Retire early, live abroad until 65 and come back

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flyingaway
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Re: Retire early, live abroad until 65 and come back

Post by flyingaway » Mon Aug 07, 2017 5:45 pm

WhiteMaxima wrote:
VictoriaF wrote:In addition to the financial, medical, and social considerations be realistic about the time and effort it takes to select a country, a town, an apartment, and various local services. Even the preliminary research of visiting all the sites and watching all the videos recommended in this thread will takes months. It's conceivable that all your time would be spent on administrative issues leaving no time for la dolce vita.

A better alternative, in my opinion, is to choose one country as the base and travel from there. If you have a good healh insurance in the U.S., create the base there. You can choose it in a state with no state income tax. If you need health insurance, make your base in one country abroad. I would consider the 2nd largest city in a Central European country, such as Brno in the Czech Republic or Krakow in Poland. You can live there less expensively than in the capital, live without a car, and be well connected to the rest of Europe.

You will need to take language courses, but that has advantages of making local friends and warding off mental decline.

Victoria
Maintain a US base, you would eliminate the cost saving: You will have to pay two places. I would sell everything in the US or put in stroage. The property taxe saving is enough for me to rent an apt in Brno. The purpose of living abroad: 1) explore new world 2) reduce living expense (by withdraw from your before-tax up to 15% tax rate). Brno and Krakow are good choice. From map, Brno is just hrs away to Wien. US passport allows 60 days stay. Might just take a weekend visa trip to Crotia.
Some people mentioned elsewhere that people are likely to be priced out of market if they sell their houses to go overseas, come back many years later and want to establish residency at some places inside the U.S.

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Hyperborea
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Re: Retire early, live abroad until 65 and come back

Post by Hyperborea » Mon Aug 07, 2017 5:53 pm

WhiteMaxima wrote:US passport can only stay 90 days out of 180 days. Short stay means high travel and rent expense. Stay more than 180 during a year you are subjected to hefty EU taxes.
Portugal is another option that has low to no tax for the first 10 years, a relaxed lifestyle, good climate, low cost, and a base to explore the rest of Europe from. A US citizen is still going to owe US taxes. Others can set it up so that they pay no income taxes during that time. It's on my short list.

http://www.livinginportugal.com/en/movi ... residents/

flyingaway
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Re: Retire early, live abroad until 65 and come back

Post by flyingaway » Mon Aug 07, 2017 5:57 pm

AlohaJoe wrote:
WhiteMaxima wrote:According to https://www.numbeo.com/cost-of-living/comparison.jsp
Living abroad is cheaper than in US
I have lived abroad for many years. I would take that calculator with a grain of salt. You will not be able to live on 1/2 or 1/3 of the US unless you change your style of living dramatically...but you could do that in the US too.

I think the overall idea of living outside the US is fine, obviously. I think your plan doesn't make much sense as it stands. You need to refine it, do more research, and think harder about what kind of future life is actually possible and enjoyable.

What country is going to let you live there for a year? They all require visas. The Schengen visa means you get to spend 90 days there before you have to leave.

Spending a year in a country means you become subject to their taxes and will have to figure out how they work.

Moving every year while abroad means you will never have any friends.

Few people who are over 50 enjoy an itinerant lifestyle like that. Even people who enjoy travel often (but not always) "get it out of their system" after a while and find themselves traveling less.

Moving back to the US after 15 years abroad means you will have no friends in the US.

If you don't have a car expense how are you going to get around in these other countries? Are you going to buy a scooter in Southeast Asia and drive that everywhere? Are you going to take a taxi everywhere?
Pay cash for health care (same quality of service at 1/2 or even 1/3 of US).
Have you ever sought medical care in a place where their English wasn't 100% perfect in explaining what's wrong with you and what they're doing to fix it? Are you comfortable with that?

If not, you probably will be paying more than you expect to go to the international/expat clinics. As an example, I went to an expat-friendly dentist and my tooth cleaning and check up was $90 cash. I went to a dentist who spoke broken English and didn't know all the right words for medical things and I got a root canal for $50.

Picking one country you love and figuring out how you're going to build a life for 10-20-30 years there is almost always a much better approach.
I also lived extensively in another Asia country. All I can say is that if you want to have a life style similar to that you have in the U.S., it will be more expensive than many places in the U.S. If you want to live like locals, yes, it is much less expensive.

For example, to see a doctor in a small local hospital in China, you just pay about a few dollars (not including any medicine or exams). The doctor speaks local language to you, with about 20 other patients standing in her office looking at you talking to the doctor.

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Hyperborea
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Re: Retire early, live abroad until 65 and come back

Post by Hyperborea » Mon Aug 07, 2017 6:14 pm

flyingaway wrote: I also lived extensively in another Asia country. All I can say is that if you want to have a life style similar to that you have in the U.S., it will be more expensive than many places in the U.S. If you want to live like locals, yes, it is much less expensive.

For example, to see a doctor in a small local hospital in China, you just pay about a few dollars (not including any medicine or exams). The doctor speaks local language to you, with about 20 other patients standing in her office looking at you talking to the doctor.
I think that in most countries, including the US, if you try to live in a way that the locals don't it will be more expensive. Visit an Australian or British store in the US and compare the prices of the items there. Far, far higher priced (and understandably so) than those items bought in their home country or comparable local items. It's not too expensive if it's a couple of things you want from home - a favourite sauce or a something like that. But to keep your whole life identical becomes cost prohibitive and you might as well have stayed at home.

I've had a family member have an MRI in Japan. It was nothing like it was in the US - it was quick, efficient, and inexpensive (cheaper than the US deductible/co-pay).

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VictoriaF
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Re: Retire early, live abroad until 65 and come back

Post by VictoriaF » Wed Aug 09, 2017 3:21 am

WhiteMaxima wrote:
VictoriaF wrote:In addition to the financial, medical, and social considerations be realistic about the time and effort it takes to select a country, a town, an apartment, and various local services. Even the preliminary research of visiting all the sites and watching all the videos recommended in this thread will takes months. It's conceivable that all your time would be spent on administrative issues leaving no time for la dolce vita.

A better alternative, in my opinion, is to choose one country as the base and travel from there. If you have a good healh insurance in the U.S., create the base there. You can choose it in a state with no state income tax. If you need health insurance, make your base in one country abroad. I would consider the 2nd largest city in a Central European country, such as Brno in the Czech Republic or Krakow in Poland. You can live there less expensively than in the capital, live without a car, and be well connected to the rest of Europe.

You will need to take language courses, but that has advantages of making local friends and warding off mental decline.

Victoria
Maintain a US base, you would eliminate the cost saving: You will have to pay two places. I would sell everything in the US or put in stroage. The property taxe saving is enough for me to rent an apt in Brno. The purpose of living abroad: 1) explore new world 2) reduce living expense (by withdraw from your before-tax up to 15% tax rate). Brno and Krakow are good choice. From map, Brno is just hrs away to Wien. US passport allows 60 days stay. Might just take a weekend visa trip to Crotia.
Several years ago, I was contemplating an idea of living winters in Florida and summers in Europe. I don't own any real property and so property taxes would not be an issue. I would have kept a limited number of things in storage and take them to my half-year rented apartments. My tentative Florida base was Sarasota.

When I looked at it closer, I noticed several issues with my plan:
- winter rentals in Florida are expensive
- half-year rentals are not much cheaper than annual rentals
- furnished rentals would not have met my needs because most of them do not include desks and bookcases
- moving in and out of storage is an overhead
- I'd need to keep a car somewhere while I were away.

My modified plan has become to rent a cheap apartment in Sarasota on the annual basis, use it as a storage for my possessions and the car while I am away, and pay someone to keep an eye on it.

In the end, I decided to stay in the Washington DC area, because I really like it here and I can afford it. I am traveling 30-35% of the year, during which time my rent is wasted, and this is fine by me.

...
Bratislava is one hour by bus from Vienna and is very inexpensive. I stayed there for 35 Euros/night within short walking distance to the center. Most Bogleheads would reject that hotel, but I like living and traveling like a student.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

flyingaway
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Re: Retire early, live abroad until 65 and come back

Post by flyingaway » Wed Aug 09, 2017 8:33 am

VictoriaF wrote:
WhiteMaxima wrote:
VictoriaF wrote: Victoria
Maintain a US base, you would eliminate the cost saving: You will have to pay two places. I would sell everything in the US or put in stroage. The property taxe saving is enough for me to rent an apt in Brno. The purpose of living abroad: 1) explore new world 2) reduce living expense (by withdraw from your before-tax up to 15% tax rate). Brno and Krakow are good choice. From map, Brno is just hrs away to Wien. US passport allows 60 days stay. Might just take a weekend visa trip to Crotia.
Several years ago, I was contemplating an idea of living winters in Florida and summers in Europe. I don't own any real property and so property taxes would not be an issue. I would have kept a limited number of things in storage and take them to my half-year rented apartments. My tentative Florida base was Sarasota.

When I looked at it closer, I noticed several issues with my plan:
- winter rentals in Florida are expensive
- half-year rentals are not much cheaper than annual rentals
- furnished rentals would not have met my needs because most of them do not include desks and bookcases
- moving in and out of storage is an overhead
- I'd need to keep a car somewhere while I were away.

My modified plan has become to rent a cheap apartment in Sarasota on the annual basis, use it as a storage for my possessions and the car while I am away, and pay someone to keep an eye on it.

In the end, I decided to stay in the Washington DC area, because I really like it here and I can afford it. I am traveling 30-35% of the year, during which time my rent is wasted, and this is fine by me.

...
Bratislava is one hour by bus from Vienna and is very inexpensive. I stayed there for 35 Euros/night within short walking distance to the center. Most Bogleheads would reject that hotel, but I like living and traveling like a student.

Victoria
Bratislava is indeed a very nice place to stay for a week or so. But how do you spend your time there every day? Going to downtown, sitting at a coffee shop, and watching people passing by? This could be fun for a week, but is not good for long term. I would also think it is not a good idea to maintain a room in Bratislava and pay another room in Vienna when you go there.

flyingaway
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Re: Retire early, live abroad until 65 and come back

Post by flyingaway » Wed Aug 09, 2017 8:48 am

Back to the OP, I think there are actually two issues, which are put together, but should be dealt with separately. One is travel abroad, another is affordability of medical insurance in the U.S.

Medical insurance first: Insurance is for something that is very serious, such as cancer, organ transplants, heart surgery, etc. For these sort of things, you would not be able to have them done in an arbitrary country you happen to be travelling in. You have to come back to the U.S., and if you don't have medical insurance in the U.S., I don't know what to say. On the other hand, you could potentially manage your income (not your assets) to get subsidized insurance or even Medicaid, as someone mentioned and discussed elsewhere. So travelling outside the U.S. before 65 for medical insurance purpose is not a valid reason.

If you really like travel and want to see the world, that is a different story. The OP has $1.5M (4% rule yields $60K annually), which is more than several popular early retiree bloggers who are just doing that have. So I think that is doable, as long as the OP does not stay in five star hotels everywhere. There are some detailed strategies discussed in this thread, which, IMHO, do not affect the whole picture, just sort of optimization.

flyingaway
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Re: Retire early, live abroad until 65 and come back

Post by flyingaway » Wed Aug 09, 2017 9:04 am

WhiteMaxima wrote:I have company pension at 30k per year. That will last me quite well in Thailand between 65 and 70 1/2 when I will claim SS at $3400 /month. I guess I would complete Roth conversion by 70 1/2. Until then I have no RMD just SS and pension. Between now to 70 is truly a golden era for traveling, exploring and learning.
With your pension at $30K and SS at $4.1K and another $1.5M in retirement funds, I have no reason to believe that you cannot do what you want to do. I would certainly just do that if I were you.

But 15 years is really a long time, are you sure that you want to travel that long around the world? (Do you want to maintain a house in the U.S.? That is the problem that I am facing.)

WhiteMaxima
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Re: Retire early, live abroad until 65 and come back

Post by WhiteMaxima » Wed Aug 09, 2017 10:40 am

I have booked flight next month to re-visit Prague, Vienna and Budapest. Fly in Amstasterdam and rent a car through Berlin, then heading south into Aus-Hungarian land. Any suggestions?

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HomerJ
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Re: Retire early, live abroad until 65 and come back

Post by HomerJ » Wed Aug 09, 2017 10:44 am

alaskantraveler wrote:As others have said, cost of living even abroad comes down to lifestyle. I think the cheaper cost of living abroad gets overstated. There are many good places to live in the USA where you can rent a one bedroom apartment for $500/month. Owning an inexpensive used car can cost less than $200/month, and food can be had for $500/month. Add a cell phone bill and some miscellaneous, and you can reasonably live a modest lifestyle in places in the USA on less than $2000/month. Yes you can also live in Thailand for $2000.
This.

There are some very pretty LCOL areas in the U.S., near lakes or mountains where one can live very cheaply.

flyingaway
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Re: Retire early, live abroad until 65 and come back

Post by flyingaway » Wed Aug 09, 2017 10:57 am

WhiteMaxima wrote:I have booked flight next month to re-visit Prague, Vienna and Budapest. Fly in Amstasterdam and rent a car through Berlin, then heading south into Aus-Hungarian land. Any suggestions?
We were in Vienna, Budapest, Bratislava, Athens, and two Greece islands this May. We used bus and train to travel between Vienna, Budapest, and Bratislava, and flied to Athens. I did not want to drive in Europe after I got tickets the year before in Italy. I found bus and train are very convenient in Europe.
I would recommend Naschmarkt Market in Vienna. We discovered it too late in the morning of our leaving Vienna. I also like Bratislava very much, see Victoria's post before. Bratislava is a small town, you can walk around. I like the blue church there. My wife liked the goose liver dinner in Budapest. We had bad weather in Vienna and Budapest, and good weather in Bratislava, I don't know if that was the reason.
Last edited by flyingaway on Wed Aug 09, 2017 11:05 am, edited 1 time in total.

flyingaway
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Re: Retire early, live abroad until 65 and come back

Post by flyingaway » Wed Aug 09, 2017 10:58 am

HomerJ wrote:
alaskantraveler wrote:As others have said, cost of living even abroad comes down to lifestyle. I think the cheaper cost of living abroad gets overstated. There are many good places to live in the USA where you can rent a one bedroom apartment for $500/month. Owning an inexpensive used car can cost less than $200/month, and food can be had for $500/month. Add a cell phone bill and some miscellaneous, and you can reasonably live a modest lifestyle in places in the USA on less than $2000/month. Yes you can also live in Thailand for $2000.
This.

There are some very pretty LCOL areas in the U.S., near lakes or mountains where one can live very cheaply.
I agree that the COL should not be considered as a major reason to live overseas.

WhiteMaxima
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Re: Retire early, live abroad until 65 and come back

Post by WhiteMaxima » Wed Aug 09, 2017 11:22 am

On the contrary, I feel less like to get ticket in west Europe than in the USA. You don't see many police on the motor way. Most is speed camera. Driving up to 200 km/h is no big deal. I booked a VW for a week from Amsterdam for just $100 a week. No city tax, no stadium tax. Of course I have to pay $6 /gal gas. Let's see if I can get a diesel version of VW.
Last edited by WhiteMaxima on Wed Aug 09, 2017 11:54 am, edited 1 time in total.

flyingaway
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Re: Retire early, live abroad until 65 and come back

Post by flyingaway » Wed Aug 09, 2017 11:49 am

WhiteMaxima wrote:On the contrary, I feel less like to get ticket in west Europe than in the USA. You don't see many police on the motor way. Most is speed camera. Driving up to 200 km/h is no big deal. I booked a VW for a week from Amsterdam for just $100 a week. No city tax, no stadium tax. Of course I have to get pay $6 /gal gas. Let's see if I can get a diesel version of VW.
I did not get speeding tickets, I got tickets at some ancient Italian cities that restrict accessibility for outsiders. I also did not want to have any problems with potential accidents or scams, so I bought full insurance from the rental companies, just a peace of mind.

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HomerJ
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Re: Retire early, live abroad until 65 and come back

Post by HomerJ » Wed Aug 09, 2017 12:21 pm

WhiteMaxima wrote:I have booked flight next month to re-visit Prague, Vienna and Budapest. Fly in Amstasterdam and rent a car through Berlin, then heading south into Aus-Hungarian land. Any suggestions?
How much of your yearly $30k budget is this trip going to cost you?

WhiteMaxima
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Re: Retire early, live abroad until 65 and come back

Post by WhiteMaxima » Wed Aug 09, 2017 12:32 pm

HomerJ wrote:
WhiteMaxima wrote:I have booked flight next month to re-visit Prague, Vienna and Budapest. Fly in Amstasterdam and rent a car through Berlin, then heading south into Aus-Hungarian land. Any suggestions?
How much of your yearly $30k budget is this trip going to cost you?
Free flight frm Chase Reserve Card. $900 round trip (use 60000 pts x1.5), Car rental $100 ( cost 6000 pts + $31 of my own dollar). DW travel free because she has a business trip before our vacation. So except the hotel, gas, dinning out. It's free.

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HomerJ
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Re: Retire early, live abroad until 65 and come back

Post by HomerJ » Wed Aug 09, 2017 3:00 pm

WhiteMaxima wrote:
HomerJ wrote:
WhiteMaxima wrote:I have booked flight next month to re-visit Prague, Vienna and Budapest. Fly in Amstasterdam and rent a car through Berlin, then heading south into Aus-Hungarian land. Any suggestions?
How much of your yearly $30k budget is this trip going to cost you?
Free flight frm Chase Reserve Card. $900 round trip (use 60000 pts x1.5), Car rental $100 ( cost 6000 pts + $31 of my own dollar). DW travel free because she has a business trip before our vacation. So except the hotel, gas, dinning out. It's free.
Awesome... How long into your 15 years of not working will those free trips continue?

WhiteMaxima
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Re: Retire early, live abroad until 65 and come back

Post by WhiteMaxima » Wed Aug 09, 2017 3:23 pm

HomerJ wrote:
WhiteMaxima wrote:
HomerJ wrote:
WhiteMaxima wrote:I have booked flight next month to re-visit Prague, Vienna and Budapest. Fly in Amstasterdam and rent a car through Berlin, then heading south into Aus-Hungarian land. Any suggestions?
How much of your yearly $30k budget is this trip going to cost you?
Free flight frm Chase Reserve Card. $900 round trip (use 60000 pts x1.5), Car rental $100 ( cost 6000 pts + $31 of my own dollar). DW travel free because she has a business trip before our vacation. So except the hotel, gas, dinning out. It's free.
Awesome... How long into your 15 years of not working will those free trips continue?
Let's assume retirement at 55. 15 years of Roth conversion plus withdraw from pre-tax ( keep below 15% tax bracket, and living on post-tax, at 1/2 of living cost in central EU region) till 70 1/2. When you look at the wage and purchase power outside of US, we are paying too much for everything except jeans (import from Vietnam) and Coke in the USA. Plus two round trip back and forth to the USA. The problem is visa requires me to out 1/2 of the year so no one years lease from both side of the ocean. But six-month lease would still better than hotel or airbnb. My be I could find a couple to exchange house on both side of the ocean in order to eliminate the waste of vancancy.

frankmorris
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Re: Retire early, live abroad until 65 and come back

Post by frankmorris » Wed Aug 09, 2017 4:56 pm

Fascinating thread. One person mentioned this a while back - taxes on the state level. I'm not sure how taxes are assessed if you live abroad, but would assume you'd be state income taxes if you had a home base in that state. So, yes - living in a no-income tax state would likely be best if you could.

Someone even earlier mentioned accounts being frozen - this seems like a double standard. On one hand, as an expat (but still US citizen), you're expected to still pay US taxes. BUT, you aren't allowed to have US-based financial accounts?

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Re: Retire early, live abroad until 65 and come back

Post by Diogenes » Sat Aug 12, 2017 6:59 pm

frankmorris wrote:
Wed Aug 09, 2017 4:56 pm

Someone even earlier mentioned accounts being frozen - this seems like a double standard. On one hand, as an expat (but still US citizen), you're expected to still pay US taxes. BUT, you aren't allowed to have US-based financial accounts?
I haven't found this to be a serious issue over the past 10 years overseas. Just have a U.S. mailing address, perhaps a virtual mailbox, and there will be no questions. Use a VPN to access any sites that block foreign access. Done!

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Re: Retire early, live abroad until 65 and come back

Post by windrose » Sun Aug 13, 2017 3:34 pm

I am considering this as well (Europe)... not for general lower cost of living, but mainly health insurance costs. It is not my top plan...more like a plan C, but as a lower income boglehead, I will not be able to afford to retire at 55 without the ACA. If the ACA stays, I would probably just visit Europe for a few months out of the year.

Without ACA, my options will be: stay at current job for the insurance, retire and take another job for insurance, or move to Europe (I have access to EU citizenship) and buy private insurance over there....which cost-wise would be similar to current ACA rates at my income level.

My current employer offers early retiree insurance (55-65) for $1400 per month, per person. It is just too big of a % of my income to make the early retirement numbers work. But the biggest issue to consider is not just the premiums, but the total costs I would face with a serious illness. If it were just the difference in premiums, it would be more of a wash, after paying for an apartment over there. But the the opportunity to spend some of my retiree years doing something new, learning new languages, etc. is also appealing. Plus...I really like it over there. But I am also very content here...which it is why is is my plan C.

I'd plan to keep my residence in the US, and maybe make a trip back every 2-3 months. I have a paid for condo which in today's dollars costs about $550 per month (HOA and taxes). HOA includes, heat, A/C, cable, and internet, and the staff will check on your unit, and bring up your mail, for $10 a week (the building is in a touristy area and has a lot of snowbirds as well as owners who use their units as an "in-town" property). I would not need a car here, or in Europe. I'm aiming for a seaside town (Italy, Spain, France, Portugal) within 2 hours of a bigger city with airport.

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Re: Retire early, live abroad until 65 and come back

Post by cherijoh » Sun Aug 13, 2017 4:15 pm

Barefootgirl wrote:
Wed Aug 02, 2017 8:00 pm
I would think it is easier for US born people who are open minded, find it easy to pick up new languages and find a community they fit in wherever they land.
You're kidding right? Most older Americans would find it very difficult to learn a new language - especially if they are currently mono-lingual. Plus I think a lot of people just think they are open-minded about new experiences because they have only had to be out of their comfort zone for short periods in the past while on vacation.

WhiteMaxima
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Re: Retire early, live abroad until 65 and come back

Post by WhiteMaxima » Mon Aug 14, 2017 5:04 pm

windrose wrote:
Sun Aug 13, 2017 3:34 pm
I am considering this as well (Europe)... not for general lower cost of living, but mainly health insurance costs. It is not my top plan...more like a plan C, but as a lower income boglehead, I will not be able to afford to retire at 55 without the ACA. If the ACA stays, I would probably just visit Europe for a few months out of the year.

Without ACA, my options will be: stay at current job for the insurance, retire and take another job for insurance, or move to Europe (I have access to EU citizenship) and buy private insurance over there....which cost-wise would be similar to current ACA rates at my income level.

My current employer offers early retiree insurance (55-65) for $1400 per month, per person. It is just too big of a % of my income to make the early retirement numbers work. But the biggest issue to consider is not just the premiums, but the total costs I would face with a serious illness. If it were just the difference in premiums, it would be more of a wash, after paying for an apartment over there. But the the opportunity to spend some of my retiree years doing something new, learning new languages, etc. is also appealing. Plus...I really like it over there. But I am also very content here...which it is why is is my plan C.

I'd plan to keep my residence in the US, and maybe make a trip back every 2-3 months. I have a paid for condo which in today's dollars costs about $550 per month (HOA and taxes). HOA includes, heat, A/C, cable, and internet, and the staff will check on your unit, and bring up your mail, for $10 a week (the building is in a touristy area and has a lot of snowbirds as well as owners who use their units as an "in-town" property). I would not need a car here, or in Europe. I'm aiming for a seaside town (Italy, Spain, France, Portugal) within 2 hours of a bigger city with airport.
You probably could rent your condo out while you are traveling. The benefit of traveling is learning new things everyday. Before 65 you are still capable to learn and relatively healthy. Life is too short, keep on traveling.

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