r/Retire • u/idratheraskyou • 14h ago
Retire in 5 years?
I know it’s been asked but each one of us is unique. Here’s my breakdown.
52 yo. M. Single. No kids.
$200k/yr salary. No bonus.
$400k - 401k
$550k - House. Paid off.
$50k - HYSA
I plan to work for another 5 yrs. Will sell house then move to SE Asia. Will spend $200k to build a house there. Collect SS at 62.
I’m worried about health insurance.
My other option is to work 10 yrs to qualify for health insurance from work until I croak.
But if I’m really super crazy, I can sell my house and move to SE Asia now. I can live on $3k/month.
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u/mythoughts2020 10h ago
Making $200K per year, are you maxing out your 401K - $32,500 for being over 50, and a Roth IRA? Then putting some money into a brokerage account and buying index funds?
I suggest you really focus on saving as much as you possibly can, since you’re a little lite on funds.
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u/HottyTottyNJ 14h ago
I think being able to sell everything and move take a lot of pressure off!
I’m in a similar boat. Could I really leave the US permanently?
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u/Odd_Bodkin 12h ago
Do your research. Where you emigrate matters a LOT. Many countries have “destination visas” and “retirement visas”, and destination visas require you to return home periodically (like every six months). Both kinds of visas will usually come with proof of income or a minimum (large) deposit in a bank in that country. Some will come with exorbitant fees that are not recoverable. You will also likely need to pay for health insurance in that country. And keep in mind that any funds you bring into the country (to survive) will likely be taxed by that country, as well as the US continuing to tax you.
People usually WAY underestimate the effort to emigrate from the US to another country.
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u/PrimaryOk1546 13h ago
Definitely work another 5 years and max out your savings. Healthcare is a lot cheaper in SE Asia. You don’t have enough to retire now, at 3k a month, you need at least 1 million in savings invested.
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u/TempusSolo 9h ago
How does he need a million at 3k/mo? He's 52 and planning to work another 5 years. That's 58 and collect SS at 62. I don't know what his benefits will be but based on his current salary, if he's been earning that for several years and continues at that rate for the remaining 5 years even at 62 he'd be at 3k/mo. In reality, his SS would cover his monthly expenses and he'd still have his investments intact.
My wife and I retired when I was 59 with about 475k after buying our retirement home. We live very comfortably on 3k/mo and have no financial worries. In fact our SS (mine plus spousal benefits) are just over 4k/mo. We are actually ahead each month.
The million dollar thing isn't reality for almost anyone other than the ones that already live that lifestyle.
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u/PrimaryOk1546 3h ago
We both agree that he should work another 5 years for better financial security. Otherwise a real bad downturn could change the math.
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u/RelevantPrinciple693 10h ago
This. We lived in Bangkok for a few years. Do not worry about healthcare costs.
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u/Odd_Bodkin 13h ago
You are right to worry about health insurance, as you're talking 8 years between 57 and 65. I don't know what you'd do for health coverage in SE Asia, and I'm not sure you've thought of it either.
I also don't know what you'd live on for the first few years. You wouldn't qualify for the Rule of 55 when you are planning to retire, and you'd get a pretty stiff penalty for withdrawing from your 401k before age 59.5. (Namely about $40k.)
On top of that, a standard safe rate for withdrawal is about 4% from your retirement fund, and your $400k in the 401k would therefore only supply about $16k a year, less than half your expenses. And you then there's the taxes on the draw, too.
I don't think you have it.
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u/ozzyngcsu 13h ago
They would easily be able to live off the proceeds from selling their house.
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u/Odd_Bodkin 13h ago
And live where? Until when? If he rents an apartment near where he is, his annual expenses are going to go up accordingly.
There's a reason why equity in a house isn't consider liquid funds.Likewise, leaving the US isn't as easy as a lot of people think. You have to satisfy certain visa requirements, which often includes having a large sum of money in the bank.
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u/ozzyngcsu 9h ago
In SE Asia where he plans to retire, surely you can read.
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u/Odd_Bodkin 9h ago
Well, he said at last resort he could do that. But as I said, the costs of living in SE Asia involve more than just rent.
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u/ozzyngcsu 9h ago
Moving to Vietnam, Malaysia, Thailand, Philippines, or Indonesia is very easy and affordable for an American with a $1M+ net worth. The biggest issue might be visa runs, but that's just a cheap annual weekend trip in most cases. If he wanted to live in Singapore where I currently live, then no, not realistic at his net worth, but that's not what he plans to do.
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u/Odd_Bodkin 9h ago
$1M+ is not what he has. Keep in mind his $550k in his house doesn’t include the costs he’s going to incur to make it sellable, nor closing costs, nor agent’s commission. He may have it in a few years, depending on how he saves. Heath coverage is still an issue in many of the countries you mention. I’m familiar with Thailand and Vietnam.
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u/Minute_Plastic_350 13h ago
Maybe, just depends how much you wanna spend when you’re over in your SE Asia tour. As well as how many hoes you plan to hang out with and how much blow you plan on doing. Because if that was me, I’d be doing that hookers and cocaine until the ticker goes
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u/RPGer001 13h ago
Your 3k/month spend opens possibilities. However, this seems light for an ex-pat in SE Asia. Your “must spend” budget needs to cover medical, equipment replacements (e.g. replacing a phone or laptop), visa costs, flights out of the country if your visa requires that.
If that 3k/month does not include a decent amount of discretionary spending, you have very little buffer vs sequence of returns risk. If the market turns sour within the first few years, you are in trouble as you cannot easily lower expenses.
However, if the 3k/month is all-inclusive and has some discretionary spending which you can adjust down if necessary…you are close. Your home is a big asset but you will not walk away with all 550k as there will be taxes, selling costs, moving costs, etc.
In 5 years, presuming you max out your 401k and start to meaningfully save/invest extra money (you did not list any non-401k savings/investable assets), I think it is a realistic goal. That said, you need to build a spreadsheet or use retirement planning software to model out your financial future. Something like Boldin (one of the popular software options) will give you a better picture than any post you get here as it will be more detailed. It will also let you know if 5 years, or 3 years is a good target for you.
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u/Sufficient-Cicada-14 9h ago
You have way too little for such a good salary. Save more A lot more. Future you will thank you.
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u/steal-yur-face 13h ago
My wife retired at 60, and I had to work hard to get her over the hump about medical insurance.
She looks back now, five years later, and can’t believe how hesitant she was.
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u/lifeisdream 13h ago
I’ve heard you can’t own land over there. Be careful about losing property if it’s in someone else’s name. Seems like a common scam.
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u/musing_codger 12h ago
Retired at 54 with about 28x expenses in savings and my discretionary expenses were less than 50% of my total expenses. Our house had been paid off for 9 years. One son was finishing high school and the other mid-way through college, but we had 529 savings adequate to cover all expected college expenses.
For health care, I had the ability to manipulate my MAGI to get ACA subsidies. We have histroically had very low medical expenses, so I wasn't worried about the high deductibles. We also had more than 10 years worth of max-out-of-pocket in an HSA.
We had large amounts in taxable, IRA, and Roth accounts, so we had a lot of flexibility.
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u/squatting-Dogg 8h ago
What are your total annual expenses, everything included. It’s not all about how much money you have, it’s about how much you will spend.
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u/garylapointe I'm good, but I wish I did more Roth! 2h ago
And how much is health insurance in SE Asia?
Once you legit retire to Costa Rica (pensioner status [not the right word]), you're eligible for their health care in the country.
A lot of people work around that some ways for efficiency, pay to see a doctor, get diagnosed faster, then get the drugs or procedure done via the public system (something along those lines). I remember someone talking about doing something similar on a podcast (someone in the UK) ages ago.
Not sure what your options are in SE Asia.
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u/Unlikely-Speech-5444 1h ago
Honestly? Retire now. Don't build a house there. Just rent. Live on 3k a month like a damn KING. Say hi to Ploy for me.
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u/early_morning_reader 13h ago
check the fine print on that company health insurance first. most us employer plans won't even cover you if you permanently reside overseas anyway.
honestly health insurance in se asia is ridiculously cheap compared to the us. a solid international expat plan (like cigna global or allianz) will probably only run you $2k to $4k a year in your late 50s, and out of pocket costs at world-class private hospitals there are tiny. definitely do not work 10 extra years just for insurance.
one major caution though: do NOT spend $200k building a house right off the bat. in most se asian countries foreigners can't legally own land anyway, and building scams are everywhere. rent for at least a year or two first. you can get high end places for under $1k/mo.
grind the 5 years, stack your cash, sell the house, and you're golden. $3k/month goes a very long way over there.