Instead of Retiring in Your 30s, Try This

Instead of Retiring in Your 30s, Try This

Us here at Financial Uproar (me and my 52 helper monkeys) are no fans of retiring super early.

There are a number of reasons why. First, I LURVE money, and want to make more of it. I see no reason to stop doing so early. I’ll just go do something else if I get bored.

I also think taking our hardest-working and most motivated employees from the workforce in their prime working years isn’t good for anyone. Somebody with FU money is far more likely to stumble upon something truly remarkable than the guy who is 14 different kinds of screwed if he gets fired. The wealthy guy can afford to take a few risks; to try and create something worth creating. The poor guy is going to play it more safe than a Mormon on prom night. ZING HE’S STILL GOT IT.

But, alas, no matter how much I shout, y’all don’t care. I know very reasonable people who insist on hanging up their proverbial skates right when their working lives are about to get really interesting. HOW DARE THEY DON’T LISTEN TO ME. I ought to murder them all…with love. And axes.

While most of us don’t have the desire to permanently stop working in our 30s, I think many of us would like the freedom to change jobs, take a year or two off, or be able to start a business without worry. I know I went from working for the man to self-employed, and it was terrifying. Let’s not talk about how many times I wet myself.

So rather than retiring early, allow me to propose another option.

Mini retirements

I can’t take much credit for the originality of this idea. Tim Ferriss came up with it before me, and he probably ripped it off of somebody else. I’m pretty sure the first guy who came up with the idea was Benjamin Franklin, but keep in mind my research skills are about as through as a 7th grader throwing together a last-minute homework assignment.

The concept is simple. When working, save your ass off. Create that huge savings rate everyone is always talking about. And then when you inevitably get tired of your job, quit it without hesitation. I’d recommend not playing your boss’s head like a bongo drum on the way out the door, but hey. I’m not your mother.

bongo

At that point, you’re free to do whatever you want. Fancy a trip to the French Alps? Go ahead, Captain Pretentious. Want to start your own business? Feel free to work really hard before throwing up your hands and getting a real job. Wife about to have a family? Cool beans. Somebody’s going to have to get yelled at.

And so on.

The whole key is what happens next. After taking a few months or even a year or two to recharge your batteries, it’s time to get back to work.

This arrangement offers the best of both worlds. It allows someone to have the advantages of spending some of their prime years traveling, learning a new craft, or one of the million other things folks who retire in their 30s end up doing. And then it makes sure they get back to work before their resume turns to dust and they become unemployable.

Imagine you were an early retiree who wrapped up your working career at 35 during the top of a long bull market. You have $1 million in the bank. Suddenly, stocks are down 40%, and you’re only looking at a nest egg of $600,000. The whole plan looks shot.

So you decide to go back to work. But the combination of a poor job market and the giant gap in your resume make you all but unemployable. What’s an early retiree to do?

I’m sure plenty of these retiring early folks have planned for such contingencies. Still, backup plans are good. I’ve always found work comes easy when I’m not exactly looking. The opposite is true when I’d really like to find something.

Let me tell you a secret

Come close. I’m going to tell you kids something that’ll blow your collective minds.

There’s no such thing as people who retire in their 30s.

Every last one of them has something that keeps them busy. Some build an online presence. Others build houses. Some freelance. And some take care of the house/kids. The point is all of them end up working in some sort of capacity again. The work might not be paid, or very glamorous, but they do it.

When you’re financially independent, you can make the decision to switch from a very demanding career to an easier one. You can take a break from working. Or you can travel. You can do anything you desire, including retiring.

The point? Get financially independent and then let the rest take care of itself. Once you get to that point, all sorts of options open up. I’m a fan of taking time off between jobs myself, but hey. Whatever floats your boat.

Maybe You Don’t Deserve a 30 Year Retirement

It’s good to be old in 2016.

People suck up to seniors almost as much as they suck up to attractive women. Older folks get priority seating on the bus, discounts pretty much anywhere, all sorts of funding from politicians, cheaper car insurance rates, and probably 1,874 things I don’t even realize. Sure, they gotta put up with an increased chance of death and a little impotency, but that’s a small price to pay for FREE SHIT, BABY.

The biggest rip of all are pensions. Seniors think that just because they’re been working for a whole bunch of years that means they can sit back, relax, and get paid hundreds of dollars each month to nap and bitch about arthritis. Pretty sweet gig if you can get it. No wonder all those internet guys are jonesing to retire early.

This whole notion of retirement is a relatively new one. Back in the day, you pretty much worked until you couldn’t, which took you until rocking chair time. You’d spend the last few months of your life stubbornly stinking up your kids’ house until you finally kicked it. Man, what a time to be alive. Well, not really alive, anyway.

Germany is credited with coming up with the first pension, right around World War 1. Back then, average life expectancy was just a few years beyond the retirement age, so legislators knew the cost wouldn’t be onerous. In other words, Olaf would kick it before his pension cost the government a whole lot.

The ol’ Great Depression changed everything. People ended up poor as balls, which meant they were more likely to cut up and eat grandpa than take care of him. So left-wing governments elected at the time started instituting small state pension plans.

Over the years, these plans have grown and grown. Politicians have been generous giving benefits to retirees, knowing they’re the only people that actually vote. The gradual aging of our population has ensured that these retirement benefits are in place far longer than our forefathers ever anticipated.

Somebody who retires today at age 65 can reasonably expect to stay retired between 20 and 25 years. By the time you or I (but mostly you, I eat a lot of red meat) decide to hang up the proverbial working skates, we should be able to expect a retirement that lasts at least 25 or 30 years.

Blame the seniors. Blame personal finance blogs. Hell, blame your dog for all I care. All I know is society has this expectation that our golden years should last almost as long as our working years, an expectation that needs to stop. The Ponzi Scheme which is our retirement benefit plans just can’t handle it.

Stop expecting to retire for 30 years

Think about the expectations of today’s millennial generation, a group of people we can universally agree are worse than Satan mixed with Hitler mixed with Warren Buffett’s evil dog.

Yes, Warren Buffett has an evil dog. I can’t believe y’all didn’t know that.

They delay working for years after they hit 18, maybe doing summer jobs while they’re at home from college. They’ll hit the workforce at age 22 if they avoid grad school, something that’s becoming increasingly unlikely.

They’ll then work for between 40 and 45 years, giving them a retirement age somewhere in their early-to-mid 60s. Many of them will take extended breaks from the workforce, for whatever reason. Most will end up procreating, something that’s a proven wealth sap. Some will even take time off after they get a pet, an actual thing that exists.

And millennials wonder why people laugh at them.

By the time it’s all said and done, the average working person today is probably going to end up working between 35 and 40 years and then expecting to take it easy over the next 30 to 35 years. Add on the first 22 years which are supported by parents, and we’re looking at a whole generation that has an expectation of working, at most, 40% of their lives.

How exactly does that work? Sure, I get we’re more productive these days than we even used to be, and richer too. A lot of people end up getting subsidized from things like inheritances too. There are also lots of examples of people who didn’t want to retire at 60 but found themselves laid off. So I get all that.

But planning to only work 40% of your life? Have we gotten that soft in only a century?

I recently visited a friend who decided to take early retirement around his 61st birthday. He’s now 64 and bored out of his tree. He’d love to get a part-time job, but doesn’t really want to do anything physical. His days are spent fishing, watching TV, playing fetch with his dog, and concocting elaborate plots on how to kill his wife. It’s not a bad existence, but he’s the first to admit how pathetic it is. He craves something to do, he’s just not sure what it should be.

It also takes a ton of resources to have a 30 year retirement. Never mind things like public pensions or old age security (AKA welfare for seniors). You’ve got to save your ass off pretty much your whole working life to be able to afford that life of leisure. Is that really the best way to go about things?

This whole movement of mini retirements makes more sense to me. If you’re burned out, take a few months or a year off when you’re 35. Use some of your retirement savings if you have to. As long as you don’t screw yourself, you’ll be fine. Make up for that time off by working a sweet office job into your 70s.

But it’s hard to convince me that somebody who takes several sabbaticals during their working career deserves the same sort of extended retirement we’ve all come to expect, especially if you believe that traditional retirement is already too long. Hell, even if you’re a Walmart greeter, at least you’re getting out of the house and doing something.

Anyhoo, I’ll wrap this up. It’s amazing that we live in a time and place where we can realistically expect a retirement to last 25 years (starting today) or 30-35 years (starting in a few decades). It’s also amazing that sex androids exist, but that doesn’t necessarily mean you should use one. Perhaps retirement should come with a similar attitude.

Where To Retire Outside of North America

Finally, we’re nearing the end of the Financial Uproar retirement series, the literal best series in the history of time. And none of you read it. It’s like you guys are trying to suck.

There’s no better time to start than the present. It works for cleaning out the cat’s litter box and it works for going back and seeing where you should retire in Canada and the U.S.

Just in case those destinations aren’t enough for you, let’s expand the search around the world before we mercifully take this series out behind the barn and put a bullet into it. Like before, we’re going to examine things like proximity to airports, living costs, the affordability of housing, climate, medical care, and so on. We’ll focus a little less on taxes this time around based on the assumption that taxes are almost universally cheaper in the developing world than they are here.

Let’s get the party started.

Mexico

Don't run into this guy. Sean Penn I mean. His friend seems nice.

Don’t run into this guy. Sean Penn I mean. His friend seems nice.

 

According to estimates I found after Googling for a few minutes (RESEARCH FOR THE WIN), Mexico has close to a million U.S. expats living there. And surprisingly, not all of them are shot up in the drug-related shootings I assume happen every 14 seconds.

This has led to the rise of communities (mostly close to the U.S. border) which are teeming with Americans. Puerto Vallarta is probably the most popular destination. Thousands of expats spend serious time there, with thousands more popping in on vacations to enjoy the beach.

As long as you’re willing to stay away from the beach, real estate isn’t terribly expensive. Puerto Vallarta is a popular medical tourism spot, so you’re not going to get leeches attached to your wounds. The airport has plenty of flights to the U.S. and Canada, and most of the locals speak English.

There are a few downfalls. Drug violence is common, although not usually in the types of cities expats call home. Corruption is also rampant.

South Korea

Okay, I may be biased here on account of spending so much time there, but South Korea is a decent place for Canadians looking to retire.

Stuff is relatively inexpensive, and housing is reasonable. The climate is better than in Canada, especially if you spend time in the southern part of the country close to the ocean. They have a young population who (mostly) speak English. Medical care is every bit as good as you’d get here, and paying out of pocket for services was reasonable enough I almost didn’t bother with travel insurance when I went over there.

Plus, Canadians can stay for up to six months without leaving the country. In fact, if you travel to Jeju Island, a small autonomous island just south of the mainland, you can buy yourself a South Korean residency permit for an investment of 500 million Korean Won, worth about $575,000 Cdn. today.

Thailand

We all know the reason why many people want to retire in Thailand, and that’s hookers. Here at Financial Uproar, we will not squash your hooker-related dreams. We’ll just remind you that, for the love of God, wear a rubber. Maybe even two.

But there’s more to it than that. We’ll start with the two main downfalls to retiring in the country, the government bureaucracy and the political instability. Thailand has coups more often than I change my underpants. And good luck if you have to deal with the government for anything. And if the last year is any indication, 100% of all flights either going to or from the country end up crashing.

There’s also the issue with real estate. The country will allow you to own real estate, but it restricts new developments so foreigners can only own a certain amount. It’s still cheap, but often a white guy will end up spending much more than his Thai neighbor for equivalent places. And you don’t have an many rights as an owner than a native would.

Thailand has a special program for retirees that will let you stay in the country if you can prove you have 800,000 Thai Baht in a bank account in the country and 65,000 Baht per month in income. This works out to $31,000 in deposits and $2,500 in monthly income in Canadian Dollars, which I’d hope most retirees can pull off.

Cuba

Don’t laugh guys. Cuba is on the verge of really turning things around. I can feel it. Plus, they recently got a very generous gift from some nice American visitors.

trillion dollar bill

Costa Rica

We won’t spend much time on Costa Rica, since it seems like everybody wants to retire there.

Two of Costa Rica’s major industries are tourism and catering to expat retirees. So the country is gradually evolved from the typical Central American place to something that more resembles the U.S. but further south. This also means U.S. type prices, which takes away a big advantage to retiring in Costa Rica. You’re not saving as much money as 15 years ago, that’s for sure.

Like with Thailand, it’s at least easy to get the proper visa. All you need to prove is a pension of more than $1,000 per month and you’re in. If you’re a little younger, you’ll need to either prove an income of $2,500 per month or make a deposit of $60,000 into a Costa Rican bank. Again, these aren’t hard to accomplish.

Honduras

Honduras saw the number of expats heading down to Costa Rica and decided they wanted in on that sweet action. So they pretty much copied them.

The big advantage is cost. Costa Rica is so popular the country has started to get expensive. Honduras offers many of the same perks for lower costs. You can easily own real estate with no restrictions, and Honduras has pretty much the same visa requirements as its neighbor. If you stick to the Roatan area, you’ll find plenty of people who speak English.

Final thoughts on retirement

To be honest, I don’t really get this whole thing where you move somewhere to retire. If you’ve spent your adult years somewhere, why leave just for the sake of leaving? You’ll abandon your friends, family, and favorite branch of Subway. As far as I’m concerned, you do that kind of stuff when you’re young.

There is one big benefit, and that’s getting away from winter. I can understand why you’d want to do that. So instead of moving somewhere for good, just take a nice three month vacation. You can even switch it up each year. You won’t have to dick around with visas. And then when you come back, you’ll miss your friends. And even if you’re only going to Thailand for the hookers, you can still do that on an extended vacation. Just don’t marry some Thai girl.

Where Should A Canadian Retire In the United States?

It’s part two of the retirement series here at the Financial Uproar blogenin, looking at places to retire in the United States. Part one took a look at the best places to retire in Canada. Part three, coming next week, will look at the best locations around the world to wrap up living. 

Because sometimes, even Canadians gotta retire in the United States. TAKE IT TOBY KEITH BROOKS AND DUN.

Oh, don’t act so shocked country fans. Like Toby Keith and these guys aren’t all the same person. It’s the ultimate long con.

Like with the retiring in Canada post, let’s take a look at some places in the U.S. which might be nice for a Canadian to call home when finally eschewing work for good. We have to factor in things like the cost of real estate, the overall cost of living, access to medical facilities, climate, availability of airports, taxes, and so on.

Many Canadians don’t actually retire in the states. They split their time between Canada in the spring, summer, and early fall, while spending winter somewhere much warmer. As long as they don’t approach 180 days in the States, it’s fine from an immigration point of view. You’d just be a visitor. So we won’t spend a lot of time talking about potential retirement destinations in Duluth, Minnesota, even if the price of housing is reasonable and the people are as non-threatening as vanilla flavored ice cream.

We’ll start things off with a couple destinations in the western part of the U.S., and then follow it up with locations a little more east. After that you’ll go home and this will be over. Oh, you’re already home. WELL SCREW YOU THEN.

Western U.S.

Las Vegas

Ah, the Sin City. The place where the things you do won’t follow you home. Except syphilis. That shit will follow you everywhere.

There are a number of reasons why retiring in Las Vegas is a good idea. You can rent a decent place for $1,000 (all figures USD, because obvs) or buy one for $150,000. It has a busy airport with flights all over the place. Pretty much everything you could ever want for medical care is around. And if you get bored, locals casinos have decent food and gambling specials. Or you can go to the Strip and meet all sorts of different people.

Las Vegas is basically a sauna in the summer but it is quite reasonable between November and February. It might snow once every couple years and dip below freezing once a year, but come on man. You’re Canadian. It’s time to buck up.

Las Vegas does have a sales tax of 8.1%, which is a bit on the high side. It also has a tax of 12% on hotel rooms, so make sure your retirement plans involve getting an actual house or apartment. But the state also has no state income tax, which is nice for residents. As a part-time resident it won’t be much help to you though. Sucker.

Galveston

Galveston, Texas, is just down the road from Houston. The medium-sized city itself is home to about 50,000 people, with another 200,000 living close by. Where Galveston begins and Houston suburbs end is sort of up in the air. Kind of like my sexuality. I’ve said too much.

Galveston has a lot going for it. Its proximity to Houston means access to airports, medical facilities, and anything your old ass might desire. Galveston’s climate is a bit cooler than Houston’s because of its proximity to the water, and plenty of folks from Texas end up retiring there as well. So you’ll have lots of company when you tell the teens to get off your lawn.

House prices are reasonable, with the average being around $180,000. Galveston is less exposed to oil than many other cities in Texas, with tourism, shipping, and health care as the main industries. And if you don’t want to go to Houston for a check-up, Galveston has a medical college with more than 2,500 students. I’m sure at least one of them can identify that strange growth on your junk.

Texas does have a pretty high sales tax, coming in at more than 8%. Property taxes are high as well. Oh, and there is the risk of hurricanes. But other than that, it seems like a decent place in the United States to retire.

Eastern U.S.

Augusta, Georgia

TIGER WOODS SIGHTING? PROBABLY.

You probably don’t know a damn thing about Augusta, Georgia except the annual golf tournament that gets played there. But in reality, it’s a nice medium-sized city with affordable living, good health facilities, and all sorts of neat historical buildings.

It’s downright cheap to live in Augusta. The average house price is just $115,400, and you can easily rent a decent place for $700 per month. It has a diverse economy, with medicine, higher education, and the military being the biggest employers in the area. And if you buy a house, you’ll be able to make bank renting it out for that first week in April.

Of issue is the climate. It regularly dips below freezing in December and January, but usually warms up to well above zero. The airport isn’t huge either, so you’ll be stuck connecting in somewhere like Charlotte if you want to go anywhere. And the sales tax of 8% is a little excessive.

Mobile, Alabama

You might be saying to yourself “Nelson, why isn’t Florida on this list? It’s pretty much retirement central.” Two reasons, mainly. One, it’s getting to be expensive. Unless you’re willing to live in parts of the state nobody really likes, you’re paying a lot. And secondly, they change an assload for property taxes for non-residents. Screw that noise.

Instead, go look at Mobile, Alabama. House prices are super cheap, with an average of just less than $120,000. Property taxes are affordable too, with an average house costing about $80 in property taxes per month. The climate is good, the airport has plenty of flights to hubs like Houston and Atlanta, and hey, you’re right on the water. Enjoy falling asleep on a beach chair old man.

Like with Augusta, Mobile has plenty of history. It also has way more culture that what you’d expect from a medium-sized city in Alabama. There are four major medical centers in the city limits, which is good news for those of us who fall down a lot. The overall economy isn’t particularly strong, but has come a long way from the slow decline of the 1960s through 1980s.

The biggest reason not to retire in Mobile is the sales tax. Alabama itself only charges a 4% tax. Mobile County charges 1.5% and Mobile charges 4.5%. Maybe you’ll want to retire somewhere around Mobile to avoid those taxes.

Oh, and imagine if you lived in a mobile home in Mobile. You’d spend your whole retirement chuckling.

And that’s about it. Anyone else have ideas of places to retire in the U.S.A.? Comment away, yo.

Where To Retire In Canada?

This is the beginning of a three part series. Next week will be part two on where to retire in Murica, and part three will look at international destinations. No, throwing your underpants at me will not make the process go any faster. 

Dammit Grandpa, put a shirt on. I don't care if it's a beach.

Dammit Grandpa, put a shirt on. I don’t care if it’s a beach.

Congratulations, Financial Uproar readers! Not only do you get to show up here twice(!) per week for the hottest of finance takes, but apparently you’re also about to retire. And that was even after you bought pumpkins as an investment the day before Halloween. Enjoy your 4PM dinners and hiking your pants up to your armpits. Naturally, the grandkids will never visit.

So where exactly is a good place to retire in Canada? There’s many different things a potential retiree can look at. They typically care a great deal about weather, because hey, who wants to spend their golden years with their tongue stuck to a metal pole?

But it isn’t just about the weather. Other factors are equally as important, if not moreso. Taxes are one such concern. So is access to medical care. The cost of living is also important. And so is distance to the family. At a minimum, a retiree should be close to a major enough airport to get places.

Once you factor in all those things, pickings are a little slim. But here’s a list of several cities which are pretty good choices to retire in Canada.

Medicine Hat, Alberta

I would like to point out how exceedingly nice it is for me to suggest Medicine Hat as a place to retire in Canada, especially since I have an ex-girlfriend who lives there. If you see her, punch her in the face. Or… maybe just scowl at her. PASSIVE AGGRESSIVENESS FOR THE WIN.

Alberta has some of the lowest provincial income tax rates in Canada, and is the only province without a provincial sales tax. Sure, we’re polluting the world with our dirty oil, but like hell we care about that. GO TO HELL, GREENPEACE. Overall, it’s a fairly low taxed place.

Medicine Hat also has a low cost of living. There are plenty of 2 and 3-bedroom apartments for rent in nice locations for under $1,000 per month. Rent of between $700 and $800 can be had if you’re willing to sacrifice things like a dishwasher and in-suite laundry. The average house price is $285,000, a full $160,000 less than Calgary. There are plenty of decent options on the market for around $200,000.

The Hat (as we locals [I’ve been there more than once] like to call it) also boasts a vibrant college, good hospitals, plenty of employment, and all the big city amenities you could ask for. The only real downfalls are access to an international airport and weather. The eastern part of Southern Alberta is the coldest in the winter and the warmest in the summer. And if you want to go anywhere from Medicine Hat, you’re stuck either flying or driving to Calgary.

Lethbridge is another great choice. It has many of the same benefits of The Hat, with slightly better weather and a marginally bigger airport. It might even be a little cheaper to live in, and it’s closer to Calgary too.

Related: Here are some other places you might want to live in Western Canada

Moncton, New Brunswick

Moncton has a few things really going for it. You can get a house for less than $150,000 (the average price has hovered between $150,000 and $175,000 for years now), the weather isn’t bad from a Canadian point of view, and it also serves as a transportation hub for the maritime region. You might have to connect in Toronto or Montreal, but getting from Moncton to anywhere isn’t hard.

The local economy is relatively strong, with unemployment barely above 5%. Moncton has become a commercial hub for Atlantic Canada, with many companies choosing to put offices in the city. Tourism is also big, and the proximity to ports has attracted a certain amount of manufacturing.

Moncton University is a French-language school (which means WE HATE IT SO), but hey, it exists. And the city’s two hospitals seem pretty decent, employing more than 5,000 people between the two of them. Will the nurses give you a sponge bath? Probably not.

The biggest issue with living in Moncton is the taxes. For the first $40,492 in income you’re paying 9.68%, and then it jumps up to 14.82% on the next $40,493. So if you make $81,000 in New Brunswick, you’re looking at 12.25% in provincial tax. In Alberta, you’d be paying 10% in provincial tax, plus you’d cut the 13% HST to just 5% GST, at least until that bastard Trudeau raises it again to pay for MARIJUANA FOR ALL THE TEENS.

Windsor, Ontario

Windsor is a great place to retire.

Kijiji is littered with decent looking apartments for less than $800 per month and the average house price is still under $200,000. Southern Ontario weather is civilized in the winter, although it gets pretty hot and humid in the summer. The airport really only offers flights to Toronto, but you’re only a half-hour drive away from Detroit’s airport, which will take you pretty much anywhere you need.

Windsor is a nice enough city, although the economy is struggling. Car manufacturing dominates the region, and many of the plants have been shut down or contracted over the past decade. This might start to change with the Canadian Dollar going down, but I wouldn’t hold my breath. Unemployment is quite high, approaching 10%. Oh, and you have Detroit right next door, which automatically makes your city crappier in comparison.

Taxes aren’t bad in Ontario. If you’re making $80,000 per year, you’re paying about 7.1% in provincial tax. You’ve got an 8% provincial sales tax on there too, but I could deal with that if I could get a 30% cut in my provincial taxes.

Niagara Falls, Ontario

Because hey, who doesn’t want to be misted on all the time?

Niagara Falls has many of the same advantages as Windsor. It’s close to a big U.S. airport (Buffalo). Real estate is reasonably priced. Taxes are low. And there’s always the opportunity to meet interesting tourists.

There are a few issues though. The population of both Niagara Falls and Windsor are falling. The economy isn’t great either, on account of fewer people showing up to see the waterfall. Although this might change with a weaker Canadian Dollar. I’m also told folks from Niagara have to go to St. Catherines for decent health care as well.

And hey, Marineland. On second thought, maybe not.

Hamilton

Excuse me as I repeat many of the things I’ve just said about the other two Ontario cities.

Hamilton has a relatively big airport close by, easy access to Toronto, and affordable real estate. The economy isn’t bad, and the city is becoming more popular among the kids. Parts of it are still pretty dumpy, but overall it’s heading in the right direction.

Related: I looked at living in Hamilton (and other eastern Canadian cities) before.

Wrap it up

There are other good places to retire in Canada, but I’m bored so I’ll wrap it up. Feel free to add your input in the comment section. Just don’t say Toronto or Vancouver and not expect to be mocked.