places to retire cheaply

[HomePage]

Last year we went to NZ and QLD and we spent about $35k all year. My council rates are $2600 pa and our medical is $3500 pa and we eat out once a week. We drive 2 cars and buy anything we need when we need it.

$58k is a beat up

Indeed. Our spend over the last year was $42K and included:

• Running a car and a motorbike
• Holidays to NZ, Townsville, Ayers Rock and Melbourne (about 6 weeks all up)
• An upgrade of my gaming computer
• Roof repairs to our house (ridge capping and pointing)
• All text books for a Master's degree
• Two dogs operating costs
• Living in an area with hideous electricity, gas, water and property rates
• 2 mobile phones + ADSL internet
• Most discretionary spending going on entertainment (dining out, concerts, netflix, cinemas)
• Very little spent on "stuff" (clothing, gadgets, nick knacks)
• Limited spending on bad health luxuries (alcohol, take away food) for lifestyle, not economic, reasons
• Medicare all the way baby!

This is living a life of me being retired (@ 45) and my wife working casual. If I was over 60, I'd get access to seniors discounts as well.

My most prized leisure activities are walking my dogs, bush walking, riding my push bike, reading library ebooks, watching movies that I already have or come on TV, home cooking, helping out elderly relatives and playing computer games. Only the latter activity costs anything of note, but keeping an eye on regular Steam sales keep this to less than $5 a week.

$58K a year would be an (overly) luxurious amount to spend in retirement for my wife and I.

 

[Macca]

Are your retired Macca? Do you realise you are living in poverty?

LOL, yes so it seems, 99% would love to swap with me Terry.

For medical reasons I have been semi retired for 16 years, people on here are the exceptions, the sheeple just don't realise how many things can go wrong and blow everything on whims and fancies then whinge poor b****r me when the wheel turns.

 

[Angel]

From other books and articles I have read over the last few years, that 50 something K$ per annum to spend in retirement includes putting aside cash each year to purchase another car every five to ten years, private health insurance plus extra funds for those old people's operations that will require gap payments even after the health fund payouts. It is not too far off what I had calculated myself when I read my first ever "preparing for retirement" book about five years ago.

For example I would budget maybe $2000 or $3000 per year over 7 or so years to save up for my next $20K car.

Another way to look at it is that I might want about $40K per annum for us both to live off, plus another $100K invested separately for various additional medical bills when we know that sometime in the future there will be both a knee and a hip operation at (currently) $20K each out of pocket .

Medicare is fine when we are in our 40s, just not when we get into our 60s and beyond. Maybe that is when Thailand will look good!

 

[MTR]

So the moral of the story Macca and Homep.....is you just have to be street smart, you guys are living a very good life but you have refined it and made it work, but it is also a mine set and not the norm on this forum??, how good is that.

 

[kathryn d]

So the moral of the story Macca and Homep.....is you just have to be street smart, you guys are living a very good life but you have refined it and made it work, but it is also a mine set and not the norm on this forum??, how good is that.

personally....I think that is sad.

In my opinion, people who are able to live on a small income, generally are happier.

 

[MTR]

personally....I think that is sad.

In my opinion, people who are able to live on a small income, generally are happier.

Hi Kathryn
So why is it sad?

Funny thing is most would say "so sad" those who live on small income.. right?

This forum is about accumulating wealth via property, living the dream, seems $100K pa is the goal from what I have read, I am also guilty of this. Seems people doing pretty good with much less from what I am reading.

MTR

 

[Macca]

Hi MTR,

People on here are the exceptions, if you have no intention of investing then you don't come to investment forums, you are too busy "enjoying life" Every one who comes here and contributes in any way, almost certainly will have a better life than those who don't.

I think it is a great idea to aim for $100k pa in your old age, lets face it, when you are young, full of energy and enthusiasm that is the time to be setting the foundations for your future.

Even if you fail miserably and only get to $50k in todays dollars, you will be way in front of the mob and your life is so much easier with money than without.

With real estate time is SO important, so set them up and let the tenants create your super fund, good news for you, your kids and the government.

Money does not buy happiness but it does buy comfort

 

[HomePage]

From other books and articles I have read over the last few years, that 50 something K$ per annum to spend in retirement includes putting aside cash each year to purchase another car every five to ten years, private health insurance plus extra funds for those old people's operations that will require gap payments even after the health fund payouts. It is not too far off what I had calculated myself when I read my first ever "preparing for retirement" book about five years ago.

For example I would budget maybe $2000 or $3000 per year over 7 or so years to save up for my next $20K car.

Another way to look at it is that I might want about $40K per annum for us both to live off, plus another $100K invested separately for various additional medical bills when we know that sometime in the future there will be both a knee and a hip operation at (currently) $20K each out of pocket .

Medicare is fine when we are in our 40s, just not when we get into our 60s and beyond. Maybe that is when Thailand will look good!

Good points. I should have said that $5K of that $42K spend came from my 10 year major expense bucket of approx $100K budget for that 10 year period (ie. $10K per year on average). This major expense bucket includes:

• Car and motorbike replacement with near-new every 6 and 7 years respectively
• Furniture and appliance replacement
• Electronic equipment modernisation
• Major house maintenance / renovation
• Major vet surgery
• Elective surgery cue jumping funding
• Self education
• Major holidays (eg. around the world)
• Children's weddings
• Major birthday functions and presents
• Parental assistance
• Funeral expenses

This equates to a base budget of about $37K per year and $10K major expenses for a total of $47K for everything we can possibly think of. Retirement income is about double that, so plenty of buffer in that too and it builds a cash reserve for any mega medical issue that could come along (eg. cancer). We think we live a life of luxury, so we could easily drop $10K per year off with minimal impact.

This is our grand plan for a very long retirement and, one year into it, so far so good. I know many here shoot for the magical $100K pa income in retirement. Savvy property (and share) investors here should easily get there, but there are also many that are not financially disciplined enough to get there and are destined to work 'til they nearly drop. Knowing what I know now, I wish I had retired sooner as I am having the time of my life and have far more buffer than I need.

 

[sanj]

Every one who comes here and contributes in any way, almost certainly will have a better life than those who don't.

I think you are vastly exaggerating the importance of SS.

 

[dajackal]

Option #1 will give you more income from renting out your home but traveling for 1-5 years without coming home during that time for significant periods (3mths) will get you classified as a non-res.

I just ran through pretty much every permutation of the ATO tool and from what I can determine...as long as you don't 'base' yourself in any one place you are still considered an Australian resident for tax purposes. Therefore as long as you keep traveling to different cities or countries and staying in temporary accommodation you'll be right.

If I 'base' myself in a place outside of Australia for anything more than 2 years I'm no longer an Australian resident. Less than two years it becomes subjective....so 2 years seems to be the cutoff and if I can prove I put my things into storage, maintained Australian bank accounts, etc. should be classified as Australia resident.

2 year mini retirement here we come!!!

 

[kathryn d]

Hi Kathryn
So why is it sad?

Funny thing is most would say "so sad" those who live on small income.. right?

This forum is about accumulating wealth via property, living the dream, seems $100K pa is the goal from what I have read, I am also guilty of this. Seems people doing pretty good with much less from what I am reading.

MTR

Most people do not work in offices.
Maybe the ones who are members of SS do...I don't know.

If the average family, who doesn't work an office job, was given the choice of working for another 20-30 years at a job, they don't really like or to be shown how they could retire on an income (not centrelink) which may seem low, at the onset, but will provide what they need .......what would they pick?

Trouble is, so many people are brain washed into thinking they need a lot of money to retire.
You do need some....but not $100k a year...especially if they never earned that in their life.


Some on SS always say it is better to earn more, than reduce costs.
I disagree.....it takes a lot more work to earn 'after tax ' dollars.

Similar to telling people it costs $200k to raise a child to age 18.
It can, if you have more money than brains....but it is not required.

Anyway....if it makes people happy to work an extra 20-30 years in a job they don't like...that is their choice.
I'd rather have my time now...than hope I will be still alive at 67 retirement age.

 

[ellejay]

@HP
We'll hopefully be following in your footsteps next yr. I'm the same age as you and agree we can be really comfortable on that amount. I've got $40k revolving credit which will be an added emergency fund and even working a couple of days a week, or a few months per year to keep boredom at bay will only add to the travel/luxuries fund.

 

[MTR]

Anyway....if it makes people happy to work an extra 20-30 years in a job they don't like...that is their choice.
I'd rather have my time now...than hope I will be still alive at 67 retirement age.

I agree with your comments

 

[Macca]

I think you are vastly exaggerating the importance of SS.

It is the mindset I mean, if someone is regularly visiting SS or any investment forum, then they are investment conscious, hence they will be people who have the intent of accumulating assets.

People who never visit investment forums are unlikely to be savers as most savers seek to maximise their returns and seek knowledge via forums.

 

[sanj]

It is the mindset I mean, if someone is regularly visiting SS or any investment forum, then they are investment conscious, hence they will be people who have the intent of accumulating assets.

People who never visit investment forums are unlikely to be savers as most savers seek to maximise their returns and seek knowledge via forums.

The 4 most successful people of my age group (in fact all younger than me so 25-30) would have a combined wealth of well into 8 figures and don't visit any investment forums.

Don't get me wrong, SS is a great resource that I thoroughly enjoy but we aren't talking some kind of Holy grail here

 

[skater]

Trouble is, so many people are brain washed into thinking they need a lot of money to retire.
You do need some....but not $100k a year...especially if they never earned that in their life.

I think the reason so many on here couldn't 'think' of retiring with anything less than $100k passive income is because this forum is made up with a lot more high income members than lower income members.

Most, but certainly not all, SS members are on high incomes. With high incomes you have high expectations and high expenses. You have the private schooling of the kids, the expensive PPOR, the luxury accommodation when on holidays, the lavish dinners, the new cars, the expensive IP's, the lower yields, the large tax right offs etc.

Those on lower incomes find it harder to invest. So, there are fewer of them here as contributing members. They have less disposable incomes, have a cheaper PPOR, are less likely to pay for private education, they may still take holidays (even overseas), but will often look for middle of the road, or even more budget accommodation, look for cheaper IP's (they are easier to hold onto & often have a higher yield) eat out less often, buy late model cars etc. These SS members will find a way to enjoy themselves, AND live a very good lifestyle on much less income.

AND you know what, in all the years I've been a member of the forum, I think I've seen a lot more of the lower income investors be able to retire early than I have of the higher income ones.

 

[Macca]

The 4 most successful people of my age group (in fact all younger than me so 25-30) would have a combined wealth of well into 8 figures and don't visit any investment forums.

Don't get me wrong, SS is a great resource that I thoroughly enjoy but we aren't talking some kind of Holy grail here

The hardest thing for people who don't have a like minded group is to maintain enthusiasm, SS and other investment forums help those who don't have a support group.

I know no one that I can even talk about real estate with, let alone general investing, SS and other forums are open to all and make it easy for people to ask dumb or intelligent questions and be helped along the way.

None of my extended family or any of their friends will talk about money, they consider it greedy to provide for ones old age by owning an investment property.

I can no longer be bothered pointing out to them that they are renters who go overseas twice a year and complain about being poor. They will be the ones who will scream the place down when they find their Super is not enough to fund their rent and lattes for more than a decade then they will have to live on whatever the pension is in 25 years time.

SS is not a magic pudding but it has sure helped an large number of people make a lot of $$$

 

[robboat]

I know a guy who lives in Pattaya on AUD$12,000 pa. He has been there about 5 years now and all he does is work on his body and look in the mirror. He never wants to leave.

Pattaya is full of foreigners so it pretty expensive. If you were willing to go up country Thailand then you could live for half of this. You could rent a big house for about $100 per month. If you live close to the Lao boarder it is easy to go out and come back with a fresh visa - though there can be problems after doing it several times - Cambodia is not far either and now Myanmar is opening up too.

BTW the internet in NE THailand is better than Australia. I was using voip phone through my mobile last time I was there and was very clear.

It is even cheaper to live in Cambodia.

Japan is also very cheap. Aussies get 3 month visas on arrival. Excellent medical facilities too. You could rent a studio apartment in Osaka for $500 per month. Eating out at a restaurant from $4.

Retire early, and do the things you always wanted to do - you can always come back to Australia every 6 months. You could do half retirement. Or try full retirement for a few years and then come back here if it doesn't work out.

Also consider living in the countryside of Australia - cheap housing.

Used to be cheaper....now not so as the country has high inflation and prices, especially for food, have increased +20% or more.

 

[robboat]

The 4 most successful people of my age group (in fact all younger than me so 25-30) would have a combined wealth of well into 8 figures and don't visit any investment forums.

Don't get me wrong, SS is a great resource that I thoroughly enjoy but we aren't talking some kind of Holy grail here

I always ask how much people earn when they are not working......and how much they will earn if they do not work for 5 years.....
Plenty of people with "assets" that produce little to no worthwhile cashflow.....poor millionaires!

You cannot eat dirt.....

 

[robboat]

I just ran through pretty much every permutation of the ATO tool and from what I can determine...as long as you don't 'base' yourself in any one place you are still considered an Australian resident for tax purposes. Therefore as long as you keep traveling to different cities or countries and staying in temporary accommodation you'll be right.

If I 'base' myself in a place outside of Australia for anything more than 2 years I'm no longer an Australian resident. Less than two years it becomes subjective....so 2 years seems to be the cutoff and if I can prove I put my things into storage, maintained Australian bank accounts, etc. should be classified as Australia resident.

2 year mini retirement here we come!!!

Unless you own a property in your own name........then you have a "base"....