Time for Something Adventurous
A Facebook friend is visiting the Republic of Georgia and the pictures look stunning. He and I engaged in a back and forth in which he said he plans to spend part of his retirement there. He noted that it is very cheap there, it is also stable and safe and while he appeared to be out in the middle of nowhere he was able to communicate with me via his smartphone (speaks to the infrastructure).
I started doing a little research but the Georgian expat life is hard to find information about without paying for it which I don’t feel the need to do. I don’t know how safe or stable it really is but even if Georgia isn’t that safe or stable there are plenty of places where the lifestyle is much cheaper than in the US and there is safety, stability and good healthcare (we didn’t discuss healthcare in our Facebook conversation).
This ties in with an idea I had for a blog post a while back but never quite finished about early retirement years being a time for something adventurous, very adventurous, like living in another country.
To the extent that Americans are collectively undersaved for retirement but for people who are a decent part of the way there (like $400,000 versus an $800,000 goal), they will have to take a more innovative approach to their retirement but they don’t have to be in serious trouble. People in their early 60’s who are fortunate enough to be healthy and fit will have more options to be innovative, like living in another country.
The expectation is that at some point the healthy and fit couple in their 60’s will need return to the US for health reasons. Maybe that happens at 70 or 80 or maybe never but as things become a little more difficult at some point for everyone, planning to return makes sense. For this reason, it would be wise to keep your house and rent it out. Staying consistent with past posts, the hope would be that retirement would coincide with having paid the mortgage off. What is fair market rent for a house of your size in your town and how far would that go (net of expenses like maybe a management company) in some place like Georgia, Panama or Ecuador (the latter two being somewhat popular)? Netting $1500-$2000 per month might cover all the regular monthly expenses and maybe some sort of hobby related income could combine to allow that $400,000 to keep growing untapped and without having to take Social Security at 62.
At age 70 when it’s time to go back to the US, that $400,000 in a balanced portfolio might have become $500,000 (far from a heroic assumption). Having kept the house creates options including one we have talked about here which is downsizing into a tiny house (a small house more practically) in which selling a home priced around the national average in today’s dollars and going all in on a small house could net $100,000.
So now the $500,000 is up to $600,000 and having waited until 70, the Social Security payout is obviously much higher than it would have been at 62. While the $800,000 number might not get met until much later if ever, the chances for a successful retirement are greatly improved.
Any plan like this would require a tremendous amount of research and planning but that will be the case with any type of financial/retirement plan that requires some form of innovation. As I usually say in these types of posts, this sort of thing won’t work for too many people but could be a huge difference maker for some folks.