I can tell you exactly when I ditched a conventional lifestyle. It was 2002. I left my teaching job at a Canadian school and began a yearlong traveling stint. Despite my tight budget, I started with a travel package. Just $1,100 got me a flight to Portugal and a month’s offseason accommodation at a luxury ocean-side resort in the Algarve. I arrived in October, swam 30 consecutive days in the Atlantic, then headed to Morocco.
Bringing a laptop, I earned some money as a freelance writer. Fourteen months after leaving Canada, I took a full time teaching job in Singapore. I had become an expat, learning the lessons people who retire to other countries discover.
My wife and I are now ready for a new chapter, one that will make our lives even closer to those of retired expats. We’ve quit our jobs and plan to vagabond. Now in our mid 40s, it’s going to be different this time. We won’t be backpacking. I’ll bring my laptop again, hoping to continue my work as a freelance writer. But this is where things get interesting. In the dozen years I’ve been flogging my words, published articles are paying 30 percent less. Nominally, the pay is the same: about $1 a word. But after inflation, such spending power over the past dozen years has been cut by nearly a third.
Many people can relate. Wages haven’t kept pace with inflation. But medical and educational costs have ballooned. A balanced stock index (60% stocks, 40% bonds) has only averaged 6 percent per year since 2000. And most people’s investments have done far worse. Plagued by high fees and a volatile market that kept many from a disciplined course, too many investment accounts haven’t kept pace with inflation.
Sound familiar? If it does, you may be wondering if you’ll ever be able to retire. Enter that unconventional lifestyle I mentioned. I’m not ready to stop working. But I want to stretch my freelancing dollars as much as you may want to stretch your retirement savings. The U.S. Social Security Administration reports sending roughly 550,000 payments overseas. If you’re interested in the same standard of living you enjoy in the United States, you may be able to do so abroad, for 30 percent less.
The International Living Guide To Retiring Overseas on a Budget is a great place to start looking. Sure you can rent a 2000 square foot beachside home with free Internet in southern Cambodia for $150 a month (I’ve seen it). But it’s important to strike a balance between costs of living, solid healthcare, safety and social amenities. Popular expat retirement communities include the Lake Chapala area of Mexico. International Living estimates that 30,000 or more U.S. citizens, and an equal number of Canadians and Europeans, live in villages like Ajijic, Chapala, Jocotepec, San Antonio and San Juan Cosalá.
Decent homes in the Chapala region, such as this one, can be purchased for $89,000. Most couples can enjoy a decent standard of living on $2,500 to $3,500 a month, including accommodation rental. Many report spending far less. My wife and I plan to be among them. In 2013, Billy and Akaisha Kaderli, authors of several expatriate retirement books, housesat a luxurious home overlooking Lake Chapala for four months. They didn’t pay a penny for accommodation. At trustedhousesitters.com, you can seek such opportunities, or find reliable people to look after your home while you’re away. Applying for free accommodation is much like a job interview. Once you build a resume, other homeowners find you more appealing.
My wife and I already have a place to housesit in Lake Chapala, for September, October, and November. But other places have also caught our fancy.
International Living claims Uruguay is “more first world than the United States.” Health care is reported to be excellent. And the cost of living is lower, so we want to check it out.
Panama is reported to have the world’s best retirement program. Anyone with income of $1000 a month from a government agency qualifies for 50 percent off entertainment (movies, theaters, concerts, sporting events); 50 percent off closing costs on home ownership; 50 percent off hotel stays from Monday to Thursday; discounts on flights, medical costs, restaurants….the list goes on.
Off the tourist’s beat, bargain living arrangements exist where you might least expect them: France and Italy, for example. In 2000, the last year the World Health Organization ranked global health care, the United States languished in 37th place. Canada wasn’t much better, ranking 30th. By comparison, France and Italy took the top two spots. You may not qualify for these countries’ social health care programs. But private medical insurance in such places is a fraction of what it costs in the United States.
While not as cheap as South America or South East Asia, you can still purchase fine European homes in desirable locations for similar prices to what you might expect in Lake Chapala, Mexico. You can buy a home in France (away from the major cities) for less than $100,000. Statistical surveys on costs of living in the world’s major cities are available at www.numbeo.com
Over the next few years, I hope to keep you posted on the places we choose to live, revealing the warts and wonders. Unconventional overseas lifestyles aren’t for everyone. But if you want to stretch your money, few options match it.
Andrew Hallam is a Digital Nomad. He’s the author of the bestseller Millionaire Teacher and Millionaire Expat: How To Build Wealth Living Overseas