How to Save for Retirement
There are a number of experts who can tell you how to save for retirement. If you're trying to figure out what percentage of your income you should save read Schwab's article. You'll need to sock at least 10% away if you're in your 20s and the percentage only gets bigger as you get older. US New and World Report's article has lots of info on retirement. Look at this article about the 7% solution or the rule of 72. If you're looking to retire early, the website Early Retirement Extreme has lots of good info. One thing to keep in mind: some countries (like the US) require you to pay taxes on your worldwide income. The Millionaire Teacher, written by Andrew Hallam, has a lot of info about saving for retirement. Check outhis website.
Budgeting for Retirement The first thing that you should work on is budgeting. You should find out what your debt is really costing you and look at these budgeting tips from self-made millionaires. If you're American, take a look at Kiplinger's article on waiting to claim Social Security benefits.
- Diversity is the key. Don't put all your eggs in one basket.
- Banks. There are also high interest accounts that you can use such as HSBC. CDs are another option.
- Stocks and bonds are another option. Conservative long term investments that produce dividend / interest income are best for those close to retirement age. More risky investments are better for those that have a while to go before they retire. Jackie Bolen, a former university teacher in Korea, blogger, and author of a number e-books (including The Wealthy English Teacher) shares what she invests in in a Google doc. If you're looking to get dividends, check out the post Dividend Portfolio by DiviKeep Working. Teaching, tourism (such as giving tours or owning a hostel), editing, and translating are some options. Supplementing your teaching salary, teaching online, retiring on the web, and earning money online have some ideas.
- REITs - Real Estate Investment Trusts. These are similar to owning property except you don't have to do the hard work. They deal with all the rentals and plumbing issues and you get a nice share of the profits
- Property. You can buy stuff at home or abroad. Houses in other countries may be cheaper than what you'd find at home. Dmocha from Dave's ESL Cafe says that in some countries you can get tax breaks for property. Put the full down payment on a property, keep it mortgaged, and use a property manager. By doing this you can make tax claims of the interest, improvements to the property, the manager's fees, and other items. It's better to have 4 properties with the tax advantages and eventual rise in value, than tie up all your capital up in one property that just generates income with no expenses to offset that income.
If you're looking at the US take a look at the 10 tax-friendly states for retirees by Kiplinger or CNN's best places to retire. Retirepedia has a list of the best places to retire and the cheapest places to retire.
If you want to retire abroad, here's an article from October 2014 about the most popular countries. CNBC has a slide show of the best places to retire outside of the US. International School Review has an article about retiring overseas. Usually you have to be 50 or older to get a retirement visa, but there are some exceptions.
- Belize:They have a retirement visa (rentista) that requires you to be at least 45 and have $2000 usd a month. Here's the embassy's information and Retirepedia's information.
- Bulgaria: If you have a EU passport, then you won't have visa issues. If not, then you will have to prove that you have to apply for a type D visa and show that you are entitled to retirement income from your own country, have a Bulgarian bank account, a place to stay in Bulgaria, and a Bulgarian address. You might also have to show proof of funds.
- Cambodia:You can get a business visa ($25) at the border. It only costs about $5 more than a tourist visa. You're allowed to renew it indefinitely for periods of 1, 3, 6 or 12 months.
- Cyprus: If you have a EU passport, then you won't have visa issues. If not, then you might have to be creative since long stay visas are only issued for employment, study, or business.
- Dominica: You can buy citizenship.The cost is $75,000 for an individual or $100,000 for a family. The process is quite legal and fairly well known and called the Dominica Naturalisation and Citizenship Act (thanks go to overseas-exile).
- Rules have changed though. Now you can't get this visa unless you already have another visa, such as a work or marriage one. Here's what Guy Courchesne has to say. You have to renew it every year. Due to the low cost of living, more and more people are retiring in Mexico and you don't have to be 65 to do so either. There are people in their 30s and 40s who have retired in Mexico. For more info, take a look at retire in luxury.
- Ecuador: Retirement visas (Visa 9-1: Rentista) are available if you are receiving pension or social security funds of at least $800 monthly for a single person, $900 for a couple. Here's the application form and instructions on what to do. Ecuador is now allowing you to work while on a retirement visa.
- Ireland: With as EU passport you won't have visa issues. If not, you will have to show proof of insurance and adequate funds.
- Japan: They have a lot of self sponsored visas and if you can prove sufficient income you can get a resident visa.
- Malaysia: They have MM2H visas (Malaysia My Second Home). You have to renew it every 10 years.
- Mexico: They have an FM3 visa (no inmigrante-rentista).
- Panama:There is no minimum age for retirement and they have four different visas that you can retire on. 1. Resident visa as a pensioned tourist. 2. Reforestation investor visa. 3. Economic solvency visa. 4. Macro business investor visa. The Canadian embassy has better information than the American one. Here's also information on how to become a permanant resident.
- Peru:If you can prove a retirement income of $1000 a month, then you can get a retirement visa (rentista). You're not allowed to work but after 2 years you can apply for citizenship and then work. Here are some useful links about retirement visas in Peru.
- Spain:With an EU passport you won't have visa issues. If not, you will need a criminal background check and medical certificate. You also need proof of income of at least $20,000 a year and medical insurance. All documents must be translated into Spanish. The embassy has further information.
- Thailand:They have a non-immigrant "O-A" visa (long-stay). You have to renew it every year.
- Turkey: You can get a resident visa for up to 5 years provided you show enough money. For each month you want to stay you have to show 300 euro in your bank account. Check out your move to Turkey for more info.
- Vietnam:You can get a business visa for 3 or 6 months which can be purchased through a travel agent and renewed in country.
- Uruguay: You'll need to go to Immigration in Uruguay in order to petition for their visa. You'll need to have your birth cert, criminal record check, health check, and proof of income. It usually takes 6 to 12 months to get the visa. You can get citizenship after 5 years, or after 18 months provided you have $18,000 a year in income and have bought a property in Uruguay for at least $100,000. You can find more information by contacting the embassy, reading the steps to getting an Uruguayan Visa, or looking at Overseas-Exile.
TEFL Tips recommends: