Places Where You Can Retire on $200,000 and Feel Rich

[wingssail]

Originally Posted by barnakiel

You know, there is this other thread where a cruising couple quotes their monthly budget in a wee boat. I think they are at about 2k per head.

Hence 24k per year.

Hence 200k gets burned in some 8 years.

I think in the US the retirement age is 66?

Apparently the person who wrote that piece of material has chronic cancer and intends to die at 74. Give or take.

Nonsense.

I am going to live for ever. And never retire. And I feel rich every day the sun shines, or someone smiles back at me. In a place with low criminal rates and high quality med services.

b.

The scenario you describe is so unrealistic that anyone who bases a retirement plan that way deserves to run out of money at age 74. What? They put the $200k under their mattress and pull out enough to live on each month? Idiocy.

Take the $200K and invest it in a diversified manner, using a few brains, and try to avoid paying some "financial planner" the big fees.

Maybe you can put 50% in growth investments and 50% in income. If you're average lucky you'll get 5% (I'm getting better than 8%, have been for years, and I'm not fund manager or professional) so that's $5,000 a year from the part of your investment that is in income stocks.

Then, assuming that you worked in the USA (I don't know about all other countries, but the ones where I worked all have some sort of retirement, and the rest must have some similar retirement funding) you're going to get Social Security of some amount. For my wife and I, since we quit really early (age 50) we don't get so much, but it's enough with the income from the investments, that we live OK and our $200k is still sitting there.

You balance this against what you think you will spend. If you've made some record over the years you should know. (We have detailed expense records for living aboard over the last 33 years, and we'll post these one of these days). And you make some adjustments.

For us, living in Mexico, it's pretty easy, and we can cruise when we want, live in a marina at other times, have a nice car, race our boat 25 times a year (and buy a new sail or two every year) and we still make it, as described above. One thing we know is that a huge medical expense will blow us up. For that we'll go back to the US and see what we can get with Medicare. But even of we have to dip into the $200k, we'll could probably still have the income side of it funding our basic living expenses.

One of the main things is that we have not gone native in some far off land living in a grass shack. We have a normal life. It is sustainable. And we are close to the USA.

So don't poo poo the $200k figure It didn't just come out of thin air.

[a64pilot]

The $200 K figure breaks down when or if the market takes a big hit, cause to get close to 10% you have some higher risk investments.
I couldn’t sleep at night with that plan myself, I’m too risk adverse.
Hope for the best, but plan for the worst.
My long term return rate so far has been 6.9% and this year so far 10%, that is after fees, which are actually minimal.
I assume some are crooks, but not all are.

[barnakiel]

(...)



Take the $200K and invest it in a diversified manner, using a few brains, and try to avoid paying some "financial planner" the big fees.

Maybe you can put 50% in growth investments and 50% in income. If you're average lucky you'll get 5% (I'm getting better than 8%, have been for years, and I'm not fund manager or professional) so that's $5,000 a year from the part of your investment that is in income stocks.



(...)

RED FLASHING NEON ::: RETIREMENT MONEY, RETIREMENT MONEY



You see this is exactly the challenge.


You are not a professional investor, while I hold both a stock exchange license and a CFA license. And I do not hold any 8% investments while you do. Is this not somewhat surprising?



1) you are NOT investing your RETIREMENT MONEY when you are 60, you should have done that when you were 25,


2) you are not getting 5% return on your 200k RETIREMENT MONEY in cruise control mode,


this, but deduct inflation! :

https://www.investing.com/rates-bond...ear-bond-yield
https://tradingeconomics.com/united-.../inflation-cpi


2% minus 2% is 0% (give or take)



Also, what are the FX related charges in those retirement paradises? Well, if you are a US guy and retire in say Spain, you will be lighter by 6-8% of any EUR withdrawal from your USD account.



3) when you do get 5% the inflation will eat out 3%, management cost will eat the remaining 2%, etc.


4) 200k is a wee funky amount in investing world - you will be limited to over the counter mass packaged investments, your best bet could be e.g. a couple of small apartments next to a Uni, rented to students (because old red brick Unis, unlike T-shirt factories, tend NOT to move their production, and workers (=students) to China).


etc.


Long story short: 200k is a funky funny amount for a Westerner to retire on. Do read that other thread with small boat cruisers' budgets. Small boats are likely at the lower end of how little one needs to go on for obvious reasons.


You are not going to get 5% return on 200k in of your RETIREMENT repeat RETIREMENT money. Return is related to risk and no regular retiree is going to go the risky way. Unless fooled by an 'investment advisor'.



People retire to slow down and have some easy life, not to sit on the edge of their death bed worrying about stock exchanges, investment funds or Bitcoins.


I lived in some of the places mentioned in that unlucky article. I still do in one. And I am one of those marginal garbage can level cruisers too. I can't see retiring on 200k, even with my very low expectations and marginal lifestyle. And I am not a Westerner, I do not share that lifestyle. I feel rich with smaller things, that do not cost me any money.



Telling Westerners they can retire anywhere on 200k and feel rich? Maybe at heart. Silly and noxious summer gig by a social media 'journalist'. That's that.


All due respect, just vastly different mileage.


Cheers,
barnakiel

[sailorboy1]

it all depends on what one defines as "living"

[barnakiel]

Yep. And 'feeling rich', and 'retiring'.


b.

[HighTemp]

Let me get this out there up front, I am no investment genius. However, I am tighter than Dick's hat band and have been moderately successful over the course of my career. I could not imagine trying to retire, even in a place like the Philippines, on $200K in investments and SS. But that is me. Our whole thought process for heading back to the Philippines is based on two things.

1. My wife is a Filipina,
and
2. The cost of living there, while it has gone up over the years, is low enough to make whatever we ultimately save, go a little farther and hopefully help our money out live us.

Currently, I figure it is realisitically going to take us around $5K to $6K per month on average. That will cover all expenses including food, clothes, basic healthcare, cruising expenses, boat repairs / maintenance, etc.... Hopefully, if our monies are invested properly, along with SS, we can maintain that level of cashflow for at least the remainder of my lifetime. At least that is the plan.

[wingssail]

Originally Posted by barnakiel

RED FLASHING NEON ::: RETIREMENT MONEY, RETIREMENT MONEY

You see this is exactly the challenge....

You are not going to get 5% return on 200k in of your RETIREMENT repeat RETIREMENT money. Return is related to risk and no regular retiree is going to go the risky way. Unless fooled by an 'investment advisor'.

People retire to slow down and have some easy life, not to sit on the edge of their death bed worrying about stock exchanges, investment funds or Bitcoins.

Barnakiel,

My point is that the amounts needed to fund a cruising retirement are often overstated, (just about as often as young cruisers optimistically start out underfunded). Some basic thinking, research, and good records, can help a person plan a retirement without having a million dollars. Intelligent and realistic investment decisions can be made. Budgeting is necessary so one can track expenses vs. income and make adjustments. We know exactly what our monthly (and annual) budget is, we’ve tracked it in great detail for 30+ years and perhaps we’ll share that with the forum one of these days.

Yes, in the eyes of most “professional investors” $200k is a pittance. OK, cruisers with only that amount are “poor” in your view, should they just stay home until they can earn more? Sorry, that amount (or less) is what some have decided was the minimum to be able to cruise. To accumulate more money most people will have to keep working. For us, we’d rather enjoy the cruising life. So far it’s worked out. As for saving since age 25? Well, we (I) spent those funds long ago, and several accumulations since then, all of it (but we’ve had a lot of fun sailing). The money we have now was earned after we reached 60 after we left the US on a boat to go sailing.

We don’t think that living on this kind of sum means people have to cruise on a small boat or be resigned to camping out. A person with $200k probably does not think of themselves as rich, obviously, but they can be plenty comfortable.

I don’t get your point about “RETIREMENT MONEY, RETIREMENT MONEY”, unless you are highlighting a view so risk adverse that you shun all investments except government bonds. You may have licenses, etc, but that seems too conservative for me. I think a diversified portfolio is wiser. I have no 8% investments, nothing with much risk, no stocks or bonds actually, primarily just mutual funds). 5% is not hard, and it’s only on the portion which is in Income funds. Anyone can do this. My bigger gains have been capital gains on very safe large cap growth funds. We recognize the chance (likelihood) that a downturn will reduce the value of our retirement funds, but over time the value will come back. You just need to avoid spending the funds while the value is depressed.

Foreign exchange should not effect one very much. I don’t recommend investing in local currency funds or certificates; there the chance of an exchange rate shift makes the return too chancy. But I don’t get how one loses 6%-8% simply by withdrawing our USD funds in EU currency?

Anyhow, let's encourage people to examine their own resources and needs, (and living opportunities) and decide for themselves.

[john61ct]

And again.

The topic is not whether or not it is "possible" to retire with only 200K in assets.

Fact is, most Americans do so, with far less. Yes most people here call them poor.

The topic is, if you **are** retiring with that "paltry" amount, perhaps no longer have any choice in the matter,

where can you go overseas where you can enjoy your twilight years better than staying at home.

Now, having a boat rather than paying rent may make things cheaper, or more expensive. But that I think deserves a separate thread.

And back and forth on "how much is 'enough' ?" or investment strategies FFS really is useless, at least do not fall within what the article, or this thread are aboit.

IMO

[Augi]

My wife and I have lived in Guatemala for 7 years.

A single person can retire here and live extremely well for $3000 a month in Antigua, Guatemala that has a good size ex pat community, and locals that are used to Gringoes, expats. Knowing basic Spanish is helpful but not necessary to start.

To continue the discussion lets say you have $3K in Social Security a month and $200K in savings this how it could workout very well:

$2K(of the $3K), a month for living expenses, includes comfortable, secure rented apartment, cell phone, wifi, cable with USA channels, excellent fresh produce, meat, fish, (food is much better than in the USA because locally grown, raised), includes basic used car for ocassional use, but no need for car(you can walk everywhere or take a tuk tuk), includes occasionally eating out, does not include entertainment(but there is lots of free entertainment in Antigua), includes basic health care for minor ailments and payments for medicare, includes a maid two full days a week or a couple of hours a daily, to clean, to prepare breakfast and lunch, to wash dishes.


$1K(of the 3K), a month to be saved for emergencies, trips to USA for any major healthcare needed to take advantage of medicare, for maid or nurse as you get older and need help.

So if you have 3K a month in Social Security and the 200K invested very conservatively at least keeping up with inflation the 200K can be a further cushion beyond the $1K for emergencies, health issues later in life that is being saved.

Antigua has spring like weather year around; Never goes below 45 F or above 80 F. No need for heating or air conditioning. Antigua is at least as safe as any american city. There are few things you cannot get in Antigua that you can get in the USA. Antigua offers many things not available in the USA: inexpensive healthcare, best of both worlds: modern american grocery stores and old style mercado with a huge selection of local amazing fresh food. You can have an excellent breakfast or lunch in the mercado for $2.50.

The exchange rate for the last 20 years has varied against the US$ in a range of about 12%.

When Guatemalan want to do something well they do it very well. The difference is compared to most Americans they don't give a crap about a lot of things.

You can take a bus or go with friends or drive your basic used car to the beach on the Pacific in 2 hours.

You can go to Rio Dulce by bus or in a friends car or in your basic used car in about 5 hours and crew on other people's boats.

If I was single, was at retirement age and ready to retire, had $3K in Social Security and $200K in savings I would move to Antigua Guatemala and live/ spend / handle my resources as described above.

Other than missing family or "home", IMO the vast majority of Americans would end up preferring the above retirement versus retiring in the USA with the same resources.

I think there are many places around the world that offer similar as the above, and would be equal cost or less expensive for the same quality of life. Places that come to mind that I have visited(but not lived) are: Columbia, Ecuador, Mexico, Philippines, Thailand, Vietnam. Costa Rica and Panama would be more expensive for the same quality of life.

[Saleen411]

There is TONS of information on the internet about this subject. There are MANY "best places to retire"/"cheapest places to retire" lists....etc etc.

I've personally been to many if not most of the listed countries.

Unless one is truly broke-ass......i personally couldn't live full time in most of the suggested places. It's not just living cheaply that is the issue....QUALITY of living is the issue for me. Who simply wants to just exist IF one has the choice. If one is used to a first world lifestyle, living in a third world country can be eye opening and not something everybody would willingly do.....again, unless you are broke ass and have no choice.

Also, many if not most of the people on this planet could't or would't live full time 24/7 on a mid-sized sailboat either. Otherwise there would be millions more doing so.

JMHO FWIW.

[barnakiel]

Yep.


Just you cannot help them believers. Faith and reality tend to be somewhat detached. For we all know it is FLAT. Except navigators.



People who believe they could live in the Himalayas @ USD1,00 a day are people who have never done so. They believe they could. And,as any believer, they want to believe. So there is no way stopping this. You can speak your guts out and give them examples from people who are there and who do live the expat / retired life. But faith is faith and faith is blind. Just like love.



And assuming them believers would pass the dreadful border between believing and looking for a proof (like many cruisers do - selling their homes and living on boats, often in places vastly different from their home cultures) - you can be sure 99% will not like the experience. 1 % will. OK, maybe the relationship is like 80/20. Let it be.


Because a believer does not want to live and try and prove things, they want to believe things. Believing is safe. It is easy. Trying and living the proof (or dying while trying) is a thing of the elected few. We call them live aboard trouble makers and we have a separate thread to bash them there. Me Too!


The most useless 'advice' will sure come from a person who lives a happy two at less than USD 600 a month (boat included). Happy YES. Feeling rich? Define rich. Rich in experiences and empirical data in any case, sailing rtw does it for ya.



Except that the 200k plugged into any fin calc formulas and given real market conditions as they are today (however, not allowing for any FX costs (sic!!!)) returns USD 738.



https://ffcalcs.com/how_long


Why calculate, read and THINK while one can believe things?


Are you watching the SailGP series by any chance? I do. Quite an awesome event, eh?



Cheers,
b.

[john61ct]

Or you plan assuming zero income on your $200K

If you happen to get any, great you can have a couple extra meals prepared by others that month. . .

[redneckrob]

Originally Posted by barnakiel

RED FLASHING NEON ::: RETIREMENT MONEY, RETIREMENT MONEY



You see this is exactly the challenge.


You are not a professional investor, while I hold both a stock exchange license and a CFA license. And I do not hold any 8% investments while you do. Is this not somewhat surprising?



1) you are NOT investing your RETIREMENT MONEY when you are 60, you should have done that when you were 25,


2) you are not getting 5% return on your 200k RETIREMENT MONEY in cruise control mode,


this, but deduct inflation! :

https://www.investing.com/rates-bond...ear-bond-yield
https://tradingeconomics.com/united-.../inflation-cpi


2% minus 2% is 0% (give or take)



Also, what are the FX related charges in those retirement paradises? Well, if you are a US guy and retire in say Spain, you will be lighter by 6-8% of any EUR withdrawal from your USD account.



3) when you do get 5% the inflation will eat out 3%, management cost will eat the remaining 2%, etc.


4) 200k is a wee funky amount in investing world - you will be limited to over the counter mass packaged investments, your best bet could be e.g. a couple of small apartments next to a Uni, rented to students (because old red brick Unis, unlike T-shirt factories, tend NOT to move their production, and workers (=students) to China).


etc.


Long story short: 200k is a funky funny amount for a Westerner to retire on. Do read that other thread with small boat cruisers' budgets. Small boats are likely at the lower end of how little one needs to go on for obvious reasons.


You are not going to get 5% return on 200k in of your RETIREMENT repeat RETIREMENT money. Return is related to risk and no regular retiree is going to go the risky way. Unless fooled by an 'investment advisor'.



People retire to slow down and have some easy life, not to sit on the edge of their death bed worrying about stock exchanges, investment funds or Bitcoins.


I lived in some of the places mentioned in that unlucky article. I still do in one. And I am one of those marginal garbage can level cruisers too. I can't see retiring on 200k, even with my very low expectations and marginal lifestyle. And I am not a Westerner, I do not share that lifestyle. I feel rich with smaller things, that do not cost me any money.



Telling Westerners they can retire anywhere on 200k and feel rich? Maybe at heart. Silly and noxious summer gig by a social media 'journalist'. That's that.


All due respect, just vastly different mileage.


Cheers,
barnakiel

What's a "stock exchange license"? We usually call them seats if you're talking about an exchange, as in you hold a seat on a stock exchange. Or licenses if you're talking about an SEC license, as in you hold a series 7 license. By terminology alone it would appear you hold neither. Anyway, ever hear of TIPS? They yield >0 so yields do exceed inflation. And I convert currency using my interactive brokers account for a fraction of a percent for both EUR and CAD from USD, if you want to pay a bit more I think Transferwise is about 1.5% If you're a CFA and you think people have to pay 6-8% to convert USD to EUR you're practically guilty of malpractice!

[a64pilot]

The problem with the $3,000 a month SS check is nobody gets one, even if you are a Billionaire, its more than the max SS will pay, anyone.

However just for planning, the average SS check is a little over $1,400 a month, well shy of $3,000.

I’ve seen 5% tossed around, a little higher than I’m planning, but may well be a good, sustainable number, maybe.
Well your $200,000 at 5%, returns about $833 a month.
So your going to be chewing into the principle, which of course means the return is smaller so every year your going to be spending more and more of the principle etc. and we haven’t talked about inflation yet.

[redneckrob]

Originally Posted by a64pilot

The problem with the $3,000 a month SS check is nobody gets one, even if you are a Billionaire, its more than the max SS will pay, anyone.

However just for planning, the average SS check is a little over $1,400 a month, well shy of $3,000.

I’ve seen 5% tossed around, a little higher than I’m planning, but may well be a good, sustainable number, maybe.
Well your $200,000 at 5%, returns about $833 a month.
So your going to be chewing into the principle, which of course means the return is smaller so every year your going to be spending more and more of the principle etc. and we haven’t talked about inflation yet.

I think folks are shorthanding their and their spouses as together, which on average gets you just shy of $3,000.