Retiring Overseas on a Budget: How to Live Well on $25,000 a Year

Retiring Overseas on a Budget: How to Live Well on $25,000 a Year

Who hasn’t thought of chucking it all and moving overseas to some cheap little beach villa or living in some exotic country? When I saw this at the library, I figured I’d pick it up:

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International Living Guide to Retiring Overseas on a Budget: How to Live Well on $25,000 a Year

First off, this book was written by people who lived what they’re writing about – which makes it highly credible. It is an easy and fast read written like a good buddy chatting about his life over coffee. It is clearly geared for people who are thinking about retiring abroad for the first time as opposed to an in-depth or technical guide. Its main strengths are that it gives you a great broad overview sufficient for you to begin your deeper dives elsewhere, and for the realities/questions to ask yourself to see if retiring abroad is really right for you. Its biggest weaknesses are that it lacks depth in legal/technical/financial matters and definitely paints an overly rosy/optimistic picture on most of its topics.

Good points/advice:

  • Probably the best part of the book is the chapter on if life abroad will mesh with you or not. He tells you to really dig deep and be brutally honest with yourself. I wish he’d gone into this more, but it was a great eye opener. I believe he correctly asserts that the more brutally honest you are with yourself, the better your decision will be. He breaks his points down into about 10 questions and refers you back to them again and again. They boil down to these points:
    • Are you ok with change and living as your new country lives? This isn’t a retirement community, it is a lifestyle change to live more as a traveler. Do you love at least a little adventure every day doing even common things like getting around, buying toothpaste, etc – or do you want to ‘nest’ in US comforts?
    • You cannot afford to ‘take it with you’ nor will you likely want to. Living abroad on these budgets means you will live and eat as that country lives. Cosmetics, medication, deodorant, snack foods, tv shows, furniture, etc – all will be different. In many cases, you simply can’t live as you did. Electronics here might make no sense in a country with no internet fast enough to stream Netflix – or will not work at all on 220/50hz. That heirloom cloth pattern chair will do nothing but mold on a humid tropical beach. That fancy washing machine will not work with local hookups or water quality/electric . You will also need to eat local foods to live cheaply. Are you ok with that, or need your steak dinners each night?
    • Be honest about the weather you like. Are you really a beach person or would mountains suit you better? Are you ready for sand all the time and 100% humidity every day for 6-8 months? Are you ok with rainy seasons? Have you traveled to your country of choice during the ‘worst’ season?
    • Are you ready to live, recreate, eat, and pattern your life after how your target country lives? How attached are you to watching US football or sports? How do you spend free time and are you able to get supplies for hobbies there? Are you ok with neighborhood roosters crowing at 6am every day (with no noise ordinances)? Are you ok with the slower, possibly more corrupt pace of business and government services? Poverty, food safety, and animal treatment in your new country may shock you. Will you be ok with building new local friends/connections on relationship and spending time rather than business/utility?
    • Are you really ready to leave natural support nets with your grandkids, family, friends, communities, and lifestyle here in favor of skyping/visits? Flying home is one of the biggest costs you’ll have – are you cool with only 1-3 visits a year? Are you ok leaving business associates and other professional contacts behind?
    • If you have a spouse, are you evaluating these questions with them and both onboard 100%
  • The book is very easy and quick to read. Covers a lot of ground and give a great broad overview.
  • Sample real-world budgets of his own living expenses along with discussions about what that buys you (at least in the author’s country).
  • Great common-sense advice like:
    • Take at least one long trip, and hopefully several/yearly trips, to your destination before moving. Preferably at least once during the ‘worst’ season (hottest/rainiest/etc).
    • Don’t decide to buy a home there while drinking a margarita by the beach. Contact a local lawyer and ask yourself the deep soul-searching questions he had above.
    • What we would have done differently from those that went there.
    • Getting a reputable local lawyer for real estate purchases and protecting surviving spouses by writing contracts properly.
    • Don’t expect to make any extra income by working there. The pay will not be sufficient to make up gaps.
    • You may not need to become fluent, but if US tax laws confuse you, imagine doing legal documents and taxes in a foreign language. You’re going to need to hire a few lawyers at the beginning for sure.
    • Be prepared/able to return if this doesn’t work for you. Some people find it very difficult and give up. Others do great for years, but ultimately decide to return for family.
    • The US is based on Common Law, while most of the rest of the Americas are Civil Law. This makes getting a good lawyer for things like buying a home essential.
  • He has information about individual countries in the book. The best communities in that country for ex-pats on a budget and interesting social/financial/cultural notes. It’s a great place to get started to dig deeper.
  • Basic overview of how medical insurance works in other countries – especially private/public coverage and important key questions/differences to ask to make sure you’re getting the coverage you need.
  • Basic information and common issues with buying a house abroad and the fact you will absolutely want a local lawyer for this type of transaction.
  • Some basic differences between Common Law and Civil Law:
    • You must codify transferral of your home/property to surviving spouses after your death or they might have to go fight for their own home.
    • You must do very thorough ownership history checks or you could end up in a legal fight with a great grandchild that never signed a release on property that you purchased.

Shortcomings:

  • Big sections read like just common sense since it doesn’t give enough specifics on many topics. This, however, might be what some romantic types need.
  • Focuses primarily on Central and South America, even though none of those (except Mexico) are in the top 10 countries of expats. However, some of the top 10 are likely not livable on $25k/year.
  • Feel he paints too rosy a picture of living aboard when it comes to personal safety and health care.
    • He makes many valid points about several countries on his list having tentatively ‘better’ healthcare – but that was as defined in an old study he quotes by the UN and his metrics of office wait times. Without specifics of their metrics used, I’m tempted to believe a country might get great marks for maternity care and treating common ailments but may not for what the average 65 year old (til death) will deal with. His budget numbers/livability also assumes you are a ‘relatively healthy 65 year old person’.
    • Missing all together is an honest discussion about inevitable end-of-life care you will receive there (terminal cancer, organ failure, etc). There is no discussion about handling or treatment of those permanently disabled by stroke, dementia, etc.
    • He asserts more security that I believe is safe. While traveling abroad is usually safe, there are real concerns. A good example is how he talks about how great his own Ecuador is, yet never talks once about the real security threats that a personal friend who was in the Peace Corps encountered. During an uprising, they were evacuated from their mountain towns to the capital, protected under armed guards in a compound, then flown home as things deteriorated. Brazil has serious safety issues in their big cities with paid executions in broad daylight. He doesn’t mention the growing dangers of kidnapping, car jacking, etc in Mexico. At best, he mentions that ‘he has stories’ and that one lady was fleeced in a real estate purchase, but doesn’t give sufficient details for my tastes.
  • Not enough really detailed financial advice. I can’t fault the book on this since you could write a whole book on that, but this book simply doesn’t give you enough information on how to handle taxes/etc.
  • The book simply is not sufficient to actually plan a move abroad. It gives a great starting point, but you will need to do a lot more.

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