10 Alternatives to Retiring Abroad

The premise of my site is that moving to a low-cost country like India will allow you to retire earlier than you could otherwise. This is a straightforward case of cost-of-living arbitrage, which is the idea that differences in cost-of-living between different places can be exploited to one's advantage.

Now, moving to another country to retire is no simple matter, and is certainly not for everyone. This got me thinking about some of the other non-traditional living options that can help with the goal of retiring early. If moving outright to another country seems too radical to you, you may like to consider one of the following options (or maybe not!).

1. Roaming ("Perpetual traveler")
For those with an adventurous streak, one possibility is not to settle down anywhere, but to keep moving from place to place. This requires you to downsize aggressively, selling everything that you really don't need. Not having to maintain a permanent home cuts down significantly on costs (no mortgage, property taxes or home insurance to worry about).

Some perpetual travelers prefer to travel abroad, living primarily in low-cost countries, and occasionally returning home. There are several well-known early retirees who followed this model, such as Billy & Akaisha Kaderli and Paul & Vicki Terhorst (I reviewed Paul Terhorst's book Cashing in on the American Dream: How to retire at 35 in an earlier post). Some others prefer to stay in the US, preferring low-cost areas of the country. When you are no longer limited by your employment options, you have a lot more places to choose from.

2. Home exchange
If you own a home in a desirable location that many others want to visit, this is an attractive option to consider. You can exchange your home for someone else's whenever you feel like. This allows you to live in many other locations at low or no cost. There are sites like Home Exchange and Invented City that cater to this interest.

3. Owning two homes
In this option, you own a low-maintenance vacation home (typically a condo or apartment) in a low-cost country, in addition to your primary home in the US. You live in your vacation home for part of the year, and return to the US for the rest of the year. You may choose to rent out your primary home when you are not around.

For example, there are many older Indian immigrants in the US who are now trying out different variations of this model. Many of them describe this "six months in India, six months in the US" lifestyle as their ideal retirement goal.

4. Living in a hotel
How about never having to worry about home maintenance, yard work, housecleaning, paying utility bills or even making your bed? You can then stay in a hotel or motel, especially in one that offers attractive weekly or monthly rates. Here is a story about a British couple who stayed in a Travelodge for over 20 years.

Mr and Mrs Davidson book 12 months in advance to get the cheapest rates, paying an average of £90 a week which includes electricity and heating bills, laundry and bedmaking.

For meals, the couple walk across the car park to the service station's Little Chef or visit nearby restaurants.

Mr Davidson, a former second world war Royal Navy sailor, said: "We get great rates because we book well in advance and we even have our own personal housekeeper. It doesn't get much better than that, does it?"

5. Living in a resort
This is one step up from living in a motel. If you are lucky enough to find a resort that allows long-term rentals, you may find yourself with a good deal. Millionaire Mommy Next Door swears it can be done.
We've decided to ditch suburbia and live in a "resort style" community. Our total monthly housing expense (rent and utilities) will drop from ~$1,565 to ~$1,225, saving us about $4,000 annually. We're adding extra recreational opportunities - while decreasing our maintenance requirements and monthly expenses in the process.

Imagine living as if on vacation every day. You'll likely be trading your current square-footage for resort-like amenities. Sell or give away many of your furnishings and all of your yard-work implements. You won't need them. Pare down and simplify your life.
6. Living on a boat
Bill Dietrich's Retire Onto A Sailboat site provides extensive information on living on a sailboat and is fascinating to read. He quit his job, sold all his stuff and bought a sailboat in 2001. He has been living aboard and sailing the Florida coast, along the Mississippi and to the Bahamas, Dominican Republic, Puerto Rico and the Virgin Islands.

You could go one step further, and retire on a cruise ship! Why not? After all, snopes.com says that the story about retiring on a cruise ship is NOT an urban legend.

9. Living in an RV
Jacob at Early Retirement Extreme is planning to cut his expenses in half by living in a 34′ RV (equipped with a kitchen, a bedroom, a bathroom, a couch, an easy chair, and a table).
We bought an RV and have found a place to park it. Only about two miles from where I work too and within biking distance of the mainstay supermarket. Rent is reduced to 1/3. Incidentally this is less than either of us has ever paid in rent. There are no more water bills and no more trash bills.

We are going to reduce monthly outlays in half. We’ll free up almost $1000 a month. This means that we will be living on somewhat less than half of [wife's] paychecks, or a little over a quarter of mine. I would almost be able to support both of us out of my retirement “fund”.
8. Volunteering
If you like the idea of making a difference in other people's lives, but do not have large sums of money to donate to charities, volunteering may be for you.

The best known organization for volunteers in the US is the Peace Corps. The mission of the Peace Corps is to serve the country in the cause of peace by living and working in developing countries. If you always wanted to travel overseas after retiring, this is an option to consider.

Peace Corps volunteers have to commit to 27 months of training and service on each assignment. Peace Corps welcomes older people, both singles and couples. For a volunteer organization, it provides generous benefits.
The Peace Corps provides Volunteers with a living allowance that enables them to live in a manner similar to the local people in their community. The Peace Corps covers the cost of transportation to and from your country of service. When you return from your 27 months of service, you will receive just over $6,000 toward your transition to life back home.

All Volunteers receive comprehensive medical and dental benefits during service. Additionally, Volunteers can obtain affordable health insurance for up to 18 months following service through an assistance program. The Peace Corps pays the first month's premium and you then have the option to purchase a reasonably priced, comprehensive insurance policy to cover you and qualified dependents.
9. Joining a commune
If you like the idea of living in a community where neighbors are like an extended family, perhaps you should consider cohousing. If you are a hippie at heart, and feel that you missed out on the idealism of the 1960's, it is not too late to re-discover the idea of communal living.
With living costs spiraling upward and empty-nesters feeling a need for a greater sense of community in their lives, some baby boomers are reconsidering the concept of group living. This time around, the idea holds appeal as a cost-efficient, socially engaging way to spend their golden years.
Communes are based on sharing of income and expenses among members. This ranges from monasteries and similar faith-based communities to communal farming co-ops, group homes and collectives of varying sizes where residents pool at least a portion of their incomes.

As Scott Burns describes in an MSN money article, there are big economic advantages to this kind of shared living.
Imagine a single retiree living in a 55-and-over trailer park. She has a monthly net Social Security benefit of $1,000. From that she has to pay $400 for land rent and $300 for the loan payment on the manufactured home. That leaves only $300 a month for food, clothing, transportation and everything else.

[Now imagine her sharing her 1,400-square-foot 4-bedroom double-wide trailer with three roommates]. Income quadruples to $4,000. This leaves $3,300 after shelter expenses. With this much shared income, each person has $825 a month.
10. Slacking off
If none of this excites you, you could just decide to quit work, adopt a college student's lifestyle (except for having to attend classes!), and support yourself by taking up a temp job whenever you run out of money.

As a confirmed member of Generation X ("Slacker" is an all-time favorite movie of mine), I have to admit that the notion has a certain appeal to me. While practical considerations (such as a wife, kid and a mortgage) prevent me from adopting this path, there is nothing stopping me from enjoying the wonderful Why Work? forum and support group:
We're a pro-leisure and anti-wage-slavery group of people dedicated to exploring the question: why work?

We actively promote alternatives to the wage slavery mindset and what we call "The Cult of the Job" which automatically equates having a job with making a living. Our main purpose is to encourage people to value leisure, re-think the Puritan work ethic and its derivatives, and critically examine other work-related legacies of industrial capitalism.
There, that sounds much better than "slacking off", doesn't it?

If you liked this article, you may wish to check out some of my other posts:


Lee said...

Great summary of alternatives. I enjoyed Paul Terhorst's book too. If you can remain flexible and mobile you can live on a fraction of what most American's live on. For example, how much would the average person save if they didn't own a car? Most people are living cheaper by renting a home instead of owning one. The biggest issue I had with Mr. Terhorst was regarding health care in the third world. I'm not sure I'm ready to sign up for that yet.

Anonymous said...

"While practical considerations (such as a wife, kid and a mortgage) prevent me from adopting this path, there is nothing stopping me from enjoying the wonderful Why Work? forum and support group"

Amen on both fronts! (Family & and whywork forum)

Great post.

Daizy said...

In 2 years I won't have a mortgage on my rental house and can use the rental income to live on. Then I can go the slacker route with a safety net. I'm not a big risk taker, just a little one. Thanks for the links!

Millionaire Mommy Next Door said...

Great collection of options! (Thanks for including mine.) We're thinking about trying the home-on-wheels option next year (RVing). I hope gas prices come down...

Shoban Sen said...

I know many older Indians who actually practice "six months in India, six months in the US" lifestyle. But these are people who worked in India and live in India. They come to visit their children who live and work in the US. They come to the US in the spring and return to India in the fall routinely like migratory birds. The only difference is that the migratory birds usually leave their homeland in winter to escape from freezing temperatures. Our Indian seniors leave their homeland in summer to escape from the scorching temperatures.

I don't think any Indian who has lived in the US for many years, can actually return to India permanently after retirement. They simply would not be able to adjust to Indian lifestyle and Indian situations. Visits for a few weeks or a few months are okay, and people actually do that.

Anonymous said...

Respected Shoban Sen,

Perhaps you are almost right, but every rule has its exceptions and my family will be celebrating 10 years back in India in the coming October. Not only can it be done, it can be wonderfully done.


Anonymous said...

About home swapping: There are many Internet-based services that pair prospective travelers with one another for a home-exchange vacation but I would highly recommend www.homeforswap.com