Adios Estados Unidos - hola España?

[Thomas3857]

Hi, Want to retire to Spain in the next 2 years. What do you think?

Me: 55; Wife: 56

Tax deferred accounts (IRA, SEPP, 401(k), etc in a conservative allocation: $1,000,000
Taxable accounts: $200,000
Cash (think the market is due for a correction): $1,100,000
House - paid for (worth $225k) and can rent with a net of $1200 monthly
Rental property (worth $280k) nets approximately $1500 monthly
Social security - 62/67/72 (me) 2k, 2,500, 3,000 and wife $900/1200/1500

Annual income: approximately $275,000. Wife - no job since 1998.
Two kids - one adult married and on her own financially (finally) and one other a junior in college.

no debt

Been to Spain many times. Speak Spanish (well enough). Cost of living is cheaper than US. Think we can live comfortably on $80,000 yearly including rent. Don't want to buy in Spain in case we return to USA.

Likely need to maintain our US health insurance at nearly $1000 per month plus international health insurance (required for visa) at approximately $350 per month. Both very healthy with no problems (so far).

Tax treaty with Spain so no double taxation but will have to pay 24% so if I pay $20% to USA will still owe Spain 4%.

Do I sell houses or continue to rent? Too conservative with cash?

Firecalc: 100% but I may need more than 30 years (I hope).

Doable?

Thanks for any input.

 

[Sunset]

Why would you need to maintain US health insurance ?
Should you want to travel back to US for a visit, just buy travel insurance like most tourists.
Use the money saved to get deluxe Spanish health insurance, or to pay more out of pocket costs.

Who is going to manage your rental houses while gone. Do you really want to have to deal with anything about them from Spain ?
Also you will be running down the clock on selling the home tax free, what if you love Spain and decide to stay longer ?

Where approximately are you thinking in Spain ?

 

[Thomas3857]

Thanks Sunset - Since we're not sure if Spain is our forever destination and may return to the US I didn't want to be stuck having to re-apply for health insurance especially since we will both be older and may have pre-existing conditions that although may still be covered may increase the price substantially. I have thought about the aggravation of owning rental property while living in another country but like the idea of steady (hopefully) net income of approximately $2,700 per month and having a place to return to in the event we return.

We are considering Valencia. Spain's third largest city on the sea and the cost of living is considerably cheaper than Barcelona and Madrid.

Thanks for your input. Tom

 

[Nemo2]

We are considering Valencia.

Saw more beggars there than elsewhere in Spain, and on a local bus we were on a guy snatched, but didn't get away with, a tourist's pack.

 

[Mr. Tightwad]

Buenos suerte.

I would sell any real estate before leaving whether you return or not.

 

[Thomas3857]

Saw more beggars there than elsewhere in Spain, and on a local bus we were on a guy snatched, but didn't get away with, a tourist's pack.

Well we currently live in Memphis so beggars and purse snatchers would be a welcome change!

 

[Thomas3857]

Buenos suerte.

I would sell any real estate before leaving whether you return or not.

That decision is one we are wrestling with now.

 

[Nemo2]

Well we currently live in Memphis so beggars and purse snatchers would be a welcome change!

Yeah, I guess it's all relative.

How about Malaga or Cadiz?

 

[MarieIG]

You mentioned that you have one rental property now.

How/ who is overseeing that one?

I like the idea of you keeping properties, but if there is no one to oversee them, it is a bit of a risk. (And yes, I understand that there are professional management companies, but they can be a bit of a hit or miss.) If one of your kids is nearby, and reliable, that might be a consideration.

BTW, I like the idea that you are looking at this two years in advance, as it gives some time for things to calm down after Covid and you can see how both Spain and the US are doing. I also like the idea of you renting rather than buying. I suspect that this is something you may enjoy for a few years; but return once either a grandbaby comes along, you turn 65 (and Medicare kicks in) or you start needing more by way of assistance.

P.S. Before claiming SS make sure that you look at all the options. Obviously you have a lot of time in that regard.

 

[Thomas3857]

Yeah, I guess it's all relative.

How about Malaga or Cadiz?

Haven't been to Cadiz yet. Spent about two weeks in Marbella a couple of years ago (just south of Malaga). The problem we have with those cities and really all of the Costa del Sol is the incredible amounts of tourists and ex-pats especially from the UK. I know it's ironic since we will also be ex-pats but we are looking for a place a little less touristy and more authentic while still allowing us to enjoy a large metro area.

 

[Thomas3857]

You mentioned that you have one rental property now.

How/ who is overseeing that one?

I like the idea of you keeping properties, but if there is no one to oversee them, it is a bit of a risk. (And yes, I understand that there are professional management companies, but they can be a bit of a hit or miss.) If one of your kids is nearby, and reliable, that might be a consideration.

BTW, I like the idea that you are looking at this two years in advance, as it gives some time for things to calm down after Covid and you can see how both Spain and the US are doing. I also like the idea of you renting rather than buying. I suspect that this is something you may enjoy for a few years; but return once either a grandbaby comes along, you turn 65 (and Medicare kicks in) or you start needing more by way of assistance.

P.S. Before claiming SS make sure that you look at all the options. Obviously you have a lot of time in that regard.

Thanks Marie - Right now I manage the rental. It's a condo so low maint. and it's only 10 miles away so it's doable at this point. I like that with some planning we could make it our home if we return to the US.

 

[Nemo2]

The problem we have with those cities and really all of the Costa del Sol is the incredible amounts of tourists and ex-pats especially from the UK.

I hear ya.....I was first in Spain in 1963; all along the coast just small fishing villages, (in fact I don't know if it was even called the Costa del Sol in those days).....none of the unsightly apartment buildings.

DW & I were in Fuengirola a couple/few years back...what a change.

We were up in Northern Spain, León et al, (a different few years back).....tourists everywhere too....and like Pogo, "we met them and they were us".

 

[Retireby45ish]

I agree with the comment on not needing insurance in US if you will be there. If you do come back you should be able to apply for ACA, and if you plan income right get a subsidy to boot.
Not sure how rental income is factored into ACA.

Health care is way cheaper in Spain.

Can you reside there year round without a resident visa or something similar? I assume that part is easy.

But at ~15k per year, I’d look again at health insurance options. That is a big chunk of your spend, so if you can do better that frees you up for a lot more tapas and pinchos!

 

[gamboolman]

Agree with other recommendations - sell your houses.

We lived and worked in Africa for 17 years as permanent residents for megaoil corp. We kept our home in Spring, Texas - BUT our son lived in it.

No way in Hell would I keep a home in USA and live International.... but that's just us....

gamboolman.....

Lifes A Dance And You Learn As You Go...

 

[WestUniversity]

Look into health insurance for expats through Cigna Global. From what I have read you can get a policy that is valid in the country to which you move to, as well as here in the US.

https://www.cignaglobal.com

For a lot of reasons I’ve been researching leaving as well. I also speak Spanish and I’m planning a move to Latin American in the next year or two...

 

[tb001]

This looks like an amazing adventure! Others are more knowledgeable than I am, but on the real estate, look into whether you would be covered if the home was vacant. I can’t imagine being remote for an extended period of time with a property. Ive seen too many houses where a washer line or toilet valve broke while the owners were away.

The flip side is that if you’re tied to a specific area and the housing market takes off you may be priced out. I saw that happen in the Bay Area when people decided to leave and wanted to come back. Seattle and Portland as well.

Just a few more things to think about.

 

[Sirka]

Agree with other recommendations - sell your houses.

We lived and worked in Africa for 17 years as permanent residents for megaoil corp. We kept our home in Spring, Texas - BUT our son lived in it.

No way in Hell would I keep a home in USA and live International.... but that's just us....

gamboolman.....

Lifes A Dance And You Learn As You Go...

+1
I would keep the condo, get helth insurance in Spain as recommended by others and enjoy the retirement.

 

[RetMD21]

I think you will be fine. With a conservative AA and a huge amount of cash I think you are being overly conservative for my taste.

 

[Mr. Tightwad]

+1
I would keep the condo, get helth insurance in Spain as recommended by others and enjoy the retirement.

Why would you advise to keep the condo?

 

[Thomas3857]

I hear ya.....I was first in Spain in 1963; all along the coast just small fishing villages, (in fact I don't know if it was even called the Costa del Sol in those days).....none of the unsightly apartment buildings.

DW & I were in Fuengirola a couple/few years back...what a change.

We were up in Northern Spain, León et al, (a different few years back).....tourists everywhere too....and like Pogo, "we met them and they were us".

I've been to Spain 3 times once for an extended period to get a feel for the country. Never been to Northern Spain, however. Too cold for my taste but the geography looks amazing.

 

[Thomas3857]

Thanks for everyone's advise. As I suspected, I'm likely too conservative but there's something comforting about money in the bank even if inflation reduces purchasing power. Still undecided about rent/sell real property. Like the idea of a safe harbor in case of return to US and the cash flow vs. the hassle of owning property while living overseas. Lots to ponder over the next two years. Thanks again - Tom

 

[explanade]

What is your visa situation?

 

[ATX78701]

I’m doing a test version of what you are planning with a few different facts: in Mexico, no spouse, no kids. I did sell the house and most all of my possessions for peace of mind. Mexico is giving the chance to improve the Spanish before I decide if I’ll stay here or try other Latin America or European country.

That said: one item I saw with Spain is a net worth tax. I think it’s set regionally. Madrid is at zero but no information on the cities you listed. Might want to google that a bit and see if you might get pulled into it or not.

Not Spain specific, but have you thought about where to maintain a permanent mailing address? One of the addresses for the kids would work. Plus consider a service that scans your mail for other things. Plus consider as much electronic delivery as you deem acceptable.

Consider a VPN. Some banks (Marcus for example) won’t let me connect from a non-US IP address.

Rent at first don’t buy.

PS: I agree with you comment about Memphis. Lived in Cooper-Young for years. Was happy to leave.

 

[Thomas3857]

What is your visa situation?

Haven't started the process. As I understand it I can get a non-lucrative visa w/o much trouble since we won't be working in Spain and have sufficient assets. I think it's good for a year and renewable from that point on. Have to apply while we're in the states and go to the nearest Spanish consulate which for us is likely New Orleans.

 

[MichaelB]

Do you plan on leaving your portfolio in US$ or converting some or all to euros? Living in one currency and having income / assets in another is always a bit tricky.