A Simple 4-Step Process to Remove Money Concerns in Retirement


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By Steve Garfink, International Living,

At a recent International Living conference, I was answering questions. As I worked through the line I noticed a woman standing to the side and I asked if she just had a quick question. “No, I just wanted to stop by and thank you for your book. I thought I couldn’t afford to move overseas for many years. Then I saw myself in one of the case studies in your book and realized I don’t have to wait any longer to start my dream life.”

Of course, I was thrilled and gratified to be told that my book had made such a positive and life-changing difference for someone. It made my day, and then some!

Still, there’s a larger insight for us to gain here. There are so many ways we can become stuck in our way of thinking, creating an obstacle to living the life we desire.

Because you are reading this Postcard, I know that you have a notion that at some point you might start a better, more exciting, affordable, and satisfying life overseas. Maybe your thoughts are still a bit fuzzy or maybe crystal clear. Maybe you will live this dream part-time or full-time. And maybe you are planning for it sooner or later.

What are you waiting for?

Some reasons for delay make all the sense in the world: waiting for the kids to get off on their own, looking after an elderly parent, waiting to qualify for that pension, and so on.

Other reasons may feel legitimate, yet they don’t stand up to close scrutiny. One that I often address is the concern many have that Social Security will not be there for them. Well, if you think it won’t be there, then there goes a big chunk of your funding for retirement: you are likely to conclude that you have to continue to work much longer than necessary.

One concern is legitimate: How can we be sure we won’t run out of money after we stop working and move overseas? The only thing worse than waking up one day in our mid-80s in poor health and running out of money, is waking up in our mid-80s fit as a fiddle—and running out of money! For most of us at that stage it would be a depressing thought to contemplate returning to work.

While this is a sensible—I would even argue an essential—concern, it is also a concern that can and should be addressed by putting a lifetime budget plan in place. I have discovered that many people get stopped at this point. If you let this happen to you, you might never reach your dream. Here’s a simple, four-step process to create a quick plan to help you assess your financial readiness to start your life overseas.

Step 1
Determine what it will cost each month to live in the location(s) of your dreams. International Living is your primary source for current guidance. You can also look online at blogs and/or expat groups focused on your destination of choice. Be sure to include spending for travel back home, healthcare, and any special expenses (relocation, a child’s wedding, a cruise).

Step 2
Pick the start year for your dream. Typically that will be when your current income and spending will end and your new spending will begin.

Step 3
Figure out what your guaranteed income would be after age 70. Include your maximum Social Security benefit, any pension income, and/or net property rental income and the like. If this is more than enough to cover your planned spending, then the question remains whether you have enough to live on between your start year and then. (If not, you will need enough savings to make up the difference for the rest of your possible life: always plan for a very long life—it happens.)

Step 4
Add up all the spending you will have between the start year and age 70. If you have enough savings (be sure to include proceeds from any home sale, business, etc.) to cover all this spending, you should be OK. Once all your other income starts by age 70, you can probably save some to restore your savings.

Once this basic plan is in place, you can play with these assumptions: change the spending, make your move sooner; perhaps a married couple might have one spouse claim earlier than 70. Guaranteed, you will learn much about what you can and cannot do and when.

It’s not rocket science. If you have trouble doing this, ask for help—it’s out there. I don’t know exactly what that conference attendee saw in the case studies in my book, but it was clearly enough to show her she would be OK financially, even if she were to move now.

What are you waiting for? Worst case, you will have better insights into your financial situation for the remainder of your life; best case, you just might discover that living your dream is much closer than you think!

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