4us]

Good job paying off the house.

As you stated earlier healthcare is the big unknown. How much of your budget are you planning to cover this cost for you ,the wife, and the kids until the age of 26.

40 k a year is extremely low IMHO even with a paid for home. What about inflation? Your retirement could last 40-50 years. In just 20 years what will things cost?

 

[MuirWannabe]

Sorry. But one of my favorite silly jokes that came to mind when I saw the thread title.

Do you know the difference between people who live in Dubai versus the people who live in Abu Dhabi?


The folks who live in Dubai don’t like the Flintstones. But the folks who live in Abu Dhabi do.

 

[MichaelB]

House paid off yesterday, paid it off in a year and 20 years early. Now the fun begins!

Sounds like you’re doing well! Thanks for the updates and stay focused.

 

[Puentin]

Good job paying off the house.

As you stated earlier healthcare is the big unknown. How much of your budget are you planning to cover this cost for you ,the wife, and the kids until the age of 26.

40 k a year is extremely low IMHO even with a paid for home. What about inflation? Your retirement could last 40-50 years. In just 20 years what will things cost?

Great questions and I have certainly been considering all points. At 45, and DW 40, healthcare so far has been a concern, though we are all currently quite healthy with no issues. I currently pay about $800 a month for DW and the two youngest. As far as covering the kids to 26, welp, that may or may not happen. I don't feel obligated to do so. I've been working since 15 and I figured it out, so they can too.

As it stands, that $800 for those 3 is 50% of my remaining monthly fixed costs. DW and I have discussed having her go from PT to FT just for medical next year, and try to cut that number down to something a bit more palatable. My medical is covered by the Abu Dhabi Government and costs me nothing.

As for inflation and the long term outlook, the plan is to focus on the things I can actually control such as asset allocation, a nice reserve of cash to bridge to tax free withdrawals, etc. Perhaps the market will be kind like it has to many here for the last 10+ years, who knows. If you knew the lifestyle of myself and DW, 40K a year is more than enough for the two of us. I am grill-something-outdoors-are-free-6-pack-O-beer kinda guy, and we will be taking advantage of what we love the most: mountains, rivers and grandkids/kids. Travel desires internationally will be satisfied by the time I am done here, so travel domestically will be the only travel we will do after that.

My plan all along has been to focus on lowering expenses; Get rich quick by wanting less! Huge, huge relief to have zero debt at 45 and own a still newer home. Those two Belgians I drank the other night to celebrate never tasted so good.

 

[Puentin]

Sorry. But one of my favorite silly jokes that came to mind when I saw the thread title.

Do you know the difference between people who live in Dubai versus the people who live in Abu Dhabi?


The folks who live in Dubai don’t like the Flintstones. But the folks who live in Abu Dhabi do.

LOL

 

[Puentin]

Sounds like you’re doing well! Thanks for the updates and stay focused.

Thank you for the kind words and encouragement. I feel as though I have never been more focused in my life and it's great to set and smash goals with DW.

 

[pacergal]

House paid off yesterday, paid it off in a year and 20 years early. Now the fun begins!

congratulations on meeting that goal.
You are the only one who truly knows your budget, if you are sure of your numbers, keep plugging along, save as much as you can and have some fun along the way. I am sure it is difficult being apart from your wife and kids.
Continued good luck to you.

 

[Puentin]

congratulations on meeting that goal.
You are the only one who truly knows your budget, if you are sure of your numbers, keep plugging along, save as much as you can and have some fun along the way. I am sure it is difficult being apart from your wife and kids.
Continued good luck to you.

Thank you very much for the encouragement. If there was one thing I wish I could change, it would be to remove he distance from my family for sure.