In a yet to be posted list on NotePD titled "What is something you can talk about for hours" I mentioned retirement planning and that "I can talk about conventional retirement planning but unconventional retirement planning is far more interesting, I blog about that aspect all the time."
Included in that conversation would be my take on retiring to other countries. Expat retirement has gained popularity but although growing, it is a small number that do this. My father actually did this but I don't think he realized his going to Spain would end up being permanent. His circumstance was a little different than retiring, he was 53 and it was sort of a forced hand situation.
It is pretty easy to start the research process on the internet, there are plenty of resources to begin learning. Internet research can be the first couple of steps or more but the final step(s) needs to be some form of a test drive.
One country that will come up if you do some research is Ecuador. The cost of living is quite reasonable, the climate is great, there are expat clusters of people to meet and interact with in addition to immersing in the local community and there's plenty to do (you'd need to make sure your interests would align with what's available). The healthcare purports to be excellent as well.
To be clear, I don't have firsthand knowledge of this. I am persuaded enough on Ecuador that if an expat retirement was of interest, that I would try to learn more about Ecuador but that is as far as it goes.
Fast forward to this past week when supposedly "the economy has collapsed" in Ecuador per a Tweet from James Melville. He blames lockdowns and high prices for the "collapse." The Tweet has a video of what looks like a large protest in Quito and the capitol building (maybe just a federal building?) being taken over. Here's another Twitter feed with a lot of different videos of protests in Quito or maybe just many different videos of the same protest, tough to tell.
There were a lot of comments on Melville's Tweet, plenty were very doomsday-ish and others were from people checking in from Ecuador, mostly Cuenca which is an expat favorite up in the mountains, saying the protests did not indicate a collapse of anything that Ecuador is not the next Sri Lanka. I didn't see anyone dismissive of the protests just that they do not indicate a societal collapse.
Would a financially comfortable expat living outside of Quito ever feel some sort of economic collapse? Maybe not though. I actually have an acquaintance in Ecuador who've I've messaged with a couple of times. He and his wife live in Cuenca so I reached out for his perspective. They were on a trip in Europe and he didn't feel it would be right to weigh in without being on the ground there.
I don't know how serious the situation is and am not trying to guess but in terms of risk management no one is threatened by Ecuador maintaining its stasis. The threat to an expat retirement is that things take a wacky turn and leaving becomes the best course of action. If Ecuador stops being a viable option, it wouldn't be the first expat destination where that happened. For my money, some sort of fallback or Plan B is important in many aspects of life including moving to another country.
In my posts about expat retirement I talk regularly about not selling you mortgage-free house, instead keeping it and renting it out an living off of the rental income or combining the rental income with other sources of income, even if you have to pay a management company. Relative to many places where an American might retire to, money from renting a house in the US would go a long way in countries like Ecuador or Panama or Uruguay. Keeping the house is also optionality for going back. If it's over for Ecuador, there's a whole lot less uncertainty about what comes next beyond waiting for your renter's lease to expire.
The context for what I've always thought made sense was to just go live "over there" for a few years with the intention of coming back. It makes it more of an adventure that allows you to fully immerse in a different culture while your untapped Social Security payout continue to grow and your portfolio continues to grow too. Maybe you go "over there" at 65 or so and come back 3,4,5 years later.
Being fit and healthy makes this much more viable, a form of optionality. A place that would appeal to me in this context would be in or near Cinque Terre in Italy. It's an area comprised of five towns along the coast but there are plenty of other idyllic areas nearby. We visited there in 2016 and stayed in Vernazza, pictured.
Long term rentals on Airbnb appear seem to mostly run from about $1600-$2300. If you go in from the coast the rents cut in half. So even cash flow from renting our house in Prescott out to cover rental on the coast or cover a lot more inland a bit. If this was 10-12 years from now I would expect to still be managing client assets for income. US stock market hours are pretty friendly over there, opening in the afternoon with the close coming in the evening leaving the morning's open to explore/immerse.
I don't think we'd do this for financial need, letting our assets and Social Security each grow although that might be how it turned out, this for us would be a year or so just as an adventure. With a finite time horizon though, it becomes much easier to leave if something negative and unexpected happens either with the chosen country or from a health issue.
Maybe most people are less into having a Plan B or backup than I am but trying to look around a corner or two at whatever might threaten your retirement plan, whatever it might be, probably lets you mitigate much of the problem.
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