According to several resources including a report by analysts at CNBC and another recent report by the Employee Benefit Research Council, older Americans are in trouble! Those approaching retirement, ages 55-64, whose hopes were placed in 401K accounts have, on average, $76,381 in their Vanguard 401K plans. CNBC reports that folks need around $2.5 million dollars to comfortably retire in the U.S. It’s no surprise that retirement security is the top worry of older Americans today whose best efforts have fallen short of the $2.5 million dollar mark.
And with the constant threat of loss of Medicare and Social Security income, financial security in one’s golden years appears to be a fading dream and sleepless nights wondering how things will turn out occur all too often.
Diane and I faced that situation a few years ago during the great recession. Our modest assets were lost and we could see no way for a comfortable retirement in the U.S. We would become one of many who would need to work until death. My health would not permit that so we put all our effort into a rescue plan based on living a stress free life, wherever that would take us. After some preliminary research, it became apparent that there were a number of choices outside the U.S. where one could do quite well on a modest retirement income.
For us, it has been a great experience! We now live without one financial worry. After a couple of great years on Ecuador’s coast, our modest fixed income now permits us to rent a beautiful condo on Mexico’s Caribbean coast where proximity to U.S. medical care and modern infrastructure have added to our quality of life and security. We own a very reliable used car, have a housekeeper once per week and enjoy nice meals in great restaurants with friends from time to time. One can live a very nice life in many places in Central America, South America and Mexico for around $2500 per month. There are places where one can live on much less!! Our initial budget in Ecuador was $1600 per month and that permitted us to put a few bucks into savings, too.
I am definitely not in the business of providing financial advice and have absolutely nothing to gain from any personal decisions or financial decisions you may make. I can almost guarantee your financial expertise is far superior to mine. You may be perfectly content and secure with your financial position and your retirement plan is rolling along, adding dollars every month. Great! But if you are one of the millions who is lying awake at night, worrying about eating cat food in the future…I encourage you to take a good hard look at a retirement overseas. Oh, and use as many resources as possible when you do your research.
PS- After one of my subscribers suggested that this piece was a bit too optimistic and used “scare tactics” to frighten people into moving overseas, I felt I could do a better job of delivering the message I wanted to deliver. So…after allowing this post to simmer for a few hours, I have drafted this Post Script. First, not all who attempt a life overseas will find the long term solutions they seek. Some will take a taste and then move back home or to another location. Second, moving overseas will not solve all problems for all people. Some of those who are miserable before making the move will remain miserable after moving. Finally, there is no guarantee that moving overseas will be any better than the life one currently lives in their current situation. Moving overseas may provide wonderful opportunities for many people but not all, as my critical subscriber notes. There! My conscioius is clear! Your life may completely suck if you move overseas…or not. 🙂 Hope that’s honest enough for all!