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Hi, from soon to be FIRE, looking to retire to Italy.
Old 01-15-2011, 09:38 AM   #1
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Hi, from soon to be FIRE, looking to retire to Italy.

We are planning on retiring in 2 years.

My plan is to move to Italy, but DW is not to sure about it (coming around)

History: I am 52, DW is 49, I am retired active duty USAF (1996) with 30% disability from VA; DW will retire FERS (she was active duty USAF for 13 years and has been Air National Guard for 14) with current 20% disabilty from VA and Social Security supplement with FERS.

We current collect the following:

My USAF retirement; reduced dollar for dollar of VA payment
My VA tax free disability
DW VA tax free disabiltiy
My 125k income for IT work
DW 68k income from ANG and civil service

We never had kids will be debt free at the end of 2011 except for house, which we plan to sell in 2013 at about 150k profit based on currect appraisal and som other assest for addition to the saving of about 280k.

We are maxing out 401k, TSP, and IRAs every year including catchup.

We are planning on having 1.1mil in post tax accounts, 401k/IRA, and TSP.

Will start to draw about 2% from post tax accounts for the first 8 years of retirement and at that time have more fixed income with adding my SS at 62, DW military retirement at 60, DW SS 62 (SS supplement stops) we will not have to touch our 401k.IRAs or TSP until RMD at 70.5 based on a 5% ROI on account and at this time we are averaging over 7% over the last 3 years since we continued to invest all the way through the down turn.

We are both entitled to Tri-Care and VA medical and can use the Tri-Care in Europe, but will get personal health insurance too.

Average income in Italy is about 35k/year we are planning on having about 64k to live on, going to rent away from the cities.

Want to get your opinions on the plan.

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Old 01-15-2011, 09:41 AM   #2
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The financial side of your plan looks very good.

This, on the other hand, appears to be iffy:
Originally Posted by DFA View Post
My plan is to move to Italy, but DW is not to sure about it (coming around)
Numbers is hard

Retired in 2005 at age 58, no pension
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Old 01-15-2011, 10:16 AM   #3
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I won't comment on your financial plan, but I will say I admire you for moving to Italy. There are enough unknowns to staying here in retirement, I wouldn't be daring enough to add the unknowns of another country. That said, I had the good fortune to live in Germany for 4 years, I have absolutely loved every visit I've made to Italy in my lifetime and I suspect I would be thrilled to live there...
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
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Target AA: 50% equity funds / 30% bond funds / 20% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
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Old 01-15-2011, 11:37 AM   #4
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I would love to move to Italy, but the young wife is an all American girl who doesn't speak any foreign languages, so it is unlikely.
Living an analog life in the Digital Age.
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Old 01-17-2011, 01:59 PM   #5
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Are you familiar with living in Italy? $64k may sound like a lot, but it won't be as much as you think.

Some of your retirement income may be tax free in the US, but will Italy tax it? Your taxes here will be probably double what you pay in the US, and there's a 20% VAT, of course.

I am living in Italy right now, and it is difficult to believe how expensive things are and how quickly hundreds of euros can evaporate here. I wouldn't think there would be much property for rent in the country, but I could be wrong. I live in Rome and pay €1050 in rent and €150 in condo fees per month for a small, one-bedroom apartment (45 m^2 or about 500 ft^2). Fortunately, it came furnished; property for rent may not even come with a kitchen. Also, ordinary maintenance is the responsibility of the tenant, so if the drain clogs, you have to pay the plumber, not the landlord. Electricity cost us 10.4 cents per kw/hr in the US; here it is 30.9 euro cents (40 cents US). We use less electricity than we did in the US, but we still pay 2-3x more, around €250 every two months. Plus the annual lease registration tax, plus the TV license, etc.

Are you familiar with the requirements to get a visa and permit to stay? The bureaucracy here is incredible. If you are not a citizen, it may take a year for you to get issued enough permits and papers to get to the point where you can buy a car, which I would think could greatly hamper country living. I am a citizen, and it still took me six months just to be granted residency and get an ID card.

Do you speak Italian? There is a lot of English spoken in the big cities, but away from the touristy stuff, you need to speak Italian.

Italy is not all bad. There are many things I like here, especially being able to travel in Europe cheaply. But I am looking forward to returning to the US. I make considerably more than $64k (working for a US company, an Italian company would pay maybe 20% of my US salary), and even I feel stretched.
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Old 01-17-2011, 02:23 PM   #6
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Thanks for the info, the 64k is just a budget I planned out @ about 2.1% of assets withdrawal. I have spent a lot of time traveling while I was in the USAF for 20 years and found Italy one of the best places to visit.

So if the Italians would pay 20% less then you are making then how do the locals live on that? If you lived out of the Rome how much would you save, and if being retired with no real need for a car all the time to get back and forth to work that would be a saves too?

We don't speak Italian, but are willing to learn, really like the layed back pace of the countryside vs the cities.

As for taxes that is one thing that I am still trying to work out since you can not find much on line about what is taxed and at what rate. As for the 20%VAT that is another thing that has added to the plan. There are only the two of use we don't drink, we cook at home a lot, just what to spend time doing a lot of low cost stuff and not being the tourist.

I have checked into the visa, permit to stay and we need to apply before going and keep it up to date once we are there. Still need to convince the DW to go, she is suggesting 3 months to see how it is.

Thanks again.
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Old 01-17-2011, 02:48 PM   #7
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Originally Posted by DFA View Post
Still need to convince the DW to go, she is suggesting 3 months to see how it is.
With all due respect, your plan is doomed. 3 months is ONLY long enough for her to struggle with the languge, cultural differences, and distance and decide she doesn't like it, not long enough for her to get acclimated to the languge, cultural differences, and distance and decide she wants to stay.
YMMV, I hope I'm wrong. (it's happened before...)

Good luck.
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Old 01-17-2011, 03:14 PM   #8
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LOL, an Italian company wouldn't pay me 20% less, they'd pay 20%, i.e. 80% less.

How do Italians do it? First, they live with their parents until they're well into their 30s. Then when they get married and move out, their parents buy them an apartment. Then they scrape by on €1000-1200 a month, which is considered a good salary. Many of them leave, which is why Italy is shrinking and having to let in immigrants. Italy is a horrible place if you're working, but it's probably a lot better if you're not.

A three-month trip could be a good idea, but that would best done as a long vacation, three months being the longest you can stay as a tourist with no visa. Getting the visa to move here requires either proof of property ownership or a registered lease, but you wouldn't want to sign a lease unless you were committed, as the notice period to break a lease is usually six months.
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Old 01-17-2011, 03:50 PM   #9
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big scrooge,

Thanks for the additional information; so I did a little math so 1200 eruos/monthly plus if I add in rent at 1200 euros/monthly that only take me to around 29000 erous/year. If I have 50,000 euros/year with an additional 15,000 euros/year as needed I still think we could do it.

As for the wife, she has been to Europe many times and loved it, spent 6 months in Germany, she has been to France, England, Ireland, Lux, Amsterdam(sp), and several other places, she loved them all, but just never thought about living there. She is willing to try Italy and if she like it stay or find some other place in Europe to go and try. She is not fighting this very hard, just has some questions about jumping in with both feet.

Thanks for all the comments.
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