rogernusbaum

A couple of retirement articles at Marketwatch caught my eye this weekend. Once was about a tech worker who lost his job at 59 in 2009, sold it all and moved to Phuket. The second was about a Canadian tech worker (probably a theme there) who went FIRE three years ago at 36.

The article about Phuket has much more meat on the bone. The profiled retiree did a lot of research and found a groove that appears to suit him very well. The article about him has all the plusses and minuses as he sees them along with details about his expenses which are $2500/mo all in. He covers his expenses with his $1800 SS check with the rest coming from "investment income."

The Canadian, like many FIRE people, isn't actually retired. He's cobbled together multiple streams of income including consulting in the field from which he "retired." I'm not critical of him but I am snickering at the idea of his being retired, he clearly isn't but he owns his time, he sets his own schedule which of course resonates with me.

I've written a lot of posts about retiring to another country. The gentleman living in Thailand pays almost nothing in healthcare. I don't know how good or bad the healthcare is there but for someone in good health, not taking a lot of medications and not managing a lot of chronic conditions, how good does the healthcare have to be? Good health is optionality. One option that good health gives you is the ability to live in some country that is much cheaper than the US for folks whose hand is forced financially.

A married couple with more of an emergency fund than a retirement fund could sell their home in the US for $272,000 (the average per Zillow) and build an income portfolio that combined with $2250/mo from Social Security (the average benefit plus spousal benefit paid in 2020) and do very well in a place like Phuket or Cuenca, Ecuador which tend to be popular expat destinations and inexpensive. This is a pretty straight forward application of the idea.

I've put a couple of twists on this in previous posts. Once you sell your house in the US, you might not be able to buy back in, you might be giving up optionality where coming home for some unforeseen reason is concerned. I think it makes sense to keep the mortgage free house, rent it out and use that income plus Social Security to get by. Yes, there would be some logistics like hiring a property manager or the like but you keep an easy path back home open to you. My father left the US in 1980 when he was 54 to Spain (it's a long story) and after a few years, he saw no path back to the US "even if I wanted to." Don't short sell optionality.

The other spin on expat retirement is to just plan on moving some place for a couple of years or so and think of it as more of an adventure. The picture in the header of this post is from Vernazza, Italy from a trip in 2016. While I have no interest in moving there, the idea of staying for a year or so, or some other old European coastal town, in our 60's has a ton of appeal, it would be a great life experience that done correctly could be cheaper than living in the US. For people financially motivated, rental income from your house, combined with some well planned side-gig work for a few years in a place that appeals to you the way Vernazza appeals to us could allow your Social Security payout to grow and let your portfolio grow. Think about being healthy at 65 and having a four year plan for this. Social Security would grow meaningfully and with a positive sequence of market returns, so could the portfolio. Then at 69 would could come back if you wanted to your house and initiate Social Security.

I've been living FIRE since I was about 37, before FIRE was a term. The difference for me is that I do not consider myself retired and have been consistent in believing that I will never retire. I love all the challenges that capital market offer so walking away from that makes no sense to me. But as alluded to above, the idea of owning my time long ago became a vital building block to my lifestyle. It started in my 20's not wanting to have the hassle of a commute. The vast majority of the years I was an employee, my work day started at 6am or earlier and ended at 2pm so I was lucky enough to never have too much commuter hassle. Then it evolved from there; getting laid off from Charles Schwab in 2001 became a quick path to the lifestyle I have now.

Where the 'E' in FIRE refers to retiring early, the 'I' for independence is the more important letter and shouldn't have a clock. Why put that sort of negative pressure on yourself? To the extent financial independence is actually important to you, live below your means, put some money away, work hard to cultivate multiple streams of income, or just one, that fit your situation and interests. If that gets you out of the daily grind and office nonsense then your life will be better for it, regardless of what age that happens.