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Retirees Find More Financial Freedom Abroad

Article Summary:

Retirees both now and for the foreseeable future are facing serious financial challenges. They can expect to work longer and still not necessarily save enough to retire comfortably. In many ways, that paints a grim picture for their future. The good news is that many Americans of retirement age are finding financial freedom when moving and working abroad.

Photo: The American Interest

Original Article Text From The American Interest:

Retirement Roundup: All Roads Lead Abroad

Baby Boomers have lost, on average, 117 thousand dollars in retirement savings to unexpected “retirement derailers,” according to a recent Ameriprise Financial survey. CNN money reports:

Nearly all, or 90%, of those surveyed, had experienced at least one economic or life event that hurt their retirement savings. And nearly 40% of respondents said they had been hit by five or more unanticipated events, causing their average loss to jump to $144,000. […]

Nearly half of those surveyed said their savings is less than they had imagined, compared to only 18% who said their nest egg is larger than expected. More than half said they wished they had started saving earlier.

The Times has a visual breakdown of the various costs that set retirement back, from low interests rates causing slow asset growth to health care costs. According to Suzanna de Baca, an Ameriprise Financial vice president, the lesson here is that ”Something will happen to throw your retirement off track,” said de Baca. “So you probably need more in retirement savings than you anticipated.”

Meanwhile, another survey finds that the average US retirement age is now 61 years old, compared to 57 two decades ago, while a third calculates that an average 65 year old couple retiring this year will need to save 220,000 dollars to pay for health care costs in retirement. That same survey found that the average health care consumer underestimates how much he or she will have to spend on care in retirement by 20 to 30 percent. And the WSJ reports on research indicating that Gen X will be even less financially prepared for retirement than the Boomers are.

So retirees both now and for foreseeable future are facing serious financial challenges related to health care and cost of living. They can expect to work longer than those that went before them, and still not necessarily save enough to retire comfortably. In many ways, that paints a grim picture for their future.

But there’s a solution. Most people probably won’t be able to escape working later into life—which is not necessarily a bad thing—but there’s ways of doing so that will make their retirement much more pleasant. We’ve noted before that retiring abroad can save the would-be expat tons of money and strength, and improve his or quality of life. In particular it can save the individual and the US health care system tons of Medicare money, given that other countries charge far less for medical services.

It now appears that moving abroad and working is the new wave for Americans of retirement age. The Times reports on Patrice Wynne, a 61 year old American expat who closed her business in the US to pursue a “working retirement” abroad:

When Patrice Wynne shuttered her independent bookstore, Gaia, in Berkeley, Calif., and retired, she knew three things. She wanted to move to a place where she could slow down the tempo of her life, and it was cheaper to live, but where she could continue to work in some fashion.
“I promised myself — I’m not going to slip into going to cocktail parties and playing tennis,” Ms. Wynne, 61, said. “I wanted engagement.”

And that’s what she got. Three years ago, along a cobblestone street in the center of San Miguel de Allende in Mexico, she opened Abrazos, a 650-square-foot retail shop selling colorful Mexican-themed fabric aprons, kitchen and cooking accessories, handbags and clothing, all sewn by a dozen local seamstresses.

Simply retiring abroad has become old news, as people seek cheaper places to live and to slash health care costs while enjoying more temperate climes. But now enjoying a “working retirement,” like Ms. Wynne’s, appears to be gaining traction with expats, as it has in the United States.
Read the whole thing, and gain some insight into how retirement may increasingly look for future generations.

Link to Original Article:

From The American Interest

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