After graduating from college, you got a job – not your “dream” job, but one that paid the bills. Thinking you would eventually move into your dream job or profession, you didn’t worry about your future, only about the present. Next thing you know, 15-20 years have passed and all of a sudden you’re not 20-something anymore. Not only did it take you much longer to attain that dream, you realize you haven’t saved enough for retirement along the way. With retirement staring you in the face only 20 some-odd years away, you scramble like crazy to concoct a plan.
Whether the excuse was waiting until you had your dream profession in place, made enough money, or thinking you had nearly an eternity to worry about those golden years, you haven’t saved enough to live comfortably in retirement. Trying to live the equivalent lifestyle you have now in retirement will be difficult since time is working against you. You don’t have 30+ years of compounding interest to help build your nest egg. Rising inflation will also mean that even if your income remains consistent, the cost of living will be higher in retirement.The short 20 years or less until retirement will be spent focusing on saving as much as you can now for a modified lifestyle then.
There are some solutions to not having saved enough to live comfortably; one of which is to continue working well past your retirement age. Some people may be just fine with this, yet others may not. Another solution may be having to settle for lifestyle deflation. Reduce your expenses as much as possible and live frugally. Again, for some, this will be the solution of their choice. But a third solution often overlooked, is moving out of the country to one that is much less expensive. Some people may find this solution difficult since it may mean leaving family behind (children and grandchildren). However, for couples who have family all over the world, or no children, this could be the perfect solution.
Recently, a Yahoo Finance article identified five countries that cost less than $500 a month in rent. I found two of these countries intriguing and added a third:
- Las Tablas, Panama – One of my favorite picks since health care is accessible and very good; something that’s very important as we age. Rent ranges between $300-400 a month which means if a person can bring in $1,000 US a month, that would leave plenty of money for food, utilities, transportation, and health care.
- Chiang Mai, Thailand-Another favorite. I’ve heard Thailand is beautiful. I also found an Expat Club that meets each month to create friendships and help members integrate into the culture.
- Belize – This wasn’t on the original Yahoo article list, but I’ve read that Belize is an up and coming retirement and eco-tourism destination. I also found a couple of sites describing first-hand experiences of moving to Belize. One is a personal blog, the other site explains more matter-of-fact information. Belize is affordable, English is one of their primary languages, and health care is very affordable.
Becoming an expat isn’t for everyone. This is a conversation my husband and I have been having lately. Though retirement is 25 years away for us (or sooner perhaps), we’d have to really research the benefits and potential drawbacks for leaving the US for good. However, it’s definitely an option to explore given that our nest egg may not allow us the same luxuries here in the states.
It can be hard to enjoy your retirement when you are worried about money, and taking out a standard mortgage on your home will not help matters because you will have a new mortgage bill to pay. A reverse mortgage is designed specifically to help you during retirement by allowing you to tap into your home equity with no short-term consequences. After you use a reverse mortgage calculator to figure out the percentage of home value available, you can spend it in whatever way you want. However, if you ever move out of your home, you must pay the loan balance back with interest. Alternatively, you can allow the sale of the home. None of your other assets can be seized, so any balance remaining after the sale will be erased.
Be sure to read my other series posts.
Have you thought of some alternatives to traditional retirement? Have you researched other countries?