Double Your Early Retirement Savings Overnight!

Double your retirement savings?

Yup.

Well, effectively yup.

And for once, it’s simple AND easy.

But how, I hear you ask (in my ever-optimistic imagination).

Here it is, up front:

All you have to do to double your retirement bankroll is jump on a plane. 

For many Generation X, early retirement is coming even earlier by doing just that. 

Here’s how it works.

WARNING: This post is filled with early-retirement porn. Like this:

Generation X Early Retirement Overseas

If there’s one thing Generation X knows well, it’s how to spot a bargain.

So when word got out that moving overseas can double your early retirement dollars, Gen X was on a plane quicker than a vicar on an alter boy. 

That’s why Aussie Gen Xers are retiring to warmer climes in Southeast Asia. And American retirees are moving to holiday havens in the Latin American tropics. And Europeans are migrating south to the Mediterranean where competition for retiree dollars is fierce.

Double. Really?

Yup, really.

Here’s the Association of Australian Superannuation Funds benchmark for retirement costs in Australia (as of March 2019, assuming you own your home) 

 

	Modest lifestyle		Comfortable lifestyle
	Single	Couple	Single	Couple
Total per year	$27,646	$39,848	$43,255	$61,061

 

Compare that to Bali, where a single person can retire modestly for around $12,000/year. Less than half of what you’d pay in Australia ($27,646). And you’d be living in a comfortable villa near the beach or in the countryside.

If you spent the same money in Bali that you did to retire modestly in Australia, you could expect to live in a luxury villa on the beach with a private pool, cook and cleaner. 

That’s why over 10,000 Australians have packed up their shit and moved to Bali.

How Early Retirement Overseas Works 

Retiring overseas is part of the FIRE (Financial Independence Retire Early) play book.

Not only because it means a better lifestyle, but because moving to a more affordable economy solves the early retirement ‘gap’ problem.

What’s that? (You all ask in perfect unison).

Mind the Gap

The trickiest part of early retirement is accumulating enough savings to cover the ‘gap’ between your retirement and when your superannuation (401k or pension) kicks in many years later.

For example, I’ll be 55 and Maggie will be 49 when we retire early in 4.5 years. We have a 10 year ‘gap’ before we can access our superannuation.

So we need to fund the ‘gap’ through other savings and investments. The earlier you retire, the more clever (or frugal) you need to be to cover the ‘gap’.  

How We’ll Beat the Gap

Maggie and I will stretch our ‘gap’ savings much further by moving to a cheaper economy, bouncing back and forth to Australia for family events.

When our superannuation matures, we’ll have more savings to play with and we’ll move back to our lovely but expensive home country.

If our kids follow the average, we’ll be back in Oz around the time they’re spitting out babies. After all, we’d hate to miss out on watching them change all those shitty nappies.

And of course we’re looking forward to judging the hell out of their parenting.  

Generation X Early Retirement: The Expat Upside

Besides the financial upside, there’s plenty of reasons to move overseas.

Cash-hungry countries across the globe are competing hard for Western retirees:

• Malaysia, with its cheap city living, amazing food and excellent medical and dental facilities, is offering a whopping 10-year retiree visa
• Several super-cheap Southeast Asian countries are almost giving away long-stay visas with generous conditions
• In Europe, Portugal and Malta have long attracted retirees with their warm weather and cheap living (by European standards), and Spain is allowing retirees to freehold purchase property
• In the Americans, Costa Rica, Columbia and Panama offer cheap, stable and modern retirement havens.  

Medical standards are rising throughout Asia and Central/South American. And health care is far cheaper than in Western countries.

Not only is the cost of housing, shopping and food cheaper, but you can ditch that expensive car and use cheap local transport or get a moped.

And you can throw away your (expensive) winter clothes! 

Generation X Early Retirement: The Expat Downside

Medical services are patchy in the developing world. It’s important to live near a good health facility and to have the means to get there.

Get good travel insurance. Don’t skimp and ensure it covers living (not just travelling) overseas.

For Australians, note that if you stop paying taxes in Australia, you may lose your Medicare entitlement – this may not bode well when you return to Australia later in retirement.

As a non-citizen abroad, you may not be able to purchase property in your adopted home. Property law is not as dependable in developing countries, so be very careful when purchasing or leasing land.

Living on a visa will usually prohibit you working overseas – most countries like to reserve jobs for their citizens. But there are exceptions.

Some countries let you earn up to a nominal amount or work for charities or to study. If you need to earn during your retirement, you can always join the digital nomads and earn a living online.   

Okay, So Where To?

Here’s a comparison of some of the places Maggie and I are considering for retirement.

Remember that visa conditions change, so double-check this information if you’re basing decisions on it.

(Sorry US readers, we didn’t look at the Americas, though there are many there vying for retiree dollars.) 

Retirement Locations
	Visa Length	Visa Conditions	Cost of Living	Lodging	Medical	Property
Indonesia	2 years	* Evidence of self funding (amount not specified)	Low	$100 / week basic; $220 / week good	basic (Lombok) very good (Bali/Jakarta)	Cannot purchase, but can lease long-term (30 years)
Malaysia	10 years (renewable for 10 years more)	* Over 50: If retired, $3200 / month pension * Medical certificate and medical insurance valid in Malaysia * $500 security deposit	Medium	$150 / week basic; $250 / week good	good (rural) excellent (city)	Can purchase
Thailand	1 year	* Over 50 years * Police check * Medical certificate * $31,000 cash holdings or $2,500 / month income	Medium	$150 / week basic; $250 / week good	good (rural) excellent (city)	Cannot easily purchase (there are ways to do it), but can lease long-term (30 years)
Cambodia	1 year (under a business visa	* None, including no income or employment proof.	very low	$80 / week basic; $200 / week good	basic, worse in rural areas. Exfil to Bangkok. Expat medical insurance would be needed.	Can purchase apartments, but cannot own land. Can lease property up to 99 years
Philippines	Permanent residency	* Over 50: $60k in deposited cash  * Medical certificate * Police check * $2000 fee	very low	$80 / week basic; $200 / week good	basic (rural) excellent (city)	Can purchase apartments, but cannot own land. Can long-term lease property.
Malta	EU Member State. Right to reside through European citizenship. Spouse and kids under 21 years.	Nil, but need proof of self-sufficiency and medical insurance to retire in EU states.	high (European prices, but not as high as London). Some expats live on $3000 / month.	$400 / week (2brm house) outside of city	Excellent (Slightly cheaper than Australia)	Yes, if EU citizen. Minimum purchase amounts apply
Cyprus	EU Member State. Right to reside through European citizenship. Spouse and kids under 21 years.	Nil, but need proof of self-sufficiency and medical insurance to retire in EU states.	high (European prices, but not as high as London).	$375 / week (2brm house) outside of city	Excellent (Slightly cheaper than Australia)	Yes, if EU citizen and resident in Malta
Spain	EU Member State. Right to reside through European citizenship. Spouse and kids under 21 years.	Nil, but need proof of self-sufficiency and medical insurance to retire in EU states.	high (European prices, but not as high as London).	$400 / week (2brm house) outside of city	Excellent (Slightly cheaper than Australia)	Yes. No restrictions

Starting Your Journey to Early Retirement Overseas

Got a place picked out?

Ready to retire early overseas?

You can start right now. Here’s the first two steps:

• Educate yourself on FIRE. In fact, you’ve already begun – you got through this post, right? Next, take a look at how to get your finances in shape. And here’s a few home truths about investing. 
• Then plan and invest (wisely). See a financial adviser to get on track for early retirement and to ensure you can sustain your lifestyle once you quit work. Don’t cheap out on financial advice – it’s critical. 

What next?

Enjoy planning your new life in exotic climes!

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