Retirement

[richard5za]

I am a boomer and with modern medicine and the modern focus upon healthy living I suspect that most of us we will live longer than we think, cetainly longer on average than the silent generation. So we will need more money at retirement than previous generations required.

I would be very interested to hear views from people in different parts of the globe, already retired, or approaching retirement, on financial needs for their part of the world.

Bear in mind that it is a mobile world and your children and grand children will easily scatter to different continents. I think its a mistake to build a huge house at 'the seaside' hoping children and grand children will come and spend their summer holidays with you. They may do from time to time, but you are probably better off budgetting to visit once a year. Last year my wife and I spent 3 weeks in Switzerland looking after my grand children during their school holidays. It enabled us to build a genuine relationship with the grand children which is a joy, plus we had quality time with my daughter and son in law. That family has now moved to Australia. So overseas travel needs to be part of the retirement budget: To visit children and grand children plus some interesting travel along the way. I now have children scattered in 3 continents and grand children in 2.

The increased longevity means, I suspect, that we dare not be less conservative that the '5 % rule'. If I have a million dollars invested then my 'salary' is 5% or $ 50 000 for a year, not more. Hopefully my investment grows at a rate which enables my annual income to keep pace with inflation. Likewise if you receive social security payments or a pension then mentally convert those using the 5 % rule.

To retire in the UK, husband and wife, in reasonable comfort and enough money to visit children I believe you need:
A paid for house
A new paid for car
No debts at all
An investment amount of US $ 1.6 million to produce an income. So in year 1 your income is $ 80 000 (GBP 50 000). If you receive a pension deduct that from the lump sum required using the 5 % rule.
Bear in mind that UK has NHI so health care costs are not computed in.

To retire in South Africa I reckon you need the same as UK. For the two of you budget health care at $ 11 000 per annum which includes health insurance. South Africa has higher security costs but lower capital gains taxes, lower labour costs for domestic and garden help. If you are invested in equities and selling stocks to provide the income then low capital gains taxes are really important.

I would be most interested to hear other views

[Tom Acre]

Its easy to make very precise calculations, easier than ever given the legions of software packages created specifically for that purpose. The problem is finding reliable assumptions to serve as a basis. If GenDynm is correct, the big picture for the next twenty years is uncertain at best.

[richard5za]

If GenDynm is correct, the big picture for the next twenty years is uncertain at best.

Yes, there is uncertainty, but:

If John's forecasts are correct, I will have a lot more money than I need, simply because I am in cash now (except for ins and outs on gold and miners to keep the total investment growing) and I'll pick up quality general equities at bargain basement prices. Of course for some retirees this will be a huge problem.

My fear is that John is wrong and we head for serious inflation which will leave me scrambling into inflation hedges. The income and expenses picture now becomes very uncertain.

But retirement planning needs to be done on what we know and the question always is how much money do I need now in current circumstances. In view of the uncertainty there needs to be high investment flexibility at short notice. To be locked into something like general equities could be a very serious problem.

I don't trust retirement software packages - I like to do the math myself

[OLD1953]

The main thing I'm considering is having no debt at all and as little expense as possible. A huge home seems unnecessary, if it was totally up to me (I'm married so it isn't) I'd just build a container home ( http://green.yahoo.com/blog/daily_green ... ouses.html ) with two bedrooms and go on from there. If solar panels continute to decline in price then by the time I retire solar panels could eliminate or contain (reduce) the electric bill to something very small. In East Tennessee and Kentucky land is still fairly cheap, it should be possible to buy 15 or 20 acres for 1000$ per acre or perhaps less, given the financial condition of the world.

As the population ages, the focus of corporate entities will turn to the older citizens, and the first question will always be, how do we get more money out of them. Reducing costs to a minimum would seem essential in such an environment. Given that I was raised on a pretty much self sufficient farm, I can do this pretty effectively.

I agree on the travel thing totally, I'd not be surprised to find my kids living anywhere in ten years. Hopefully they will all survive the next round of crisis, and we'll all be able to get together during the recovery.

[richard5za]

East Tennessee and Kentucky land is still fairly cheap, it should be possible to buy 15 or 20 acres for 1000$ per acre or perhaps less

I also have a fantacy about having a small farm, putting in a garden designed to attract birds and animals, a stream with fish holes, and being self sufficient on food. But you get to an stage through age or illness when doing these things is impossible. If one spouse becomes seriously ill e.g. cancer, you need to move back to town for treatment and hospital visiting.

One of my sisters and her husband moved to an isolated coastal village in Spain. It was fantastic for a while until he got cancer, and the mistake they made was not moving back to England immediately. From then until his death there was a constant communication problem and it cost her a fortune staying in (cheap) hotels in the city so that she could visit him.

Clearly the USA is still a safe society. In a number of parts of the world isolated old people on farms are robbers' targets; the really bad part is the violence against the old people.

From the point of view of getting old and retirement the UK must be the best place in the world. For some years my father had a NHI 'nurse assistant' arrive at 7.30 am every morning to get him up, wash him and make his breakfast, and then another arrived at the house early evening to put him to bed - all paid for by the taxpayer.

I am a UK citizen but the weather in England is the worst in the world; it would drive me mad.

Buying a small house in a retirement village is a great idea; they usually have a frail care facility on premises as well. So while you and spouse can look after each other you stay in the little house, then move to frail care, and finally the grave yard.

[vincecate]

I also have a fantacy about having a small farm, putting in a garden designed to attract birds and animals, a stream with fish holes, and being self sufficient on food. But you get to an stage through age or illness when doing these things is impossible. If one spouse becomes seriously ill e.g. cancer, you need to move back to town for treatment and hospital visiting.

I live in Anguilla, an island in the Caribbean. I have seen many times where someone retires here from the US, goes through the trouble of building a really nice house here, and then a few years later has to move back to the US because they got some medical condition that takes frequent visits to medical specialists.

[gerald]

Very Interesting.

I can give no advise, since each person has a different set of circumstances.

However, for the discussion ----

My wife and I run a small business in Chicago providing a basic necessity. ( housing) We have no debt, some cash, a decent cash flow, and NO pensions. After all, why trust others? We also spend about two months of the year traveling and have been to all seven continents. We are are in our late 60's and our major concern is what happens nationally and geopolitically, How do we dodge it? Our children appear established and grounded in reality,

We know or know of people who are in their 90's, and their life appears to be shit. From our perspective, life is the experience of varying experiences and productive activity, if that can't be done what is the point? To exist like a sponge? How many times does one have to die, to understand the purpose of life?

Gerald

[richard5za]

We know or know of people who are in their 90's, and their life appears to be shit

If we don't die before we become frail (through illness or old age) then we become frail. And life changes, and may appear to be "shit" by those of us who are not frail. I think we need to accept that for many of us that there will be much change in our lives between now and death. So welcoming and dealing with the change is important. I have lost count of the number of times that my wife has said to me: "If you die before me I will kill you". She really doesn't want to be left on her own.
How you deal with change is very individual and depends upon your health, especially mental health, I suppose. As people live longer there is more and more dementia.
My wife and I met a women last year who joined the Carmelites after her husband died when she was about 55 and children grown up, and at age 84 left the Carmelities to retire. Amazing!

[steve12]

I envy those who has the chance and the capability to retire early at the same time I am inspired too to make much effort to plan my retirement days. If I'll based the situation in world's economic status I would say that only rare could retire at young age about early 4o's or 50's, still healthy and have the chance to enjoy the fruit of their labor. Majority I must agree they retire at old aged and ill, sad but that's the reality. I'm looking for a place to retire where cost of living is low without compromising its quality.

[richard5za]

I'm looking for a place to retire where cost of living is low without compromising its quality.

Yes, I think we all want that. Problem is that they tend to be culturally different and with quite basic medical care. Great until you need good medical then you need to move back to a city with first world facilities. If you make a list of your needs (and potential needs) at ages 60, 70, 80 and 90, the list changes quite a lot as you get older.

The cultural issue is important. For instance, one of my daughters plus husband and children have recently moved from Switzerland to Australia. The problen was not money, my son in law was very well paid, but their inability to make friends with Swiss people. They could only make friends with the expatriate population who were ever changing - totally unsatisfactory. They have been in Australia now for only 9 months and have made lots friends with other parents at their children's school and also at church.