Marketwatch had a couple of different retirement-related articles that are worth mentioning. The first one looked at ten things people wish they knew about before they retired. The headline is a little misleading, number 6 talked about being grateful for being mortgage free and having other expenses be reduced or eliminated.

This is pretty important in terms of making retirement easier (all of life, really) and something we talk about here all the time. Think about the typical list of fixed monthly expenses. The mortgage and car payments are likely two of the biggest three, with that third being health insurance. At younger age, student debt could be just as expensive but hopefully that is wrapped up long before retirement.

Think about that list of fixed monthly expenses again, less those big expenses and you're left with utilities, still health insurance, groceries, other insurances, maybe gas for your car and then maybe a bunch of small stuff like the gym or hair cuts. Entertainment is discretionary and there will always be one off expenses that can't be budgeted for (new tires, vet bills) but this is obviously much easier than all of these things plus the mortgage and car payments. Our fixed monthly expenses without our mortgage, we've not had car payments in ages, is about $2600 and that includes a couple of extravagances like the extra-innings baseball package on Directv. In the context of average Social Security payouts, $2000-$3000 isn't that scary.

One thing I didn't mention is out of pocket healthcare expenses. These of course can be budget busting. I will again make the case for behavior modification in terms of reducing sugar (carbs) consumption and doing resistance training with weight. Whatever chronic malady you might have, I promise you there is research out there about the effects of diet and exercise on that malady. Many of them can be reversed but don't take my word for it, do the research for yourself and draw your own conclusion.

That last paragraph stole the thunder of the other item on the list, health care expenses but it uses the example of $5000 worth of dental work. I've never had serious problems but candidly I don't know if I am lucky or if flossing every night (I actually do that) and using an electric toothbrush really mitigates problems. You've probably heard the cliche that you're only as healthy as your teeth (and gums). That one resonates with me but I would think anyone would be interested in trying to avoid several, four figure expenses financially as well as not wanting to endure that type of work.

The other article was another profile of a US couple that retired to Ecuador. Their expenses are $2000/mo including health insurance. I continue to believe this route solves problems for a lot of people, especially those who are undersaved and relatively healthy (the profiled couple are both). A viable strategy would be to rent out a paid for home in the US (so you can come back) and live off that rental income and Social Security in whatever country you end up in.

This route likely requires a willingness to be very adventurous and there is a lot of work to do. The wife in the article said “it’s a nightmare” and “it is complicated” to get residency status there. In the context of monetizing a hobby I've talked about possibly needing years to figure out how to do it, not waking up on day one of retirement and asking yourself ok, how am I going to make money from my <fill in whatever is relevant to you here>. So it probably is with an expat retirement. The financial benefits of both can be retirement-saving but they require work.