retiring abroad with savings worth 200k...

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user199
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retiring abroad with savings worth 200k...

Post by user199 » Tue Oct 30, 2018 12:36 pm

Hello.
I am a single male(intent to stay single early 40's with savings around 200k all in a savings account currently.
i am looking to move abroad and retire preferably puerto vallarta mexico and intent to live a modest simple life.
expect my monthy expenses to be around 800-1000$ per month.
wondering if have enough savings to make this happen and also how to invest this amount to get the required returns.

Thanks

Jack FFR1846
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Re: retiring abroad with savings worth 200k...

Post by Jack FFR1846 » Tue Oct 30, 2018 12:42 pm

A 4% withdrawal would give you $666.66 per month.

Not enough.
Bogle: Smart Beta is stupid

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greg24
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Re: retiring abroad with savings worth 200k...

Post by greg24 » Tue Oct 30, 2018 12:43 pm

At $800 per month, you're looking at a withdrawal rate of 4.8%. $1000 is 6%.

Most people recommend 3 to 4%. Particularly if retiring in your 40s.

There is a very good chance that you will run out of money.

Jordan4FI
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Re: retiring abroad with savings worth 200k...

Post by Jordan4FI » Tue Oct 30, 2018 12:50 pm

That is going to be very tight, and if you are not going to invest it, you will not last long.. 16 years if you keep your budget indeed under 12K a year.

If you invest it and earn 6% average per year, that gives you 12K, but some years will not produce that so you will then eat into capital. Have you been to the location you talk about? You need to visit there a few times before you choose a location.

I would highly request you have 25X your expected budget. 12K x 25 = 300,000

I am going to live in Thailand, my "walk away from work, but return later" is 225K in one fund, 30K in another fund just for health insurance, 36K in my checking as a buffer, and 40K in my savings for visa, move and set up costs.

My walk away from work possibly for life is 600K+

I also know, that my monthly costs in Thailand can be between 1000-1500 a month, although 2K a month would be the most optimal lifestyle.

terran
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Re: retiring abroad with savings worth 200k...

Post by terran » Tue Oct 30, 2018 12:54 pm

In addition to the other warnings about not having enough, you should do some serious soul searching about "locking" yourself into living in a low cost of living country. Think about what you would do if you want to move back stateside for whatever reason.

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JoMoney
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Re: retiring abroad with savings worth 200k...

Post by JoMoney » Tue Oct 30, 2018 12:54 pm

How long do you plan to be 'retired' ?
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

PFInterest
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Re: retiring abroad with savings worth 200k...

Post by PFInterest » Tue Oct 30, 2018 12:55 pm

Jack FFR1846 wrote:
Tue Oct 30, 2018 12:42 pm
A 4% withdrawal would give you $666.66 per month.

Not enough.
And that's just 30 yrs 😁

Jordan4FI
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Re: retiring abroad with savings worth 200k...

Post by Jordan4FI » Tue Oct 30, 2018 12:56 pm

If you plan to try to find some source of income, then your 200K is a huge help. There are many many people out there with no financial backing that work just enough to keep the daily life needs met. But to just walk away and quit, 200k is not going to work.

Ensure you price out your expat insurance options, if you want to have it, you will need to add around 3-5K extra per year for that premium.

GmanJeff
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Re: retiring abroad with savings worth 200k...

Post by GmanJeff » Wed Oct 31, 2018 6:53 pm

The answer is almost certainly no.

Even if your savings were sufficient, which other have pointed out they are not, are you confident your projected expenses actually reflect the cost of living in Mexico, and will remain as projected indefinitely, i.e., are unlikely to rise for any reason as you age, e.g., increased need for medical care or, eventually, for long-term care, or due to future changes in the Mexican economy or political system?

If your ambition is inextricably intertwined with the location you have chosen, are you confident that's really where you want to be forever? Mexico has a reputation for extensive and potentially intractable social and economic problems. If the experience turns out to be less appealing in reality than in contemplation from afar, do you have a Plan B?

It would seem that you have zero margin for error, and that the mathematics don't work to begin with. The risks involved are arguably too great to make this remotely prudent.

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JoMoney
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Re: retiring abroad with savings worth 200k...

Post by JoMoney » Wed Oct 31, 2018 8:42 pm

If I was going to try and live my remaining in days relative poverty, which is what living on $1,000 a month is, I would rather attempt it in the U.S.
You would likely qualify for medicaid, have access to great library and park system, likely reduced rate public transportation/bus, possibly free/cheap educational opportunities, possibly some food stamps and housing aid. There are lots of cheap housing locations, especially in rural America, even studio apartments in high-crime urban areas. (and if crime is an issue, I would take a hard look at some of the foreign locations)

You might also find lots of opportunity to improve your financial situation during your 16+ waking hours of the day.
What is it you really want to do? "You don't need a million dollars to do nothing, man..."
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

Momus
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Re: retiring abroad with savings worth 200k...

Post by Momus » Wed Oct 31, 2018 8:47 pm

Not enough...you need at the very least 500k investment savings to live abroad.

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JoMoney
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Re: retiring abroad with savings worth 200k...

Post by JoMoney » Wed Oct 31, 2018 8:54 pm

Momus wrote:
Wed Oct 31, 2018 8:47 pm
Not enough...you need at the very least 500k investment savings to live abroad.
OP is planning on living on $800-$1000 a month, from "early 40s" assuming they've earned enough to expect Social Security will offer something close to that at 67, they need to come up with $1000 x 12months x 25 years = $300,000 , assuming zero real return. There might be a way to make that happen on $200k assuming some risk (which of course means it might not work out either)... But I have a hard time believing OP would want to live under the oppression of severe poverty rather than give up a few hours of their day doing something productive.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Watty
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Re: retiring abroad with savings worth 200k...

Post by Watty » Wed Oct 31, 2018 9:12 pm

I don't think it is a good idea but I would look at it this way.

1) If you stopped working today then how much Social Security would you get when you are 62, full retirement age, and 70. You can get this from the Social Security web site but you need to be careful since it will default to assume that you work until you retire. You have to change the assumptions to be that you stop working today.

2) Depending on when you start Social Security you might only need to make your $200K last 20 years or so until you start Social Security. That would put you a lot closer to being able to fund the $800 to $1,000 a month that you think you will need.

One huge problem with retiring like that in Mexico would be that you would have a very difficult time getting a visa that would allow you to work.

When people have posted similar questions one thing that has been mentioned is that there are many very low cost areas in the US where you could buy a tiny house or mobile home and then have a very low cost of living. An advantage of that is that you could have some part time job to bring in some income. That would not only make your numbers work better but it would increase your Social Security benefit amount since that is based on your 35 highest years of inflation adjusted earnings and you have a lot of zeros in your 35 year work history.

Just for brainstorming I have known several people that were laid off in their 50s who needed a bridge job to retirement. They ended up working as school bus drivers. The pay was not great but it came with benefits and that was enough for them. They got summers and school holidays off so it was sort of like being semi-retired. At least around here they are always looking for school bus drivers since it does not pay enough for people that need a full time job.

AlohaJoe
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Re: retiring abroad with savings worth 200k...

Post by AlohaJoe » Wed Oct 31, 2018 9:15 pm

The 4% rule (or the 3% rule) and talk of Social Security are not meaningful in this scenario. Both of those things only deal with US inflation. Social Security, for instance, just adjusted by 2.9%. Inflation in Mexico over the past year was 5%.

If you pretend that 2% gap is permanent (it isn't) then by the time the OP is 67 he will need over $1,300 in today's dollars, not $800.

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JoMoney
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Re: retiring abroad with savings worth 200k...

Post by JoMoney » Wed Oct 31, 2018 9:32 pm

AlohaJoe wrote:
Wed Oct 31, 2018 9:15 pm
The 4% rule (or the 3% rule) and talk of Social Security are not meaningful in this scenario. Both of those things only deal with US inflation. Social Security, for instance, just adjusted by 2.9%. Inflation in Mexico over the past year was 5%.

If you pretend that 2% gap is permanent (it isn't) then by the time the OP is 67 he will need over $1,300 in today's dollars, not $800.
Is Mexico's inflation measured in U.S. dollars ?
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

AlohaJoe
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Re: retiring abroad with savings worth 200k...

Post by AlohaJoe » Wed Oct 31, 2018 11:30 pm

JoMoney wrote:
Wed Oct 31, 2018 9:32 pm
AlohaJoe wrote:
Wed Oct 31, 2018 9:15 pm
The 4% rule (or the 3% rule) and talk of Social Security are not meaningful in this scenario. Both of those things only deal with US inflation. Social Security, for instance, just adjusted by 2.9%. Inflation in Mexico over the past year was 5%.

If you pretend that 2% gap is permanent (it isn't) then by the time the OP is 67 he will need over $1,300 in today's dollars, not $800.
Is Mexico's inflation measured in U.S. dollars ?
I don't quite understand what the question means?

But if you're asking do exchange rates adjust perfectly to account for differing rates of inflation, the answer is no. They can and do diverge substantially for many years.

Here's a comment I posted on another forum on the topic
Here's Vietnamese inflation since 2012:

2012: 9.1%
2013: 6.6%
2014: 4.09%
2015: 0.63%
2016: 2.67%
2017: 4.37%
And here are the Social Security COLA increases

2012: 1.7%
2013: 1.5%
2014: 1.7%
2015: 0
2016: 0.3%
2017: 2%
On January 1st, 2012, the exchange rate was $1 got you 21,030 Vietnamese Dong (VND).

Given those Vietnamese inflation and those Social Security COLA changes, the exchange rate today would need to be 25,135 VND to stay even.

Except it was actually just 22,703 VND on January 1, 2018. That's a more than 10% difference. Someone relying on Social Security lost 10% of their purchasing power over the past 6 years.

A dollar doesn't buy the same amount.

madbrain
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Re: retiring abroad with savings worth 200k...

Post by madbrain » Wed Oct 31, 2018 11:46 pm

You are off by a factor of about 10 .

Starfish
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Re: retiring abroad with savings worth 200k...

Post by Starfish » Thu Nov 01, 2018 12:02 am

JoMoney wrote:
Wed Oct 31, 2018 8:42 pm
If I was going to try and live my remaining in days relative poverty, which is what living on $1,000 a month is, I would rather attempt it in the U.S.
You would likely qualify for medicaid, have access to great library and park system, likely reduced rate public transportation/bus, possibly free/cheap educational opportunities, possibly some food stamps and housing aid. There are lots of cheap housing locations, especially in rural America, even studio apartments in high-crime urban areas. (and if crime is an issue, I would take a hard look at some of the foreign locations)

You might also find lots of opportunity to improve your financial situation during your 16+ waking hours of the day.
What is it you really want to do? "You don't need a million dollars to do nothing, man..."
There are countries where 1000$ is nowhere close to poverty but provide frugal but decent living for a family of 2 and pretty good living for one person.
You would live in a nice city with very low dangerous crime and go to the opera, theater and philharmonic and spend your evenings drinking beer with friends in a bars instead of wasting away in rural america or high crime rate cities. You would have cheap public transportation and lots of things to see and do. You could have enough money to travel in many places. You could have access to libraries and public parks and you could travel the world.
It's not optimal, 2X that amount would better, but it's enough if you are frugal.
You would have to own a condo/house though (50-80k$). With rent it's harder.

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mrspock
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Re: retiring abroad with savings worth 200k...

Post by mrspock » Thu Nov 01, 2018 12:05 am

user199 wrote:
Tue Oct 30, 2018 12:36 pm
Hello.
I am a single male(intent to stay single early 40's with savings around 200k all in a savings account currently.
i am looking to move abroad and retire preferably puerto vallarta mexico and intent to live a modest simple life.
expect my monthy expenses to be around 800-1000$ per month.
wondering if have enough savings to make this happen and also how to invest this amount to get the required returns.

Thanks
First congrats for saving $200k! That said, I think you might want to try the Mr. Money Mustache crowd aka "Mustachians" (Google it), as they can probably offer a bit more advice for this sort of retirement plan. We Bogleheads are going to tell you a bunch of stuff you probably don't want to hear, as the bias here is to very bullet proof retirement plans in fairly conventional locales :). If a good number of Mustachians balk at this plan.... I'd be thinking twice.

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HomerJ
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Re: retiring abroad with savings worth 200k...

Post by HomerJ » Thu Nov 01, 2018 12:10 am

user199 wrote:
Tue Oct 30, 2018 12:36 pm
Hello.
I am a single male(intent to stay single early 40's with savings around 200k all in a savings account currently.
i am looking to move abroad and retire preferably puerto vallarta mexico and intent to live a modest simple life.
expect my monthy expenses to be around 800-1000$ per month.
wondering if have enough savings to make this happen and also how to invest this amount to get the required returns.

Thanks
Get a job as a bartender at a resort working 10-15 hours a week, and let that $200,000 grow.
The J stands for Jay

AlohaJoe
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Re: retiring abroad with savings worth 200k...

Post by AlohaJoe » Thu Nov 01, 2018 1:20 am

HomerJ wrote:
Thu Nov 01, 2018 12:10 am
user199 wrote:
Tue Oct 30, 2018 12:36 pm
Hello.
I am a single male(intent to stay single early 40's with savings around 200k all in a savings account currently.
i am looking to move abroad and retire preferably puerto vallarta mexico and intent to live a modest simple life.
expect my monthy expenses to be around 800-1000$ per month.
wondering if have enough savings to make this happen and also how to invest this amount to get the required returns.

Thanks
Get a job as a bartender at a resort working 10-15 hours a week, and let that $200,000 grow.
In the developing country I live in, bartenders get paid $200 a month to work 10 hours a day, 6 days a week. And they need to speak the local language fluently to deal with all the other staff. I've never actually seen a foreigner working as a bartender at a resort. I can't imagine why they'd hire one. But maybe it is different in Mexico?

Starfish
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Re: retiring abroad with savings worth 200k...

Post by Starfish » Thu Nov 01, 2018 2:12 am

There many foreigners in tourism industry in Mexico working as diving instructors so on. It requires a qualification though. I saw mainly Europeans and Australians. Not sure how it's paid.

sfnerd
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Re: retiring abroad with savings worth 200k...

Post by sfnerd » Thu Nov 01, 2018 3:42 am

So, I live in Thailand, and I spend similarly to when I lived in San Francisco.

Now, it is possible to live in TH or Mexico on a small amount, if you want a very simple lifestyle. However, if you think you will live on 20k/year, you it will mean you have to make sacrifices. Going home over the holidays means spending 1-2k on a ticket if you're in Thailand, so that needs to be considered. If you are under 50 in Thailand you need to do quarterly Visa runs, which gets expensive. You have to eat local food on that budget as well (which might be fine for you). Imported goods are very expensive.

Inflation, as others have mentioned, must be considered. Thailand is getting much more expensive, relative to the US. So if you can live on 20k now, it might not work out in 10 years.

It can be done cheaply, but I would be very careful if your budget is low. 200k seems destined to fail in my opinion.

Jags4186
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Re: retiring abroad with savings worth 200k...

Post by Jags4186 » Thu Nov 01, 2018 5:10 am

mrspock wrote:
Thu Nov 01, 2018 12:05 am
user199 wrote:
Tue Oct 30, 2018 12:36 pm
Hello.
I am a single male(intent to stay single early 40's with savings around 200k all in a savings account currently.
i am looking to move abroad and retire preferably puerto vallarta mexico and intent to live a modest simple life.
expect my monthy expenses to be around 800-1000$ per month.
wondering if have enough savings to make this happen and also how to invest this amount to get the required returns.

Thanks
First congrats for saving $200k! That said, I think you might want to try the Mr. Money Mustache crowd aka "Mustachians" (Google it), as they can probably offer a bit more advice for this sort of retirement plan. We Bogleheads are going to tell you a bunch of stuff you probably don't want to hear, as the bias here is to very bullet proof retirement plans in fairly conventional locales :). If a good number of Mustachians balk at this plan.... I'd be thinking twice.
Forget MMM, OP should go over to Early Retirement Extreme and start reading there.

quantAndHold
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Re: retiring abroad with savings worth 200k...

Post by quantAndHold » Thu Nov 01, 2018 8:22 am

$200k is not really enough. Other people have covered that, so I won’t pile on.

As far as living on a shoestring budget abroad, there are better countries than Mexico. Do some research and find a country where you can get permanent residency, the ability to work, and buy into their healthcare system. I still don’t think you can do that on $200k, but if you can work and have healthcare, you’ll be a lot closer.

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HomerJ
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Re: retiring abroad with savings worth 200k...

Post by HomerJ » Thu Nov 01, 2018 9:08 am

AlohaJoe wrote:
Thu Nov 01, 2018 1:20 am
HomerJ wrote:
Thu Nov 01, 2018 12:10 am
user199 wrote:
Tue Oct 30, 2018 12:36 pm
Hello.
I am a single male(intent to stay single early 40's with savings around 200k all in a savings account currently.
i am looking to move abroad and retire preferably puerto vallarta mexico and intent to live a modest simple life.
expect my monthy expenses to be around 800-1000$ per month.
wondering if have enough savings to make this happen and also how to invest this amount to get the required returns.

Thanks
Get a job as a bartender at a resort working 10-15 hours a week, and let that $200,000 grow.
In the developing country I live in, bartenders get paid $200 a month to work 10 hours a day, 6 days a week. And they need to speak the local language fluently to deal with all the other staff. I've never actually seen a foreigner working as a bartender at a resort. I can't imagine why they'd hire one. But maybe it is different in Mexico?
Well, I'd assume the OP is fluent in Spanish if he wants to retire to Mexico.

Resorts pay more than normal jobs, and there are tips too.

But yeah, I just threw that out there... :)
The J stands for Jay

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HomerJ
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Re: retiring abroad with savings worth 200k...

Post by HomerJ » Thu Nov 01, 2018 9:11 am

quantAndHold wrote:
Thu Nov 01, 2018 8:22 am
$200k is not really enough. Other people have covered that, so I won’t pile on.

As far as living on a shoestring budget abroad, there are better countries than Mexico. Do some research and find a country where you can get permanent residency, the ability to work, and buy into their healthcare system. I still don’t think you can do that on $200k, but if you can work and have healthcare, you’ll be a lot closer.
Well, right now, ACA gives you basically free health care if you're living on $1000 a month in the U.S.

Small towns are pretty cheap.

And finding a 10 hour a week job in most small towns is certainly possible to make $400 a month. So now the OP only needs to pull $600 a month from $200,000 which is possible.
The J stands for Jay

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JoMoney
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Re: retiring abroad with savings worth 200k...

Post by JoMoney » Thu Nov 01, 2018 11:01 am

People saying it's impossible to live on $1,000 a month don't seem to get the reality that most of the world lives on much less than that. Not saying they're enjoying it, but that's their reality.

Whether or not $200k is sufficient to support $12,000 a year for 25+ years is pretty questionable though too..
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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HomerJ
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Re: retiring abroad with savings worth 200k...

Post by HomerJ » Thu Nov 01, 2018 4:49 pm

JoMoney wrote:
Thu Nov 01, 2018 11:01 am
Whether or not $200k is sufficient to support $12,000 a year for 25+ years is pretty questionable though too..
Oh, that's a huge risk.. That's a 6% withdrawal rate that has to last 40-50 years.

I would bet the chance of not going broke is in the 50% range.

I sure wouldn't retire to Mexico with a minimal budget with a 50% chance of being completely broke around 60 or 70.
The J stands for Jay

bhradbh
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Re: retiring abroad with savings worth 200k...

Post by bhradbh » Thu Nov 01, 2018 5:22 pm

With no rent, car or medical expenses, a single person could live adequately on $1k per month, even in the US.

texasdiver
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Re: retiring abroad with savings worth 200k...

Post by texasdiver » Thu Nov 01, 2018 9:32 pm

No, you don't have remotely enough money. I wouldn't think of doing something like that with less than $500k. Stuff comes up all the time. First time you need to fly back to the states for a wedding funeral, or family emergency, rent a car, get a hotel room, etc. your budget will be blown for 4 months. You need to figure out how to supplement your income. If it were me, I'd go down with a 6 month plan to create some kind of adequate side income and if you can't make that happen in 6 months then it's time to go home.

Last time I was in Puerto Vallarta the Americans I met who actually lived down there were working in time share sales. But that was some years ago. I've been all over Mexico and Latin America in just about every country except for Venezuela and the Guyanas. I've never once seen Americans working in service jobs like bartending or waiting tables unless it was someone working in their own bar, restaurant or B&B which is something you do see a lot.

If you want to earn $$ in Latin America your options are basically going to be: (1) opening your own business, (2) sales to Americans such as real estate or time shares, (3) services to Americans such as, for example, managing AirBnBs for other Americans, (4) internet businesses of some sort.

In a place like Puerto Vallarta I'd probably look do do something like be the local manager for AirBnBs owned by Americans living back in the US. Be the person that arranges all the local service people who do cleaning and maintenance and the American on the phone who nervous tourists call when they have some issue. But that's the sort of job that would need some kind of long-term resident in the city who knows everyone.

freebeer
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Re: retiring abroad with savings worth 200k...

Post by freebeer » Thu Nov 01, 2018 9:54 pm

Not to pile on the negativity but just one more note: Puerto Vallarta is quite expensive by Mexican standards- a tourism-oriented place with high percentage of expats and visitors. If you wanted to live frugally in USA you wouldn't go to San Diego, or in Spain go to Barcelona. That's what your mentioned destination sounds like to me. There are plenty of places you could live cheaply in Mexico - including some with beautiful beaches - but on your budget you will have to find a place that's off the beaten track not smack in the middle of it. Some outlying areas of Puerto Vallarta's greater area are a bit more out of the way (Sayulita, Chacala, Yelapa) but are still gringo-infested = $$ that you can't afford on your budget IMHO.

togb
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Re: retiring abroad with savings worth 200k...

Post by togb » Thu Nov 01, 2018 10:02 pm

ummmm, you don't have enough money to retire. Not in Puerto Vallarta, not anywhere. You have enough to take a sabbatical. But not enough to retire, unless you were like, 85 years old.

My math might not be perfect but it's close enough to know this can't work.

stocknoob4111
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Re: retiring abroad with savings worth 200k...

Post by stocknoob4111 » Thu Nov 01, 2018 11:58 pm

Puerto Vallarta is relatively expensive since it's a major tourist spot... I went there last Dec. and it was not as cheap as other places. I would suggest Panama or even Ecuador. I lived in Ecuador for a bit in 2010, in Quito, it was pretty cheap. I met a US expat there actually who had just retired at 62 and had a SS check of $1500/month and total savings of $75k in the bank, he seemed to be totally fine with his situation LOL! This was in Cuenca. Personally I would be more comfortable with $300k and retiring not earlier than 50... 12 years until SS is not too bad of a gap to bridge. Another great place is Chiang Mai, Thailand - very nice place and extremely cheap.

smitcat
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Re: retiring abroad with savings worth 200k...

Post by smitcat » Fri Nov 02, 2018 8:15 am

My thoughts and goals have changed very much over time - between my early 40's and now they are much different.
Even with twice those funds locking my 40's self into that plan would not work within 10 years let alone twice or three time that amount of years.
I would suggest some deep thought about the future you oand the choices you would like to have available.

quantAndHold
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Re: retiring abroad with savings worth 200k...

Post by quantAndHold » Fri Nov 02, 2018 8:20 am

stocknoob4111 wrote:
Thu Nov 01, 2018 11:58 pm
Puerto Vallarta is relatively expensive since it's a major tourist spot... I went there last Dec. and it was not as cheap as other places. I would suggest Panama or even Ecuador. I lived in Ecuador for a bit in 2010, in Quito, it was pretty cheap. I met a US expat there actually who had just retired at 62 and had a SS check of $1500/month and total savings of $75k in the bank, he seemed to be totally fine with his situation LOL! This was in Cuenca. Personally I would be more comfortable with $300k and retiring not earlier than 50... 12 years until SS is not too bad of a gap to bridge. Another great place is Chiang Mai, Thailand - very nice place and extremely cheap.
Exactly. If I wanted to live in Latin America, I would be looking at Ecuador. Beautiful country. Easy to get permanent residency, healthcare is both cheap and good. And the climate is mild. $200k is still not enough without some sort of income, though.

texasdiver
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Re: retiring abroad with savings worth 200k...

Post by texasdiver » Fri Nov 02, 2018 10:02 am

quantAndHold wrote:
Fri Nov 02, 2018 8:20 am
stocknoob4111 wrote:
Thu Nov 01, 2018 11:58 pm
Puerto Vallarta is relatively expensive since it's a major tourist spot... I went there last Dec. and it was not as cheap as other places. I would suggest Panama or even Ecuador. I lived in Ecuador for a bit in 2010, in Quito, it was pretty cheap. I met a US expat there actually who had just retired at 62 and had a SS check of $1500/month and total savings of $75k in the bank, he seemed to be totally fine with his situation LOL! This was in Cuenca. Personally I would be more comfortable with $300k and retiring not earlier than 50... 12 years until SS is not too bad of a gap to bridge. Another great place is Chiang Mai, Thailand - very nice place and extremely cheap.
Exactly. If I wanted to live in Latin America, I would be looking at Ecuador. Beautiful country. Easy to get permanent residency, healthcare is both cheap and good. And the climate is mild. $200k is still not enough without some sort of income, though.
There are actually a lot of countries in Latin America that I would choose over Mexico in general and Puerto Vallarta in specific. Equador, Costa Rica, Chile, Colombia, Uruguay, Argentina. If I was moving to Mexico I'd be looking at southern Mexico. Oaxaca if I wanted to be on the Pacific. Lots of interesting towns down there. Or else the Yucatan, maybe Merida if I wanted the Caribbean.

That said, if I was 40 and looking to start a new life in Latin America I wouldn't be doing it in the context of being "retired" with limited resources. I'd be looking for ways to support myself through some kind of side gigs if not actual jobs. That's a more reasonable scenario with 200k. It will buy you the time to land on your feet. Say 6 months to a year to make a productive life in Latin America. And if you can't make anything happen in that amount of time you can still get back with some resources left and your job skills still fresh enough to get back into the flow of things in the US.

SoonerD
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Re: retiring abroad with savings worth 200k...

Post by SoonerD » Fri Nov 02, 2018 11:16 am

madbrain wrote:
Wed Oct 31, 2018 11:46 pm
You are off by a factor of about 10 .
Are you saying the OP needs $2,000,000 USD to retire in his 40s with a $10-12,000 annual budget? I must misunderstand your post because $2,000,000 earning 0% real return would allow for a draw of $10,000/year for 200 years.

Or are you referring to AlohaJoe's post? In which case I have no idea what is off by a factor of 10? The impact of Vietnamese inflation relative to SS COLA?

Can you please clarify your post? What is off by a factor of 10 and how did you arrive at that?

GmanJeff
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Re: retiring abroad with savings worth 200k...

Post by GmanJeff » Fri Nov 02, 2018 7:13 pm

SoonerD wrote:
Fri Nov 02, 2018 11:16 am
madbrain wrote:
Wed Oct 31, 2018 11:46 pm
You are off by a factor of about 10 .
Are you saying the OP needs $2,000,000 USD to retire in his 40s with a $10-12,000 annual budget? I must misunderstand your post because $2,000,000 earning 0% real return would allow for a draw of $10,000/year for 200 years.

Or are you referring to AlohaJoe's post? In which case I have no idea what is off by a factor of 10? The impact of Vietnamese inflation relative to SS COLA?

Can you please clarify your post? What is off by a factor of 10 and how did you arrive at that?
I'd think this is meant less as a judgment about the amount of principal relative to expenses, but more as a commentary on the reasonableness of the stated planned expenses. Most respondents to this thread seem to consider a plan to live in that location on that amount of money, for the duration of a retirement of unknown length, to be unrealistic. Further, while some respondents reference future Social Security income, the OP has not stated that he will qualify for SS (or for Medicare); he may or may not have the requisite 40 credits paid into the system.

stocknoob4111
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Re: retiring abroad with savings worth 200k...

Post by stocknoob4111 » Fri Nov 02, 2018 8:44 pm

SoonerD wrote:
Fri Nov 02, 2018 11:16 am
Are you saying the OP needs $2,000,000 USD to retire in his 40s with a $10-12,000 annual budget?
$2,000,000 is a sum that most people on this planet will NEVER even see... heck, even most people in the United States will not see that sum in their lifetimes. Forget $2M, even $1M is a solid amount of capital to generate some good income and finance a very comfortable lifestyle in many parts of the world or even many parts of the US. 3% of $1M (super conservative) is $30,000 and combine that with SS you have about $45k/yr. Realize that in many of these countries even Engineers don't earn that kind of salary.

If you are careful and smart with your expenses you can live VERY cheaply and also comfortably.

Personally I plan to retire at 60, but I MAY retire at 55 depending on how I feel. I'm 44 now but I want to work because I am fortunate to work in a field I love. So, perhaps my take on it is find a way of making money that you really love instead of retiring at 40. Retiring that young just seems super boring to me, but that is just my take on it.

CFM300
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Re: retiring abroad with savings worth 200k...

Post by CFM300 » Fri Nov 02, 2018 8:50 pm

Starfish wrote:
Thu Nov 01, 2018 12:02 am
There are countries where 1000$ is nowhere close to poverty but provide frugal but decent living for a family of 2 and pretty good living for one person.
You would live in a nice city with very low dangerous crime and go to the opera, theater and philharmonic and spend your evenings drinking beer with friends in a bars instead of wasting away in rural america or high crime rate cities. You would have cheap public transportation and lots of things to see and do. You could have enough money to travel in many places. You could have access to libraries and public parks and you could travel the world.
It's not optimal, 2X that amount would better, but it's enough if you are frugal.
You would have to own a condo/house though (50-80k$). With rent it's harder.
Could you list a few such cities? Genuinely curious.

stocknoob4111
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Re: retiring abroad with savings worth 200k...

Post by stocknoob4111 » Fri Nov 02, 2018 9:02 pm

CFM300 wrote:
Fri Nov 02, 2018 8:50 pm
Could you list a few such cities? Genuinely curious.
You can definitely live in Bolivia for that. When I was in La Paz in 2011 I stayed in a pretty nice hotel (with nice bathroom, flat screen TV, great bed, room service etc.) for $7/night. I had to do a double take if that was in fact what I was paying because it was so damn cheap. I ate at a very fine French restaurant in Sucre (one of the very beautiful colonial towns in Bolivia), steak and wine plus dessert for like $20 total and that was considered an extravagant outing. So yes, $1000 is quite a princely sum in some of these places. Prices may be higher now not sure, this was 7 years ago.

andrew99999
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Re: retiring abroad with savings worth 200k...

Post by andrew99999 » Sat Nov 03, 2018 12:16 am

I am living in a developing country (Thailand), so this question is very relevant to me.

I came across this a couple of days ago linked from another forum.
https://fireinthailand.com/leanfire-liv ... -disaster/

I can verify that everything said is absolutely true.
I know Australians who moved to Thailand who "retired" early with around 200k. Since then Australian currency has dropped vs the USD and Thai currency has risen vs USD, the cost of living just based on the currency change has increased around 50%.
Then on top of this, there is inflation risk.
Then on top of this, there is SOR risk.
I guarantee that if even 2 of these 3 hit together (which is very much a possibility), you will run out of money even at a 3% withdrawal rate

The other thing is that one day you may want to go home, and getting a job when you have been out of the work force for so long is likely going to be much more difficult, and you will either take a big pay cut or possibly not even be able to find a job.

I certainly understand the frustration of modern day office-slavery, it's horrible and depressing, and I know it is tempting to want to retire like this. But for me, I'm planning on no more than about a 2-2.5% withdrawal rate in this situation, so for 10-12k/yr that I am currently living on, I would want an absolute bare minimum of about 500k.
Yes I know it sounds so hard, but you really need to be aware of the dangers of exchange rate, inflation, and market returns being of favour, especially in the first 10-15 years.
PassiveInvestingAustralia.com

Starfish
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Re: retiring abroad with savings worth 200k...

Post by Starfish » Sat Nov 03, 2018 12:39 pm

CFM300 wrote:
Fri Nov 02, 2018 8:50 pm
Starfish wrote:
Thu Nov 01, 2018 12:02 am
There are countries where 1000$ is nowhere close to poverty but provide frugal but decent living for a family of 2 and pretty good living for one person.
You would live in a nice city with very low dangerous crime and go to the opera, theater and philharmonic and spend your evenings drinking beer with friends in a bars instead of wasting away in rural america or high crime rate cities. You would have cheap public transportation and lots of things to see and do. You could have enough money to travel in many places. You could have access to libraries and public parks and you could travel the world.
It's not optimal, 2X that amount would better, but it's enough if you are frugal.
You would have to own a condo/house though (50-80k$). With rent it's harder.
Could you list a few such cities? Genuinely curious.
Eastern Europe has them. Portugal, parts of Spain.

For Eastern Europe:
50E low cost flight to Western Europe. Decent cultural life in bigger cities. Walkable, very good transportation. 100kE for a condo, 3-500E rent. Almost zero murder rate.
Of course, there are downsides, nothing is perfect. The main one wold be the medical system for something truly serious.
Last edited by Starfish on Sat Nov 03, 2018 2:08 pm, edited 1 time in total.

InertiaMan
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Re: retiring abroad with savings worth 200k...

Post by InertiaMan » Sat Nov 03, 2018 12:51 pm

The OP had another post 3 years ago that gives some additional context to this thread.
user199 wrote:
Sat Aug 29, 2015 6:35 pm
I am a 37 year old man with no investment experience.
single with no loans or debt here and have about sizable savings from my job in a checking account(around 100k).
I don't know much about investing . basically bit scared of the market.
real estate sounds promising but owning and renting a property can be a big headache..
where do i start? what would you do if you were in my shoes..
meanwhile i am scanning this forum to get some ideas of mine own...
D
So in the past three years, the OP has (a) continued to hold all assets in a savings/checking account, and not move forward with any actual investment actions, and (b) save an additional $100k.

My observations are:
- you don't have near enough $$ to retire in any deterministic sense
- you have the capacity to save significant $$ (+/- $30k/year)
- anxiety and/or naivety has, thus far, stopped you from taking basic investing steps
- (speculating a bit here) you're naive about the resources required to retire (health care, etc)

My suggestions:
- Keep working and saving. At your current savings rate, in 3 years you could increase your assets 50% to $300k.
- Get yourself beyond a checking account. Figure out how to comfortably move forward with investment actions (building a portfolio) and consider that a prerequisite to retiring.
- Get more informed about the realities of retirement. Spend some time and energy doing detailed review of retirement spending, compare/contrast your first destination w/ other options, etc.

Good luck.

Starfish
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Re: retiring abroad with savings worth 200k...

Post by Starfish » Sat Nov 03, 2018 2:11 pm

sfnerd wrote:
Thu Nov 01, 2018 3:42 am
So, I live in Thailand, and I spend similarly to when I lived in San Francisco.

Now, it is possible to live in TH or Mexico on a small amount, if you want a very simple lifestyle. However, if you think you will live on 20k/year, you it will mean you have to make sacrifices. Going home over the holidays means spending 1-2k on a ticket if you're in Thailand, so that needs to be considered. If you are under 50 in Thailand you need to do quarterly Visa runs, which gets expensive. You have to eat local food on that budget as well (which might be fine for you). Imported goods are very expensive.
I can't imagine why somebody would replace excellent fresh Thai food with some dried, preserved Western Food, especially with American food.

andrew99999
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Re: retiring abroad with savings worth 200k...

Post by andrew99999 » Sat Nov 03, 2018 8:50 pm

Starfish wrote:
Sat Nov 03, 2018 2:11 pm
sfnerd wrote:
Thu Nov 01, 2018 3:42 am
So, I live in Thailand, and I spend similarly to when I lived in San Francisco.

Now, it is possible to live in TH or Mexico on a small amount, if you want a very simple lifestyle. However, if you think you will live on 20k/year, you it will mean you have to make sacrifices. Going home over the holidays means spending 1-2k on a ticket if you're in Thailand, so that needs to be considered. If you are under 50 in Thailand you need to do quarterly Visa runs, which gets expensive. You have to eat local food on that budget as well (which might be fine for you). Imported goods are very expensive.
I can't imagine why somebody would replace excellent fresh Thai food with some dried, preserved Western Food, especially with American food.
That person said "local food", not "excellent fresh Thai food".
I would say that 90% of "regular" Thai food is fried in a ton of oil, palm oil too since it is cheaper, they put tiny amounts of meat in there so you end up protein deficient, they often use food that is old to avoid throwing it away so you get diarrhea more often.

They do offer food that is better, more protein, fresh produce, etc, but this costs significantly more.
As a basic guide, "regular" Thai food that is 40 baht does not in any way resemble Thai food you buy in a western country for $10-20. You can still get good quality Thai food in Thailand, but you will be looking at 80-120 baht plus 20 baht for rice in those types of restaurants. As a result, your cost of living with 2-3 of these meals a day is going to rise by an amount that will definitely be noticeable for someone whose purpose is to go there is barbecues it's cheap.
PassiveInvestingAustralia.com

jminv
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Re: retiring abroad with savings worth 200k...

Post by jminv » Sun Nov 04, 2018 12:02 am

stocknoob4111 wrote:
Fri Nov 02, 2018 9:02 pm
CFM300 wrote:
Fri Nov 02, 2018 8:50 pm
Could you list a few such cities? Genuinely curious.
You can definitely live in Bolivia for that. When I was in La Paz in 2011 I stayed in a pretty nice hotel (with nice bathroom, flat screen TV, great bed, room service etc.) for $7/night. I had to do a double take if that was in fact what I was paying because it was so damn cheap. I ate at a very fine French restaurant in Sucre (one of the very beautiful colonial towns in Bolivia), steak and wine plus dessert for like $20 total and that was considered an extravagant outing. So yes, $1000 is quite a princely sum in some of these places. Prices may be higher now not sure, this was 7 years ago.
Bolivia is still very inexpensive. I know about the French restaurant in Sucre, there's also another one in Potosi. Filet is crazy cheap everywhere in the country and I say that having been around South America. Hotels are still inexpensive, except in the salt hotels in Salar de Uyuni due to it being an international tourist destination. Did a 5 hour long distance taxi ride since I didn't want to do a 9 hour bus ride as I had a deadline - $50.

Met a few European men that married Bolivian women and they all ran (packed) western themed restaurants with their wives so it seems that there's that option for early retirees. Also saw some boutique hotels owned by expats which seemed to be doing well.

Markets are inexpensive. It would be a good place to live if you enjoyed the country. I was not a fan of la paz due to the bowl shape pollution effects that aren't pleasant at the altitude.

sfnerd
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Re: retiring abroad with savings worth 200k...

Post by sfnerd » Sun Nov 04, 2018 8:32 am

andrew99999 wrote:
Sat Nov 03, 2018 8:50 pm
Starfish wrote:
Sat Nov 03, 2018 2:11 pm
sfnerd wrote:
Thu Nov 01, 2018 3:42 am
So, I live in Thailand, and I spend similarly to when I lived in San Francisco.

Now, it is possible to live in TH or Mexico on a small amount, if you want a very simple lifestyle. However, if you think you will live on 20k/year, you it will mean you have to make sacrifices. Going home over the holidays means spending 1-2k on a ticket if you're in Thailand, so that needs to be considered. If you are under 50 in Thailand you need to do quarterly Visa runs, which gets expensive. You have to eat local food on that budget as well (which might be fine for you). Imported goods are very expensive.
I can't imagine why somebody would replace excellent fresh Thai food with some dried, preserved Western Food, especially with American food.
That person said "local food", not "excellent fresh Thai food".
I would say that 90% of "regular" Thai food is fried in a ton of oil, palm oil too since it is cheaper, they put tiny amounts of meat in there so you end up protein deficient, they often use food that is old to avoid throwing it away so you get diarrhea more often.

They do offer food that is better, more protein, fresh produce, etc, but this costs significantly more.
As a basic guide, "regular" Thai food that is 40 baht does not in any way resemble Thai food you buy in a western country for $10-20. You can still get good quality Thai food in Thailand, but you will be looking at 80-120 baht plus 20 baht for rice in those types of restaurants. As a result, your cost of living with 2-3 of these meals a day is going to rise by an amount that will definitely be noticeable for someone whose purpose is to go there is barbecues it's cheap.
Exactly. Most Thai dishes here are extremely unhealthy. There are plenty of healthy Thai joints, but they usually are not very cheap. The good, fresh Thai food I eat here costs a similar amount to the US. If you eat the cheap stuff it is a pretty noticeable sacrifice that you make. If you make your own food you can avoid this cost, but you need to use local ingredients, which are not the ones that you may like.

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Redstorm
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Re: retiring abroad with savings worth 200k...

Post by Redstorm » Sat Sep 21, 2019 6:54 pm

Jordan4FI wrote:
Tue Oct 30, 2018 12:50 pm
That is going to be very tight, and if you are not going to invest it, you will not last long.. 16 years if you keep your budget indeed under 12K a year.

If you invest it and earn 6% average per year, that gives you 12K, but some years will not produce that so you will then eat into capital. Have you been to the location you talk about? You need to visit there a few times before you choose a location.

I would highly request you have 25X your expected budget. 12K x 25 = 300,000

I am going to live in Thailand, my "walk away from work, but return later" is 225K in one fund, 30K in another fund just for health insurance, 36K in my checking as a buffer, and 40K in my savings for visa, move and set up costs.

My walk away from work possibly for life is 600K+

I also know, that my monthly costs in Thailand can be between 1000-1500 a month, although 2K a month would be the most optimal lifestyle.
retiring in Thailand

Not a boglehead and the portfolio management looks to be massive but an interesting read on one persons strategy who has left the US and is now living in Thailand. I believe he left the US when his portfolio reached $300k, he has been living off the dividends (and blog/coaching) and the portfolio now sits at around $412,851.43 generating $14,245.58 in annual dividend income

Looks like his monthly expenses are around $1'300 to $1'400 per month

https://www.mrfreeat33.com/portfolio/

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