My Backdoor Early Retirement: Loving the Loophole

I consider what I’ve done a Backdoor Early Retirement. It took a backdoor approach to exit the rat race long before age 59 ½. I took control of the things that I could and then went for a little loophole to avoid IRA early withdrawal penalties. Almost all of my early retirement funding is from my tax advantaged retirement accounts. I would have never been able to retire early under traditional retirement standards and rules. Paying 10% penalties every year would kill my and anyone’s long-term retirement funding chances.

Backdoor Early RetirementWithout using the backdoor early retirement approach I would have missed out on the past 7.5 years of my rat race escape. I wouldn’t trade the freedom I’ve experienced and all I have done in my early retirement for nothing.

There are reasons why there is a 10% early withdrawal penalty for taking money out of our retirement accounts before age 59 ½. Some are thought-out logical government attempts to discourage us from prematurely spending down retirement savings. More or less protecting us from ourselves. They have the authority to do this. We are given a tax break through deferred taxation on the amounts of our contributions and investment gains. That said, although legal and allowed, the 72t backdoor early retirement approach I took requires careful thought and planning.  

Why I Call the SEPP IRA 72t a Backdoor Early Retirement Approach

To me “backdoor” simply means another way in, out, or through other than the more visible front-door. Early retirement bucks the traditional work and retirement norms. There are specific ages associated to standard penalty free retirement savings withdrawals (age 59 ½), our beginning Social Security payments (ages 62-70), and receiving Medicare health coverage (age 65). Retiring before these dates requires careful consideration and in my case the use of the IRS rule 72t, an exception  to the standard (above) front-door retirement age guidelines.   

That is why I call what I have done and continue to do a backdoor early retirement.

My Backdoor Early Retirement Funding Approach

How I Got Here and How It Has Worked Out

Money-wise my early retirement was/is only possible through use of this rule 72t IRS exception that some may call a tax/penalty loophole. Many people don’t know about it. Some of those who do know about it wonder whether it’s a safe route to take. I am sure some caution is advised but It has certainly worked for me.

I was at an obvious early retirement disadvantage. 85% of my portfolio was in IRAs and I was a long way from age 59 1/2. My non retirement account assets couldn’t cover my early retirement funding needs for very long and I had no other source of early retirement income.

That is why I took advantage of the IRS SEPP 72t exception.  It’s a backdoor rule where one can establish Substantially Equal Periodic Payments (SEPP) based on IRS guidelines and avoid the 10% early withdrawal penalties. The rules are strict and crossing them results in penalties back to the first withdrawal. I recommend the free 72t calculator that I used in my early retirement planning at 72t.net

The 72t.net calculator will give you an idea of how the 72t calculations figure out and allow you to play with different numbers. I have more on another page about this subject of using your 401K and IRA to fund your early retirement without an early withdrawal penalty

How my SEPP 72t IRA Sits Today-

In February 2010 I dedicated $665K to my SEPP IRA. You cannot add to this SEPP 72t IRA later on if it gets into trouble during a major market meltdown. Rotten market conditions or not, once started it must continue 72t payments until the required end or you suffer the 10% penalty all the way back to day one. It was decided best to invest my SEPP 72t IRA conservatively for income.

Note: You can make one 72t payout method change to the “minimum distribution” to save your account if necessary. That is an option if your finances will allow for a major retirement income reduction.

Because the amount is locked up for 5 years or age 59 ½ (whichever is longer) it is wise not to allocate all of your funds in a SEPP IRA for 72t. Having other accounts to access if needed is a good way to go. I invest for growth in my other IRA and Roth funds.

My May 31, 2017 statement shows the SEPP 72t IRA value at $595K. It’s down $70K from it’s start but has paid out $244K during the 7 years 3 months of early retirement monthly income to me. My 72t payments will continue for 6 more months until the end of 2017. That’s when I reach the age of 59 1/2. Even though the account is less than what I initially invested, as far as I am concerned this 72t backdoor early retirement funding approach is a success. That’s just how real life goes in investing. $70K for 7.6 years of early retirement is a good deal. Although this SEPP 72t IRA is a little down my other untouched IRAs/Roths are substantially higher since my retirement.

Today’s 72t Drawback

I retired early at the age of 51 in December 2009. I started my SEPP 72t payments in February 2010. At that time the approved 72t calculation interest rate was set at around 3.5%. Today (June 2017) it appears to be at 2.55%. What that means is that at today’s 72t approved interest rate it would take more money dedicated to the SEPP IRA to generate the same monthly retirement income/check I am now getting.

A low-interest rate environment is certainly a challenge to this backdoor early retirement approach. However one must assume that Interest rates will eventually rise. A strategy to use would be to establish one SEPP 72t IRA now and use other penalty free funds to supplement any income shortfalls. Then plan to later start a second SEPP 72t account once interest rates do go up. You can have multiple SEPP 72t IRAs working independently to fund your early retirement.

There is one good thing about being forced to use a low interest 72t calculation for your early retirement 72t income. It reduces the chance of exhausting your SEPP 72t IRA through taking too high of a set withdrawal amount from it. In my case the interest rates dropped after I began my 72t causing investment interest income to also drop.

Of course this backdoor is closed if such low approved interest rates makes it so there isn’t enough in your portfolio to dedicate to a SEPP 72t IRA and meet your specific funding needs.

Last Words on this Backdoor Early Retirement Approach

Deciding to use SEPP 72t as a backdoor early retirement funding approach can be a little tricky. I had mine set up by the CFP that I had worked with for many years. They also manage my SEPP 72t and the rest of my portfolio. I receive a monthly deposit from my CFP firm.

Seek assistance through a trusted CFP, where your portfolio is held, or tax professional.  

There are certainly other backdoor early retirement funding approaches that can be taken. Like building Roth ladders, backdoor Roth strategies, having enough non-retirement account funds available, retirement side hustles, and passive income strategies.

Research and find the approach that will work best for your unique situation. My backdoor early retirement funding strategy has worked very well for me. I hope my sharing this gives you ideas for your own approach to pursue.


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What You Need to Know About Your Finances before You Hit 60

 

Know About Your Finances by age 60

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Retirement. What was once little more than a word, a concept that didn’t really matter much to us when we were young is now of vital importance. As we get older and as retirement age gets closer and closer, we begin to realize that every financial decision we have made in the past has brought us to this point in time.

For some of us, this will be a gratifying feeling because we know we’ve made most of the right decisions along the way, and for others, it will be terrifying because we haven’t taken this whole retirement business quite as seriously is we should have done. No matter which camp you fall into, if you’re under 60, you still have time to make some real changes that will make a difference to your quality of life during retirement.

Here are some important things you need to know right now if you want to make your retirement the best it can be:

How Much Longer You’re Expected to Work

If you want to know how much cash you’ll have to play with and what you’ll need to do between now and retirement to make things better for yourself and your family, you need to know when you’re expected to retire. On average, current Americans retirees quit work at the age of 65, but new retirees have been getting older and older in the past few years, with approximately 37 percent of all workers saying that they are likely to work past 65.

For many, working longer is a good option as it enables them to build up more savings for retirement, but if you work in a` very physically demanding job, or have health issues, it might just not be possible. Whatever your circumstances, you have to honestly appraise your ability to work and then take a close look at your finances to see what can be done.

When the Best Time to Trigger Social Security Is

Another thing that you need to know as you approach the age of 60 is when you should start claiming social security benefits. So many Americans trigger this benefit at the wrong time and end up with too little money to support them at the end of their lives. The best time to trigger Social Security is as far from now as possible. You see, the longer you delay claiming them between the ages of 62 and 70, the amount you’re due rises between 6 and 8 percent, which means you’ll be entitled to quite a bit more if you can hold out. I know this won’t be possible for everyone, and any future changes to the benefit might make things different, but right now, working longer or living off savings and private pensions until you hit 70 is the smart choice for most.

How Much of Your Income is Guaranteed

For many retirees, their Social Security will be the only guaranteed source of income they’ll get, but if you have any traditional company pensions, there is a good chance that you will be entitled to other sources of guaranteed lifetime income. You can find out if this is the case by talking to Human Resources and asking them to provide you with a statement for the benefits and pensions you’re due.

Once you know what you’re likely to be entitled to, you can start looking at your expenses to see if you’ll have enough to live on or if you’ll need to start saving more. You might also consider buying an annuity, which will give you a fixed income throughout your retirement. This is an increasingly popular option, which has helped countless retirees to better manage their money after leaving work.

What Your Safe Withdrawal Rate Is

 what you need to know about 401k

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If you’re not lucky enough to have a guaranteed lifetime income, and you’re going to have to make the cash in your 401(k) last as long as possible throughout your retirement, now is the perfect time to sit down and work out how much money you can safely withdraw each year, so that you don’t completely drain your account. This isn’t always easy because you don’t exactly know how long you’ll live, but if you work on the basis that you’ll live another 30 years after retirement, that should give you a good place to start.

A common way of managing the 401(k) used by many retirees is to withdraw no more than 4 percent of the balance each year. This is the best way to increase your odds of not running out of cash in that 30-year period after retirement, but it’s not a guarantee, and many financial experts are now recommending that this figure is dropped to 3 percent annually.

When to Concentrate on Paying Off Debts

When you’re planning for expenses in advance, not only do you need to know how much money you’ll have coming in, but you also need to know how much debt you’re likely to have. More and more people are retiring while still in debt, and this really isn’t ideal because it drains so much of their precious retirement income needlessly.

If you don’t want to be like them, you need to work out when is the right time to work on paying off your debts. If you’re fast approaching 60, that time is probably now. Start by paying off your most important and expensive debts, like mortgages, overpaying if you can, and then work your way down to smaller debts, which won’t change or mess with your future security quite so much.

Whether You Can Afford to Stop Paying Life Insurance

Most young people with their own families take on term life insurance policies because they are more affordable and because they will normally expire when they are no longer needed. If you are approaching 60, it’s the perfect time to take a look at your life insurance policy and determine whether you need to extend it, switch it with another policy or let it lapse completely.

A lot of people don’t want to let their life insurance lapse because they’ve been paying for it for so many years, but the thing is, a life insurance policy isn’t like a savings account, and that money hasn’t been building up – you’ve just been paying for the right to get a large payout for your family should you pass away before your time. If your children are now living their own self-sufficient lives, your mortgage is paid off, and you don’t need to worry about money in your retirement, there is a good chance that you can let that life insurance policy go and save the monthly cost for your retirement. Just be sure to talk it through with your family first.

Your Possible Future Medical Bills

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In recent years, a lot of retirees have gotten into serious financial difficulties because they have not properly considered any future medical expenses they could be expected to pay. Retiree health benefits are just not as common as they once were and because we all seem to be living longer, medical problems are pretty much a given for most retirees, which means that it’s probably sensible to look at purchasing a good medical insurance policy to see you through your twilight years, and that means you need to account for the premiums in your retirement financial planning.

Are you approaching 60? Have you been thinking more about your retirement? What plans have you put into place?


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How Adopting the Smart Home Revolution Can Save You Time and Money

How Adopting the Smart Home Revolution Can Save You Time and Money

The word revolution means different things to different people and depending on your personal perspective it may be good or bad – that’s just human nature. Even a revolution in technology that’s meant to make our lives easier can be a scary prospect for some. That’s definitely true when it comes to the rise of the smart home and everything that comes with it. It’s our position that the increased use of smart home technology should be embraced with open arms as there really is nothing to fear and a lot to be gained. Smart home technology can save you both time and money as long as it’s set up properly and being used to its full potential. Below you’ll find the reasons we’re convinced the smart home is good for families at all stages of the life cycle.

Why a Smart Thermostat Will Reduce Your Heating Bill

Until recently the idea of a thermostat that could actually help the home owner save money would have seemed like a myth right up there with the Unicorn. Sure they kept your home warm, but it was never an even heat on all levels and it wasn’t unusual for one level to be uncomfortably warm while temperatures were downright frigid on another. Enter the smart thermostat from companies such as Nest. This ingenious little device can sense your presence and turn up the heat accordingly – when no one’s home it can automatically turn itself down to minimal levels. This type of self-adjusting thermostat can potentially save you between 10 and 12% per year. For the average family that’s typically somewhere between $150 and $300 in your pocket. You can also use an app to access the Nest thermostat remotely to make manual adjustments if you know you’ll be arriving home soon.

Shedding Some Light on Your Electricity Bills

It isn’t just a smart thermostat that can save you considerable amounts of money off your energy bills each month. There are all kinds of smart technologies that have the potential to save you a lot of money in the long run – a great example is the Philips Hue smart light bulb. These bulbs can actually learn your behaviour over time. They are connected to your home Wi-Fi network and they can be controlled through it. Eventually the system learns when you typically go to bed and it will turn off lights automatically behind you. These smart light bulbs can also sense when you enter a room unexpectedly and raise the lights accordingly. It’s estimated that the average household spends as much as 12% of their electricity bill on lighting and this type of system can easily cut that bill in half. That may only be between $50 and $100 per year, but in today’s challenging economy every penny counts.

Remoted Doorbell Convenience

If you’ve ever had the displeasure to miss the delivery person when they show up with a package you’ve been waiting on for weeks you share my pain. A few years ago I was waiting on a new laptop to arrive and while I had a general idea when it was going to show up I didn’t know the exact day for sure. Not surprisingly it showed up while I was away one day. I ended up having to drive to the delivery company’s central depot a few miles away to pick up my package. This cost me a lot of time that could have been better spent on other things. There might not have been an easy answer to my problem then, but there certainly is now. With a video doorbell you can see who’s at the door and interact with them using its built-in camera and microphone from anywhere in the world.

A Lock that Saves Time

When you combine one of the video doorbells we just mentioned with a smart lock system you can easily make sure that package gets into your home safely and securely. A smart door lock such as the Schlage Connect can be used to control and allow access to your home remotely using an app. This can be used to let that delivery person in to drop your package off so you don’t have to pick it up, to

let the grandkids in the house so you don’t have to rush home, or just to check if you remembered to lock the door. All of these scenarios would have cost you precious time in the past, but with this new door lock technology those problems are a thing of the past.

Worth the Upgrades

The products we’ve talked about above can save you both time and money as part of your smart home. With these smart devices there may be a bit of cost upfront, but the overall savings are considerable. If you haven’t already started building your smart home you should get stared today.

Note: This is a guest post by Joseph Mack from smarthomeSAGE, a blog that analyzes the impact that smart home technology has on home life.


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What are the Best US States to Retire in?

Deciding Where to Live in Retirement: The 10 States Retirees are Really Moving to.

Like many retirees I have considered making a retirement move to somewhere with a little less winter and a little more summer. My wish list aside, doing a search on the best US States to Retire in comes up with as many variations as there are opinions and wish list attributes. With all the different search outcomes I find it to be an interesting twist to see a list of the best US States for retirement based on where retirees are actually moving to.

I always believed that what people really do and how/why they do it is a good indicator of what makes the grade or to be one of the best States to relocate to in retirement. To me it’s no different from checking personal product reviews before buying something. I think it has a value that is different from results based on theory or survey answers as to what makes a good retirement relocation consideration.

The key word of course here is “consideration“.

There are a lot of factors that must come into any retirement moving decision. The study I latched on to is one where United Van Lines used actual retiree move data to come up with the list of 10 best US States to Retire in.

What are the Best US States to Retire in?

Since United Van Lines is in the moving business it makes sense that this data shows what retirees on the move value today in where they want to live. It does give a glimpse at why these states came into the top 10. Knowing what these states share allows us to open our own thinking to what factors make for a smart retirement move. Or at least what retirees on the move are valuing. Any of us that are interested in making a retirement move can then see if we are on the right track.

There are a couple of surprises in their study results.

It’s not all sunshine and recreation although that still appears to be a popular factor. That is if it meets the other details that seems to be prevalent.

I have actually spent time in 6 of the 10 best states that the United Van Line’s study shows retirees moving to. I can agree that they could be an attractive destination based on my limited experience. Or at least worth consideration and more research if I had no set ideas on where I wanted to land.

The 10 Best US States to Retire in: Where Retirees are Moving to

The United Van Lines’ 40th Annual National Movers Study for the most part shows that retirees are moving to states that offer what is seen as a financial bump. That being a little help by way of friendly retirement tax policies. I’m not too surprised since many of today’s retiree’s need to be concerned with their long-term retirement financing. Lower taxes would certainly help to smooth out rising “living” costs. Especially when considering the ever climbing cost of health care. What was a surprise is that some of the retiree destinations are snowy winter-prone states. It just goes to show – different strokes for different folks.

Here are the 10 Best US States to Retire in:

1. Delaware

Delaware comes in as number 1 and it seems that this is where retirees move who want a lower cost east coast retirement. All that and proximity to several major cities and the Atlantic coastline. Delaware evidently offers both the east coast lifestyle many retirees want and some attractive state tax benefits.

  • Delaware doesn’t tax Social Security benefits.
  • It has significant pension deductions.
  • Delaware income taxes are capped at 6.6%.
 2. Florida

It was no surprise that Florida is in the top of this list. When you think about retirement locations it’s the first thought-of destination. Florida has a lot of affordable living and recreation to offer. Having 1,250 golf courses and 663 miles of beachfront is an attractive retirement draw. And then their income taxes, oh wait, what income taxes?

  • Florida doesn’t tax Social Security benefits.
  • There is no state income tax.
  • Retirement income isn’t taxed.
3. Nevada

Nevada is certainly a well-known low-tax haven for retirees. That and if you are into it, gambling, golf, and entertainment easily comes to mind as why retirees are moving to Nevada.

  • There is no state income tax.
  • Broad Social Security and pension exemptions.
  • Nevada has no state inheritance or estate taxes.
4. South Carolina

At #4 South Carolina wasn’t a big surprise to me. I think warm weather, recreation and laid back southern living when I think about South Carolina. But I didn’t know about their retiree attracting low taxes.

  • South Carolina has one of the lowest state tax rates in the US.
  • South Carolina doesn’t tax Social Security benefits.
  • Retirement income has many money-saving tax exemptions.
5. Arizona

Along with Florida, Arizona is always recognized as a place retirees love to move to. More summer (a lot more) and little if no cold winters in most of it. You certainly can still find snow if you want it (think Flagstaff). Recreation is something that is a huge draw but there appears to also be a financial factor.

  • Arizona doesn’t tax Social Security benefits.
  • Seniors enjoy property tax breaks.
  • Arizona has no state inheritance or estate taxes.
6. New Mexico

New Mexico is known as the “Land of Enchantment”. Recreation is again something that draws retirees there. From hiking and mountain-biking to winter sports like skiing and snowboarding to summer time water sports.

  • New Mexico has lower state sales tax rates.
  • New Mexico retirees enjoy an $8,000 exemption on their retirement income taxes.
  • For those age 65 and older there are also tax rebates.
7. Idaho

Idaho making the list was a surprise to me. I always considered it a best kept secret for what it has to offer. Known for its spuds, Idaho happens to offer a very scenic state with plenty of recreation and if city life is what you want Boise offers all that retirees want. Once homeowners reach age 65 they can apply for an Idaho state offered temporary property tax deferral program.

  • Idaho doesn’t tax Social Security benefits.
  • No state sales tax for prescription drugs.
  • Qualifying people enjoy retirement benefits deductions.
8. Montana

When I think about Montana I think wide blue skies. I also think about its vast unspoiled areas and it’s beauty. If getting away from the crowd is your thing then Montana fits the bill. Montana does tax Social Security payments and your other retirement income

  • Montana has no state sales tax.
  • There are some retirement income exemptions offered.
  • Montana does have some tax breaks and property tax assistance for seniors.
9. Maine

Maine makes the list even with all of its snowy winters. Maybe because it also has over 200 miles of coastline to make up for it (I kid). Retirees who want 4 real seasons can enjoy warm summers and cold winters. New England’s northernmost state is a scenic retirement destination.  

  • Maine doesn’t tax Social Security benefits.
  • There are some pension-income exemptions available.
  • No state sales tax for prescription drugs and food.
10. New Hampshire

Known as the “Granite State”, New Hampshire is where you can see plenty of picturesque barns and farmhouses. It definitely offers a certain kind of New England retiree lifestyle. New Hampshire does have highish property taxes and it does tax your interest and dividends, but…..

  • New Hampshire has no income tax.
  • There is no state sales tax.
  • Retirement income is not taxed in New Hampshire.

Final Words on the best US States to Retire in

As I said, you can get a lot of different answers when searching for the best US States to retire in. Everyone has a different wish list and value different perks to make a place attractive for retirement. Fact is, for many retirees none of the above matters if the primary desire is to be close to family. But I thought I would share these results. I had posted a few weeks ago 8 money-saving places to retire abroad and thought this would be an appropriate companion article.

This list provided by actual retiree move data is interesting. However, it is at a “state” level and each of these states offer entirely different lifestyle options depending on where in the state you target. Some even have different weather within the state’s footprint (less winter more summer, vise versa). More research would be needed to get to that perfect retirement location and there is a lot to consider other than financial

From what I see, what sticks out is that many retirees are interested in state tax relief and recreation opportunities. Even when snow is involved. I hope you find this study’s results interesting. It is obviously limited to retirees who have hired a moving service and may not represent all retirees. But I still think it is interesting and has value.

As far as my retirement relocation thoughts: My wife and I have already decided to stay put in Colorado and living with our 4 seasons. Seasons that includes snowy winters. All because we value staying close to our kids and grand-kids above all else. But if I were to make a retirement move…..


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Broke Family Member’s Long Term Care Can Be Your Retirement Shock

Saving for a decent retirement is tough enough. Financially planning for our old age adds a lot of overhead to the numbers. But did you know that in some cases a family member’s long term care can become your retirement shock?

There are many people who couldn’t or wouldn’t save for retirement. Some of them may even be a family member or two. Many people have no plan for their old age nor any needed long term care. The issue of extended family’s long term care becoming our legal financial obligation just came to light for us.

We are now navigating the tricky issues around the sudden need for long term care for a parent. I thought it important to share what we have discovered.

First some numbers: According to what was found in the 2016 Genworth study, the national median nursing home cost for a semi-private room is $6,844 a month. 

Our situation: Where our parent lives the nursing home care happens to be $5,000 a month. She has $3,500 a month in Social Security and Pension income. That leaves a $1,500 a month shortfall that has to be paid from her other assets. Once all her assets are exhausted then State Medicaid can be applied for.

That is when things can become your own retirement shock to deal with. Fortunately our parent isn’t broke. Not yet anyway. Medicaid or our financial assistance won’t be needed or involved for a little while.

Filial Responsibility Laws Might Cause Your Retirement Shock

At issue is what’s called Filial Responsibility. The State can try to recover amounts paid out for long term care from family members. There was even a recent case in Pennsylvania where the courts backed a private nursing home. They singled out and sued one child for $93K under the state’s Filial Responsibility laws for his mother’s care. Medicaid had been applied for but not yet granted before his mother left. 

There are 29 US States and the territory of Puerto Rico that have these Filial Responsibility Laws. Our parent happens to live in one.

The following States have their specific flavor of Filial Responsibility laws on their books:

Alaska, Arkansas, California, Connecticut, Delaware, Georgia, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, Montana, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia and West Virginia, and in the territory of Puerto Rico

Filial Responsibility isn’t limited to one’s parents either. The State laws where our extended family members reside applies to siblings too.

That was a surprise to me and nothing I planned for. It’s one thing to try to help out a parent. But extending that financial responsibility to siblings goes far beyond anything I considered in my retirement planning.

I happen to have one financially reckless sibling who also lives an unhealthy lifestyle. I am not thrilled to know that my sibling’s life choices could turn into my retirement shock down the road.

The State Filial Responsibility Law Where our Extended Family Resides Says the Following:

“Children shall first be called upon to support their parents, if they are of sufficient ability; if there are none of sufficient ability, the parents of such poor person shall be next called upon; if there are neither parents nor children, the brothers and sisters shall next be called upon; and if there are neither brothers nor sisters, the grandchildren of such poor person shall next be called upon, and then the grandparents.”

Some State’s filial responsibility laws can also impose both criminal and civil penalties for failing to support their parents.

Broke Family Member now your Retirement ShockThe takeaway from all of this is that these laws allow nursing homes, hospitals, governments and certain third parties the ability to file a lawsuit against family members. They have legal backing to go after a judgment. One that obligates a family member(s) to pay their parent’s, sibling’s, or grandparent’s bill.

In the above mentioned Pennsylvania case. The nursing home didn’t even have to bother including all children in their lawsuit.

The Good News and Bad News Regarding Filial Responsibility Enforcement

The Good News- The filial responsibility laws have thus far been rarely enforced by the States. From what I read it’s because it is very expensive to track down and begin a suit against relatives of a broke Medicaid recipient. Not only that but judicial systems are already overburdened and filial enforcement would add to that burden.

States with these laws don’t even agree with each other over aspects of the laws. For example in the area of “sufficient ability” to pay. Nor have they figured out how to go after family members who live in a different State that does not have filial responsibility laws on their books.

The Bad News- The times they are a changin. There seems to be an appetite in Washington to reduce federal Medicaid support to the States. State budgets are already strained. If federal cuts do occur or States develop huge budget shortfalls they may feel that they have no choice but to hunt down extended family members who haven’t stepped up to the plate for their filial responsibility qualified family members.   

Mitigating Filial Responsibility Risk: What To Do

I wish we had been more involved in our parent’s financial condition and future elder care issues. It is usually uncomfortable to bring this up with a parent. I know I have heard “none of your business” many times from my parents. Along with our love and concern for their care, with filial responsibility it is our business.

If luck prevails, the hope is always that an elderly parent or family member can stay functional and healthy enough to remain in their home with our help.  Arrangements can also be made to have them live with us or with a sibling.

My mother lives with my sister in an apartment built specifically for her in my sister’s home. My sister and mother find it is a mutually beneficial arrangement.  

However, luck doesn’t always prevail. There is always the risk of incapacitation.

My mother-in-law was functional at home with her children’s assistance. But a fall and subsequent stroke has ended that option and left as us all scrambling. Something like this happens out of the blue and then there is no going back.

Here is what we are working through. I hope my sharing this will help others realize that it has to be part of our own financial planning to avoid serious future retirement shock.

Look into your parent’s State Filial Responsibility Law

Look online and find out what is on the books. We all want to do what is best for our loved ones. Knowing this will both motivate us to get moving and use it as leverage to get cooperation from an elderly parent who prefers financial privacy.

We only found out about filial responsibility after the fact. It was a financial surprise during an already emotionally stressful time. We are lucky that our parent has the funds to cover the financial side for a while. It gives us some time to adjust our finances to prepare for when our assistance may be needed.

Go over all of their financial information

Siblings should decide who should act as the lead. That way it is done once and not by everyone concerned. Have your parent write down all account information and assets held. Home equity/mortgage information, beneficiary designations, signers on accounts, etc. This is something that should be done for spouses and may have already been completed. If so then make sure it is up to date.

We had done this last summer when she was considering moving into an assisted living center. She had concerns that the house was too much. But she wasn’t ready to make a huge move like that yet. At that time we were just figuring out if she could financially handle it. Although we looked at account signers, beneficiary designations, etc. in the event of need, we should have been more seriously considering long term care too. I wish we had insisted she make the move then. But we all live without knowledge of what is ahead. The whole hindsight thingy… Our thought was she will decide soon enough on her own.

Power Of Attorney (POA)

It is important to get a POA. This is necessary to cover any assets that may need to be sold if our parent becomes totally incapacitated.

We were told one was in place but it was confused with beneficiary designations or something else. We should have all communicated more clearly among the siblings instead of taking our elderly mother-in-law’s recollection. My mother-in-law’s home equity is a big percentage of her assets. However there is still a $100k mortgage. That means we have to somehow come up with a nursing home funding shortfall and her home mortgage/HOA/etc. All those payments will quickly deplete other accounts until we can sell the home. Getting a POA now will be a huge challenge. Working under a “Guardianship” condition is time-consuming and costly.

Consult with an experienced Estate Planning or Elder Law Attorney

Be sure to seek a lawyer in the State where your parent lives. Filial responsibility laws and processes can vary State by State. A little money spent ahead-of-need will save a lot of trouble later on. Get educated. Know what is needed to facilitate and handle all the difficult decisions and options once a health event incapacitates a loved one. Develop a strategy covering which assets to use first for long term care, how/when to sell any property, and Medicaid issues.

We missed doing this before it was needed and have now met with an elder law attorney after the fact. The first thing they needed was a list of all the assets. Fortunately we had that done. We now wait to get their advice on next steps. Fortunately one of my mother-in-law’s accounts has one of our siblings as a signer. Otherwise we would be handling all the current financial issues for house payments, utilities, HOA payments, nursing home, etc. ourselves until things can be worked out.

Last Words

We did a lot in our own retirement and old age planning to make sure we won’t be a burden to our children. We now have the retirement shock of knowing we may have to also include a plan to handle a parent’s or even a sibling’s long term care debt as our financial problem if things go wrong.

It is important to be ahead of need in these issues. The goal is to have a clear long term care support strategy in place. One that is ready to be used in the worst case scenario. That includes having all the necessary legal work done to gain access to assets in the case of incapacitation.

Even though filial responsibility law enforcement is not a high priority in most cases for States to pursue, it doesn’t mean they never will.

We should all care about our elderly loved ones to help provide for them. Caring for a parent’s long term care wasn’t a big highlight of our retirement planning. Now it will be.

Doing things right can avoid ever having to worry about filial responsibility laws telling us through the courts what we will be paying and causing us severe retirement shock. By having a plan it also makes sure we are optimizing all options in a strategic way to reduce overall cost and provide the best care.


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Early Retirement is a Mistake for Some People

But it doesn’t have to be terminal: What to lookout for.

Most people who retire early have their numbers figured out. But for some people their early retirement is a mistake. A mistake they will regret and claim they were seduced or duped by an early retirement illusion. Just because you can doesn’t mean you should retire early. At least not until you understand your own head and your early retirement “why”. People understand the importance of getting the early retirement math right. But many underestimate the mental side. Happiness happens between the ears.

A couple of recent conversations with early retirees claiming early retirement regret has reminded me of that. We have shared early retirement experiences but with different conclusions.

Even with all of my planning my early retirement messed with me a bit until I made the complete transition. But for others the transition doesn’t happen or happen fast enough because of what wasn’t seen as necessary to plan for.

Then there are those whose plan was spot-on but they didn’t see the signs of their pending problems. We have to recognize a problem before we can take positive corrective action.

Early Retirement is a Mistake If You Can’t Adjust Your Performance Driven Conditioning

Early Retirement is a Mistake for Some PeopleWe all begin our conditioning for performance and approval at a very young age. In school we push to get good grades. Then there is our decades in the rat race. Performance measurements, objectives, goals, etc. where we try to measure up and advance in some way. We compete with others whether we do so intentionally or not. Then we retire and it’s just us. All of our lifelong conditioning if left unrecognized, unchecked, or not planned for can turn anyone’s early retirement into a mistake.

For most of us this performance and approval based dynamic is the only life we have lived. Early retirees are usually very driven. It’s no wonder that retiring early before we are physically or mentally broken can lead to thinking our early retirement is a mistake. Our drive to succeed and perform doesn’t magically disappear when we walk off into the early retirement sunset. But it should change and we can change it.

How to Make Sure Early Retirement Won’t be a Regrettable Mistake

Some early retirees like the two I spoke with have feelings of dread that they made a big mistake. I admit that I felt a little of that too after the celebration of my early retirement faded. It only gets worse if not addressed. Going from being a hero to being a zero was how I felt it. For years I was the go-to guy for everything important. Then in a flash I was seen by the world as unemployed. I thought I had everything figured out and planned what I was retiring to.

My two pals claiming that their early retirement is a mistake also thought they covered everything. I feel that I was able to quickly make the transition. They are still trying to work things out.

Nobody wants to waste their priceless time on early retirement regret. There are things we can do so that retirement regret can be avoided, reversed, and/or managed.

Know Why You Want To Retire Early- What Are You Retiring To?

It’s something people forget to plan for. Retiring to something is overshadowed by what is being retired from. The celebration of ditching the rat race and everything that goes with decades of work obligation is wonderful. But the exuberance of a retirement based on what is being left behind is short-lived. Knowing what we are retiring to and identifying it as why we are retiring early is what helps us avoid early retirement regrets and feeling it was a mistake.

I have said it many times, nobody wants to or will enjoy retiring into a void. Leisure is great but our brains have been conditioned towards productivity. We have to replace the drudgery of unfulfilling work with things that we value to ensure long-term happiness.

First off make a plan to retire living a healthier and happier life and really think about what that means to you. Satisfy your brain’s conditioned need for goals and measurement with what it is that you want to do or accomplish. Is it a business venture? Maybe an encore career, stepped down job or volunteer work. Do you want to spend more time doing hobbies and activities that you enjoy?

I planned for what I was retiring to but there were some holes. My biggest miss was that I underestimated my social circle. I planned on having an active social life in my retirement. But after decades in a career I found that my circle of friends was exclusively work related. I felt it and then set upon a plan to meet new people. Recognize whatever it is that’s missing and plan to fix it. Don’t abandon early retirement and call it a mistake.

Recognize the Importance of Structure Your Brain Needs It

Our brain is conditioned to function under structure. It makes more sense to us when things start and finish at certain routine times. We should have planned scheduled timelines. They can be loose or rigid. It’s our call. But believe me, it is necessary. We feel better when in healthy and productive routines. Our routines then turn into healthy and productive habits.

Without this structure we can drift without accomplishment and our brain’s conditioning feels like we have wasted time. It can lead to things like anxiety, depression, and self destructive habits. All of which leads to classifying early retirement as a mistake.

I learned early on to introduce structure into my early retirement. I routinely exercise during certain daily timeframes, work on projects, socialize, etc. If I didn’t place some kind of timelines I would never routinely get to it. Not fulfilling what I wanted to retire to would be in the back of my mind always messing with my mellow.

Value Self-Approval : No Second Party Appraisal Rendered or Required

Some people’s brains value appraisal and feedback more than others but everyone understands when it’s missing. That pat on back for a job well done all ends with early retirement. It was a huge part of our conditioning from school grades to job performance reviews.

Understand the need to value self-approval for your early retirement. It starts with celebrating early retirement and continues with retiring well. Early retirement is a huge accomplishment in and of itself. Every month, fiscal quarter, and year of successfully living life on your terms in early retirement should be awarded with your own approval.  

After the first few months of early retirement I was aware that nobody but me really cared about my accomplishments. Everyone appreciates positive feedback. I soon learned that my happiness in early retirement is all the positive feedback that I need. When feeling other than happy then that is when self assessment is needed and corrective action taken.  

Last Words

There are many things from financial to the brain that can cause someone to claim their early retirement is a mistake. But it doesn’t have to stay or end that way.

One of the early retirees who claimed his early retirement was a mistake returned to the rat race at his old company. He is working 50 hours a week and is stressed out. But said the lack of forced structure in his retirement had him only looking forward to happy hour. He was drinking too much and over-eating. His Dr. told him he was headed for a heart attack. I am not sure jumping back into the performance driven stress-pool is the right answer. But I am certain he will retire again soon and make the necessary mental adjustments to feel good about his early retirement.

We can counter our lifetime of conditioning when it raises its ugly head. Another thing we can do to tame our brain’s performance driven conditioning in early retirement is recognize the important job we now have.

  • Portfolio Manager for the $XX-figure portfolio of a very important client.
  • Accounts Payable/Accounts Receivable Manager.
  • Leisure and Activity Program Director.
  • Project Manager.

The job is extremely flexible, fun, and rewarding. Best of all the boss is very appreciative.


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Save Money in Retirement with the Latest Solar Technology

Save Money in Retirement with the Latest Solar Technology

 

 

 

 

 

 

 

 

 

 

Solar energy is on the up. Technology is advancing further every year, making today’s solar panels more affordable while at the same time more efficient than ever before. Little wonder, then, that the solar energy industry now employs more than a quarter of a million people in the USA, and is growing faster than the overall US economy.

More than a million American homes have embraced the benefits of solar power and retirees are able to make massive savings on their energy bills. Here is why you should join them.

Invest in the future

Fossil fuels will not last forever, and it is up to us to leave the planet in the best possible condition for future generations. Solar energy is completely renewable and non-polluting. As far back as the 1930s, Thomas Edison commented to Henry Ford, “I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.”

It might have taken longer for us to truly tackle the question of renewable energy than Edison hoped, but there is no doubt that we have finally “got with the program”. Solar industry jobs are increasing 17 times faster than the overall US economy and the latest data from the Solar Energy Industries Association (SEIA) shows year-on-year growth of around 100% in the solar market.

Save money

Just how much can you save by using solar energy? The exact answer does, of course, vary depending on where you live, as it is determined by the average amount of sunshine you enjoy and the policies in your home state relating to grants, rebates and so on. In general, however, the states that see less sunshine have tended to counter this deficiency by offering better cost incentives, so as a guideline, most people can see significant cost savings of at least $50 and often $100 per month.

Low maintenance

Solar panels require very little in the way of maintenance. Periodic cleaning keeps them at optimum efficiency, but otherwise it is a simple case of having them inspected and, where necessary, routine tasks such as antifreeze replacement every five years.

An investment for future generations

We have already raised the point of creating a better world for your children and grandchildren to inherit, but investing in solar provides a great inheritance in more financially pragmatic ways too. The truth is that if your home is fitted with solar panels, it has lower costs, and that makes it more valuable, particularly for those of us who are leisure freaks!

Research by Berkeley National Laboratory for the US Department of Energy concluded solar panels increased the value of a home by an average of $17,000, proving that solar is a sound investment for future generations in more ways than one.

Resources:

Uncommon Friends: Life with Thomas Edison, Henry Ford, Harvey Firestone, Alexis Carrel, and Charles Lindbergh by James Newton

Article on https://understandsolar.com ‘How Much Do Solar Panels Save Me Over Time’

Article Contribution from freelance writer Jackie Edwards.

Now working as a full-time freelance writer, Jackie Edwards is also a busy mum of two small children. In any free time she has (which isn’t much) she likes to volunteer and do charity work and take the family greyhound Bertie for long walks.


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Rethinking Retirement Car Ownership

I have seen the same planned retirement right of passage many times. People securing their magic carpet by following the Retirement Car Ownership tradition. Buying a new or late-model car before ditching the rat race.

Having all the time in the world for road trips means needing a reliable and new car to jump in. It should last forever without the commuting to work and is the smart retirement move to make.

Or is it?

Here’s Why I’m Rethinking Retirement Car Ownership

I fell for this same thinking. Not by buying a new car but we did get a year-old manufacture/dealer certified used car a year before I retired early. Paid cash and thought this is it, we are all set.

I really believed that with proper maintenance and mostly light duty highway driving that it would last a very long time.

Rethinking Retirement Car OwnershipThere was some method to my madness, I didn’t just blindly follow the herd with our thinking. I have a 1981 Toyota truck that I have been able to drive for well over 2 decades so this retirement logic seemed sound. I am a car-nut and consider my automotive hobby as important to my retirement. It’s part of what I retired to. I find a car I like and it’s till death do us part which has worked for me over my life’s decades.

But I am beginning to understand the NEW reality about retirement car ownership

I was right in one aspect of my retirement car ownership thinking. In these 7 years of my early retirement we have taken many road trip adventures in that retirement ride. We have plans for many more too. But there is a huge flaw in my and what I believe is the common retirement car ownership thinking.

These newer cars aren’t made to last long.

It has nothing to do with the engines. They are marvels of engineering compared to the old stuff and there is no questioning their higher fuel efficiency and their safety. In a collision my old truck is barely safer than a motorcycle.

Our retirement ride is now 10 years old and has 145,000 miles on it. It runs beautifully. All of the dutiful fluid changes have paid off. But that isn’t the problem with modern-day autos and yes, I do consider a 10-year-old car a modern-day car.

The retirement car ownership logic’s flaw is the tech.

All of the sensors, computers, electronic controls, and everything else that makes modern cars function becomes quickly obsolete and failure prone. That is what we are starting to experience. Some tech failures do more than annoy us with a Check Engine light to warn us to get something serviced. They can shut the car down.

The problem is when there is a tech failure it almost always comes without warning. No amount of regular car maintenance is going to keep someone from experiencing most automotive tech failures either. It will happen when it happens and it would certainly bite if it happened in the middle of nowhere hundreds of miles from anywhere. We see a lot of no cell service on our open road travels too.

Before all the tech lovers decide I am crazy just ask yourself how many people you know are rocking a 10-year-old laptop? How about even one that’s 6 or 7 years old? Modern cars are controlled by a computer of some sort.

Just do a web search on the Year, Make, and Model of car you are interested in followed by the word “problems” and see where most of the failures are.

My New Retirement Car Ownership Plan

I had set aside $20,000 to replace our magic carpet retirement ride at some point in our retirement.

But I now plan on using that money for another purpose. Instead of buying another vacationing ride I will just rent them. Problem solved. A new car for road trip vacations and keep my older cars for the other 90% of my life within 50 miles of home and within cell service.

I just had to start questioning my retirement car ownership thinking and ask, why pay for a newer car for the purpose of vacationing? A new car with more tech than ever. One that I know will have tech issues within 10 years regardless of my dutiful servicing and easy driving miles.

My justifying financial thinking went like this: We average 27 days of road trip related travel a year. The car rental rates for a full-size car on the Costco Travel site is just under $30 a day. That’s with an in-town pick-up/drop-off and with unlimited miles. If we travel as we have been then for $810 plus taxes we will be road-tripping in a new car.

My brain always insists on my doing a little Pros vs Cons analysis
Pros
  • We will always travel in a late-model car with the latest safety features.
  • The comfort of having that “Reliability” factor settled.
  • Lower Cost. I will have lower car insurance cost by keeping our older rides. They also have lower licensing fees and taxes.
  • That depreciation thing. New cars lose value fast. My cars are already at rock bottom.
  • The money I have set aside for travel car replacement could easily pay the rental car costs for many years.
Cons
  • I can’t be as spontaneous. We will have to always plan ahead to reserve a rental car.
  • There is the whole pick-up and drop-off hassles. But it just needs coordination with the bride or someone friendly.
  • There is the possible insurance hassles due to any damage to the rental car. Between my credit card car rental benefits and my personal $500 deductible auto insurance I should be covered. But it will be more work to get done than my personal car would take.
  • Not all full size cars are created equal. I could get an uncomfortable car for our long road trip.

Wrapping Up

I believe the Pros far out way the Cons. I think the swing away from the traditional retirement car ownership logic is all about the new tech and where things are headed. Aside from the above, it’s amazing how quickly technical advances are moving. From e-cars  to autonomous cars

I am convinced at some point combustible engines will be obsolete.

There is also the current jokes (I hope they are jokes) that soon steering wheels will be outlawed.

I am also fully aware that as I age the road trips will likely decrease. That is what I saw happen with our relatives over the years.

As our current old rides need more money than they are worth to repair we will just donate them. At some point I may be down to just my trusty old truck of 24 years and our bicycles.

Uber and Lyft drivers are now in our town and that too may be a new retirement car ownership shift to consider.

Obviously if I had a giant budget I could just buy a new car every 3 to 5 years and not have to worry about failing tech laden cars. But this early retiree doesn’t have a giant retirement budget to spend like that. Even if I did have that kind of budget I doubt I would do that. It would go against my frugal living values.

Do you see any flaws in my new retirement car ownership thinking? Have you already come to the same conclusion?


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Leisure Freak’s Three Year Anniversary

This month marks Leisure Freak’s Three Year Anniversary. It has been a wonderful ride, full of fun and discovery. I look back and have to laugh at how naive I was about creating and running an Early Retirement website/blog. I didn’t even know what blogs were when I started. Today Leisure Freak has 89 static pages and 161 posts (counting this one). Not bad for a leisure freak who set out to learn about how all of this interweb stuff works through doing it

Leisure Freak Goals-

Primarily I want to help others in their financial independence early retirement journey be successful. There are some real mind-effs that come with retirement and I try to cover them on Leisure Freak. From retirement fear and making the work to retirement transition. To looking beyond finances when it comes to paying yourself first and retiring well. I think that if anything else that is where this website shines.

Leisure Freak isn’t just information based on financial theory or long-held traditional retirement beliefs. It has basis in real life early retirement experiences.

My goal is to continue along those lines by including the often missed non-financial aspects of retirement.

Leisure Freak’s Three Year Anniversary Marks Some Recognition & Mentions

I have been honored lately with a couple of recognitions and noteworthy mentions. I don’t go out to promote my Leisure Freak Tommy persona or the Leisure Freak site because I am just too busy in my early retirement for that. I’m sure if I did, LeisureFreak.com would have a larger following. But this was never meant to be an all-encompassing endeavor. It is something I started so I could learn from it and have some fun at the same time. This year (2017) has brought the following:

Leisure Freak’s Three Year AnniversaryFeedspot selected/awarded Leisure Freak to be in their top 20 early retirement blogs.

Self Directed Retirement Plans – I was invited to answer some retirement based financial questions and be part of their 78 Retirement and Financial Planning Tips from 26 Financial Experts.

Rockstar Finance- Leisure Freak is part of their “Best Blogs” list. Rockstar blog directory: Category- Early Retirement

Freedom is Groovy, Make Wealth Not Debt- I was included in their Early Retirement Highs and Lows: Eight Top Bloggers Weigh In post. It was an interesting reflection and I enjoyed sending in my thoughts.

Thank you all. I appreciate it.

Plans for Leisure Freak’s 4th Year

My plans for this next year are fairly simple and more of a continuation of what I have been doing:

  • Try to at least write a couple of new posts each month.
  • Grow my followers.
  • Expand the Leisure Freak brand within the limits of my interests and fun equation.  

For me personally,

I WILL stay curious and continue researching everything finance so I can share anything new with my readers.

I WILL also continue visiting my favorite financial independence and early retirement (FIRE) sites/blogs. There is so much to learn and things are always changing.

Most importantly I WILL stay true to what I value most.
  • Financial Independence and freedom to live life on my terms.
  • Living a Passion-Drive Life. Always being open to paid opportunities of interests and passions.
  • Simple Living / Frugal Living by valuing what is truly important in life. I assure you it isn’t about stuff.

I guess that just about does it.

Thank You

Thanks to all of Leisure Freak’s readers and followers. I appreciate all of your page views and comments.

My early retirement and the Leisure Freak site has been an awesome adventure. I am happily looking forward to see what year 4 brings.


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8 of the Cheapest Places to Retire Abroad to Stretch Your Savings

We have all done it at one time or another. We look to find some of the Cheapest Places to Retire. For some it is a curiosity and a fantasy but for others a necessity. Necessary because sometimes things don’t work out how we planned. Especially when it comes to our retirement savings. After years of saving, coming up far short of our wishes means thinking about taking the adventurous retirement option.

 of the Cheapest Places to Retire AbroadThat being, looking for where in this beautiful world we can stretch the retirement savings we do have to go farther. Not only that but without sacrificing our living standards.

The countries that make this Cheapest Places to Retire List are the countries where $200K can fund up to 30 years of retirement.

An Affordable Retirement Is Good But Be Sure To Look At The Non-Financial Aspects Too

Obviously there are many more considerations other than money when it comes to moving in our retirement that should be explored.

Are you interested in a rural or urban lifestyle?

Do you want mass transportation options or being close to an airport, hospital, etc.?

If looking for a country with a lower cost retirement then understanding the lifestyle we want helps us narrow our search for the country and the targeted city, town, or village within it.

Then visit it first if you haven’t spent any or much time there. It takes more than a couple of weeks of vacationing to really understand whether it is right for you as a full-time home. Go and LIVE it before committing. Don’t look at it as a vacationing tourist. Get deep into the living part. Check out the Leisure Freak Retirement Moving Considerations page for more non-financial aspects of moving.

There Is The “Language” Thing

Do you already speak the local language? If yes, then you are way ahead.

Are you willing and able to learn it? Then start before making your move.

Are you hoping to find a place that has enough English speakers to get by? Then Target communities with a large ex-pat population where English is commonly known. Do make a plan to learn the language ASAP.

The Elephant in the Room

Choose A Place Where You Will Be Welcome

I don’t see much about this on affordable retirement abroad articles but I believe it is important to note. Immigration is a huge worldwide topic these days. Even when a country’s policy is welcoming to ex-pat retirees, that doesn’t mean every community within it will be. That is no different from here in the US. Test the waters when visiting your target country and community by mentioning your intentions. See the place through non-tourist eyes.

The reason I mention this: When we were in Oahu Hawaii last year there was a lot of talk about how immigrants with big money were causing already expensive housing and other living cost to soar sky-high. There were feelings and claims that it was pushing the locals out. We sensed some animosity.

Be aware that in some countries our meager US retirement savings may make us look like the wealthy invasion driving their costs higher.

It is something to be aware of even though for the most part your retirement income and adding to their economy will be welcome in most country’s communities.

For some countries, even ones with an accepting culture and people, new tensions may arise when any new US policies play out they see as negatively impacting their country. If you notice any animosity then decide if it will get better or worse as time goes on.

Be sure to find the right welcoming place and get to know your new neighbors.

Here They Are: 8 of the Cheapest Places to Retire Abroad

This list of 8 affordable countries for retirement comes courtesy of a storymap from Easy Life Cover.

These countries offer a low-cost and a full retirement lifestyle. They all have low health care, rent and utility costs.

There is income, age and possibly other requirements necessary to retire to another country. Take Belize as an example. They have a great retirement plan for people aged 45 and over with a minimum income of $2,000 per month. Social Security can cover most if not all retirement lifestyle costs for many couples.

The 8 countries on the cheapest places to retire list are in order from highest to lowest retirement living cost (cost includes rent).

Panama $30,648 ($2,554 per month)

Spain $27,396 ($2,283 per month)

Costa Rica $23,100 ($1,925 per month)

Thailand $20,880 ($1,740 per month)

Malaysia $18,684 ($1,557 per month)

Belize $18,000 ($1,500 per month)

Ecuador $17,808 ($1,484 per month)

Nicaragua $14,172 ($1,181 per month)

For more details and geographical reference please check-out the below storymap.


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