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Retiring Overseas : How to stretch your retirement savings without compromising your lifestyle

retiring overseas retire early

Many Australians are now attracted to the thought of retiring overseas as a way to make their retirement savings go further.  Martin is one such person considering the move.  He shares his thoughts as well as explaining how retiring overseas may also enable you to retire early as well.

This article has been provided by Martin, founder, creator, and writer of Get FIRE’d asap. Martin recently discovered he had become financially independent and came to the conclusion that, with enough saved and invested to cover his living expenses for the rest of his life, he’d retire early.  Discovering early retirement comes with its own set of issues and Get FIRE’d asap is all about how this Oz-based Kiwi spends his new found freedom.

How to stretch your retirement savings without compromising your lifestyle

It’s no surprise that living costs are rising faster than incomes in many places and this becomes most apparent when you’re living on a fixed income such as a pension or superannuation. According to the Australian Bureau of Statistics the cost of living here has risen by around 30% over the last 10 years. When your income isn’t keeping pace with inflation, you’ll find the buying power of your dollar going further backwards with every passing year.

But what many people don’t know is that there is a way around having your dollars, pounds or Euro buying less and less every year. In fact, there is a way to go from living on an ever-tightening budget to a life of comparative luxury whilst spending far less than you currently do.

Improve Your Lifestyle By Retiring Overseas 

Maybe you’ve heard of retirees uprooting themselves and moving to relatively exotic locations and retiring overseas.  They now live far more luxurious lives for a lot less cost than they did in their home country.

What used to be considered a life of the rich, and possibly famous, with housekeeping, gardening and cooking provided by hired help, and the opportunity to dine out most nights of the week, is fast becoming a realistic option for many of us considering retiring overseas.

In fact, this lifestyle is possible for 50 to 70 percent less than you may be forking out in most western countries such as Australia, New Zealand, UK, or much of Europe.

If you’ve ever thought to yourself, “Wouldn’t that be the life. I’d love to do that one day”, the reality is……….now you can.

If you are using the simple 25-times annual spending retirement savings rule-of-thumb to calculate how much you need to have saved for retirement, consider this. Let’s say you have worked out that to retire you need $750,000 stashed away and invested to allow you to live comfortably using the tried and tested 4% safe withdrawal rate.

Now, what about if you could have the same, if not better lifestyle for only $300,000? What’s not to love about that?

retiring overseas retire early

Ok, ok, this is starting to sound like an advertisement for some too-good-to-be-true product isn’t it?

Well, my better half and I are seriously considering what an ever increasing number of retirees are doing. And that is a move overseas to one of the stunning destinations that can offer us a pretty luxurious lifestyle compared to back home in Australia, but at significantly reduced cost.

For us, South East Asia is our preferred region for retiring overseas but there are plenty of other destinations in the world that offer similar benefits such as low cost of living, reasonable infrastructure (internet access is a must these days), safe, and relatively stable government. Destinations that are becoming increasingly popular include Spain, Portugal, Greece and several Latin American countries for example.

At this stage we’ve got Bali, Thailand, and Malaysia on our shortlist although Cambodia and Vietnam are also on the radar. The plan at this stage is to take extended trips through each of our shortlisted destinations and check out the local ex-pat scene with a view to making it home.

Why Retire Early & Move Overseas?

So why would we, or anyone for that matter, want to do this? What would possess us to sell off most of our worldly possessions, pack up our bags and move away from the sedate, predictable, safe and stable calmness of life in one of the world’s richest and most developed nations? Why would we swap all that for a life of forever being a foreigner, risking possible chronic intestinal dysfunction on a grand scale, and taking your life in your hands every time you cross the road?

Well the first reason is……..because we can. I use to travel throughout the region a lot with work and always wanted to come back and stay longer to experience living ‘local’. Amongst other reasons, I love the food, the vibrancy, the culture and the friendliness of the people which seems to be common regardless of where you go in Asia.

That should be enough of a reason alone, but I’m not finished yet.

The second is of course that it costs a shedload less to live in most of SE Asia, especially the more ‘local’ you become. Sure, if you want to live in a flash apartment building surrounded by ex-pats and want to continue living a spendy, material life, and dining on imported foods, it’s not going to cost you a lot less than where you came from.

In saying that, your money will go so much further than it did in ‘the west’ so you can find decent accommodation at very reasonable prices in many places, and dining out where the locals eat is not only much cheaper but also incredibly delicious with a huge variety of dishes to salivate over.

And thirdly, the additional travel opportunities on offer while living within such a diverse region. If you’re living in say Thailand, destinations such as Cambodia, Vietnam, India, or Malaysia are within a few hours direct flight. There’s plenty of reputable budget airlines servicing this part of the world so cheap flights are always going to be available.

retiring overseas retire early

But also consider this. Now that your cost of living is 30 to 50% of what it was in your home country, you may find that you have sufficient funds left over to be able to afford travel to further, more expensive destinations such as the UK, Europe, or USA. Suddenly the opportunity to travel more becomes a very real option that wasn’t possible back home because it was so hard to save while forking out most of your hard earned on day-to-day living.

I’m sure I’ll discover plenty of other great excuses to relocate to SE Asia once we get there but I reckon these three are reason enough already.

Once you reach financial independence and retire early, suddenly you have the freedom to do whatever you want unburdened by the need to meet someone else’s schedule. That’s what we’re planning on doing. Escaping the lifestyle and day-to-day’ness that we’ve grown up with and doing something entirely different.

Retiring overseas may not be for everyone. Living away from friends and family may not be an option for you but think about this. Once you’re all settled in your new home, and sharing your new-found ex-pat lifestyle on Face-twatter and Insta-book, friends and family will be begging to come and visit. You’ll probably end up running a pseudo bed and breakfast for all of your visitors who see it as an ideal destination for a holiday with free accommodation thrown in.

Apps like Skype continue to make the world a smaller place too. Keeping in touch has never been cheaper or easier than it is now as long as you have a decent internet connection. So really, wherever you choose to settle down, keeping in touch is not such a huge issue any more.

Of course, moving to a new country is never as easy as just visiting. Not every land-of-paradise wants herds of comparatively rich ex-pats flocking in to take up residence in their country. Most of the SE Asian countries have strict visa restrictions and may not allow foreigners to live there indefinitely on a single visa. Many of these countries require foreign residents to do what’s known as the ‘visa run’ every few months where you have to physically leave and re-enter the country to renew your visa.

As much a hassle as this may seem, travel within the region is very cheap and these visa-runs give you the opportunity to visit other countries even if it’s just for a weekend away. The good news is that some of the preferred ex-pat destinations are offering longer-term, ‘retirement’ visas that allow you to live in-country for much longer periods as long as you meet certain criteria such as a guaranteed income from your home country, and comprehensive medical insurance.

Many SE Asian countries won’t permit foreigners to own land, although in most, you can buy or lease a home, you just can’t own the dirt that it sits on.  Countries like Thailand, Indonesia, and Vietnam are ensuring that their country doesn’t succumb to an influx of rich foreigners buying up their land making it unaffordable and inaccessible to the locals. When you think about it, this is so sensible. Why aren’t we doing this in our own countries as well?

The cost of living in many western countries is forever on the rise and as a result, so is the age that many people can retire as they work later in life to afford the lifestyle they desire.

But you CAN retire early if you want to and live a far more exciting and diverse lifestyle in my opinion, and one which has been proven by the many thousands who have already sold up, packed up, and moved to their new, far more affordable home. Now, that’s our plan too.

If you are considering retiring overseas, then get a free quote online for international health insurance with Cigna Global or Bupa International.

retire early and retiring overseas
Disclaimer : This information is for educational purposes only and does not constitute financial or taxation advice. As this information is not advice and has been prepared without taking into account your objectives, financial situation or needs you should, before acting on this information, consider its appropriateness for your circumstances. Independent advice should be obtained from an Australian financial services licensee before making investment decisions, and a registered (tax) financial advisor/accountant in relation to taxation decisions. To the extent permitted by law, we exclude all liability for any loss or damage arising in any way.  We may receive referral commissions from companies referred in this article.

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These articles have been written by an Australian Expat Investor Contributor. Please see their details in the relevant post. The views expressed in the article are his or her own and may not reflect the views of The Australian Expat Investor.

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