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Old 04-18-2014, 12:10 PM
 
Location: Olympus Mons, Mars
5,001 posts, read 8,071,689 times
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What is the least amount of money needed to retire at 50? In the US and also anywhere in the rest of the world (Ecuador, Thailand etc.)

I was thinking $300,000 should cut it if one retires in a cheap country such as India...for example, interest rates in India are 9% per year. $300,000 in the bank will generate about INR 1,620,000/yr worth of interest or INR 135,000/month. Would have to move all the money to that country though.

One can live a pretty comfortable life in Bangalore city (a place that I like) for around INR 40,000/month or so which is only 1/3rd of the interest that you're earning, pretty doable.

I'm sure there are other places in the world as well that compute this way.

After 65 social security also kicks in so that would be supplemental.
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Old 04-18-2014, 01:13 PM
 
Location: The Couve
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I really think you need 3 or 4 times the amount you quote to insure a very modest standard of living in a developing country. (Oddly I have extensively researched Thailand, Ecuador and Mexico as early retirement destinations and find promise and good things about all 3. I think i do have my magic number to head off to one of those places and I am 51). The only thing holding me back is the unknown. I don't want to leave the US until I have the funds to insure I can return if my chosen "promised lands" don't have grass as green as I imagine and that number always seems to increase. All of my planning has been with the idea of leaving my money here. Taking you nest egg abroad and putting it all in third world banks seems too risky to me.
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Old 04-18-2014, 02:57 PM
 
Location: San Francisco
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Quote:
Originally Posted by k374 View Post
interest rates in India are 9% per year.
The problem is, so is India's inflation rate. If it stays that high, then in 10 years' time, your monthly interest income would only be worth half as much as it is today.
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Old 04-18-2014, 04:32 PM
 
Location: Olympus Mons, Mars
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3 to 4 times that is $1.2 million. Even most people retiring in the US do not currently have nor will that ever be able to accumulate that much money in their lifetimes given average incomes and cost of living. Remember also that the stock market has become highly volatile and so has the real estate market. It's also becoming exceptionally difficult to get into real estate in many cities because the cost of homes has skyrocketed.
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Old 04-18-2014, 05:57 PM
 
Location: Tucson, AZ
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Retire at 50? Sure, if you have your own well funded lifetime income stream and access to an affordable health care plan. Do you have a guaranteed pension that kicks in immediately at age 50 that includes a health care plan? If so, it might be feasible.

$300K by itself doesn't cut it at age 50 because you are cutting yourself off from getting much from Social Security in the future. You will have a whole bunch of "zero income years" for calculation of SS, which really cuts down what you are ever likely to collect. You need 35 good income years to get a good SS payout at full retirement age (which will be 67 for you). If you don't have any other guaranteed pension or a good SS payout lined up, $300K for the rest of your life is not much. Even if you could find a secure way to get 5% return on that amount (which I don't know of) it adds up to just $15K per year, poverty line in the US.

I've traveled to and lived in many countries outside the US. If you really want to live outside the USA for the cultural experience and change of pace, great, go for it. Leave the USA just for lower cost of living? If you add up everything, and add up the cost of the "trade offs" or "downsides or risks", many places outside the USA are really not so inexpensive. There are many places in the US outside the large metros that are very affordable and compete in true overall COL with many of the so called bargain retirement countries, and you don't have as many downsides or risks.
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Old 04-18-2014, 06:02 PM
 
Location: The Couve
164 posts, read 180,696 times
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There are no easy ways out. If you are healthy and looking at an average lifespan you can expect to live another 32/33 years. You don't want to be old and broke no matter where you live. Saving is also only part of the equation too. If you keep working, even if you aren't able to save much then at least your nest egg won't have to last as long. There is just way too much uncertainty (for me) over the next 33 years to think that $300,000 is enough to stop working at 50. Too many potential curve balls. Bummer for you (and me too). I am going to slave away for a few more years to hopefully insure a little comfort for the last leg of my journey.

I was typing away while recycled got his post in. Lots of good points there too. US has lots of low cost areas where you will also have the ability to pick up part time work if your health allows. Check out Albuquerque, Sun City (AZ), Rio Grande Valley (TX).
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Old 04-18-2014, 08:59 PM
 
159 posts, read 101,327 times
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Quote:
Originally Posted by k374 View Post
What is the least amount of money needed to retire at 50? In the US and also anywhere in the rest of the world (Ecuador, Thailand etc.)

I was thinking $300,000 should cut it if one retires in a cheap country such as India...for example, interest rates in India are 9% per year. $300,000 in the bank will generate about INR 1,620,000/yr worth of interest or INR 135,000/month. Would have to move all the money to that country though.

One can live a pretty comfortable life in Bangalore city (a place that I like) for around INR 40,000/month or so which is only 1/3rd of the interest that you're earning, pretty doable.

I'm sure there are other places in the world as well that compute this way.

After 65 social security also kicks in so that would be supplemental.
At 50, you expect to retire after the Trust Fund is exhausted - in a good economy. The SSA projects that the system will distribute 75% of its scheduled benefits - that assumes that if workers contribute 12.4% of their wages. No one knows how the 25% reduction will be distributed. So you may get more or less depending upon how the allocation works.

That all assumes a good economy and patient workers.
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