Retirement dreams?


#21

Hey, a thread I have actual real experience with! As opposed to all those other threads where I just make stuff up. ;) Also, @scottagibson should come in here and share his experience.

I’m semi-retired right now. I worked in IT (systems integration, consulting, design and architecture) until January 2013. Then I quit, and haven’t worked for pay since. I say “semi” because I could take consulting gigs if I wanted to, and also I do some volunteer work.

I wrote a couple of blog posts about this a while back: Why I Retired and How I Retired. TL;DR - Why: I lacked motivation at work, and there are so many interesting things out there to do/read/see/watch/etc. How: I’m a single guy with no kids and a modest lifestyle, who was fortunate in his career choice and investment decisions.

As for what I do now - man, where to start? I spend time working on my various backlogs: games, books, movies, TV shows. (Somehow they keep growing nonetheless.) I stay (moderately) healthy with medium-distance running and visits to a local gym. I get together with friends to play games, usually 3-4 times a month. I volunteer with a local non-profit that educates refugee children. Generally I take 1-2 trips a year, mostly to visit friends and family in the USA but occasionally elsewhere (like Japan a few years back). I sample a lot of locally brewed craft beer.

I don’t understand anyone who asks things like “aren’t you bored” or “what do you do all day?” Dude, have you seen the Internet? And public libraries? And like every brewpub ever? Etc, etc.

I’m in Caledonia, about half hour east of Holland. Let me know if you (or anyone else) comes through the area! Always happy to meet QT3’ers for a beer or dinner or games or whatever.


#22

I have been invoked by ineffablebob!

I’m retired, 56, and living full-time in Ecuador. What can I tell you about retirement in your 50s? Well, here goes.

  1. Health Insurance is a big damned problem. Most of us get health insurance through an employer. If we’re young enough to have always been contractors rather than employees, maybe our premiums aren’t too bad. But what I learned after retiring at 54 was that health insurance for a 54-yr old couple in the US was expensive and very bad. You will not be eligible for Medicare for 10 years or more, so you’ll be buying private health insurance for all of that time. My premiums were about $10k per year for coverage with a $28k annual deductible. And we’re healthy. Think about what $38k in health care cost per year (assuming the worst) for 10 or 12 years will do to your retirement savings.

  2. The Europeans only want you if you’re wealthy. It is very possible to buy or rent cheap real estate in Spain, Portugal, Greece, even Italy or France. But if you want the right to live there other than as a tourist, you’ll need a residence visa. Most countries will give you a residence visa if you buy property above a minimum value - Italy is €500k, Greece is €250k, and so on. So you can get a residence visa by buying a house or an apartment. What you can’t get is access to the national health care systems in those countries, so you’ll still need private health insurance. Some countries will let you buy in to the national health care system - Italy will, for the price of €500k per person. Remember that these countries operate on national health services so private insurance is expensive and rare. And you will still need to carry US health insurance. If you don’t jump through these hoops, your stay in those countries will be limited to what you can do with a tourist visa.

  3. So, we ended up in Cuenca, Ecuador. Ecuador has a very open immigration system and they gave us permanent residence simply because we have college degrees. We’re not required to work - the ‘professional’ visa exists to encourage educated people to immigrate whether they plan to work or not. Cuenca is a world heritage site, a beautiful colonial city of about half a million people. The city is largely walkable, and typical cab fare is about $2. We live here without a car and don’t miss one other than in a positive way. Ecuador uses the US dollar as its currency, so there are no exchange rate issues. And Ecuador lets permanent residence into their national health care system within 90 days if obtaining a visa. I pay $80 per month for full coverage for two people. That said, we never use it, because it costs about $20 to go to a doctor here. We live in a nice apartment near the old town, and we walk to shop, or go to restaurants, or bars, or whatever.

  4. Because we are out of the US for 11 months a year or more, we can claim exemption from the ACA mandate. I pay $150 per month for what is basically a permanent travel health insurance policy with coverage in 180 countries, including the US. I’ve never used it.

  5. What do we do? Travel. Study Spanish. I’m working on a novel. We dine out, or shop in local markets and I cook. There are two symphony orchestras here, and free concerts every couple of weeks. Great bars and restaurants. I don’t say Cuenca is it - there are other cities in South America - but I thoroughly endorse the idea of packing it in and fleeing the country. Next year we’ll spent 3 months in Spain and South Africa in the spring. Not sure what we’ll do in the fall.

Hope this helps!


#23

Other things that come to mind:

  1. Banking is tricky. U.S. banks do not want you as a customer if you don’t reside in the U.S. You’ll want a permanent address in the US, and it must be an actual resident, not a mail handling service. The banks recognize the addresses of mail handling services and reject them as residences. Sort out your banking before you decide to run. Your own banks may not dump you if they can pretend you’re living in the US and if they like you as a customer. We switched all mail to electronic, used a family member’s address was our new residence address, and hired a mail service (US Global Mail) for whatever fell in between. Also, Vanguard will not open an account for you if you don’t reside in the US, so sort out your investment portfolio before you jump. Vanguard is happy with us because they can pretend we’re only traveling abroad, not living abroad.

  2. We sold our home in Phoenix. We still own another house, but it’s a rental income property and we hired a full service agent to manage it. The agent charges 11% and it’s worth every penny. You can’t manage property from overseas. Most of our savings are in Vanguard, but we use several virtual banks (Ally, Capital One, American Express Savings) to park cash and get good interest rates. Our everyday bank is Bank of America. We have a local bank account in Cuenca and I move only in periodically so I can pay rent online. Otherwise we use our debit cards to draw cash when we need it. Remember you’re subject to FATCA and other overseas reporting requirements if the value of all your overseas accounts in aggregate exceeds $10k at any time during the year.

  3. As a US person you are subject to US taxes no matter where you live, forever. And, you may be subject to local and state income taxes. Before you retire overseas, move yourself to a state with no income tax. This means, get a residence address there, and get drivers licenses there. We use Florida as our residence for this reason. Also because my father lives there, and a lot of flights in and out if Ecuador go through Florida. We also use a professional to file our US taxes electronically, and I make quarterly payments online from here.

  4. Get a VPN service. Upgrade your electronics generally, but you’ll find that you can’t order flowers for your mother online if the web site knows you’re in Ecuador. Even when you can, you might find you’re being shown foreigner prices. Also, entertainment content is licensed by region, which means that your content provider won’t care that you’re paying the bill if you’re trying to watch something that isn’t licensed for where you happen to be. This applies to Netflix, Amazon, any provider you can think of.


#24

I’m 55, and don’t see any retirement in the next 15 years.

My first daughter’s college mostly drained our savings and a re-fi on the house, and we will have spent $250,000 when she’s out next year. Then there is grad school, which I don’t expect to be able to contribute to, but there will be cars, help on rent, etc.

Our next daughter starts in college next year, and I don’t expect the cost to be much different. We can cover maybe one year with our savings after #1 is done.

Then a loan from the 401k. Apparently 50k is the maximum allowed, which I didn’t know until 6 months ago.

Bottom line… Not many dreams other than my daughters make out well in life. [edit] - and don’t have to support us in old age.

I will work until 70 if my company will have me, and I expect much of any retirement stash I have will be used to pay college loans. I may even end up doing a reverse mortgage.

College costs are unbelievable now. If you have kids and make a high (+100k) salary, it defines your financial life. If you make more than 100k, there is no “financial aid”. You get no more help than those who make 1000k.


#25

This SO much.

I recently “retired” at 55 from a job and basically crossed the street to work for more money on fewer hours in order to get health care. My intention is to keep reducing hours. If it weren’t for health insurance I would solely be doing volunteer work.

The kids have left the roost which makes things far easier. The actuarial tables for folks with my health profile isn’t good. While mrs-dfs probably has another 40 years in front of her. I don’t expect to be alive in 10 years.

Mrs-dfs has a career that pretty much is her identity. She will keep doing what she is doing till she can’t sell it or she can’t breath.

I’ve traveled a fair bit. I don’t speak anything but English and find the language barrier to be very isolating and unpleasant. I envy multi-lingual folks who genuinely enjoy travel, but that’s not me.

We are both deeply embedded in local organizations and leaving would rip at our roots. I wouldn’t mind living in an area w/out income tax and didn’t see snow, but here we are and I’m pretty sure this is where we’ll stay.


#26

Thanks for saying this. I’m in a similar boat. 55 and no retirement in sight.

College is a challenge. We’re doing everything we can and the debt is just piling up. We’re in the middle of the twins sophomore year and at about 100k in parent plus loans. I’m hopeful we don’t have to take anything from 40ik/IRAs, but it’s certainly not off the table.

It’s interesting what you’re saying about salary and financial aid. I know we have to do the FAFSA forms again next year, meanwhile I’m probably underpaid right now and my wife is struggling to get back into the workforce. We’re right on the cusp of 100k, so maybe it’s all for the best.

After the kids finish college, I might leave the industry I’m in and do something else, if I can afford it!

Good luck DTG.


#27

Fascinating thread Mark!

Er, I did not know that decent savings rates existed anymore. Thank you for the awesome information either way.

The US indeed has many problems that make retirement problematic, depending on your standard of living and what you want to do. I can totally get the idea of going expat. Medical is definitely more affordable elsewhere. But contrary to what Mark thinks, I don’t know that the US future is solely the realm of the rich old white guys. If things get bad enough it may be socialist directions for the country, with such things as universal basic income and a very different tax structure in place… and perhaps a different healthcare system too. Who knows?

I’m 50 now. Kids have not yet started college and unless they go somewhere where the prestige nearly guarantees a lucrative future I will strongly encourage avoidance of student debt.

When I was younger I did not trust our government to sustain social security and have lived for the last few decades with the assumption that despite paying into it, there would not be any there when my turn to retire arrives. The government seemed incompetent to me in financial matters and seems even more so today. So I made the assumption there would not be a retirement and that I would work until I died.

Decades of IT have changed my mind. This is an industry filled with many who should not be in it and led as an industry by management that has allowed IT people to become marginalized and non-strategic to the point where CIOs now often serve the CFO instead of the CEO. In some places it seems they have no more relevance than the director of HR…I mean what the heck, how does that happen?

Forgive my rant. Suffice to say, the idea of working forever is not as tolerable to me as it once was.

The plan now is to get out of debt, build up some passive income investments, and maybe do some light consulting work if I can manage to find it. The rest of the time will be spent trying to uphold health, play games, and travel.

The expat path seems like it would be logistically undesirable for me given my roots in the US and my children. But I did find my trip to Costa Rica last summer to be quite illuminating and would consider it. Seems to be a pretty well run country with strong support for public healthcare and services. Of course they don’t spend on a military, which helps (If they have problems apparently they just give the US a call… must be nice).


#28

It is… Stay there unless your kids can get full scholarships based on merit.

I’m not any type of financial adviser, but I regret having reached for, and obtained, a “Director” position in my company. My salary jumped 30%, I got stock, and the college is sucking it all away. I’m new to the 150k salary world. It’s not like I’ve had a decade of this level of income where I could save up. And as far as I can tell, income is the #1 thing they look at when deciding financial aid.

I’ve come to peace with the idea of being in the top 10 % and having to pay full price for my kid’s college (and maybe taxes, but that’s a discussion for P&R). But it takes retirement off the table for a long time.

First World problems, I know. But we live in a first world (for now).

I knew a guy whose college savings plan was to stop working 10 or so years ago. It worked for him…his kids (who were admittedly very smart) got full rides at good colleges (1 Ivy League) because their income was so low. Made me feel like an idiot.

So back on topic…my Retirement Dream is that my 2 daughters leave college debt-free and find a job that makes them happy and financially secure. It will probably mean I work until I die.


#29

I can’t tell whether to be happy I’m poorer than some of you guys, or miserable I’m poorer than some of you guys.


#31

Lol, well there’s a famous quote that says something like this:

I’ve been richer and I’ve been poorer, and richer is better.

Also:

You can be miserable and poor or miserable and rich.


#32

Another interesting story is that of Northway games, the makers of Rebuild. Mark’s idea of not having a permanent address reminded me of it.

The husband and wife team are constantly moving. Go check out their site. I haven’t read the whole thing in detail but they appear to live a few months at a time in one spot and then move on, all the while working on their games, thanks, I assume, to the magic of portable computing.


#33

They look at assets also. We do not earn anywhere near 100k but have been frugal all our lives. Neither kid received need based aid because we had saved enough to “afford” their tuitions. The semi-joke is that we would have been better off buying something physical (an expensive boat or a motor home) a few years before the first son went to college and then selling it when the second son graduated. Sure we would have lost money on the buying and selling but not as much as 8 years of tuition. Everything will end up ok due to 529s and money from grandparents but its not fun.

I’m 52 and both sons are in college. Instead of retiring we’re moving to teach overseas (content area not just English). It’s a full time job so its really nothing like retiring but we hope to get a feel for living the expat life so that we can make more informed decisions in a few years.


#34

Ignorance is bliss: I’d rather never find out.

Also I miss Star Comma Eight.
Totally unrelated, but it had to be said.


#35

I miss it too! Baby + job have made it tough to update, and I’m spending most of my limited free time trying to learn something ‘practical’ like coding (hence DERPSPACE). That said, I definitely want to get back into game writing whether or not anyone pays me to do it, so I hope Star Comma Eight will return.


#36

I think that’s wise. A college degree doesn’t seem to go as far as it used to, especially if it’s a humanities degree. And after you’re in the workforce for awhile your work experience is what counts and the degree is secondary.

My kids all went to state schools. None of them went after technical degrees (science, engineering, etc.) so them not taking on debt was the right choice.

The only reason I can consider retiring in the next 5-6 years is because of my girlfriend’s pension (AT&T). Between that and SS we will have a decent monthly income. The plan is simply to live cheaply. We’ll splurge on a few things initially but mostly we want an affordable rent and some money to ride the trains or planes in Europe. We’re lucky in that the house we’re in has really gained a lot of value in the 8 years we’ve been in it, according to Zillow.


#37

It’s not like we want to be overseas forever. We’re thinking 4 years or so, with some spurts of coming back for a few months. We will look at it more closely once it becomes closer to a reality. I want to experience the everyday life in different cultures. You can’t really do that as a two-week tourist.

I am very tired of all the guns in the US, though. I just don’t think I want to be around that. So I could see settling down in Toronto. Hopefully global warming will make the winters milder!


#38

I feel for everyone with a kid in college these days. My daughter isn’t 2 yet but by the time she goes to college this broken system would have collapsed. My sister is 8 years older than me, we went to the same school but my parents paid double for me. I graduated 8 years ago and it has doubled again! It’s unsustainable, how can you ask someone to pay 200-500k for a piece of paper that will earn you a sub 50k salary?


#39

I have only one child, and we had him when we were very young, so he’s long out of school. I funded his first degree (two state universities, 5 years). He struggled for a few years, then went back to school for a Master’s funded by student loans. He’s still under water. He teaches public school in California, so at least he and his wife have health care. I’m hoping he has finally settled into a groove and can get by - I’ve been subsidizing him years.

On financial advisers: Do not hire them. If you have money to invest, open a vanguard account and buy only whole market index funds - a whole stock market index fund, a whole bond market index fund, and (maybe) an international stock market index fund. If you’re young, balance your portfolio at 70% stock , 30% bond. Gradually shift it as you age. They tell me I should be at 50/50 now, but I’m actually at 30% stock and 70% bonds.

In your 401k, if they don’t offer vanguard funds, ask your company’s 401k committee why not. I forced my company to add them. If they won’t add them, they should at least have low-cost index funds in the plan, or a target-date fund which mimics the recommended balance based on your age. Keep in mind that target date funds are too aggressive. Be conservative in your balance. And never, never, never buy stocks themselves, nor should you buy managed funds.

Remember that the long-term effective return on capital is perhaps 4%. That’s true for centuries (Thanks Piketty!), and that’s what you’ll get if you buy low-cost index fund and leave them alone. The downturn in 2008 hurt us a lot, but now, even including that, our return has been just below 4%. A financial advisor, or a managed fund, will charge you as much as 2% on your money. That’s half your return! Don’t do it.

Ally, Capital One, American Express Savings Bank will all give you just over 1% on your cash, and that rate will go up as interest rates start to rise, so use them rather than someone like Bank of America, who only pay a tenth of that no matter what your balance.


#40

We’ll be overseas at least 10 years - I won’t live in the US without Medicare because I don’t want health problems to destroy our savings. We like it, though, so maybe we’ll never live in the US again.

Make sure you do some checking on the places you think you might like to live. It’s hard to get the right to live in most countries. Certainly Canada is hard, as are virtually all the EU countries, and the UK is in the middle of actively making it harder. Canada wants you if you’re highly skilled and plan to work, or if you plan to start a business, or if you’re a refugee. Otherwise they don’t want you. The same is more or less true in the EU, except in the Med countries, where they want you if you’re a wealthy retiree. And they are mostly more expensive places to live, and they will demand that you are fully insured.


#41

I’m 39, two kids 5 and almost-1… We almost “retired” a year ago, where we were to sell the house here in the UK, move to a low-cost house in the States, buy a rental, live off that and a little freelancing and whatever my wife decided she wanted to do, and make it work (my wife is a US citizen). Whelp, Brexit happened, cutting our net worth, and Trump got elected, putting health care in doubt… forget it. So I’m resigned to working for at least another ten years in London, but after the mortgage is done is 6-7 years, I’m taking fun jobs afterwards, maybe to whatever VR turns in to. University is a worry, we’ll deal with that as it comes.

But my ideal right now is to move to a small community, and just work on my own little illustration/art projects until my RSI prohibits it, and then turn to dust. Probably take a few vacations around Europe in spring/autumn, unless the post-apocalypse has made anything south of us a climate hell, but otherwise just eat well, make little things, get a lot of sleep.