Author Topic: Forget $600K, retire on $100K in the Philippines (or other country)  (Read 65160 times)

josstache

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #100 on: February 07, 2015, 05:08:09 AM »
While SE Asia must undoubtedly be cheaper, I think it's underrated how cheap South Korea and Japan can be if you know what you're doing and don't live in the very largest cities.  I intend to FIRE somewhere like Fukuoka, Japan -- metro area with 5.6 million people, excellent food and public transportation, and conveniently located 2-bedroom apartments for like $450 a month.

My question is how you *can* retire in Japan? I definitely agree the countryside is cheap, but Japan doesn't pass out permanent residencies the way SE Asia does. Unless you've had a stable job teaching English or something, they're not going to let you stay.

You've caused me to notice I take this for granted because I have a Japanese husband.  It would take a bit more doing if you don't have access to a Japanese spouse. 

Gerard

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #101 on: February 07, 2015, 06:50:05 AM »
I think a lot of the discussion here frames retirement in a traditional sense (after 60, declining health), but some of the variables change dramatically for mustachians (younger at retirement, flexible, frugal). Some in-between options make a lot more sense for us.
Such as:
1. Funky snowbird: Live somewhere warm, cheap, and awesome part of the year. Keep a tiny cheap home back in your country of origin. Or rent it out during the school year or vacation high season, then come home when it's empty. This keeps people in touch with family and maybe maintains health insurance (in Canada, for example).
2. Two retirements: Live SWC&A (or slow-travel) during your 30s and 40s. Invest the difference between your costs and your earnings to cover higher expenses later in life. Return to home country as parents age or your own health care needs increase.
3. Something in between 1 and 2: retire and rent somewhere else, keep something cheap back home (maybe renting it out), be willing to leave everything behind if somewhere-else falls apart.
4. Use your plentiful and flexible free time to maximize travel hacks to get back home cheap (e.g., travelling off-peak, or getting from Bangkok to Vegas by finding a cheap ticket Singapore-LA and riding the bus at either end).

Beric01

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #102 on: February 07, 2015, 12:43:17 PM »
While SE Asia must undoubtedly be cheaper, I think it's underrated how cheap South Korea and Japan can be if you know what you're doing and don't live in the very largest cities.  I intend to FIRE somewhere like Fukuoka, Japan -- metro area with 5.6 million people, excellent food and public transportation, and conveniently located 2-bedroom apartments for like $450 a month.

My question is how you *can* retire in Japan? I definitely agree the countryside is cheap, but Japan doesn't pass out permanent residencies the way SE Asia does. Unless you've had a stable job teaching English or something, they're not going to let you stay.

You've caused me to notice I take this for granted because I have a Japanese husband.  It would take a bit more doing if you don't have access to a Japanese spouse.

Yeah, the only way I decided I could make it work was if I either arrived and held a job for quite some time (which doesn't exactly mean retirement to me), or else if I found a Japanese spouse. I love Japan - it's probably one of the top countries in world for me. But I'll most likely be getting a tourist visa and visiting from SE Asia after I FIRE.

Punchingat50

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #103 on: February 07, 2015, 01:08:35 PM »
This is part of my plan (slow travel), but I wouldn't want to do it permanently, and I'd want to be able to afford to come home to visit on occasion, as well as travel to other neighboring places.

I could retire with 500k and spend the first 5-10 years spending VERY little in foreign places while my stash continued to grow on it's own, but I wouldn't want to retire on 100k and feel stuck in a cheap foreign place because that's all I could afford to do.

Yeah, I don't think retiring on $100K is a good idea either. My plan is to retire in SE Asian on ~$500K, which should give me a very good lifestyle overseas, and a modest one in the US.

THIS ^^. My number is $650k. Looking at the Philippines, but I'm open to anywhere as long as it's in my budget.

The Philippines is definitely the budget option! Malaysia is currently #1 on my list, as it's basically the most advanced country in SE Asia (after Singapore), while still being very affordable (particularly outside of the biggest cities). The healthcare is also some of the best in the world, for extremely cheap.

But the Philippines definitely could be a better option. it's even cheaper, and residency comes easier than Malaysia.

One thing I'm thinking seriously about is ultimately getting a citizenship in one of these countries and rescinding my US one. Of course that's a ways down the road,  but as the US both declines and stretches its arms out around the world to grab your money, holding a US citizenship becomes more and more of a negative.
Haven't this other spots in Asia but I got ten more years to figure it out ;)

rob in cal

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #104 on: February 07, 2015, 03:55:15 PM »
Parts of southern Europe are cheaper than elsewhere, but not at SE Asia levels I believe.  I keep getting this emails from International Living about forgotten parts of Italy and Spain that look wonderful, and are off the beaten path for North Americans anyway, like Lecce in Italy, or Malta.  I don't think its too hard to get a one year "long stay" visa with proof of assets in some of these countries. 

SteveR

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #105 on: February 07, 2015, 05:47:38 PM »
This thread is so intriguing, because I'll have about $150k in liquid assets by the end of this year. I joke with spouse about expating and retiring, but they don't see to think it's a very funny joke!

I took a trip to India last year; my nothing-fancy-but-livable hotel in Delhi was £8/night, with wifi and breakfast included. I had similar "whoah, I could retire *now* if I lived over there" thoughts. Would probably be a miserable life away from family and friends, but an eye-opener all the same. I could imagine taking extended 3-6 month holidays in low cost locations once I'm FI as a source of flexibility in economic downturns; going all-in and retiring on too little to a low cost location permanently would be painful, but a few months of cheap living before coming back home would be fine, I think, and I'm sure I'd appreciate the luxury of living in a wealthy country again all the more for the experience.

MrScottStache

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #106 on: February 08, 2015, 09:40:07 AM »
Interesting article on the challenges of transferring money to another country.

http://www.npr.org/blogs/parallels/2014/01/16/263105199/ln-a-global-economy-whys-it-so-expensive-to-transfer-my-money

Albert

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #107 on: February 08, 2015, 10:15:07 AM »
Parts of southern Europe are cheaper than elsewhere, but not at SE Asia levels I believe.  I keep getting this emails from International Living about forgotten parts of Italy and Spain that look wonderful, and are off the beaten path for North Americans anyway, like Lecce in Italy, or Malta.  I don't think its too hard to get a one year "long stay" visa with proof of assets in some of these countries.

I've been to Malta. It is cheap by European standards, but not dirt cheap like some parts of SE Asia. Probably not any cheaper than rural Alabama or Texas. A better climate, though and cheap access to lot of other interesting places.

iamlindoro

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #108 on: February 08, 2015, 02:37:25 PM »
Very interesting as that could be the cost of living anywhere in the EU (if you converted the numbers to Euros) for example this are the rough costs of living in Munich Germany, one of the most expensive ares in Germany.

Accommodation (Basic)  €800
Electricity  €40
Food 140 -250
Internet / phone €50
Transport (public) €50
Medical insurance  ???

You can live comfortably in Munich on 1500€ a month as a single person.

Maybe as everyone is young but what about health insurance? I've had 4 knee operations and facing an operation for prostate cancer now

Yes, this seemed a little on the high side to me if we're talking about a basic COL.  A really great resource for seeing and comparing cost of living is Numbeo, though admittedly it's crowdsourced so the info should all be double checked.  Here, as an example, are the numbers for a couple SEA cities:

http://www.numbeo.com/cost-of-living/city_result.jsp?country=Vietnam&city=Hanoi&displayCurrency=USD
http://www.numbeo.com/cost-of-living/city_result.jsp?country=Philippines&city=Manila&displayCurrency=USD
http://www.numbeo.com/cost-of-living/city_result.jsp?country=Thailand&city=Bangkok&displayCurrency=USD

Those are capital/huge cities, and the prices start to drop pretty quickly when you get into second cities/large towns, and if you're willing to live outside the city center:

http://www.numbeo.com/cost-of-living/city_result.jsp?country=Vietnam&city=Hoi+An&displayCurrency=USD
http://www.numbeo.com/cost-of-living/city_result.jsp?country=Philippines&city=San+Fernando&displayCurrency=USD
http://www.numbeo.com/cost-of-living/city_result.jsp?country=Thailand&city=Phuket&displayCurrency=USD

All of that said, I might be looking for the kind of amenities in SEA that would bring me close to Lukim's accommodation budget.  We'd probably want a 3 bedroom apartment even though we could get away with one, and we'd be looking for modern comfort/full amenities in that apartment.

Numbeo is also a fun tool to compare your own city with a place, to see what kind of spending power you would have there.

Cassie

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #109 on: February 08, 2015, 05:05:47 PM »
"One could retire in Missouri on 400 a month with a 40k paid off house.  So what is that,  150k net savings?  Water 50, heat 80,  tax/ins 60,  food 75,  phone 10,  misc 100"

I think this is a very bad idea because other expenses do & will come up that will cost more then 100/month or force you to use your savings.

okonumiyaki

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #110 on: February 08, 2015, 05:38:46 PM »
One thing I'm thinking seriously about is ultimately getting a citizenship in one of these countries and rescinding my US one. Of course that's a ways down the road,  but as the US both declines and stretches its arms out around the world to grab your money, holding a US citizenship becomes more and more of a negative.

The only country is SEA that is relatively easy to get citizenship is Singapore.  The rest, not so much.  E.g. having an Indonesian spouse only gives you the right to live in Indonesia, doesn't give you right to live there or buy property, same with Thailand.

Captain and Mrs Slow

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #111 on: February 09, 2015, 12:44:15 AM »
I have some friends, he's British and she's Mexican and they alternate between Mexico and Spain and they said Mexico is very cheap especially on the services side. You can hire a full time house keeper for like $2 an hour and such. Housing is, depending on where you come from, pretty cheap. If you're in the right areas full of English speaking expats (usually Canadian or American).

Problem is most expats head home for the summer months.

Lukim

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #112 on: February 09, 2015, 01:12:27 AM »
In my earlier post I said my rough monthly figures for a single person or couple to live a basic life in South East Asia (excluding Singapore) are;

Accommodation (Basic)  $800
Electricity  $100
Food $300
Internet / phone $50
Transport (taxis) $50
Medical insurance  $100.

The following are the actual costs for me living in South East Asia (basically as a single person)

Accommodation US$3600 (that is what the apartment across the corridor from me rents for per month)
Electricity / building charges US$500
Internet / phone / TV US$130
Staff US$450 (everyone has at least a part time maid - you will be regarded as strange if you do not employ at least one person)
Food US$300
Fuel (for small car) US$120
Medical insurance US$300
Tennis / Gym membership US$75
Entertainment / Meals and drinks out US$400
Travel (average per month)  US$800

That comes out at US$6,675 per month.  I accept half of that is the accommodation cost (I own the apartment).  You could live somewhere for US$1200 per month so that reduces the monthly spend to $4,275.

I do not live a champagne lifestyle - but I am not wanting to live poor either.

Many of my local friends have much more affluent lifestyles than I do (much more).

I just think it is unrealistic you can live a pleasant, enjoyable life in retirement in S E Asia on a nest egg of US$100k.




okonumiyaki

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #113 on: February 09, 2015, 01:23:51 AM »
Lukim,

I am guessing HK?


Lukim

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #114 on: February 09, 2015, 01:29:14 AM »
No, Jakarta.

okonumiyaki

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #115 on: February 09, 2015, 01:42:39 AM »
It's gone up!  (I was there 2002-2006, paid about 25,000 US a year for a house in Permata Hijau)

But with the traffic these days - yep, would need to be a central apartment

Lukim

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #116 on: February 09, 2015, 04:29:13 AM »
$25,000 per year for a house in Permata Hijau 10 years ago sounds right.  That would now probably be about $30,000 or $2,500 per month.

A single person or couple can still find somewhere reasonable to live for $1200 per month, but they are now going to get anything decent for less than that within reasonably livable area (you can probably get something for less today in the areas that are flooded!!).

nereo

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #117 on: February 09, 2015, 09:37:53 AM »
"One could retire in Missouri on 400 a month with a 40k paid off house.  So what is that,  150k net savings?  Water 50, heat 80,  tax/ins 60,  food 75,  phone 10,  misc 100"

I think this is a very bad idea because other expenses do & will come up that will cost more then 100/month or force you to use your savings.
I believe Bob W's basic point was that you can retire for much less than $600k inside the USA if you go to one of the many low-cost areas.  If you follow his example and use the 4% SWR you'd actually have a $30k cushion to handle those 'other expenses' that you were referring to.

Beric01

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #118 on: February 09, 2015, 11:26:23 AM »
In my earlier post I said my rough monthly figures for a single person or couple to live a basic life in South East Asia (excluding Singapore) are;

Accommodation (Basic)  $800
Electricity  $100
Food $300
Internet / phone $50
Transport (taxis) $50
Medical insurance  $100.

Your food estimate seems really expensive. I spend $100/month on food here in the US. Isn't SE Asian food supposed to be cheaper?

Also, how is cycling in SE Asia? I cycle everywhere here in Silicon Valley, but of course it's not as warm. Do you eventually just get used to it? Here in the US cycling is a major saver for me, allowing me to not own a car.

Overall though, your expenses seem really high. But that's because I'd be looking for a studio. I live in 250 square feet here in the US and see no need for more living elsewhere.

limeandpepper

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #119 on: February 09, 2015, 11:38:21 AM »
I just think it is unrealistic you can live a pleasant, enjoyable life in retirement in S E Asia on a nest egg of US$100k.

I agree that a US$100k nest egg is really pushing it, even for a low-cost area like SE Asia. Triple that amount, though, and I think I can have a pretty decent life in some of the countries there.

tarheeldan

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #120 on: February 09, 2015, 11:53:03 AM »
You don't have to spend that much even in downtown Bangkok.

Decent apartment $300-500/mo (e.g. http://www.thaiapartment.com/apartment/the-fifth-residence-4291 or http://www.thaiapartment.com/apartment/108-apartment-4962)

Food certainly could be done for $100-$150/mo including restaurants.

ETA: I'd say 300k portfolio would do just fine in Bangkok.
« Last Edit: February 09, 2015, 11:56:12 AM by tarheeldan »

Beric01

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #121 on: February 09, 2015, 11:54:45 AM »
I just think it is unrealistic you can live a pleasant, enjoyable life in retirement in S E Asia on a nest egg of US$100k.

I agree that a US$100k nest egg is really pushing it, even for a low-cost area like SE Asia. Triple that amount, though, and I think I can have a pretty decent life in some of the countries there.

One question I do have is whether price inflation in SE Asia should be a concern over the long term? A lot of these countries are developing relatively quickly compared to the US, and wages of locals could increase faster than a US-based portfolio's return + a safe withdrawal rate can keep up, if one does not have a regular job.

Just wondering if I'm being paranoid, or if I would need to think seriously about increasing my Asian investments asset allocation while living outside of the US.

nereo

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #122 on: February 09, 2015, 12:14:45 PM »

One question I do have is whether price inflation in SE Asia should be a concern over the long term? A lot of these countries are developing relatively quickly compared to the US, and wages of locals could increase faster than a US-based portfolio's return + a safe withdrawal rate can keep up, if one does not have a regular job.
I've question this myself.  Around here many of us are planning retirements that could easily last through four decades.  Look at countries like India and Brazil and compare where they are now to where they were in 1975 - certainly other countries in SE Asia will have similar increases in their COL over the net 3-4 decades.

I suppose the strategy could be to move to a new country if/when it became too expensive.

justajane

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #123 on: February 09, 2015, 12:34:46 PM »
I was born in Ecuador to two Americans living abroad. Once we inquired about our status there, and they said, "Well, we consider you to be Ecuadorian." But of course the U.S. government doesn't. It was my understanding that the US doesn't allow dual citizenship unless there is a reciprocal agreement, although I wonder what incentive there is to declare citizenship in the overseas country where you retire.

Ecuador is often listed on one of the top retirement places in the world for American ex-pats. But these lists are geared towards people who want to live a non-Mustachian life in retirement. My MIL and her husband looked into retiring in Ecuador, but I think it was going to be too much culture shock for them.

Beric01

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #124 on: February 09, 2015, 12:54:39 PM »
although I wonder what incentive there is to declare citizenship in the overseas country where you retire.

Being treated as an equal in the eyes of the government in the place you plan to live for the rest of your life? Not to mention freedom from US tax and foreign banking reporting obligations.

I just wish I didn't have myself tied to the US through my 401(k) or IRA's. Unfortunately they're the only way to avoid the incredibly high tax bill on a single taxpayer with no deductions.

Albert

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #125 on: February 09, 2015, 12:56:56 PM »
In my earlier post I said my rough monthly figures for a single person or couple to live a basic life in South East Asia (excluding Singapore) are;

Accommodation (Basic)  $800
Electricity  $100
Food $300
Internet / phone $50
Transport (taxis) $50
Medical insurance  $100.

The following are the actual costs for me living in South East Asia (basically as a single person)

Accommodation US$3600 (that is what the apartment across the corridor from me rents for per month)
Electricity / building charges US$500
Internet / phone / TV US$130
Staff US$450 (everyone has at least a part time maid - you will be regarded as strange if you do not employ at least one person)
Food US$300
Fuel (for small car) US$120
Medical insurance US$300
Tennis / Gym membership US$75
Entertainment / Meals and drinks out US$400
Travel (average per month)  US$800

That comes out at US$6,675 per month.  I accept half of that is the accommodation cost (I own the apartment).  You could live somewhere for US$1200 per month so that reduces the monthly spend to $4,275.

I do not live a champagne lifestyle - but I am not wanting to live poor either.

Many of my local friends have much more affluent lifestyles than I do (much more).

I just think it is unrealistic you can live a pleasant, enjoyable life in retirement in S E Asia on a nest egg of US$100k.

What??? I live a pretty nice life in super expensive Switzerland for less than that. Plus unlike in Jakarta I get great public transport and virtually crime free environment...

limeandpepper

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #126 on: February 09, 2015, 01:17:05 PM »
One question I do have is whether price inflation in SE Asia should be a concern over the long term? A lot of these countries are developing relatively quickly compared to the US, and wages of locals could increase faster than a US-based portfolio's return + a safe withdrawal rate can keep up, if one does not have a regular job.

Just wondering if I'm being paranoid, or if I would need to think seriously about increasing my Asian investments asset allocation while living outside of the US.

I'm not sure how the inflation rate compares to the US. I feel like the cost of living has been going up faster than the local wages. I also think the prices go up quicker in city areas. From my observations, inflation hasn't been that crazy for the past decade or two, but I have no idea what it will be like in upcoming decades.

It would be wise to have a buffer. And when calculating costs, remember to account for things like travel/health insurance, vaccinations, flights, visas and visa runs.

justajane

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #127 on: February 09, 2015, 01:34:56 PM »
although I wonder what incentive there is to declare citizenship in the overseas country where you retire.

Being treated as an equal in the eyes of the government in the place you plan to live for the rest of your life? Not to mention freedom from US tax and foreign banking reporting obligations.

I just wish I didn't have myself tied to the US through my 401(k) or IRA's. Unfortunately they're the only way to avoid the incredibly high tax bill on a single taxpayer with no deductions.

Fair enough on the former, but wouldn't you only receive the latter if you renounced your US citizenship entirely? I am no expert on these things. I just couldn't imagine doing that, unless it was to a country that is politically as stable as the US - say many European countries, and those tend to be just as if not more expensive than the States. What if I wanted to return? What if all hell broke loose? I know some people who moved to Ukraine a few years ago....

I like that I have a tangible connection (i.e. an Ecuadorian birth certificate) to another country and would probably opt to retire in Ecuador some day if I was looking for a LCOL area, but I would probably just position myself as a long term visitor who happened to be born there. 

Beric01

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #128 on: February 09, 2015, 02:31:00 PM »
although I wonder what incentive there is to declare citizenship in the overseas country where you retire.

Being treated as an equal in the eyes of the government in the place you plan to live for the rest of your life? Not to mention freedom from US tax and foreign banking reporting obligations.

I just wish I didn't have myself tied to the US through my 401(k) or IRA's. Unfortunately they're the only way to avoid the incredibly high tax bill on a single taxpayer with no deductions.

Fair enough on the former, but wouldn't you only receive the latter if you renounced your US citizenship entirely? I am no expert on these things. I just couldn't imagine doing that, unless it was to a country that is politically as stable as the US - say many European countries, and those tend to be just as if not more expensive than the States. What if I wanted to return? What if all hell broke loose? I know some people who moved to Ukraine a few years ago....

I like that I have a tangible connection (i.e. an Ecuadorian birth certificate) to another country and would probably opt to retire in Ecuador some day if I was looking for a LCOL area, but I would probably just position myself as a long term visitor who happened to be born there.

I don't want to make this thread too political. Suffice to say that many (including myself) don't believe the US will be stable forever. Being the richest country in the world means that you can get away with offering less benefits for your taxes and more draconian laws (surveillance, etc.). If a smaller country is going to attract people it's going to need to offer a better value proposition.

Also, living in a foreign country that's actually unstable (not that I plan to do so) the last thing I'd want to have on hand is a US passport. It attracts too much attention, which can lead to some pretty serious consequences.

luigi49

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #129 on: February 09, 2015, 02:34:18 PM »
although I wonder what incentive there is to declare citizenship in the overseas country where you retire.

Being treated as an equal in the eyes of the government in the place you plan to live for the rest of your life? Not to mention freedom from US tax and foreign banking reporting obligations.

I just wish I didn't have myself tied to the US through my 401(k) or IRA's. Unfortunately they're the only way to avoid the incredibly high tax bill on a single taxpayer with no deductions.

Fair enough on the former, but wouldn't you only receive the latter if you renounced your US citizenship entirely? I am no expert on these things. I just couldn't imagine doing that, unless it was to a country that is politically as stable as the US - say many European countries, and those tend to be just as if not more expensive than the States. What if I wanted to return? What if all hell broke loose? I know some people who moved to Ukraine a few years ago....

I like that I have a tangible connection (i.e. an Ecuadorian birth certificate) to another country and would probably opt to retire in Ecuador some day if I was looking for a LCOL area, but I would probably just position myself as a long term visitor who happened to be born there.

I don't want to make this thread too political. Suffice to say that many (including myself) don't believe the US will be stable forever. Being the richest country in the world means that you can get away with offering less benefits for your taxes and more draconian laws (surveillance, etc.). If a smaller country is going to attract people it's going to need to offer a better value proposition.

Also, living in a foreign country that's actually unstable (not that I plan to do so) the last thing I'd want to have on hand is a US passport. It attracts too much attention, which can lead to some pretty serious consequences.

Hate to say this with or without passport if your skin color does not blend in the country you adopt you will be noticed. 

Beric01

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #130 on: February 09, 2015, 02:44:19 PM »
Hate to say this with or without passport if your skin color does not blend in the country you adopt you will be noticed.

That's why I favor living in a multicultural country. Southeast Asian countries are high on the list. Note that Europe is markedly absent.

Albert

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #131 on: February 09, 2015, 02:49:01 PM »
Hate to say this with or without passport if your skin color does not blend in the country you adopt you will be noticed.

That's why I favor living in a multicultural country. Southeast Asian countries are high on the list. Note that Europe is markedly absent.

Don't believe everything what's written... A white guy in Thailand or Malaysia will be a lot more visible than an Asian guy in Western Europe.

Honestly the map you cited is a total nonsense on so many different levels...
« Last Edit: February 09, 2015, 02:53:17 PM by Albert »

nereo

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #132 on: February 09, 2015, 02:54:24 PM »
Hate to say this with or without passport if your skin color does not blend in the country you adopt you will be noticed.

That's why I favor living in a multicultural country. Southeast Asian countries are high on the list. Note that Europe is markedly absent.
Europe isn't "absent" - Spain's right in the middle on this author's 'cultural diversity scale', with several other countries being a bit above (France, Switzerland, Netherlands, & many of the Baltics).   Also, having high levels of 'cultural diversity' can also mean very low amounts of cultural exchange.  That's how you get and maintain high diversity - lots of different groups that don't mix.  See S. Africa, DR Congo, Kenya, etc. 

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #133 on: February 09, 2015, 02:56:34 PM »
That's why I favor living in a multicultural country. Southeast Asian countries are high on the list. Note that Europe is markedly absent.

I am Asian and my boyfriend is Caucasian. We have been to many SE Asian countries. Trust me, when I go out without him, people barely notice me, I just blend in. Different story if he goes out with me, or by himself.

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #134 on: February 09, 2015, 04:44:54 PM »
I was born in Ecuador to two Americans living abroad. Once we inquired about our status there, and they said, "Well, we consider you to be Ecuadorian." But of course the U.S. government doesn't. It was my understanding that the US doesn't allow dual citizenship unless there is a reciprocal agreement, although I wonder what incentive there is to declare citizenship in the overseas country where you retire.

Ecuador is often listed on one of the top retirement places in the world for American ex-pats. But these lists are geared towards people who want to live a non-Mustachian life in retirement. My MIL and her husband looked into retiring in Ecuador, but I think it was going to be too much culture shock for them.

The US Constitution has been interpreted to prevent your US citizenship from being taken away unless you engaged in conduct with an intention of abandoning citizenship (or somesuch).  Furthermore:

"In 1990, the Bureau of Consular Affairs adopted an administrative presumption in determining whether or not a U.S. citizen has performed a potentially expatriating act with the intention of relinquishing U.S. nationality in three classes of loss of citizenship cases. Specifically, when a U.S. citizen obtains naturalization in a foreign state, subscribes to routine declarations of allegiance to a foreign state, or accepts non-policy level employment with a foreign state, the intent to retain U.S. nationality will be presumed. U.S. citizens who naturalize in a foreign country; take a routine oath of allegiance; or accept non-policy level employment with a foreign government need not, therefore, submit evidence of their intent to retain U.S. nationality."

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #135 on: February 09, 2015, 05:03:54 PM »
This seems to all come down to what type of lifestyle do you want in retirement?

Personally, I would like a lifestyle as comfortable as pre retirement - otherwise, what is the point?  By comfortable, I do not mean it has to be as expensive or costly, but I don't want to be living an uncomfortable life.

A few points to remember, to live in most S E Asian countries as a foreigner you need either to have a job or have a "retirement" visa which requires proof of funds.  Alternatively, you can do the constant 30 day or 60 day tourist visa - but that involves inconvenience and the cost of flying in and out of the country every 30 or 60 days.  Also, if you don't have a residence visa, you usually cannot get a long term lease which means you are stuck with more expensive monthly rentals.

On housing, yes, you could find a studio apartment (called a kost in Indonesian) in Jakarta for about US$250 per month.  I could live in it for a month or 2 but it would not be somewhere I would want to retire to.

Forget riding a bike or walking most places (unless you have a death wish).  The flip side is there are lots of taxis and they are cheap.

You could find somewhere to live in an outer suburb or in a regional city - you would probably be one of the few foreigners and everyone would be looking at you 24 hours a day.  It would be fun for a while but I think it would wear thin after a few months.

I am actually a strong advocate of retiring to S E Asia - there are many, many advantages.  My argument is, however, don't expect to be able to do it on US$100k.  I think if you tried it on anything less than US$1.5m you may come up short (unless you are planning on working rather than retiring).

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #136 on: February 09, 2015, 05:18:37 PM »
Forget riding a bike or walking most places (unless you have a death wish).  The flip side is there are lots of taxis and they are cheap.

People die when they walk or ride a bike in most places there?  That's terrible!

I am actually a strong advocate of retiring to S E Asia - there are many, many advantages.  My argument is, however, don't expect to be able to do it on US$100k.  I think if you tried it on anything less than US$1.5m you may come up short (unless you are planning on working rather than retiring).

Why would I need more money to retire in a lower COL country?  That doesn't make any sense to me.  My very luxurious life needs about 900k in assets to support it for eternity.

Lukim

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #137 on: February 09, 2015, 05:40:01 PM »
Timmy - you need more money as there is no social safety net in most (all) of these countries.

There is no free medical. If you have children, you have no choice but to send them to private schools.  There is no pension if you run out of money.

You need to be able to fully support yourself until the day you die (that could be a long time).

Inflation in developing countries runs at 6% to 10%.  Assume you keep your assets invested in USD and you manage to get a long term investment return of 5%, you are loosing capital from day one.  That also assumes the USD stays at is current high level and does not fall back to where it was 3 years ago.

As I said, I am an advocate of retiring in S E Asia but don't expect it to be cheap, particularly over the long term.

Beric01

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #138 on: February 09, 2015, 06:00:24 PM »
People die when they walk or ride a bike in most places there?  That's terrible!

I just checked with a couple co-workers from various countries in SE Asia and they have confirmed that bicycling in SE Asia is at least safer than driving - drivers generally leave you room and keep to themselves. They sent me a couple videos of driving in southeast Asia, and I'm sticking to my bicycle.

Inflation in developing countries runs at 6% to 10%.  Assume you keep your assets invested in USD and you manage to get a long term investment return of 5%, you are loosing capital from day one.  That also assumes the USD stays at is current high level and does not fall back to where it was 3 years ago.

Very interesting, thanks! I guess I'll do some more research.

If I can live off $10K/year but my assets supply $20K/year, my thought is that this would surpass inflation. But of course this is making a ton of assumptions.
« Last Edit: February 09, 2015, 06:02:44 PM by Beric01 »

Timmmy

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #139 on: February 09, 2015, 06:23:06 PM »
Timmy - you need more money as there is no social safety net in most (all) of these countries.

There is no free medical. If you have children, you have no choice but to send them to private schools.  There is no pension if you run out of money.

You need to be able to fully support yourself until the day you die (that could be a long time).

Inflation in developing countries runs at 6% to 10%.  Assume you keep your assets invested in USD and you manage to get a long term investment return of 5%, you are loosing capital from day one.  That also assumes the USD stays at is current high level and does not fall back to where it was 3 years ago.

As I said, I am an advocate of retiring in S E Asia but don't expect it to be cheap, particularly over the long term.

My planning doesn't not include any social safety nets in the plan and I have no children.  Also, who gets free medical? 

If I retire when I can sustain my current lifestyle (lavish) in the US indefinitely, and I choose to live in a low COL area abroad, the first years of retirement will be spent stocking massive amounts of money away.  I'll take my chances...

mcneally

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #140 on: February 09, 2015, 06:37:50 PM »
Inflation in developing countries runs at 6% to 10%.  Assume you keep your assets invested in USD and you manage to get a long term investment return of 5%, you are loosing capital from day one.  That also assumes the USD stays at is current high level and does not fall back to where it was 3 years ago.

As I said, I am an advocate of retiring in S E Asia but don't expect it to be cheap, particularly over the long term.

If inflation is in developing country currency is higher than USD inflation and your assets are in USD, that means stuff in developing country gets cheaper for you. If your worry is just that inflation everywhere will outpace investment returns, that doesn't have anything to do with where you are located.

josstache

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #141 on: February 09, 2015, 07:34:01 PM »
Inflation in developing countries runs at 6% to 10%.  Assume you keep your assets invested in USD and you manage to get a long term investment return of 5%, you are loosing capital from day one.  That also assumes the USD stays at is current high level and does not fall back to where it was 3 years ago.

As I said, I am an advocate of retiring in S E Asia but don't expect it to be cheap, particularly over the long term.

If inflation is in developing country currency is higher than USD inflation and your assets are in USD, that means stuff in developing country gets cheaper for you. If your worry is just that inflation everywhere will outpace investment returns, that doesn't have anything to do with where you are located.

This is only true if exchange rate from USD to the target currency tracks inflation, which it is not guaranteed to do.  Additionally, there can be higher inflation in certain sectors of the economy that especially affect expats, such as the rent for apartments built to international standards (if that's what you want to live in).

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #142 on: February 10, 2015, 05:31:55 PM »
although I wonder what incentive there is to declare citizenship in the overseas country where you retire.

Being treated as an equal in the eyes of the government in the place you plan to live for the rest of your life? Not to mention freedom from US tax and foreign banking reporting obligations.

I just wish I didn't have myself tied to the US through my 401(k) or IRA's. Unfortunately they're the only way to avoid the incredibly high tax bill on a single taxpayer with no deductions.

The US expat tax burden is way overhyped. I also am a US citizen who plans on retiring overseas and am doing some research. Consider:

If you are a US expat living overseas you are exempt from taxes on the first $100k or so of your overseas income: http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion

US taxes on US based income is negligible for someone living a mustachian lifestyle, especially if you are post FIRE and living off of investment income. See the section titled "Live Well for Less" in this article: http://www.gocurrycracker.com/never-pay-taxes-again/

You can get your money from the US to your country of destination with no conversion fees using a Schwab or Fidelity checking account: http://www.schwab.com/public/schwab/banking_lending/checking_account

Keeping your retirement accounts in dollars is a huge advantage compared to many other developing country currencies where inflation is a major issue that will slowly eat away at your stash.

I'm also not thrilled about the reporting requirements for overseas bank accounts, but I also don't plan on cheating on my taxes, so I'll do it. The pros of keeping my money invested in the US in dollars vastly outweigh the cons of the invasion of privacy.

Whether or not you feel the US economy will "go downhill" is just another form of trying to time the market. Sure it will someday, but it may be long after you're dead and buried. The US stock market has returned on average 10% a year since it's existence. If you want to bet against that it's up to you, but it's the wrong call.

IMO, you should be more worried with the tax authorities of the country where you're going (remember you gotta pay taxes there too). Some places have the right to tax all of your accounts, including your US based 401k's and such that aren't kept in the country.

josstache

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #143 on: February 10, 2015, 06:26:30 PM »
By virtue of being a US citizen, you cannot open savings or brokerage accounts at many foreign banks, and even if you can open them, you may be prohibited (not by law, but by the insititution's policies) from investing in many securities.  If you have a permanent address in the US, you may be able to justify calling yourself a US resident for the purposes of US savings and brokerage accounts, but it's not clear to me that this is actually correct. So because you are a US citizen abroad, you cannot hold most foreign accounts and you arguably cannot hold any US accounts (especially if you don't have a US permanent address).  Even if you find a foreign brokerage account willing to take you as a customer, will they follow all the rules set out by the IRS for such funds, or give you any kind of US reporting forms come tax season?

Furthermore, a US citizen's child born abroad, which child never sets foot in the US and perhaps doesn't know English, is a US citizen subject to worldwide taxation and reporting requirements for the rest of her life (and the same financial institution issues I described above, if she's honest). She will also be taxed by the US on any tax-preferred accounts she sets up in her home country (401(k) or IRA equivalents).  If she wants to renounce her US citizenship, she has to pay $2,300 (recently quadrupled).  If she doesn't, and goes on to have a successful career in a low tax jurisdiction, she'll have to pay the IRS at US marginal rates above the foreign earned income exclusion....for what benefit, exactly?  Ability to be drafted into US armed services?  Voting in presidential elections (because there is no representation of expats other than the President)?

Maybe this is indeed all overblown, but when you're actually living it, it's relatively shitty.  These limitations have only gotten worse in recent years.  I fear what they'll become over the course of a 60-year retirement.

An expat in Canada explained this better than I could:
http://www.forbes.com/sites/robertwood/2014/08/15/dear-mr-president-why-im-leaving-america/
« Last Edit: February 10, 2015, 07:05:21 PM by josstache »

Overseas Stache

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #144 on: February 10, 2015, 11:55:10 PM »

Maybe this is indeed all overblown, but when you're actually living it, it's relatively shitty.  These limitations have only gotten worse in recent years.  I fear what they'll become over the course of a 60-year retirement.


As a person who is "actually living it" I can tell you it is NOT shitty at all. I assume it only gets relatively shitty when you have over 100K in foreign income and/or foreign investment accounts. But really it is just best to keep your investment accounts in the US, I just use my parents address in the US, it really isn't that big of a deal.

okonumiyaki

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #145 on: February 11, 2015, 01:25:10 AM »
Inflation in developing countries runs at 6% to 10%.  Assume you keep your assets invested in USD and you manage to get a long term investment return of 5%, you are loosing capital from day one.  That also assumes the USD stays at is current high level and does not fall back to where it was 3 years ago.

As I said, I am an advocate of retiring in S E Asia but don't expect it to be cheap, particularly over the long term.

If inflation is in developing country currency is higher than USD inflation and your assets are in USD, that means stuff in developing country gets cheaper for you. If your worry is just that inflation everywhere will outpace investment returns, that doesn't have anything to do with where you are located.

Actually, as a country develops, you can have both higher domestic inflation than the US, and an appreciating currency.  Basically a major shift in PPP.

For example, China.  Both living costs rising vs the USA, and the RMB strengthening vs the USD.

TheNorwegianGuy

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #146 on: February 11, 2015, 02:59:33 AM »
I have thought about this many times. Almost any country would be a huge decrease in expenses for me. But I am also very attached with my awesome friends and family in my home country so I will probably consider slow-travelling for some years instead (3-6 months each place) just for the experience :)


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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #148 on: February 11, 2015, 01:57:06 PM »
although I wonder what incentive there is to declare citizenship in the overseas country where you retire.

Being treated as an equal in the eyes of the government in the place you plan to live for the rest of your life? Not to mention freedom from US tax and foreign banking reporting obligations.

I just wish I didn't have myself tied to the US through my 401(k) or IRA's. Unfortunately they're the only way to avoid the incredibly high tax bill on a single taxpayer with no deductions.

Fair enough on the former, but wouldn't you only receive the latter if you renounced your US citizenship entirely? I am no expert on these things. I just couldn't imagine doing that, unless it was to a country that is politically as stable as the US - say many European countries, and those tend to be just as if not more expensive than the States. What if I wanted to return? What if all hell broke loose? I know some people who moved to Ukraine a few years ago....

I like that I have a tangible connection (i.e. an Ecuadorian birth certificate) to another country and would probably opt to retire in Ecuador some day if I was looking for a LCOL area, but I would probably just position myself as a long term visitor who happened to be born there.

I don't want to make this thread too political. Suffice to say that many (including myself) don't believe the US will be stable forever. Being the richest country in the world means that you can get away with offering less benefits for your taxes and more draconian laws (surveillance, etc.). If a smaller country is going to attract people it's going to need to offer a better value proposition.

Also, living in a foreign country that's actually unstable (not that I plan to do so) the last thing I'd want to have on hand is a US passport. It attracts too much attention, which can lead to some pretty serious consequences.

Hate to say this with or without passport if your skin color does not blend in the country you adopt you will be noticed.

I find this to be a positive when visiting a foreign country; particularly the rural provinces. I become a instant celebrity the minute getting off the plane or trike......

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Re: Forget $600K, retire on $100K in the Philippines (or other country)
« Reply #149 on: February 11, 2015, 05:05:18 PM »
I don't really want to live some place else permanently, but I love to travel. I want to be at home in BC each year to enjoy the fine summer weather and get my health care sorted.

I've spent months at a time beach camping in Baja to support my surfing, kiteboarding, sea kayaking, fishing and taco habit! In around 2 years of combined camping down there I've paid less than $50 to camp. Food and beer is cheap. I buy insurance when I head down which is an extra expense and there is gas, but I tend to park for a week at at time and walk/bike from camp.

Since I would keep my place in Canada I'm not saving a ton being in Baja unless I get a short term rental setup, but it's fun and I miss the Canadian winter at low cost.

-- Vik