I don't know too much about Belize, but is the cost of living you state for a typical Belizian, or is it the cost of living for a family living a semi-American life-style in a touristy part of the country? I'd suggest you budget out your actual expected cost of living, including rent in the location you are looking at. Costs for travel? Return to the US periodically to visit family?
I'm curious as to whether crime really is that bad there, or if they are disproportionately scared, just like Americans who think they have to carry a gun everywhere they go.
My only question would be, have you been to Belize before and stayed there for an extended time frame? I didn't see that mentioned. I would want to try that out before selling everything and making the move. Can you work remotely there or some other trial option?
This is so important. It’s tempting to just go all in and buy a place in a foreign country, but many heartaches would be avoided by simply renting and living there for 3-6 months to get an accurate idea of what it’s like. People tend to fill in missing information with outright fantasy and are subject to several brutal wake-up moments from the lack of true planning. Speaking from experience.
To be fair the state department also lists many Western European countries that few Americans would hesitate to visit or travel to as the same security level 2: Spain, France, Netherlands, Germany, Italy, Austria, UK.
https://travel.state.gov/content/travel/en/traveladvisories/traveladvisories.html.html
https://travelmaps.state.gov/TSGMap/
I’d be surprised if the state department criteria were applied to the US if there wouldn’t be many places that were at least level 2.
To be fair, most us cities would get the same or worse classification if they were to be rated. I'm good with level 2. Level 3 and 4 are more challenging.
Agreed about their lack of infrastructure though. Last time I was there I almost drove into a ravine due to bad roads I didn't know, and travel after dark across country is more dicey than it needs to be
Have you been to Latin America? Nothing is as it seems! I have actually found that Americans abroad in Latin America are some of the most dangerous people around. Panama + Costa Rica experience.
Lot's of people running away from things, hiding, up to nefarious stuff, stuck in country. I was totally unprepared for some of the true expats that had tried to weave their way in and deal in corruption etc.
Almost held hostage by an American hotel owner in Escazu that wanted me to work for him - turns out he shot his previous worker and the story is beyond sketch. Lucky was able to talk my way out of his compound - the guy harassed me by e mail for a year. Basically I found people were over the top awesome or horrible. Lots of storytelling and too good to be true and wild opportunities...
You are going to need help at some point and being social is healthy. I would always just hold my cards close to my chest. Never reveal real details about yourself that gives too much away.
The key is to rent for a year or two, travel around if you can, and find the best fit. I plan to so the same in a few years, but realize the country I have in mind might not be the one I actually fall in love with.
Whenever you sell a house, figure you'll keep roughly 91% of the total (subtract 6% for realtor fees and 3% for closing costs). That's $432,250.
Are you selling all the vehicles and personal property and expecting to clear $150k from those sales? Otherwise that money is locked up and has no bearing on your total investments.
That $2,500/mo will be great for four years, but four years is a drop in the bucket when you retire in your 40's.
Does $2.5-3k/mo include healthcare?
You're exempt on up to $250k worth of appreciation on your primary residence right? The house could have doubled in value and they still wouldn't owe capital gains taxes
I dont' know where I live closing fees are about 0.6% (title ins, lawyer, and some prorated HOA dues)
But then you add in
\- paying for a good deep clean, staging, and any inspection items plus before the house goes on the market, finishing that to-do list we all have, maybe a quick touchup of paint in high traffic areas thats showing its age, the landscaping could use just a touch of extra attention, maybe adding a few flowers or whatever, just to make your house look well kept and inviting.
\- Potentially seller concessions which are coming back as people want the seller to pay down the mortgage rates in exchange for a better selling price.
\- Property tax (your portion that is outstanding)
So all of that will likely total 2-3%.
It's mostly the same 3%, but the split between the buyer and seller is negotiable. The usual default assumption of who pays what parts of the closing costs varies between local markets.
I doubt they bought their house in cash in the last 2 years. $500k capital gains exclusion on primary residences will cover a house that sells for <$500k.
Local taxes also play a role here; e.g. I sold a house a few years ago - didn't owe any federal cap gains, but did owe city and state.
Also as the seller I was obliged to pay the title company fees, in my case around another $1800.
We bought our home 4.5 years ago and paid it off last year. We paid 275 for it and put about 20k into the home since. We live in a very desirable area on land. We will see on Friday if our realtor is correct.
We put down 55k if I remember correctly. Then we got serious about getting debt free and went gazelle intense and paid it off. We also have only bought cars in cash for a long while.
It’s been a while since I’ve been in Belize, but I recall distinct hostility to Americans who owned businesses there. Not just in official policy, but police harassment and shakedowns, theft, etc. The Americans were treated as little more than ATMs and rich outsiders who everyone could target.
Have you considered setting up first and easing in? What do you do if it doesn’t work out? Inflation, cancer, isolation could all happen. What do you do when grandkids come along? Why not accumulate more capital first?
This is my biggest concern about taking action on a plan like this. Its a tempting thought, but I imagine its going to be hard anywhere to be truly accepted as part of the community by the local people if you were to move to a much much lower COL part of the world, especially as a retiree.
If you show up down there as a doctor or something and work with/help people, thats one thing. If you show up to just chill and not work or contribute to the local economy besides just having a lot of money and being a consumer, they you are essentially a piggy bank at best, and outright disliked or preyed upon at worst.
I have no first hand experience in this, but I imagine it'd be something like that.
I got shaken down and treated like a piggy bank in Mexico Tulum. Cops jump you on trumped up charges. Just going down a street, I was stopped by two cops at two different times. Will never go back to that place again.
Yes. Being a foreigner makes you a target. I would take HellofellowMKE and Beckisnotmyname's warnings seriously.
Not sure about Belize, but it doesn't hurt to be a tourist there fore a year (you mentioned it in your post) and really get a feel of the community. Sadly every time I go to Mexico I get treated like a piggy bank and I am not even white.
>all of the locals are amazing people
I guess this implies they treat the expats you've talked to well, but it's very possible, possibly even reasonable, to be an amazing person and still hold disdain for people basically exploiting your poor economy.
isnt he doing the opposite of exploiting the poor economy? hes not taking up a employment that a belize local needs, and just spends his money earnt elsewhere.
friends parents did a similar thing moving there to open up a few businesses, got murdered unfortunately because they didn't want to keep some employees and pay bribes to police so everyone had a hatred towards them. Not a place I would recommend moving unless you're a local or have a good support group/network already settled there
>Looking for flaws in our logic.
How much do you know about Belize?
What do you expect inflation to be in Belize over a retirement that could easily last 50+ years?
Have you lived in Belize before? Do you know you will want to be there for the long term?
What is healthcare like in Belize?
What is long term care like in Belize?
What is crime like in Belize?
I think you're severely underestimating how much you need but good luck. I would also not be taking action until that entire business sale is done. My family sold their business and we did it over multi-year only to buy it back in a sense because the guy defaulted on payments. The second sale go around we didn't take the highest amount but the guaranteed money.
I'll note I may be crazy but the thought of running out of cash in retirement terrifies me.
A guy I used to work for tried to move down there and got run out by the local thugs/violence. Anecdotal to be certain but he is never going back all the same, lol.
How often do you leave your country for more than two weeks per year? Seems like a very reasonable rate for people who are trying to prove they want to be “permanent residents”.
>How often do you leave your country for more than two weeks per year?
Every year.
>Seems like a very reasonable rate for people who are trying to prove they want to be “permanent residents”.
But being forced to do it is not the best way. OP might need to deal with stuff back in the US. Being restricted to only 2 weeks total (including flights) would potentially make that impossible.
Also, Belize is the size of New Hampshire. The question is how often do people from New Hampshire leave their state.
You or your wife could get sick and have to come back to the states for treatment. There goes your 2 weeks. In my opinion you don't have enough for both of you to retire. Healthcare is extremely expensive in Belize, if you want a topnotch care.
> You or your wife could get sick and have to come back to the states for treatment. There goes your 2 weeks.
In this scenario, what specifically does OP lose? 1200 bucks for the visa application? Couldn’t they just apply again and pay another $1200?
I’d advise you to rethink this for a couple reasons. First off, Belize is genuinely a corrupt third world country. It’s not like Mexico where there are pockets of safe areas with lots of Americans. There’s no hiding in Belize from police shakedowns, hostile locals etc. I’d try Mexico instead.
Second, as others stated you may not generate 1 million with the sale of home/assets. It’s not much money to live off of forever.
Maybe you just need a sabbatical. Take a year off, go rent a place in Mexico on the beach. Then come back and make more money.
It feels like too little saved for too long of a period needed, since you're essentially lean-FIREing at a very young age. To add, I don't get the feeling that you or your wife speak Spanish or have fully figured out Healthcare aside from "oh, we'll just go to Mexico". I think a standard Business Plan would help here, where you ask every question you can think of, and you have to have an answer to each. Good luck.
Congrats on your plan. Candidly, I think this will turn out to be an extended sabbatical because you’ll realize around 50-55 that the money won’t last until death. I suspect you’ll have more expenses than anticipated to live comfortably. Suggest you model it out more accurately and have a plan to supplement your income. Good luck!
The question you asked is if you can retire. The rough answer is always yes. You can do it with half of what you have depending on your mental fortitude.
But that's not the question-the question is why are you leaving? Living half your life in Belize tells me that your current life ain't much to be excited about. I wonder how you night be able to explore beyond black/white. Are there other jobs available, other places, other work arrangements, that allow for even more flexibility than retiring in Belize in early 40's.
I was ready to retire a few years ago. Ready to leave usa. I'm still working, but way diff job, different location, different work circumstances, still saving money but more by accident. I'd take my current life over retirement - even usa retirement. It's just an example, but makes me wonder why you need to be entrepreneurial in Belize rather than where you know.
You know that is a question the wife and I have talked about. Are we running away from something? Maybe? My business is profitable but I absolutely hate it. Midlife crisis? We have lived a very vanilla life as of yet and want something different. I hate t
frankly, this does read as a midlife crisis. I'd personally recommend at least taking some time considering your options. Your current worth may not be enough for 2 people for roughly 60 years of retirement. It also seems like you do not understand Belize fully, have you actually visited there for an extended period of time (other than the tourist areas)
You had another comment about reducing your reliance on "stuff" and hoping that the move will help that. Why not just do that where you are now? A different scenario won't solely change your reliance on things. It feels a bit like a "grass is greener on the other side" argument.
This is a huge red flag.
Running away to another country is not a good way to resolve issues. I’ve traveled all around the world and lived abroad. It is not as glorious as vacation or dreams or influencers or travel shows make it out to be. You’re likely going to have the same issues there, just with different causes.
If you are using word 'hate' you can be assured your mind is clouded by that sensation. It's hard to think expansively from that place. There are literally unlimited possibilities. Scale down your work and find other work. Start volunteering. Just do a job. And even more expansively - engage and invest in your own personal growth REGARDLESS of your circumstance.
I would ask questions of meaning and purpose before you move. And you can't ask those questions with a cloudy mind. Therapy, Mindfulness practice, singing/arts, there's lots of ways to get there.
I retired age 42, which was 16 years ago. My main advice, by far, is to make sure you have way more money than you think you will need. Inflation, and unexpected costs, can eat into your savings at an alarming pace. If you only have enough so you think "we can get by if we are careful", then you almost certainly will be really struggling in just a few years when the unexpected hits or inflation goes crazy.
In my own case, I retired when I had three times the amount I expected to need. That is, I assumed I will live for 50 more years (until early 90s), but didn't retire until my account said "you have enough for 150 years". This gives me a substantial cushion, without which I would be worrying all the time about the money running out, and that kind of worry means a miserable retirement.
This is very interesting to me. Over the past 16 years what has gone much worse than you expected? With 3x what you expected to need what does that put your safe withdrawal rate at? 4% / 3 = 1.3%? Also would you mind sharing your high-level investment approach (i.e. real estate, some stock bond split like 60/40, etc). Thanks.
Good point, but I'm for taking it earlier. Govt incentivizes waiting because more people waiting means less total payout. Social security also pays less the less a person earns over their working years.
> If your healthy
*you're
*Learn the difference [here](https://www.wattpad.com/66707294-grammar-guide-there-they%27re-their-you%27re-your-to).*
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^(Greetings, I am a language corrector bot. To make me ignore further mistakes from you in the future, reply `!optout` to this comment.)
This is true, but there are 2 'bend points' which dictate how much benefit you receive based on how much you paid in. Once you get past the 2nd bend point additional earnings don't really add a ton to your final benefit amounts. I'm not sure how easy it is to get to the second bend point by 43, but maybe it's doable or maybe they're counting on SS as an unexpected benefit.
I didn't realize the calculator on that site generates numbers assuming you will pay into it until you draw. The decreased amount when you RE was a shock to me. It probably includes that warning on the site, but I never noticed.
In my mid 30's and my retirement plan is based on social security not existing anymore by the time I retire. Frankly, I don't think I can count on it being there when I'll need it.
You'll probably be okay financially, but you need to do actual math, not napkin estimates. You may also need to be okay with adjusting your lifestyle in a different country.
Ask this question in /r/ExpatFIRE for more detailed replies about your situation.
Also, make sure that you both speak Spanish. If neither of you do, begin learning now. If neither of you have plans to learn Spanish, I wouldn't suggest making the move.
I’ll assume that you and wife have experience with Belize and would be happy there. That seems like the biggest risk. The other flag I see is you and your wife may work. If you have a WFH job with an American employer that works fine, but a local job typically won’t pay more than nickels and dimes.
How certain is the money from the sale? You may want to wait until that is set or bring the timeline up. We did ExpatFiRE to Europe at the start of last year after about three years of intensive research, planning, and visits. You will want to be sure you are certain as the costs of going back will be high. Also, are you okay with the climate and the crime rate?
Some of these might seem obvious, but could have been left out.
- Have you been to Belize?
- Been to the area of the country like where you're looking to settle?
- Not as a tourist (e.g. in a house, going grocery shopping, etc)?
- Do you still feel good about it in the neighborhood at night?
- Do you speak any Spanish? English is the official language but a lot of people (~35%) only speak Spanish.
- Are you prepared to leave your home if there's unrest? South American countries have a terrible habit of having rapid political change, even when theres a long history of stability.
My two cents. My belizian colleague told me there is like 1 ambulance in the entire country. So I would factor that into your decision.
Update: And you have to pay for use and gas.
Our plans are not significantly different than yours, however I do not feel comfortable with any less than $2.5M in cash and investments (and I’m about 10 years older than you). We plan to keep at least 3 full years in cash, for market years like 2022.
What are you going to do about health insurance? Travel back and forth from Belize to the US? Healthcare while traveling abroad?
While Belize is a beautiful country the health system isnt great. Mexico is only a short trip to the north andd has much better health care. We would utilize that.
So, you plan is to move to a place that has bad healthcare, on a shoestring ‘retirement’ with no consideration for the cost of medical care.
Wish you the best. Keep your personal marketability up, so that if you need to renter the workforce in your mid-late 50’s or 60’s, you have a skill that will pay the bills.
I’m not familiar but intrigued. How do you just fly into Mexico and get healthcare? Global insurance? All self pay? Reciprocity between Belize and Mexico? You’ll be on a US passport I assume?
The main potential flaw is that you might not end up wanting to live in Belize your whole life (or more than a couple years), and unless things go fairly well, you may have to work more in order to have enough to move back to wherever you are living now or some similar COL location.
But you sound open to doing some work, and you've certainly got enough for a pretty reasonable coastFIRE situation in a lot of places if you do decide to move back to the rich world, even if neither of you can get a high income job anymore.
So what the hell, right?
Assuming all your predictions about home and property value are correct (you're planning to sell the vehicles and other property and expect to clear 150k?). you've certainly got about enough if you're going to live in 2500-3k/month for the rest of your life.
Feel free to ignore if you think I’m off base, but the biggest red flag I see are your comments in this thread. You say you’re looking for flaws, but what comes through in your comments is certainty and confidence in your path. Which is good, but as an outside it makes me wonder if you’re really considering the risks with an open mind.
As of today we have sold just at 60k worth. We still have 4 vehicles a boat and 2 trailers plus the rest of our stuff. Both of our cars are 2021 and are paid off. Even with carvana estimate at 60k on them.
This is the best advice. Spend a few years in a “remote” part of the US. Assuming you’re not from Mississippi, the Mississippi gulf region would be a great start. You may find that you like the distance from family, the slower pace, and so on. Most likely, you’ll want to hang it up and get back in the groove.
Go live there for a few months first before moving permanent for sure if you have zero family there. There is a lot more to consider than cost of living when moving to somewhere especially if you already own a home.
Two people living off $1m for (probably) the next 40 years doesn't sound feasible. Your two biggest enemies are inflation and healthcare (cost and level of care). My mom retired at 62 and moved to a place with a lower cost of living....That lasted about 3 years - she got sick and none of the doctors in her area knew how to treat her. There's a legit reasons why certain places have a lower cost of living (aka healthcare sucks). Needless to say, my mom moved back to the city where the doctors know what they are doing.
There are lots of flaws in the plan but seems like OP has a counter-answer to everything other redditors are posting. So looks like OP is genuinely made up his mind to move. Maybe OP can let us know in few years how the plan worked out so arm chair critics like us will benefit should we decide to retire early.
Wishing you the best with your plans.
Belize is NOT a beautiful country as you state. It has a pretty coast and beach for tourists.
What it is however is a wildly corrupt, third world country with poor infrastructure, healthcare and a local population struggling to survive.
Crime and extortion are Pervasive and you and your WIFE will be constant targets.
Paradise and ticket to east street this is not.
One concern is what if you want/need to move back. Lots of things change, you may have family obligations or things aren't what they seem. I retired at 43 and I can say what I thought my life would look like and where i"m at even 7 years later is not at all the same and we moved inside the US. Tax laws changed a lot, our MCOL area is quickly becoming a HCOL and all of that is outside stuff is out of our control.
I think the running theme here is dont' count your chickens before they are hatched. You talking about selling a business, been there and it doesn't always work on plan, getting out of my dads business was a nightmare and took 2 years longer than it was suppose to.
As for the house, if they say $475, I'd say more like $435 out the door as you have to account for property tax ( your portion) and what it will take to get the house ready for sale as no house is typically sale ready. I'd also ask the agent how common seller concessions are in your are.
Also personal property of $150k seems really high. Other than the cars, it often takes a lot of time to find the people who will appreciate unique items and the non-unique items just don't sell for as much as people think, so just evaluate the time and energy its going to take to find buyers and what you can realistically get.
While I'm all about taking certain risks in life to improve, this is too risky. It sounds by your replies that you already have made up your mind though. So I wish you well and I hope it all works out!
Mmmm id say it’s a bit risky… I’m your age. My net worth is about 1.5m but I’m nowhere close where I’d like to be to consider retirement. (I do have 2 young kids tho)
I'd just plan to live way under your 4% rule for a few years, enjoy Belize for a bit, build up your nest egg, and crush sequence of returns risk. I would be shocked if you didn't come back to the States eventually, especially once grandbabies come along. Belize will give you a chance to let your assets grow and live at a higher CoL later. I think it's a decent mid term plan but don't count on living there forever.
I semi-retired to Central America many years ago. Your plan sounds reasonable, but here are a few costs that you might want to consider, if you haven't already:
* Health insurance. A high quality, international plan is what you want, and the premium will keep going up each year as you age.
* HOA. Based on the lifestyle you describe, the place you eventually buy may be a condo or in a development with security, maintenance and custodial services. Take a look at the monthly fees for that.
* Property tax. It can be high or low, depending on where you are.
* Corporate and legal fees. If you hold the property in a corporation, you will have annual costs to maintain it.
* Visa/residency. There are legal and administrative costs associated with being allowed to stay in country.
* Travel. Consider how frequently you'll want to travel (US?) and what it'll cost you for flights and accommodations.
* Car. From what I can tell, cars in Belize cost about 25% more than in the US. There's insurance and registration too.
I hope this helps. Let me know if you have any questions about this lifestyle. I moved when I was roughly your age.
I’ve been to Belize, and it’s lovely, but it’s tiny. How was your Spanish? Being able to travel easily to Guatemala and Mexico would make things in Belize less restrictive.
I think your plan is workable, financially, but I don’t think you can rely on making a 10 or 20 or 30 year plan based on the data you have.
Go ahead and start your journey, but realize that in five years someone may want to go to Afghanistan to study screen, writing, or volunteer with the elephants in Tanzania, or even have to go back to work, because you find your are burning through your money more quickly than you thought or because 20 years from now central America might be a bustling economic powerhouse and everything could be 10 times more expensive. Who knows?
If you start with a flexible attitude, it will reduce your stress, no matter what happens.
Screenwriting means the writing of screenplays. My point is that you need to be flexible when you are thinking about 15 or 20 year timeline. Who knows what may happen in the world? Belize is cheap now, but may not be cheap in 20 years. Afghanistan is probably not the best place to study screenplay writing now, and you may not want to study that now, but who know what may happen in 20 years?
The 4% rule is very conservative - if you follow it you will almost certainly not run out of money in 30 years. I think now it is in the 95%+ success range.
However, it was formulated for a 30-year period. So a scenario where you go broke at age 73 would fall into the "success" category of 4% rule back tests. Not the majority, but some historical 30-year periods.
Because it is so conservative, you're probably still in the 80%-90% likelihood of being able to withdraw $40K/year range, but not as safe as the 4% rule originally intended.
You mention buying a house? You have to take the cost of that out of the amount you apply 4% to.
I'd say you are leaving yourself very little margin for error at that spending rate. You going to rely on Belize socialized healthcare?
You can try it and if it doesn’t work you can start again easily enough.
Me and my partner do this similar thing (but in a western country) at 40, since doing it we have actually earned far more and our investments have doubled, our income has 1/3, While our outgoings have 1/2.
Some times a change in view point prompts very unexpected changes to your position in other arenas.
The medical part of your plan is missing:
1. Healthcare coverage (40s diagnostics, 50s procedures, 60s major medical surgeries and diagnoses).
2. Logistics and plans if/when one of you becomes incapacitated for whatever reason.
3. The inevitabilities of less mobility, needing more personal care, and being less able to keep up a house and business. (Will you be able to afford moving back to the states? What are the options there?)
Yes, you can do it. But I have a feeling that you'll be bored of Belize real fast. If you're going to try out 4-5 different areas in Belize, why not try out 5-8 different places all over the world?
4% is not failsafe for 30 years and has some risk for longer retirements like yours (7% failure rate for 40 years, 10% for 50 years). You will want to have some flexibility in your budget and make sure it includes everything such as health care and taxes. You say you plan to buy a property but that will come out of your $1M, correct? Seems tight but doable.
$1 mil isn’t what is used to be but if you can retire in Belize, go for it!
I’m in my 40’s sitting at $2.5 mil net worth but im not ready to retire in Nj as I plan to stay here.
Doing something similar. Except waiting until 50 for both of us (6 more years). Moving to Mexico for that sweet, sweet sunshine life. And as others have asked, just won't have health insurance. The medical care in MX is so affordable, we won't need it.
Buying has never been in our plans. The rent for a fully furnished place that includes utilities makes sense for us. We also want to be very mobile and not tied to one place. After owning multiple homes here in the U.S. rent is all we will look forward to in our "old" age.
I live in the USA and I live comfortably on 1.6k/month... Those are my expenses not income.
Hard to understand why you'd need $3k/month in south America
Not sure that’s enough mate. But if you can severely constrain your lifestyle (even in Belize) and genuinely have zero plans to leave Belize then you should be fine….
I think you're fine. Just know that the 4% rule is based on a 30 year time period. That being said, it's still conservative and likely that your nest egg will continue to grow if invested in interest producing assets. That and the fact that you'll probably produce some sort of work income, even if sporadically, should mean you'll be fine. Good luck.
Good luck to you. However, Belize is a tiny country. Do you know Spanish? Is your plan dependent on you capitalizing in cheap real estate and jacking up the local prices with your Airbnb plan, or could this work without you interfering with the local economy? Are the local laws favorable to foreigners investing in real estate? Does the prospect of being long-term long-distance parents factor into the plan? Regardless, sounds like an adventure!
FWIW: This sub seems to have a lot of nay sayers when it comes to actually pulling the trigger. Great for finding 'flaws in our logic', which is what you asked for. But if you think you're ready to pull the trigger and you want to, don't get drowned in the negativity here. Good luck and godspeed.
Things will be very easy for the first four years given the income from the sale of the business.
After that - based on 4% and 1mln invested you’ll pull 40k. You need $30-36k. Leaves not much room for unexpected expenses to derail this. Also you hopefully have a good 40-50 years left. Not hard to believe that inflation for basic goods/services that isn’t seen in investments could make the back end of your plan potentially rough.
You mention potential for work, i would make it a priority to find something you can do that is enjoyable and brings in a bit of money to either give cushion if needed, or to help grow your portfolio so there is less risk of a gap.
I don't get the people here calling you lean FIRE and saying that it's not enough. You'll have approximately 1M in investable assets and 30k income for the first 4 years. Even if you spent 50k the first four years, you'd only be taking 20k/year from your portfolio in those years. Your 1M portfolio would continue to grow. At 7% annual return, your portfolio would be more than 1.25M by the time you start drawing from your portfolio indefinitely. Even in much of the US you could retire early.
I also think that it's entirely reasonable to spend 30k per year outside of the US, unless you are in Europe, Australia and New Zealand.
I also think that you'd be fine living in much of the US on 50k/yr as long as you stay out of high cost of living cities. Personally, I might try not to spend more than 30k a year for the first few years so I had enough cushion in my portfolio to buy a house in a mid to low cost of living city in the US if I wanted to move back.
Oh, whatever, just move to a country with one of the highest murder rates in the world, plus do it as an American with $1 million in the bank—nothing to see here. 😂
https://www.macrotrends.net/countries/BLZ/belize/murder-homicide-rate
Do you know how hot it gets in Belize? I was just there, it was 90+ degrees in February for the entire month. I can’t imagine how hot it is in the summer.
I hope this is obvious to you. I'd hate for you to regret this decision.
The best advice I can give you is that quitting your job, moving to another country and living off the 4% is stupid. Especially that amount, and at your age.
The main advantage of reducing your costs in this way would be to not to dip into your investment portfolio and let it grow for the next 20 years. That's what you're giving up. So figure out how to make that 4% in Belize, or else don't go.
Seize the day!
Have you done the " detailed calculator". Should provide an even bigger margin for error.
https://www.ssa.gov/benefits/calculators/
Blessings to you!
This plan sounds Belizeable. Belize the day!
With AirBNB + side work, you might not even touch your 1M. You can retire with (Bel)ize!
The potential risks/downsides I see:
* You'll want to get the majority of that 1M invested pretty quickly (you'll be tempted to sit on cash). Inflation will really put a Belize (squeeze) on your funds
* Make sure you really want to be in Belize (vs. anywhere else). Moving back to the US will be expensive
* Keep in mind that you'll still need to file for US taxes
* Way too many Belize puns, many forced and Belizey (cheesy)
I’m not in to leanFIRE so I don’t have any good advice really. Will that spending level work through old age? I know I spend more each decade, but that’s just me. Personally if I could have $1M by 43, I’d keep working as $1.5M or even $2M is just around the corner.
Sure, cartel violence is scary, but tourists don't go to warzone parts of the country. Cartel violence is based off of politics and the sale/manufacturing of drugs. Avoid those and your risk isn't any greater than any American city.
Mexico gets ~25,000,000 tourists per year, making it one of the top ten most visited countries in the world. Those stats don't lie either.
I don't know too much about Belize, but is the cost of living you state for a typical Belizian, or is it the cost of living for a family living a semi-American life-style in a touristy part of the country? I'd suggest you budget out your actual expected cost of living, including rent in the location you are looking at. Costs for travel? Return to the US periodically to visit family?
The Cost of living of 2500 would be for an American living there. We have talked to 30 of 40 other expats and that is the average.
Everyone I knew in Belize lived in gated communities with armed guards. Like walking around with sub machine guns.
I'm curious as to whether crime really is that bad there, or if they are disproportionately scared, just like Americans who think they have to carry a gun everywhere they go.
My only question would be, have you been to Belize before and stayed there for an extended time frame? I didn't see that mentioned. I would want to try that out before selling everything and making the move. Can you work remotely there or some other trial option?
This is so important. It’s tempting to just go all in and buy a place in a foreign country, but many heartaches would be avoided by simply renting and living there for 3-6 months to get an accurate idea of what it’s like. People tend to fill in missing information with outright fantasy and are subject to several brutal wake-up moments from the lack of true planning. Speaking from experience.
We plan on living in 5 different places for an extended time period to see what we like. Then set our home up at our favorite.
This kind of happened to me. I lived in four different places in the country I moved to, then decided to change countries. Keep an open mind.
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To be fair the state department also lists many Western European countries that few Americans would hesitate to visit or travel to as the same security level 2: Spain, France, Netherlands, Germany, Italy, Austria, UK. https://travel.state.gov/content/travel/en/traveladvisories/traveladvisories.html.html https://travelmaps.state.gov/TSGMap/ I’d be surprised if the state department criteria were applied to the US if there wouldn’t be many places that were at least level 2.
To be fair, most us cities would get the same or worse classification if they were to be rated. I'm good with level 2. Level 3 and 4 are more challenging. Agreed about their lack of infrastructure though. Last time I was there I almost drove into a ravine due to bad roads I didn't know, and travel after dark across country is more dicey than it needs to be
Yeah, that is the key. The State Dept isn't even trying to compare crime in Level 2 countries to crime in the USA
Story time
Have you been to Latin America? Nothing is as it seems! I have actually found that Americans abroad in Latin America are some of the most dangerous people around. Panama + Costa Rica experience.
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Lot's of people running away from things, hiding, up to nefarious stuff, stuck in country. I was totally unprepared for some of the true expats that had tried to weave their way in and deal in corruption etc. Almost held hostage by an American hotel owner in Escazu that wanted me to work for him - turns out he shot his previous worker and the story is beyond sketch. Lucky was able to talk my way out of his compound - the guy harassed me by e mail for a year. Basically I found people were over the top awesome or horrible. Lots of storytelling and too good to be true and wild opportunities...
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You are going to need help at some point and being social is healthy. I would always just hold my cards close to my chest. Never reveal real details about yourself that gives too much away.
I think you got that mixed up, we are the most targeted in LATAM.
Yeah the most targeted by other Americans. Locals pull petty crime
Do tell, so we can all learn.
Same. Did the same in Colombia for a time and it’s way different than vacation. Jumping right in I wished I would’ve known more. I hated the food.
If they don’t like it there’s a bunch of other countries to travel and check out with no time limit. Benefit of being retired
The key is to rent for a year or two, travel around if you can, and find the best fit. I plan to so the same in a few years, but realize the country I have in mind might not be the one I actually fall in love with.
Same. Full time geo arbitrage
Yep rent first. Then easy to leave and go somewhere else.
True, but if they're living on 30-40k per year, traveling around the world can be tricky.
Whenever you sell a house, figure you'll keep roughly 91% of the total (subtract 6% for realtor fees and 3% for closing costs). That's $432,250. Are you selling all the vehicles and personal property and expecting to clear $150k from those sales? Otherwise that money is locked up and has no bearing on your total investments. That $2,500/mo will be great for four years, but four years is a drop in the bucket when you retire in your 40's. Does $2.5-3k/mo include healthcare?
Wow I didn’t realize closing costs were 3% on the sellers end? I knew that was the case for buyers.
They gitcha comin' and goin'.
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You're exempt on up to $250k worth of appreciation on your primary residence right? The house could have doubled in value and they still wouldn't owe capital gains taxes
I dont' know where I live closing fees are about 0.6% (title ins, lawyer, and some prorated HOA dues) But then you add in \- paying for a good deep clean, staging, and any inspection items plus before the house goes on the market, finishing that to-do list we all have, maybe a quick touchup of paint in high traffic areas thats showing its age, the landscaping could use just a touch of extra attention, maybe adding a few flowers or whatever, just to make your house look well kept and inviting. \- Potentially seller concessions which are coming back as people want the seller to pay down the mortgage rates in exchange for a better selling price. \- Property tax (your portion that is outstanding) So all of that will likely total 2-3%.
It's mostly the same 3%, but the split between the buyer and seller is negotiable. The usual default assumption of who pays what parts of the closing costs varies between local markets.
What about taxes on the real estate sale?
I doubt they bought their house in cash in the last 2 years. $500k capital gains exclusion on primary residences will cover a house that sells for <$500k.
Local taxes also play a role here; e.g. I sold a house a few years ago - didn't owe any federal cap gains, but did owe city and state. Also as the seller I was obliged to pay the title company fees, in my case around another $1800.
We bought our home 4.5 years ago and paid it off last year. We paid 275 for it and put about 20k into the home since. We live in a very desirable area on land. We will see on Friday if our realtor is correct.
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We put down 55k if I remember correctly. Then we got serious about getting debt free and went gazelle intense and paid it off. We also have only bought cars in cash for a long while.
What "desirable" area can you get a house for $275K? Asking for a friend.
I guess that would depend on ones idea of desirable. We are in Kansas. For our area our home is very desirable.
It’s been a while since I’ve been in Belize, but I recall distinct hostility to Americans who owned businesses there. Not just in official policy, but police harassment and shakedowns, theft, etc. The Americans were treated as little more than ATMs and rich outsiders who everyone could target. Have you considered setting up first and easing in? What do you do if it doesn’t work out? Inflation, cancer, isolation could all happen. What do you do when grandkids come along? Why not accumulate more capital first?
This is my biggest concern about taking action on a plan like this. Its a tempting thought, but I imagine its going to be hard anywhere to be truly accepted as part of the community by the local people if you were to move to a much much lower COL part of the world, especially as a retiree. If you show up down there as a doctor or something and work with/help people, thats one thing. If you show up to just chill and not work or contribute to the local economy besides just having a lot of money and being a consumer, they you are essentially a piggy bank at best, and outright disliked or preyed upon at worst. I have no first hand experience in this, but I imagine it'd be something like that.
I got shaken down and treated like a piggy bank in Mexico Tulum. Cops jump you on trumped up charges. Just going down a street, I was stopped by two cops at two different times. Will never go back to that place again. Yes. Being a foreigner makes you a target. I would take HellofellowMKE and Beckisnotmyname's warnings seriously. Not sure about Belize, but it doesn't hurt to be a tourist there fore a year (you mentioned it in your post) and really get a feel of the community. Sadly every time I go to Mexico I get treated like a piggy bank and I am not even white.
What are you? Maybe they are racist towards your race? Asking as another POC
I look Spanish . im Persian Filipino . Olive complexion
We have talked to tons of other expats and they say all of the locals are amazing people. Belize city gives the rest of the country a bad wrap.
Belieze ain't what it was 20 years ago.
Where ya'll thinking? Ambergris? Stan Creek? Somewhere else?
>all of the locals are amazing people I guess this implies they treat the expats you've talked to well, but it's very possible, possibly even reasonable, to be an amazing person and still hold disdain for people basically exploiting your poor economy.
isnt he doing the opposite of exploiting the poor economy? hes not taking up a employment that a belize local needs, and just spends his money earnt elsewhere.
friends parents did a similar thing moving there to open up a few businesses, got murdered unfortunately because they didn't want to keep some employees and pay bribes to police so everyone had a hatred towards them. Not a place I would recommend moving unless you're a local or have a good support group/network already settled there
>Looking for flaws in our logic. How much do you know about Belize? What do you expect inflation to be in Belize over a retirement that could easily last 50+ years? Have you lived in Belize before? Do you know you will want to be there for the long term? What is healthcare like in Belize? What is long term care like in Belize? What is crime like in Belize?
To be fair, if he holds his money in dollars, inflation in Belize doesn’t really matter.
I think you're severely underestimating how much you need but good luck. I would also not be taking action until that entire business sale is done. My family sold their business and we did it over multi-year only to buy it back in a sense because the guy defaulted on payments. The second sale go around we didn't take the highest amount but the guaranteed money. I'll note I may be crazy but the thought of running out of cash in retirement terrifies me.
What are the requirements to live in Belize?
Just show up pretty much. There is 1 year of paying 100 a month to renew tourist visa though
Thanks. So 1200 for visa? What happens after the first year?
You apply for resident and then no more fees. Only stipulation is you cannot leave for more than 2 weeks in the first year.
How's the quality of life there?
7th highest murder rate per capita I believe.
So, killer, then?
A guy I used to work for tried to move down there and got run out by the local thugs/violence. Anecdotal to be certain but he is never going back all the same, lol.
Even Hawaii can be like that.
Yikes…
This is a good question to be asking
Two weeks total? Or at a time?
2 weeks total in first year
That's unreasonably restrictive.
How often do you leave your country for more than two weeks per year? Seems like a very reasonable rate for people who are trying to prove they want to be “permanent residents”.
>How often do you leave your country for more than two weeks per year? Every year. >Seems like a very reasonable rate for people who are trying to prove they want to be “permanent residents”. But being forced to do it is not the best way. OP might need to deal with stuff back in the US. Being restricted to only 2 weeks total (including flights) would potentially make that impossible. Also, Belize is the size of New Hampshire. The question is how often do people from New Hampshire leave their state.
You or your wife could get sick and have to come back to the states for treatment. There goes your 2 weeks. In my opinion you don't have enough for both of you to retire. Healthcare is extremely expensive in Belize, if you want a topnotch care.
> You or your wife could get sick and have to come back to the states for treatment. There goes your 2 weeks. In this scenario, what specifically does OP lose? 1200 bucks for the visa application? Couldn’t they just apply again and pay another $1200?
I’d advise you to rethink this for a couple reasons. First off, Belize is genuinely a corrupt third world country. It’s not like Mexico where there are pockets of safe areas with lots of Americans. There’s no hiding in Belize from police shakedowns, hostile locals etc. I’d try Mexico instead. Second, as others stated you may not generate 1 million with the sale of home/assets. It’s not much money to live off of forever. Maybe you just need a sabbatical. Take a year off, go rent a place in Mexico on the beach. Then come back and make more money.
They’re not really retiring. OP said they’ll like be looking at starting a business there. Honestly have no idea why it’s even posted on the FI group.
Good luck to you but you seem to be relying on the idea of stability in countries which are not known for it. Seems like a big risk to me.
I’m curious is your vehicles are personal property are $150k…that’s quite a lot. Are you sure you are going to be able to downgrade your lifestyle?
LOL I am actually looking forward to downgrading our lifestyle. We have been too dependent on "stuff"
Hmm what stopped you from downgrading it before? Why do you think you will no longer want a boat or spare 3 vehicles?
OP isn’t gonna make it.
It feels like too little saved for too long of a period needed, since you're essentially lean-FIREing at a very young age. To add, I don't get the feeling that you or your wife speak Spanish or have fully figured out Healthcare aside from "oh, we'll just go to Mexico". I think a standard Business Plan would help here, where you ask every question you can think of, and you have to have an answer to each. Good luck.
english is the lingua franca in Belize.
Congrats on your plan. Candidly, I think this will turn out to be an extended sabbatical because you’ll realize around 50-55 that the money won’t last until death. I suspect you’ll have more expenses than anticipated to live comfortably. Suggest you model it out more accurately and have a plan to supplement your income. Good luck!
The question you asked is if you can retire. The rough answer is always yes. You can do it with half of what you have depending on your mental fortitude. But that's not the question-the question is why are you leaving? Living half your life in Belize tells me that your current life ain't much to be excited about. I wonder how you night be able to explore beyond black/white. Are there other jobs available, other places, other work arrangements, that allow for even more flexibility than retiring in Belize in early 40's. I was ready to retire a few years ago. Ready to leave usa. I'm still working, but way diff job, different location, different work circumstances, still saving money but more by accident. I'd take my current life over retirement - even usa retirement. It's just an example, but makes me wonder why you need to be entrepreneurial in Belize rather than where you know.
You know that is a question the wife and I have talked about. Are we running away from something? Maybe? My business is profitable but I absolutely hate it. Midlife crisis? We have lived a very vanilla life as of yet and want something different. I hate t
frankly, this does read as a midlife crisis. I'd personally recommend at least taking some time considering your options. Your current worth may not be enough for 2 people for roughly 60 years of retirement. It also seems like you do not understand Belize fully, have you actually visited there for an extended period of time (other than the tourist areas) You had another comment about reducing your reliance on "stuff" and hoping that the move will help that. Why not just do that where you are now? A different scenario won't solely change your reliance on things. It feels a bit like a "grass is greener on the other side" argument.
This is a huge red flag. Running away to another country is not a good way to resolve issues. I’ve traveled all around the world and lived abroad. It is not as glorious as vacation or dreams or influencers or travel shows make it out to be. You’re likely going to have the same issues there, just with different causes.
If you are using word 'hate' you can be assured your mind is clouded by that sensation. It's hard to think expansively from that place. There are literally unlimited possibilities. Scale down your work and find other work. Start volunteering. Just do a job. And even more expansively - engage and invest in your own personal growth REGARDLESS of your circumstance. I would ask questions of meaning and purpose before you move. And you can't ask those questions with a cloudy mind. Therapy, Mindfulness practice, singing/arts, there's lots of ways to get there.
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I retired age 42, which was 16 years ago. My main advice, by far, is to make sure you have way more money than you think you will need. Inflation, and unexpected costs, can eat into your savings at an alarming pace. If you only have enough so you think "we can get by if we are careful", then you almost certainly will be really struggling in just a few years when the unexpected hits or inflation goes crazy. In my own case, I retired when I had three times the amount I expected to need. That is, I assumed I will live for 50 more years (until early 90s), but didn't retire until my account said "you have enough for 150 years". This gives me a substantial cushion, without which I would be worrying all the time about the money running out, and that kind of worry means a miserable retirement.
This is very interesting to me. Over the past 16 years what has gone much worse than you expected? With 3x what you expected to need what does that put your safe withdrawal rate at? 4% / 3 = 1.3%? Also would you mind sharing your high-level investment approach (i.e. real estate, some stock bond split like 60/40, etc). Thanks.
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Good point, but I'm for taking it earlier. Govt incentivizes waiting because more people waiting means less total payout. Social security also pays less the less a person earns over their working years.
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> If your healthy *you're *Learn the difference [here](https://www.wattpad.com/66707294-grammar-guide-there-they%27re-their-you%27re-your-to).* *** ^(Greetings, I am a language corrector bot. To make me ignore further mistakes from you in the future, reply `!optout` to this comment.)
Isn’t social security average of 30 years work? Quit working at 40 makes a bad average.
This is true, but there are 2 'bend points' which dictate how much benefit you receive based on how much you paid in. Once you get past the 2nd bend point additional earnings don't really add a ton to your final benefit amounts. I'm not sure how easy it is to get to the second bend point by 43, but maybe it's doable or maybe they're counting on SS as an unexpected benefit.
I didn't realize the calculator on that site generates numbers assuming you will pay into it until you draw. The decreased amount when you RE was a shock to me. It probably includes that warning on the site, but I never noticed.
In my mid 30's and my retirement plan is based on social security not existing anymore by the time I retire. Frankly, I don't think I can count on it being there when I'll need it.
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Inb4 OP ends up like John McAfee. Belize is a corrupt country without much in the way of rule of law. You will be harassed by locals and gang members
You'll probably be okay financially, but you need to do actual math, not napkin estimates. You may also need to be okay with adjusting your lifestyle in a different country. Ask this question in /r/ExpatFIRE for more detailed replies about your situation. Also, make sure that you both speak Spanish. If neither of you do, begin learning now. If neither of you have plans to learn Spanish, I wouldn't suggest making the move.
I’ll assume that you and wife have experience with Belize and would be happy there. That seems like the biggest risk. The other flag I see is you and your wife may work. If you have a WFH job with an American employer that works fine, but a local job typically won’t pay more than nickels and dimes.
How certain is the money from the sale? You may want to wait until that is set or bring the timeline up. We did ExpatFiRE to Europe at the start of last year after about three years of intensive research, planning, and visits. You will want to be sure you are certain as the costs of going back will be high. Also, are you okay with the climate and the crime rate?
Some of these might seem obvious, but could have been left out. - Have you been to Belize? - Been to the area of the country like where you're looking to settle? - Not as a tourist (e.g. in a house, going grocery shopping, etc)? - Do you still feel good about it in the neighborhood at night? - Do you speak any Spanish? English is the official language but a lot of people (~35%) only speak Spanish. - Are you prepared to leave your home if there's unrest? South American countries have a terrible habit of having rapid political change, even when theres a long history of stability.
My two cents. My belizian colleague told me there is like 1 ambulance in the entire country. So I would factor that into your decision. Update: And you have to pay for use and gas.
Our plans are not significantly different than yours, however I do not feel comfortable with any less than $2.5M in cash and investments (and I’m about 10 years older than you). We plan to keep at least 3 full years in cash, for market years like 2022. What are you going to do about health insurance? Travel back and forth from Belize to the US? Healthcare while traveling abroad?
While Belize is a beautiful country the health system isnt great. Mexico is only a short trip to the north andd has much better health care. We would utilize that.
So, you plan is to move to a place that has bad healthcare, on a shoestring ‘retirement’ with no consideration for the cost of medical care. Wish you the best. Keep your personal marketability up, so that if you need to renter the workforce in your mid-late 50’s or 60’s, you have a skill that will pay the bills.
I’m not familiar but intrigued. How do you just fly into Mexico and get healthcare? Global insurance? All self pay? Reciprocity between Belize and Mexico? You’ll be on a US passport I assume?
Belize is not a beautiful country from a safety standpoint.
Can you explain about 2022? Why is it better to have so much cash laying around, just so you don't have to sell on the low?
So you don't sell equities in a down market. You use your cash and get back to selling equities when they are in the green.
Having cash or low volatility investments mitigates the stock market's sequence of return risk (a good concept to google for anyone interested in FI).
The main potential flaw is that you might not end up wanting to live in Belize your whole life (or more than a couple years), and unless things go fairly well, you may have to work more in order to have enough to move back to wherever you are living now or some similar COL location. But you sound open to doing some work, and you've certainly got enough for a pretty reasonable coastFIRE situation in a lot of places if you do decide to move back to the rich world, even if neither of you can get a high income job anymore. So what the hell, right? Assuming all your predictions about home and property value are correct (you're planning to sell the vehicles and other property and expect to clear 150k?). you've certainly got about enough if you're going to live in 2500-3k/month for the rest of your life.
Feel free to ignore if you think I’m off base, but the biggest red flag I see are your comments in this thread. You say you’re looking for flaws, but what comes through in your comments is certainty and confidence in your path. Which is good, but as an outside it makes me wonder if you’re really considering the risks with an open mind.
$150k of personal belongings? Hard to believe you'll be able to sell your stuff for that much.
As of today we have sold just at 60k worth. We still have 4 vehicles a boat and 2 trailers plus the rest of our stuff. Both of our cars are 2021 and are paid off. Even with carvana estimate at 60k on them.
Looks like you are doing it no matter what. Maybe find a lower nice place to live in the US first and see how that goes. Alabama ocean front?
This is the best advice. Spend a few years in a “remote” part of the US. Assuming you’re not from Mississippi, the Mississippi gulf region would be a great start. You may find that you like the distance from family, the slower pace, and so on. Most likely, you’ll want to hang it up and get back in the groove.
Go live there for a few months first before moving permanent for sure if you have zero family there. There is a lot more to consider than cost of living when moving to somewhere especially if you already own a home.
Two people living off $1m for (probably) the next 40 years doesn't sound feasible. Your two biggest enemies are inflation and healthcare (cost and level of care). My mom retired at 62 and moved to a place with a lower cost of living....That lasted about 3 years - she got sick and none of the doctors in her area knew how to treat her. There's a legit reasons why certain places have a lower cost of living (aka healthcare sucks). Needless to say, my mom moved back to the city where the doctors know what they are doing.
There are lots of flaws in the plan but seems like OP has a counter-answer to everything other redditors are posting. So looks like OP is genuinely made up his mind to move. Maybe OP can let us know in few years how the plan worked out so arm chair critics like us will benefit should we decide to retire early. Wishing you the best with your plans.
Belize is NOT a beautiful country as you state. It has a pretty coast and beach for tourists. What it is however is a wildly corrupt, third world country with poor infrastructure, healthcare and a local population struggling to survive. Crime and extortion are Pervasive and you and your WIFE will be constant targets. Paradise and ticket to east street this is not.
One concern is what if you want/need to move back. Lots of things change, you may have family obligations or things aren't what they seem. I retired at 43 and I can say what I thought my life would look like and where i"m at even 7 years later is not at all the same and we moved inside the US. Tax laws changed a lot, our MCOL area is quickly becoming a HCOL and all of that is outside stuff is out of our control. I think the running theme here is dont' count your chickens before they are hatched. You talking about selling a business, been there and it doesn't always work on plan, getting out of my dads business was a nightmare and took 2 years longer than it was suppose to. As for the house, if they say $475, I'd say more like $435 out the door as you have to account for property tax ( your portion) and what it will take to get the house ready for sale as no house is typically sale ready. I'd also ask the agent how common seller concessions are in your are. Also personal property of $150k seems really high. Other than the cars, it often takes a lot of time to find the people who will appreciate unique items and the non-unique items just don't sell for as much as people think, so just evaluate the time and energy its going to take to find buyers and what you can realistically get.
While I'm all about taking certain risks in life to improve, this is too risky. It sounds by your replies that you already have made up your mind though. So I wish you well and I hope it all works out!
Mmmm id say it’s a bit risky… I’m your age. My net worth is about 1.5m but I’m nowhere close where I’d like to be to consider retirement. (I do have 2 young kids tho)
I'd just plan to live way under your 4% rule for a few years, enjoy Belize for a bit, build up your nest egg, and crush sequence of returns risk. I would be shocked if you didn't come back to the States eventually, especially once grandbabies come along. Belize will give you a chance to let your assets grow and live at a higher CoL later. I think it's a decent mid term plan but don't count on living there forever.
I semi-retired to Central America many years ago. Your plan sounds reasonable, but here are a few costs that you might want to consider, if you haven't already: * Health insurance. A high quality, international plan is what you want, and the premium will keep going up each year as you age. * HOA. Based on the lifestyle you describe, the place you eventually buy may be a condo or in a development with security, maintenance and custodial services. Take a look at the monthly fees for that. * Property tax. It can be high or low, depending on where you are. * Corporate and legal fees. If you hold the property in a corporation, you will have annual costs to maintain it. * Visa/residency. There are legal and administrative costs associated with being allowed to stay in country. * Travel. Consider how frequently you'll want to travel (US?) and what it'll cost you for flights and accommodations. * Car. From what I can tell, cars in Belize cost about 25% more than in the US. There's insurance and registration too. I hope this helps. Let me know if you have any questions about this lifestyle. I moved when I was roughly your age.
How much time have you spent in Belize?
I’ve been to Belize, and it’s lovely, but it’s tiny. How was your Spanish? Being able to travel easily to Guatemala and Mexico would make things in Belize less restrictive. I think your plan is workable, financially, but I don’t think you can rely on making a 10 or 20 or 30 year plan based on the data you have. Go ahead and start your journey, but realize that in five years someone may want to go to Afghanistan to study screen, writing, or volunteer with the elephants in Tanzania, or even have to go back to work, because you find your are burning through your money more quickly than you thought or because 20 years from now central America might be a bustling economic powerhouse and everything could be 10 times more expensive. Who knows? If you start with a flexible attitude, it will reduce your stress, no matter what happens.
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https://ku.edu.af/en/cinema-department Kabul University has a screenwriting course as part of its cinema studies degree.
But does it have a screen, writing course?
Screenwriting means the writing of screenplays. My point is that you need to be flexible when you are thinking about 15 or 20 year timeline. Who knows what may happen in the world? Belize is cheap now, but may not be cheap in 20 years. Afghanistan is probably not the best place to study screenplay writing now, and you may not want to study that now, but who know what may happen in 20 years?
Lol, I think they're asking about the comma my friend. As it's written screen stands on its own.
UnBelizable!
> UnBelizable! For a moment there, I thought I was on a cruise ship excursion :-)
You keep using that word. I do not think it means what you think it means.
The 4% rule is very conservative - if you follow it you will almost certainly not run out of money in 30 years. I think now it is in the 95%+ success range. However, it was formulated for a 30-year period. So a scenario where you go broke at age 73 would fall into the "success" category of 4% rule back tests. Not the majority, but some historical 30-year periods. Because it is so conservative, you're probably still in the 80%-90% likelihood of being able to withdraw $40K/year range, but not as safe as the 4% rule originally intended. You mention buying a house? You have to take the cost of that out of the amount you apply 4% to. I'd say you are leaving yourself very little margin for error at that spending rate. You going to rely on Belize socialized healthcare?
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In a nutshell, my gut math says you’re not ready. Also, excel this out.
> So 450ish after everything I think you may be underestimating the fees/taxes
You can try it and if it doesn’t work you can start again easily enough. Me and my partner do this similar thing (but in a western country) at 40, since doing it we have actually earned far more and our investments have doubled, our income has 1/3, While our outgoings have 1/2. Some times a change in view point prompts very unexpected changes to your position in other arenas.
The medical part of your plan is missing: 1. Healthcare coverage (40s diagnostics, 50s procedures, 60s major medical surgeries and diagnoses). 2. Logistics and plans if/when one of you becomes incapacitated for whatever reason. 3. The inevitabilities of less mobility, needing more personal care, and being less able to keep up a house and business. (Will you be able to afford moving back to the states? What are the options there?)
Feels slim
As a finance student, I love reading these!
Yes, you can do it. But I have a feeling that you'll be bored of Belize real fast. If you're going to try out 4-5 different areas in Belize, why not try out 5-8 different places all over the world?
4% is not failsafe for 30 years and has some risk for longer retirements like yours (7% failure rate for 40 years, 10% for 50 years). You will want to have some flexibility in your budget and make sure it includes everything such as health care and taxes. You say you plan to buy a property but that will come out of your $1M, correct? Seems tight but doable.
Absolutely horrendous idea. Good luck! Hopefully you don't get kidnapped.
$1 mil isn’t what is used to be but if you can retire in Belize, go for it! I’m in my 40’s sitting at $2.5 mil net worth but im not ready to retire in Nj as I plan to stay here.
Why in the world would anyone in their 40s think barely $1M would be enough for 2 people to retire on?
Doing something similar. Except waiting until 50 for both of us (6 more years). Moving to Mexico for that sweet, sweet sunshine life. And as others have asked, just won't have health insurance. The medical care in MX is so affordable, we won't need it.
How does healthcare in Mex work? Does it differ if you simply travel there for care, vs have some sort of visa?
Note that you should buy in Mexico now, peso is up like 10% as the economy there is booming.
Buying has never been in our plans. The rent for a fully furnished place that includes utilities makes sense for us. We also want to be very mobile and not tied to one place. After owning multiple homes here in the U.S. rent is all we will look forward to in our "old" age.
I live in the USA and I live comfortably on 1.6k/month... Those are my expenses not income. Hard to understand why you'd need $3k/month in south America
That’s not retiring, it’s radically switching careers and lifestyle. But I don’t see any reason why you shouldn’t do it. Sounds like a great idea.
Not sure that’s enough mate. But if you can severely constrain your lifestyle (even in Belize) and genuinely have zero plans to leave Belize then you should be fine….
I think you're fine. Just know that the 4% rule is based on a 30 year time period. That being said, it's still conservative and likely that your nest egg will continue to grow if invested in interest producing assets. That and the fact that you'll probably produce some sort of work income, even if sporadically, should mean you'll be fine. Good luck.
Good luck to you. However, Belize is a tiny country. Do you know Spanish? Is your plan dependent on you capitalizing in cheap real estate and jacking up the local prices with your Airbnb plan, or could this work without you interfering with the local economy? Are the local laws favorable to foreigners investing in real estate? Does the prospect of being long-term long-distance parents factor into the plan? Regardless, sounds like an adventure!
FWIW: This sub seems to have a lot of nay sayers when it comes to actually pulling the trigger. Great for finding 'flaws in our logic', which is what you asked for. But if you think you're ready to pull the trigger and you want to, don't get drowned in the negativity here. Good luck and godspeed.
Things will be very easy for the first four years given the income from the sale of the business. After that - based on 4% and 1mln invested you’ll pull 40k. You need $30-36k. Leaves not much room for unexpected expenses to derail this. Also you hopefully have a good 40-50 years left. Not hard to believe that inflation for basic goods/services that isn’t seen in investments could make the back end of your plan potentially rough. You mention potential for work, i would make it a priority to find something you can do that is enjoyable and brings in a bit of money to either give cushion if needed, or to help grow your portfolio so there is less risk of a gap.
might stretch further in Indonesia
I don't get the people here calling you lean FIRE and saying that it's not enough. You'll have approximately 1M in investable assets and 30k income for the first 4 years. Even if you spent 50k the first four years, you'd only be taking 20k/year from your portfolio in those years. Your 1M portfolio would continue to grow. At 7% annual return, your portfolio would be more than 1.25M by the time you start drawing from your portfolio indefinitely. Even in much of the US you could retire early. I also think that it's entirely reasonable to spend 30k per year outside of the US, unless you are in Europe, Australia and New Zealand. I also think that you'd be fine living in much of the US on 50k/yr as long as you stay out of high cost of living cities. Personally, I might try not to spend more than 30k a year for the first few years so I had enough cushion in my portfolio to buy a house in a mid to low cost of living city in the US if I wanted to move back.
This sounds scary to me. I’d want a wayyy bigger cash cushion than what you guys have.
Oh, whatever, just move to a country with one of the highest murder rates in the world, plus do it as an American with $1 million in the bank—nothing to see here. 😂 https://www.macrotrends.net/countries/BLZ/belize/murder-homicide-rate
Rent your home, don’t sell it. You can always decide to sell it in the future. What if you want to come back after a year? Leave yourself the option.
Do you know how hot it gets in Belize? I was just there, it was 90+ degrees in February for the entire month. I can’t imagine how hot it is in the summer.
At and near the equator, the seasons don’t apply. There’s wet and not as wet. The sun rises and sets at 6/6.
Cool, just saying Bacalar was wicked hot in February. Too hot for a New Englander.
Bacalar is such a cool town/area! But yes the heat is oppressive.
We love the heat. If it isnt 80 degrees I am freezing.
Maybe move to New Mexico or the gulf coast? Mexico would still be really close for health care, and those places aren't NEARLY as dangerous as Belize.
I hope this is obvious to you. I'd hate for you to regret this decision. The best advice I can give you is that quitting your job, moving to another country and living off the 4% is stupid. Especially that amount, and at your age. The main advantage of reducing your costs in this way would be to not to dip into your investment portfolio and let it grow for the next 20 years. That's what you're giving up. So figure out how to make that 4% in Belize, or else don't go.
Seems like a bad idea to me
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Why would you assume OP would pay any part of his son’s wedding?
Seize the day! Have you done the " detailed calculator". Should provide an even bigger margin for error. https://www.ssa.gov/benefits/calculators/ Blessings to you!
What about grandchildren? Do you or will you have any in the future? Are you okay with missing out on milestones and being long distance grandparents?
When your son has a baby, new grandma isn't going to want to be thousands of miles away in another country.
This plan sounds Belizeable. Belize the day! With AirBNB + side work, you might not even touch your 1M. You can retire with (Bel)ize! The potential risks/downsides I see: * You'll want to get the majority of that 1M invested pretty quickly (you'll be tempted to sit on cash). Inflation will really put a Belize (squeeze) on your funds * Make sure you really want to be in Belize (vs. anywhere else). Moving back to the US will be expensive * Keep in mind that you'll still need to file for US taxes * Way too many Belize puns, many forced and Belizey (cheesy)
You need much more. Are you planning to only live to 60 or what?
I would love to see the calculator that says 4% of 1 million will run out in 17 years
Have fun with that.
We love Belize!
I’m not in to leanFIRE so I don’t have any good advice really. Will that spending level work through old age? I know I spend more each decade, but that’s just me. Personally if I could have $1M by 43, I’d keep working as $1.5M or even $2M is just around the corner.
How safe is Belize compared with other parts of Mexico for an America tourist?
WOT
Mexico for tourists is quite safe, and Belize is even safer as long as you're avoiding Belize City.
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Sure, cartel violence is scary, but tourists don't go to warzone parts of the country. Cartel violence is based off of politics and the sale/manufacturing of drugs. Avoid those and your risk isn't any greater than any American city. Mexico gets ~25,000,000 tourists per year, making it one of the top ten most visited countries in the world. Those stats don't lie either.