How much does it really cost to be a beach bum?

[Zhentarim]

I imagine retirement to be selling my northwest louisiana home, moving to a cheap beach town in the tropics, and basically swimming, sunbathing, eating seafood, sipping cold dollar store drinks, and possibly even surfing to my heart’s content. I’ve been a school teacher for a year and a half and have a pension if I make it to 20 years—at which point I’ll be 42, since I only have 18 and a half more years. Teaching isn’t a bad job and I certainly enjoy it more than my pharmacy technician and nursing assistant jobs I held as a teenager, but I really just look forward to living an easy life on the beach with few to no responsibilities. Depending on how cheap the beach town is, I may take my 50% pension at 20 years and retire in my 40’s. I keep hearing how cheap some beach towns are abroad.

[JeenLeen]

I read an article on an elderly man who realized that staying at a cheap hotel (like one of those long-stay hotels) was cheaper than a nursing or assisted-living home, and it gave him everything he needed help with.
Found it (or a replica of it): https://www.usatoday.com/story/news/nation/2019/02/25/holiday-inn-nursing-home-man-plan-golden-age/2986566002/

Of course, that's in the US and not abroad, but you might find similar amenities at a hotel abroad and it wind up more economical than renting/buying a house.

---

Maybe, during the summer (as you're a teacher) go on vacation to a few places you'd consider moving to. See how expensive it is, and see if you really like the local atmosphere and culture. That's probably the best way to figure it out.

[darkrose50]

This man made floating island from plastic water bottles, and mango trees.

https://www.google.com/search?source=hp&ei=xQC7XdSgAoPksAXnqZK4Bw&q=manmade+island+floating+mango+trees&oq=manmade+island+floating+mango+trees&gs_l=psy-ab.3..33i299j33i160.6559.15008..15161...0.0..1.556 .5877.9j14j2j1j2j3......0....1..gws-wiz.....6..0i362i308i154i357j0i131j0j0i10j0i13j0i2 2i30j0i22i10i30j0i8i13i30j33i22i29i30.EcSLLxg2vPw&ved=0ahUKEwiUl_qD68blAhUDMqwKHeeUBHcQ4dUDCAs&uact=5#spf=1572536533157

[Chen]

I imagine retirement to be selling my northwest louisiana home, moving to a cheap beach town in the tropics, and basically swimming, sunbathing, eating seafood, sipping cold dollar store drinks, and possibly even surfing to my heart’s content. I’ve been a school teacher for a year and a half and have a pension if I make it to 20 years—at which point I’ll be 42, since I only have 18 and a half more years. Teaching isn’t a bad job and I certainly enjoy it more than my pharmacy technician and nursing assistant jobs I held as a teenager, but I really just look forward to living an easy life on the beach with few to no responsibilities. Depending on how cheap the beach town is, I may take my 50% pension at 20 years and retire in my 40’s. I keep hearing how cheap some beach towns are abroad.

I don't know of many pensions that let you take them 20 years early. Usually the penalty is significant for each year. Canada Pension Plan is 7.2% reduction per year before 65 for example. The total amount of money you tend to get is the same its just that every year early you take it, the more years they have to pay it out so they reduce the amount per year.

[JeenLeen]

I don't know of many pensions that let you take them 20 years early. Usually the penalty is significant for each year. Canada Pension Plan is 7.2% reduction per year before 65 for example. The total amount of money you tend to get is the same its just that every year early you take it, the more years they have to pay it out so they reduce the amount per year.

Yeah, definitely check with HR or whoever to make sure you've got the pension details down.

Then again, I think teacher (and other state employee) pensions work like yours where I live. You can take your pension whenever you "retire", and you don't have to be retirement age. There are limitations on how much money you can make and still retain your pension if you work at another state job, but I think my state would work with your plan.

I know of one person who retired from the military (probably in her late 30s), then from the state in her 50s, so she had two pensions at the same time, plus whatever income from the job she moved to afterwards.

----

I hope it's not annoying that a lot of this advice isn't precisely on-topic. Probably just that none of us have the experience of retiring to a beach, so can't really give you the details you want. But I do hope it's kinda helpful.

A professional financial advisor could be handy. You might even get a free consultation as part of your benefits as a teacher. (On that note, I should double-check if I get a free consultation as part of my employee benefits.)

[Tvtyrant]

Just remember that for this to work you need to go to someplace with high poverty, which makes you not only wealthy by comparison but also likely a visibly distinct target. If everyone sees you as a rich foreigner without local ties you aren't safe, and unlike the local wealthy the cops won't feel like protecting you.

[tomandtish]

I read an article on an elderly man who realized that staying at a cheap hotel (like one of those long-stay hotels) was cheaper than a nursing or assisted-living home, and it gave him everything he needed help with.
Found it (or a replica of it): https://www.usatoday.com/story/news/nation/2019/02/25/holiday-inn-nursing-home-man-plan-golden-age/2986566002/

Of course, that's in the US and not abroad, but you might find similar amenities at a hotel abroad and it wind up more economical than renting/buying a house.


It's a pretty misleading story based on a faulty premise. One of the things I know from my job is that if you needed a nursing home or assisted living facility, you wouldn't be able to stay in the hotel. They seem to be confusing independent living with assisted living. To qualify for an assisted living facility, you need help with basic activities of daily living, such as bathing, dressing, medication management, etc.

So yeah, it's cheaper, but hotels aren't doing anywhere near the level of services those facilities provide.

Edit: Also, just read Terry's own facebook on the subject. Note that this is something he's planning for sometime in the future, not something he's doing now (or apparently exploring other than cost). I suspect he's in for a big surprise when the actual time comes. Again, if he actually qualifies for a nursing home or assisted living, a hotel won't meet his needs and they'll probably get rid of him pretty quickly.

[Laserlight]

Sign up for International Living or something similar and you will get more "we moved to Sokovia and live like kings on $3 a month!" stories than you need. Most of the ones I've looked at involve learning Spanish, or some tonal, not-Latin-alphabet language if you want more of a challenge.

[Tvtyrant]

Sign up for International Living or something similar and you will get more "we moved to Sokovia and live like kings on $3 a month!" stories than you need. Most of the ones I've looked at involve learning Spanish, or some tonal, not-Latin-alphabet language if you want more of a challenge.

This got a chuckle out of me. I hear the cities are falling apart there.

[Scarlet Knight]

This is pretty simple: are you willing to live like a "bum" even if near the beach? Or are you a Jimmy Buffett wannabe? Remember, Jimmy sells escapism.

Keeping it in the US (for comparison) living a life of leisure is expensive in Hawaii, but much cheaper in territories like Puerto Rico or Guam.
What do you truly need? You can fish and drink anywhere. You're from LA, are you comfortable with poverty? Can you afford the Redneck Riviera?

Are you willing to live like the natives? Cheap places have poor lifestyles and few resources...or everyone would already be there. Still, there's no reason that at 42yo you can't leave LA, teach in Guam or Samoa and still surf the Pacific. :smallcool:

[snowblizz]

I imagine retirement

Key word there.


Reality is not gonna work that way.


And how do I know that? Because the tropcis are not filled with teachers that retired at 42.

[Zhentarim]

This is pretty simple: are you willing to live like a "bum" even if near the beach? Or are you a Jimmy Buffett wannabe? Remember, Jimmy sells escapism.

Keeping it in the US (for comparison) living a life of leisure is expensive in Hawaii, but much cheaper in territories like Puerto Rico or Guam.
What do you truly need? You can fish and drink anywhere. You're from LA, are you comfortable with poverty? Can you afford the Redneck Riviera?

Are you willing to live like the natives? Cheap places have poor lifestyles and few resources...or everyone would already be there. Still, there's no reason that at 42yo you can't leave LA, teach in Guam or Samoa and still surf the Pacific. :smallcool:
It depends on where you draw the line for poverty. As a single man with no family, I’m fine with tiny accommodations—in fact, there are rooms in my house I never use. On the other hand, I like to eat 2-3 times a day and 75% of my discretionary income goes to fresh seafood, red meat, wine, and various cheeses. Guam sounds like a winner. Its cost of living is only about 20% higher than where I live now, and if I take my 50% retirement from louisiana, I could use my louisiana pension to supplement my income. Full retirement is 40 years, and the retirement payout formula is 0.025xy, where x is total years of service in louisiana and y is final pay. Not accounting for inflation, I could retire with a $1400 a month pension at 20 years. The minimum amount of years to collect is 20 years.

I will have owned my house about 20 years at that point and will have built equity in the home, too. I could use that as a down payment on another house, if it doesn’t pay for the other house outright.

I’m a single man with no family and I’m aromantic and basically asexual (basically...I might be a gray-a demisexual and I definately have a fetish around being hit with the spell baleful polymorph, which I can only roleplay) so I only need worry about lodging for myself and being able to afford my few chosen luxuries (beach access, and decent food to bring home and cook—maybe with a glass of wine with dinner most nights).

[J-H]

The Mr. Money Mustache blog has some thoughts on early retirement, etc. A lot of it involves keeping your expenses very low... bike instead of car, etc.

I like my job and don't see myself fully retiring - what would I do? I'd get bored after 3 months of catching up on all the farm chores.
Also, farming is a money pit until you're really up and running.

[Chen]

Full retirement is 40 years, and the retirement payout formula is 0.025xy, where x is total years of service in louisiana and y is final pay. Not accounting for inflation, I could retire with a $1400 a month pension at 20 years. The minimum amount of years to collect is 20 years.

You get that amount for the rest of your life? If so, you REALLY need to look at what the penalties are for early retirement. I can't imagine how you get a 2.5% DB pension plan that you can tap into at any point for the rest of your life. That would be insane.

[Zhentarim]

You get that amount for the rest of your life? If so, you REALLY need to look at what the penalties are for early retirement. I can't imagine how you get a 2.5% DB pension plan that you can tap into at any point for the rest of your life. That would be insane.

I always thought the penalty was not getting 100% of your final pay. As far as I know, only Louisiana offers a 2.5% DB pension. Texas and Arkansas both offer 1%. Louisiana does have “beaches” down on the south coast, but they are subtropical instead of tropical. I could call TRSL and clarify its for life.

[Rydiro]

I always thought the penalty was not getting 100% of your final pay. As far as I know, only Louisiana offers a 2.5% DB pension. Texas and Arkansas both offer 1%. Louisiana does have “beaches” down on the south coast, but they are subtropical instead of tropical. I could call TRSL and clarify its for life.Its just weird, because you'd be getting a bonus for leaving early, namely those extra years. Someone who works 40 years (double your plan) gets twice as much, but 20 years later. Meaning 20 years less payment. Which is a lot. You'd be basically getting a $ 300,000 gift for retiring early.
If it really works that way, I'd be quitting too.

[Florian]

It depends on where you draw the line for poverty.

In the political landscape I'm used to, the line is drawn at being below 50% below the income range of a typical household, before taxes. So around where I live, that'll be 1,1K. That, well, keeps you from starving and a roof above your head, but woe to you when something in your household breaks down, or *gulp* you want to afford some new clothing or renew your Netflix subscription.

A while ago, it was sorta-kinda a fad for rather poor income retirees to resettle to some of the poorer EU member states, preferably in "expat communities" and it quite often didn't turn out so good. While they had a good jump start by suddenly being able to afford a nice house near the beach and such, reality hit hard when they noticed that the prices of imported goods are comparatively high in poorer countries and they still couldn't afford a BMW...

[Chen]

I always thought the penalty was not getting 100% of your final pay. As far as I know, only Louisiana offers a 2.5% DB pension. Texas and Arkansas both offer 1%. Louisiana does have “beaches” down on the south coast, but they are subtropical instead of tropical. I could call TRSL and clarify its for life.

No. Most DB pension plans will cut you off after a certain number of years anyways. Its rare you ever get 100% of your final pay as pension. The amount of time you pay into the pension needs to cover the rest of your life. Thats why theres usually a large penalty for retiring before a usual retirement age. Not only are you contributing less, you have more years to live (since you’re retiring younger) and thus less money needs to be stretched further.

[sktarq]

As a note about house equity and the US Pacific territories (N Marianas at least and I think Guam too) is that you basically CAN'T buy land there. It is all 99y lease and the financing is/was rather skrewy

Other classic options are places like Thailand, N Cyprus (Hi not a nation!), and some ofthe French overseas territories....Sri Lanka also has some of this (but may well be in civil war (is war ever civil?) again by the time you are looking) .... Details may hit the political rules of the board but there are options out there.

[Zhentarim]

http://i.picasion.com/resize89/14e26b12b575b9525276927d31e058b3.jpg (http://picasion.com/resize-gif/)picasion.com (http://picasion.com/resize-gif/)

Seeing how I started in early 2018, I’m in the group that gets “actuarially reduced“. What that means is unclear.

[Lvl 2 Expert]

Seeing how I started in early 2018, I’m in the group that gets “actuarially reduced“. What that means is unclear.

But you'd qualify full stop at 52, which isn't bad. As a teacher you probably get some decent summer holidays too, so maybe you can work up to it. For the last five years of working you spend your summers renovating a vacation home, have it rented out the rest of the year (this is not profitable, because you're hogging the house to work on it during the top season, so it's really an investment for afterwards), and when you can afford it, leave your job and move in. This also gives you some time to figure out if this is actually what you want your life to be like. If not you can sell the renovated house and go spend your days hiking instead.

If you get a really good career going and have some luck you might be able to go work for an international school or something for the last parts, follow the expats under US benefits. (Actually, I have no idea if that's how things work, but they might...) That could give you even more freedom to build your little paradise.

It's not going to be a life of luxury either way, early retirement, but if you have a good plan it could work.

[Florian]

What that means is unclear.

Insurance company math. This one has been mentioned earlier, meaning that you gain less stretched over longer years, the earlier you retire.

Very crudely put, it means that the whole retirement plan has been calculated with a certain retirement age in mind (say, 60) and a certain life expectancy in mind, (say, 80), so the 2,5% payment should last for a span of 20 years and that's it. Lucky you if you retire and die a bit later... OTOH, this gets recalculated once the parameters shift around a bit. The combination of 40 and 80 means that twice the length, so you usually get half of the 2,5% to even that out.

[Chen]

But you'd qualify full stop at 52, which isn't bad.

They started in 2018 so its only the last box that applies. Meaning they get the actuarially reduced amount unless they’re over 62 when they retire.

It basically means you’ll get the same total amount of money as you would if you retired at the normal time (62 here) but it’ll be divided over more years.

[Anymage]

If you don't know what "actuarially reduced" means when it's a key point to how pensions work, I strongly recommend talking with a financial planner before trying to put any plans into place. A bunch of RPG nerds are only going to be able to give you the most cursory explanation.

You might be able to save/invest a lot to have a decently sized retirement fund for when you do retire, but that again is something you'd want to talk with a professional about. I will note that I'm a little worried that you're expecting the pension (that you didn't fully understand) to cover all your costs instead of also thinking about investments and similar passive income streams, but at the risk of sounding like a broken record you really want to discuss those ideas with a professional.

Finally, assuming that you do retire at 62, you'll still most likely be relatively healthy at that point. Being healthy in your 60s does not guarantee that you'll stay that way in your 80s/90s. Without the resources to cover rising medical costs, depending on the social safety net where you live, you'll either be stuffed in the cheapest home or left to fend for yourself. You have a long time before that's relevant, but do try not to think that things will stay easy and cheap forever.

[Lvl 2 Expert]

They started in 2018 so its only the last box that applies. Meaning they get the actuarially reduced amount unless they’re over 62 when they retire.

It basically means you’ll get the same total amount of money as you would if you retired at the normal time (62 here) but it’ll be divided over more years.

Right, my bad.

No beach for me.

[snowblizz]

If you don't know what "actuarially reduced" means when it's a key point to how pensions work, I strongly recommend talking with a financial planner before trying to put any plans into place. A bunch of RPG nerds are only going to be able to give you the most cursory explanation.Not to mention that if in fact anyone here was able to give more than a cursory explanation I believe they'd be in violation of the "no professional advice" clause.

Am I the onyl one who immediately reads "actuarially reduced" as "you're getting less money than you think".


You might be able to save/invest a lot to have a decently sized retirement fund for when you do retire, but that again is something you'd want to talk with a professional about. I will note that I'm a little worried that you're expecting the pension (that you didn't fully understand) to cover all your costs instead of also thinking about investments and similar passive income streams, but at the risk of sounding like a broken record you really want to discuss those ideas with a professional.

Finally, assuming that you do retire at 62, you'll still most likely be relatively healthy at that point. Being healthy in your 60s does not guarantee that you'll stay that way in your 80s/90s. Without the resources to cover rising medical costs, depending on the social safety net where you live, you'll either be stuffed in the cheapest home or left to fend for yourself. You have a long time before that's relevant, but do try not to think that things will stay easy and cheap forever.
There are indeed quite a lot of issues to keep in mind. I remember the story of an elderly Swedish woman who tried retiring to Thailand. Eventually the people paying the pensions decided that being in the country was a requirement for actually getting said pension paid. It's worth considering all the angles. What do you do when Louisiana or the pension fund is broke? When Bernie Madoff turns out to have been the one managing the pension fund? Etc etc etc.

Am with you on the secondary incomes. I wouldn't trust a single source for pensions. Every few years I get a letter telling me people my age are healthier and that I'll get less pension and have to work longer.

[Zhentarim]

I could always retire from Louisiana and get another job in another state. From what I’ve read, the retirement will continue so long as you stay in America but don’t work in Louisiana. I could use the equity in my Louisiana house to buy a 40 foot trawler and live on it in a Miami marina.

[Scarlet Knight]

I could always retire from Louisiana and get another job in another state. From what I’ve read, the retirement will continue so long as you stay in America but don’t work in Louisiana. I could use the equity in my Louisiana house to buy a 40 foot trawler and live on it in a Miami marina.

That's been my dream ( well USVI) . You can use the time until then to learn how to sail as you want to be far from Miami come hurricane season.

[Zhentarim]

That's been my dream ( well USVI) . You can use the time until then to learn how to sail as you want to be far from Miami come hurricane season.

I’ve been through a category 1 before that was still technically a hurricane by the time it made its way north to me, and that wasn’t fun. Where would you recommend I sail to during hurricane season? (June 1st though November 30, with a peak in Late September/Early October)

I’ll also still have a pickup truck in all probability—they hold their resale value well and I trade it out for a new pickup about every 5 years.

[Scarlet Knight]

To avoid hurricanes many people sail up the east coast, then take the St. Lawrence to the Great Lakes, down the Mississippi, back to the Gulf, just in time to miss both the hurricanes & the cold weather.

I suppose you can head down to South America if you want to stay tropical. :smallcool:

[J-H]

How do you get from the Great Lakes to the Mississippi river?

[Jay R]

Remember that, however much it costs when you first retire, it will cost more over time as you get older and your healthcare costs rise.

[tyckspoon]

How do you get from the Great Lakes to the Mississippi river?

https://en.wikipedia.org/wiki/Illinois_Waterway there's a set of locks connecting the great lakes to the Illinois River, which connects through to the Mississippi.

[Zhentarim]

Remember that, however much it costs when you first retire, it will cost more over time as you get older and your healthcare costs rise.

I misread the pamphlet—it’s not US residency required, its US citizenship. I could always buy a boat, put it in a slip in Aruba, and teach in Aruba to supplement my pension.

[Tyndmyr]

This man made floating island from plastic water bottles, and mango trees.

https://www.google.com/search?source=hp&ei=xQC7XdSgAoPksAXnqZK4Bw&q=manmade+island+floating+mango+trees&oq=manmade+island+floating+mango+trees&gs_l=psy-ab.3..33i299j33i160.6559.15008..15161...0.0..1.556 .5877.9j14j2j1j2j3......0....1..gws-wiz.....6..0i362i308i154i357j0i131j0j0i10j0i13j0i2 2i30j0i22i10i30j0i8i13i30j33i22i29i30.EcSLLxg2vPw&ved=0ahUKEwiUl_qD68blAhUDMqwKHeeUBHcQ4dUDCAs&uact=5#spf=1572536533157

Not a great long term solution, as tides and weather tends to wreck such things. I believe that example fell apart after a few years, despite being in a particularly mild climate. US East coast is a bit rougher.

It's fairly doable to stretch your dollar by moving to a lower cost of living area/lifestyle, but I would suggest trying it out for a time before committing to it. Take a vacation and see if it's for you before pinning your future on it.

A goodly portion of old age/retirement money is due to health care expenses. Living modestly is all well and good, but as you age, you are more likely to encounter illness or injury. Make sure whatever you have planned accounts for that. And definitely crunch the numbers carefully with your retirement. Maybe talk to an expert. The devil's in the details, sometimes.

There is a liveaboard lifestyle if you want to live aboard a boat, though. There's a decent reddit community for it, and it might be interesting to check out. I will note that boats are expensive. Mine's not even liveaboard sized, but it invariably needs work.

[Zhentarim]

Not a great long term solution, as tides and weather tends to wreck such things. I believe that example fell apart after a few years, despite being in a particularly mild climate. US East coast is a bit rougher.

It's fairly doable to stretch your dollar by moving to a lower cost of living area/lifestyle, but I would suggest trying it out for a time before committing to it. Take a vacation and see if it's for you before pinning your future on it.

A goodly portion of old age/retirement money is due to health care expenses. Living modestly is all well and good, but as you age, you are more likely to encounter illness or injury. Make sure whatever you have planned accounts for that. And definitely crunch the numbers carefully with your retirement. Maybe talk to an expert. The devil's in the details, sometimes.

There is a liveaboard lifestyle if you want to live aboard a boat, though. There's a decent reddit community for it, and it might be interesting to check out. I will note that boats are expensive. Mine's not even liveaboard sized, but it invariably needs work.
The best things in life ain't free.

https://www.youtube.com/watch?v=N1n5XqwUkYw

[paddyfool]

Don't forget, when making such long term plans, that sea levels are forecast to rise another foot or so by 2050, on top of whatever local changes in coastal erosion, silt deposition etc may be happening anyway.

And I've known early retirees who've come to regret skipping out on the typical wealth generation age of a person's 50s. Also, pension schemes have been known to change and/or to go bust before.

[Zhentarim]

Don't forget, when making such long term plans, that sea levels are forecast to rise another foot or so by 2050, on top of whatever local changes in coastal erosion, silt deposition etc may be happening anyway.

And I've known early retirees who've come to regret skipping out on the typical wealth generation age of a person's 50s. Also, pension schemes have been known to change and/or to go bust before.

Hopefully this pension will be protected as its public sector, but nothing would surprise me.