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The longer you wait the greater your pool of money will be and the shorter the time period you will need it for. Build up the portfolio, SS and evaluate again in five years.
The longer you wait, the more likely health problems will crop up and reduce your quality of life, or end your life entirely. The longer you wait, the more government will take of what you earn, and target what you have saved.
Should you live life to the fullest while you have the health to enjoy it, or sell your youth/health for the illusion of greater "security" later on? What choice would be better, if you reflect back from your deathbed?
The personal benefits of working continue to be less and less, as taxes increase and the government benefits more from you working. When the massive Obama tax increases really hit, workers will be nothing more than slaves to an insane government.
You are one of the few who has the option of enjoying life during your 40s. I'd take it, and as soon as we can get out from under the house we're stuck in, we'll join you in living for ourselves--rather than big government.
The biggest risk is if you have never lived in Central America in my opinion. It is actaully little good to vacation in an area and judge what living there is like IMO.
I agree. We'd expect to spend at least a year renting various furnished places in different areas to get a feel for where we feel at home. I spent part of my childhood & young adulthood living in Mexico and my husband, though actually Eastern European, spent his first few years in Peru, so we're pretty familiar and very much enjoy the Latin culture as a whole and have thought of relocating south of the border for many years - although honestly, we know a whole lot less about Central America so there's a steep learning curve there. Ive just finished reading two books - one on relocating to Costa Rica and another on relocating to Guatemala. I also very much want to learn about Honduras.
No, you aren't dreaming. You have a wonderful headstart on potentially living your dream. You have already reduced your financial footprint, and have an interest in faraway places that will let you make the money you have stretch further. I think your dream is meshing with reality very nicely.
As was pointed out, you live on so little that you have enough capital alone to make it work. And of course, there is no reason that if you find something you enjoy doing, that you can't continue to earn money as the years pass to add to what you have already. I'd think of the money already accumlated as an amount available for only the basics of living simply - and if anything was needed beyond that safety net, you need to earn it somehow or do without. The only tradeoff is how much extra could be accumulated if you were to let it grow without drawing it down, of course, and how much more might you need if bad health were to become a concern as you age.
That said, in the situation as you describe it, I would do it. I did it under different circumstances, and have no regrets (other than I wish I could have made "early" earlier). In my case, the point at which we jumped ship with a basic safety net amount in place wasn't chosen because we wanted to "retire" so much as we wanted merely to leave our old profession and lives behind and start the next stage of our life doing something entirely different, so that we wouldn't grow old feeling regrets over things we'd dreamt of but never took a chance on trying.
So maybe for us, it isn't really early retirement in the traditional sense, as we probably work as hard now as we did before, and we do earn money still. It is just that we have a bit of a stipend on which we can rely, and which allowed us to try something totally different in life. Good luck!
Last edited by sugarsugar; 07-18-2010 at 01:10 PM..
The longer you wait, the more likely health problems will crop up and reduce your quality of life, or end your life entirely. The longer you wait, the more government will take of what you earn, and target what you have saved.
Should you live life to the fullest while you have the health to enjoy it, or sell your youth/health for the illusion of greater "security" later on? What choice would be better, if you reflect back from your deathbed?
The personal benefits of working continue to be less and less, as taxes increase and the government benefits more from you working. When the massive Obama tax increases really hit, workers will be nothing more than slaves to an insane government.
You are one of the few who has the option of enjoying life during your 40s. I'd take it, and as soon as we can get out from under the house we're stuck in, we'll join you in living for ourselves--rather than big government.
Thanks for the input. But really, our income taxes are nonexistent because our AGI is so low, we live in Florida which has no state income taxes and things will get better as far as health insurance in 2014, when our income would put us in the group who would see insurance credits.
I do agree that things are way out of whack but my position is that the big corporations (at least in the areas of defense, health, energy and finance) are pulling the strings of the government and they are the ones who are benefiting and getting the cash, not the government (us, essentially), at least from the middle class. The upper classes will be asked to pay more to the government in order to subsidize the middle and lower classes who are no longer earning enough to keep these large corporations growing.
We're not miserable now, but some adventure would be great and if we could pull this off, I think we will have made the right move were we to reflect back later. Of course anything can happen that could change that - there's no security anywhere really. I just dont want to intentionally do anything stupid, which is why the feedback from here is so great.
One thing that frightens me is that I know it has been impossible for me to find a job the past few years and there probably would be no returning here after we left. Teaching (my husband's profession) here no longer has the guarantee of finding a job that it once did. Central America does seem to be growing and becoming wealthier, so my thought is that we could be better off there - whether we find work, start a business or buy property.
In your OP you talked about receiving a substantial inheritance "within the next 20 years". But then in the subsequent discussions you seemed not to be counting on this and very wisely so. There's many a slip twixt the cup and the lip. Unforeseen things can happen, so I would be very nervous about making decisions based on a potential inheritance. It seems you agree, although you didn't address this directly.
In your OP you talked about receiving a substantial inheritance "within the next 20 years". But then in the subsequent discussions you seemed not to be counting on this and very wisely so. There's many a slip twixt the cup and the lip. Unforeseen things can happen, so I would be very nervous about making decisions based on a potential inheritance. It seems you agree, although you didn't address this directly.
Oh, I do agree. $300K of that is life insurance, so that should be okay. But $500K is all in mutual funds and I don't trust that at all - that's why I put $500-$750K tho it's about a total of $800K in today's value. Of course if/as the market does grow, we should be able to keep up with inflation with that portion.
Just taking the 550K without any interest or growth at all and dividing by 30 years, gives you over $1500 a month.
If that's what you want to do, go for it.
Quote:
Originally Posted by fauve
Wow, when you put it like that, it doesnt seem so scary at all - thanks!
Even with only 3% inflation, that $1500/month only has the buying power of $750/month after 24 years. It would be reduced to $750/month in only 18 years with a modest inflation rate of 4%. And you would be in real trouble if inflation really spikes as some economists are predicting based on the massive world-wide government borrowing (read: printing paper money) that has occurred over the past couple of years.
However, given that you're not working now anyway and your household AGI is only $40k, it's not as if you would be burning any bridges to give this a try. Worse comes to worst, you can move back to the States if it doesn't work out or if early retirement overseas isn't everything that you thought it would be.
And that money for life includes the United States if things don't work out
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The Inheritance
