He was born in 1958 and she was born in 54. So he is a year older than me and she is three years younger. As a matter of fact, she’s the same age as my wife. So we are all close to the same age. Meet Ron and Theresa.
We are in the same age group. But our financial situations are a lot different. Not that they are any different from a lot of people, but we don’t have that in common. I didn’t have a lot of faith in the economy in 2007 and 2008 and was in money market funds for most of my portfolio except for some silver and gold mining stocks. Lots of people were fully invested in common stocks. And during those two years, lots of people lost ½ of their portfolio. That’s what happened to Ron and Theresa.
They both worked for a car dealership in Sacramento and it went under. And long story short, they went under too. The thought of starting all over again at new jobs, only two weeks vacation, no seniority, with people thirty years younger, was more than they could handle. But rather than start all over, they took early retirement.
They didn’t sit down when they first got married and plan to retire in 2008. They really retired much the same way that I retired. They both went into work one day and found out the car dealership was closing and they were out of work. They got busy really fast, did some research, and came up with a plan. They found someplace where they could live for around $900 a month, including health care premiums.
How did they do it? They became expats. Expat is short for expatriate. According to Wikipedia, an expat is a person temporarily or permanently residing in a country other than that of the person’s upbringing. There are more and more people leaving the US to go and live someplace else every year. Ron and Theresa are just two of a growing number of people doing this.
Why? Well let’s look at what they spend every month
| Electricity | $50 |
| Water | $8 |
| Propane Gas | $3 |
| Telephone | $5 |
| Direct TV | $75 |
| Internet | $50 downtown $130 at the coast |
| Groceries | $350 (Includes wine) |
| Transportation | $25 (buses & taxis) |
| Entertainment | $50 |
| Condo Dues | $130 (Total for both condos) |
| Health Plan | $113 ($53.42 each, which covers doctor's visits and meds) |
| Total | $859 to $939 per month (depending if they are downtown or at the beach) |
Something about their budget hit me right away. Note the Internet and Condo dues. Yup. They own two places. I had to ask; propane? Well they use propane for heating their hot water and also for cooking. Buses and taxis? They don’t have a car. Everything is within walking distance and for what’s not nearby, they get a cab or take the bus. Condo dues? They own their own places at the beach and downtown. They pay $30 a month at the beach and $100 a month downtown for the HOA fees. That’s pretty low if you ask me. And they bought the two places for less than $114,000 total. Pretty good, I’d have to say.
What surprised me the most was the health care costs. Granted, the prices are age dependent and the older you get the more you pay. But I found out that Ron and Theresa qualified for a national health plan and the price was the same no matter what your age. And as you can see by looking at their budget, they each pay just over $50 a month.
Talking with friends, this past weekend, over wine, the big question came up. “When are you moving to Ecuador?”
I’ll answer that question in another post.
For Taking Early Retirement (TER), I hope you are enjoying a great retirement or are close to that day!
Jeremiah John
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