I wanted to resurrect a thread I created many moons ago on this question, but I can’t seem to locate it (pruned?).
Anywho… I’m wringing my hands over this “is social security going to be around in 30-some years” dilema, and wonder why I couldn’t direct my 401(k) retirement funds to some island in the south pacific where my $1 converts into something like 1000 somolians and live, by the standards of the locals, in a life of opulance?
Then I thought- do I have to maintain a residence in the US in order to be able to receive my retirement, or even social security checks? Assuming that SS is still able to pay out in 30 years, would the gummint send my checks to:
Guy on the beach
El Nido
Philippines
Or would they require a US address? Is there something I’m overlooking by thinking that for the cost of a mortgage in the US, I could live in a palace in Puerto Galera? Or is it that the palaces in Puerto Galera are hovels, by US standards?
Is there some economic international exchange rate flaw that I am overlooking? Some catch that would prohibit a huge step up in personal living standards simply by changing my contry of residence?
I base my theory on the following:
income
Standard of living =
local cost of living
So if my income rises (converting dollars to pesos) and cost of living goes down (by moving to the Philippines) my standard of living should skyrocket.
Attrayant, you probably already realize this, but in case you didn’t: currency exchanges that result in huge numbers of “clams” or whatever don’t necessarily translate to great spending power. Sure, a dollar may be worth 1,000 clams, but what will 1,000 clams get ya? Probably about a dollar’s worth of goods.
I think what you’re really asking is: how much do such things as food, rent, utilities, etc. cost in developing nations, and can I exploit that to my advantage? Answer: I don’t know. While it’s nice to dream about being able to build a luxurious 3-bedroom hut on the beach on Godforsaken Island for around a hundred bucks, I seriously doubt that it works out that way.
As for your second question about Social Security, IANAFed, but I’m pretty sure you’d need a U.S. address. No biggie. Open up a PO Box and a bank account in Gullywash, TX and you’re golden.
My expereinces in the Third World suggest that while you would be rich by local standards, you still can’t get indoor plumbing. In other words, your idea about their palaces being hovels is pretty right on. Sure, you could get the things you wanted flown in (and taxed at unbelievable rates), but the expense is enormous and in the end you’d be no beter off than if you had stayed.
There’s also the problem of being granted permission to live in another ocuntry, but that’s a whole different ball of wax.
I know, it sucks. I’m rather fond of the island plan myself.
Well your idea to move somewhere where the cost of living is a lot less isn’t a bad idea. But depending on where you live now you may not even have to leave the country to significantly decrease your cost of living:
It can be done and many people do it. many Americans retire to mexico or Central America. Yes, you can afford more food, house an some services for the same amount of money… but you are still in the third world which means you are giving up access to a lot of other things like consumer protections, good health care etc. If your primary concern is drinking cheap daikiris on the beach, then you are better off over there. If your primary concern is being around your friends and people who understand when you talk, and having the right to sue your doctor or the guy who installed your roof, then you better stay where you are. In most of those countries their attitude is that foreigners are loaded and they should be taken advantage of.
What you want to find is a place where the cost of living is much less, but the natives are acquainted with niceties like indoor plumbing.
At one time the Czech Republic would have been a sure bet. Live out at a dacha (country home) in the sticks and drive into Prague twice a month and you could live like the proverbial drug lord, AND stock up on Oreos. But nowadays, you might be better off in Hungary or Poland. Pretty economically depressed, but still part of NATO! Woo-hoo!
Since the thread title mentions East Timor, I’ll just throw in that the human rights situation in East Timor under the Indonesian Occupation is less than ideal. See here: East Timor Action Network
Responding to the OP, my father, who lives most of the time in Switzerland but has an “address of convenience” with his son (me) in the USA and receives USA social security benefits that are automatically deposited to a USA bank account. He uses the money when he comes to the USA (he stays from four to six months every year.)
Also my father used some of his funds in the USA bank to pay off credit card bills for a credit card (on a USA bank) that he was using overseas. The credit card company could have sent the bill to his address in Switzerland, but in practice I would get the bill, pay it and take money out of his account to reimburse myself.
Okay so East Timor is out. So is the Philippines, at least until they stop cutting off the heads of american tourists.
Point taken about the intangible advantages of life in the US of A, but a friend of mine commented that while I might not be able to sue the guy who botched up my roof job, I could easily hire somebody to break his kneecaps.
Arnold, those are the kinds of sticky details I was trying to uncover. Is that visit to the US really necessary in order to continue receiving SS or is it enough that he has a US mailing address? Will Social Security agents (if there are such people) come knocking on your dad’s door to make sure that he really lives there?
I also assume that, unless I take the extreme step of renouncing citizenship, I will continue to pay income taxes from whatever island paradise I end up moving to. Since my check goes to my US “residence”, I must be living in the US and therefore must continue to pay my income taxes.
Maybe I’ll just move to Florida & become a crotchety old man.
Uhh, East Timor isn’t occupied by Indonesia anymore. It’s occupied by an Australian-led UN force while it gets its independent government off the ground. I’d imagine human rights aren’t bad there at the moment, although quality of life since the Indonesian scorched earth withdrawal could stand improvement.
West Timor, on the other hand, remains Indonesian soil. Many East Timorese who fled to refugee camps there (during the last days of the Indonesian occupation) continue to be terrorized and pressured not to return to East Timor.
One more interesting point on this hijack: Until the country starts to function as an independent government, the local security forces have sworn allegiance to the UN flag and administration. Other UN soldiers have always been serving Australia, or Ukraine, or whatever as part of a UN force. Black helicopter crowd take note, the UN now has a standing army.
Because of the Australian/UN forces in East Timor, life there at the moment is maybe not as bad as it could be, but it certainly isn’t great. It is an extremely poor nation with little or no infrastructure, and there is growing local hostility to the occupying forces with their dollars, beer, and air conditioning (though I’m sure East Timor isn’t the first place to experience this). Hopefully, the place will slowly gain enough wealth to become another Thailand or Philippines. The danger then is that it will become overrun with ugly, drunken Australians and Americans looking for cheap and questionable thrills.
As for the OP, I’ve seen plenty of ex-pats living in Thailand, doing the retirement thing. Some of them are happy, but most blow their cash on short term good living or ill-conceived business ventures. Or they simply get sick of the food, the heat, the lack of decent medical care, or the language barrier. Try finding fresh milk or a loaf of bread in many places). Many of them simply miss their family and friends, and use their last few bucks on a very homesick airfare outta there.
Some things are relatively cheap. My accommodation in Thailand was about US$7 per night for a large, clean and secure air conditioned room with a balcony, en suite, and cable TV. However, buying property in SE Asia can be surprisingly expensive unless you want to move out to the back of beyond in a place with no plumbing and telephone. The local food is cheap, but you need to like chilli, and be beyond the “Bali belly” phase. A beer will cost you about the same as in the West. Large American fast food chains will charge you Western prices as well. You’ll be away from your normal social circle, so to keep occupied, you’ll probably be spending more money on entertainment than you would at home. Most ex-pats also want to fly home every now and then, so allow for this in your budget.
Retiring overseas is definitely worth considering. It has many positives, but my WAG is that you’d probably need about the same retirement income as you would at home. And don’t expect the locals not to be cynical about what you’re doing.
Even with low wages, the goods you’d need to support a kingly lifestyle would probably have to be imported, and most probably imported from a country with similar prices to the US. So the mechanic working on your Ferrari might only charge you $1/hour for his services, but the parts would cost you as much if not more than here. Factor in the lack of medical care, clean water, personal safety, and the quality of life, and you’re probably better off sticking around.
In general, I’d guess a poor country is pretty much going to have a poor infrastructure, so living well there would be tough. In one of his books, P.J. O’Rouke talks about the rich in Panama, and IIRC, his impression was that the rich folk there lived about as well as upper middle class folk here, with the added thrill of armed revolutions, death squads, and a US invasion.
I’m not so sure you’d need a U.S. address to get government benefits. After all, Americans living and working abroad still have to pay U.S. income tax. Surely the government wouldn’t have a policy where they took money in but didn’t send any out?
Retiring in Mexico is not all that bad of an idea. There are several cities to consider. The two that I like the best are San Miguel de Allende and Guadalajara. Bot have large English speaking populations and excellent (cheap) medical services. Most doctors are trained in the U.S. and the biggest problem now is that it is not covered by Medicare. That may soon change, because Medicare could save money. Don’t forget to look at the weather. I always thought it was hot in Mexico and it is not in many places. It is smart to have a maid because she can do the shopping for you and get better prices. Go here: http://www.virtualmex.com/
You really don’t have to leave the US to be able to see a profound difference in cost of living. Kansas City, for example, appears for all purposes to be about 2/3 the cost of living of being in California, and about 1/2 the cost of New York City. But if I go on over to Decatur, Ill, I find that the cost of living is even lower over there. You can do pretty well if you move to a small town, outside of any “commuter belt” region.
Sorry, I should have been more clear in the OP. I am looking mainly at places that are actually interesting & fun to live in, as opposed to those where the chief export is tumbleweeds.
Having grown up as a State Department foreign service brat in Asia and primarily Africa let me assure you that while it is indeed “interesting and fun” at times, open sewers, civil rights with a question mark, lack of high quality emergency medical facilities and the other accouterments of “interesting and fun” third world living can lose their charm in a hurry for adult Americans trying to leave on the cheap.
Northern Mexico has one of the best weathers in the world. Guadalajara has beautiful weather year round. Many Americans retire in Mexico as it is next door.
In some parts more than others (especially SE Asia) I have seen Americans (and others) who were a sorry picture. They were mostly single men who had bad social skills and not many ties to their homeland. Maybe divorced and some problems behind them… few or no friends… and they think “hey, if I go to Asia i’ll be king”. Of course, a jerk is a jerk anywhere and after a while of discovering the local night scene they realize they are even lonelier and worse off. I’ve met a few like that who you can see are yearning to go home.
In those countries you are pretty much in their hands. Forget about settling scores by breaking anyone’s kneecaps as you’d be chopped liver in no time. In Bangkok I saw a drunk American get into a fight with a guy half his size but in no time the American had his ass whooped by a sizeable crowd.
