Cost of living overseas and variables involved

[robert angel]

I am trying to corral this topic into what I hope becomes a better, centralized place. Yea, 'Off Topic' is supposed to have nothing to do with foreign women and most guys thinking of living overseas definitely want a woman/women in their lives. However I'm trying to help people get a grip on the nuts and bolts of the real monetary costs involved, while not focusing so much on the women.
 
I put my last query into the Latin American Trip Reports  area and the topic has switched into several different threads. I, or maybe original authors, might copy and paste what they've written there into here, centralizing it, because some good stuff has been posted already--it'd be nice to see it in one place.

 
By titling it 'cost of living..' I'm hoping it makes future archive searches easier. It's sometimes hard to find what you're looking for, using archive searches, although you always find 'something' interesting, off topic or not
We can dig deeper and deeper, there are variables like rent versus own, whether or not a single foreigner can even own property in a given country or if he's able to in a foreign land, but only in his wife's name or what. Where you live, the preferences of those you live with  and how high on that country's scale you want to be, are all significant variables.

I think we could use this 'Cost of Living" thread for Latin American and Asian nations, if it pleases the members.

 
Something of interest to me and inevitably to others, would be how the heck do you pay taxes on your retirement income--actually how do most guys pay their USA income tax from overseas without flying back, come April for the dirty deed? Most of us will probably have to file some sort of tax return, as long as we're American citizens, I think.
 
Assuming you have some savings/income you're living off of, some of us are interested in where do you keep your savings and if they stay in the USA, how do you access them--do you do 'international banking' online and in the actual banks here and overseas? I've heard some bad things about keeping too much money in foreign banks--they're not always detail focused, honest or insured.

 
I hope this thread takes off, because I think that even if in the end it's just a 'pipe dream' and the dreamer never leaves his or her native nation--many of us have wondered about living overseas and what's involved.

 
I am going to post my original post again here below--on a thread I think I should have actually created for it. Seems lately at times I'm killing off or stalling good posts more than stimulating them with my sometimes off topic commentary. Hopefully that won't be the case here.....

(prior post)
I am always worried about getting another year in and keeping my job, which pays pretty good, especially considering my own 'cost of living', But if I lost it, I couldn't see me selling cars for 60  hours a week or being a restaurant assistant manager or whatever the economy might offer.

I look at my options and economic situation and consider a number of places overseas. Not just the Philippines, but exploring Colombia, Peru and Ecuador intrigue me. Aside from air conditioning, internet and  limited cable TV, I don't feel I need much in the way of 'fancy'. Yes, I realize I'd have to bust my ass to really learn competent Spanish.

It boils down to this.: If I lost my work here, I'd probably have between $22,000 and $24,000 a year in savings to live on for the next six or seven years.  Each year I keep working in my present capacity, it adds an extra couple grand to the yearly income I'd have, so in a year, I'd probably be looking at $24,000 or $25,000 a year instead not too far from now.

I'd allow some 'untouchable unless emergency' money, just in case I had to return quickly to the USA--funeral, etc.

Then six or seven years from now, I'd have used most of that up, but my pension would kick in, upping our to about $33,000 a year (might be higher adjusted for inflation and a cost of living increase is built into that therafter) then another $13,000 or so a couple years later from social security.

I really don't know if two people could ek out a livable existence on say $23,000 a year in the places I mention. I'm pretty sure $33,000 a year would be quite doable, and that eventual, (God willing) $45,000--$50,000 a year  would fund a rather nice, by most standards, life style.

You guys think these figures, near and long term --for a couple living modestly are workable?

There are times I really want to bail out of the rat race and life style our lives in the USA have become, but I'm just not sure if it's economically feasible, given the figures above.

Any feed back would be greatly appreciated

[Micky]

RA -

Good move with the move.  At the U.S. embassy they have a section called "citizen services",  they facilitate,  IRS,  Social Security and the like.  They can also facilitate direct deposit,  if you so choose,  to direct deposit (here in Colombia) into an account at either Banco de Bogota or Bancolombia.  I just use atm for all of my banking and have no problems at all. 

Micky

[AndyLee]

Good topic and good post robert, let's hope it generates the kind of archives that can be useful for all of us.


Quick couple of answers:
Income Taxes: Yes, everyone has to file income tax returns, even if no tax is owed. The easy way for me has been to use H & R Block in the US and give them an electronic signature to file my papers for me. Alternatively, any friend can do it for you with a simple Power of Attorney. Any tax refunds are direct deposited  by the IRS or State to my checking account.


MONEY IN BANKS:  I have my retirement benefits direct deposited to my bank in the US which is USAA in Arizona. Then I use my ATM card here in Colombia to retrieve cash as needed. The USAA debit card reimburses me ATM charges so withdrawing money is free. I am able to withdraw 720,000 pesos day from one or several banks. The ATM I use most often here in Colombia is Davivienda, but others are just as useful, including Servibanca which is a consortium of several banks.
USAA, my American Bank, offers the usual range of products; savings, checking, credit cards, insurance, investments, so it's a one stop deal for me. Only caveat is that you have to be a current or former military personnel because it is a federal credit union set up to help military personnel.
When I want to transfer money between friends or if I sell something on ebay or  then I handle it as a Paypal transaction and the money goes into or comes out of my Paypal account. When I've accumulated significant money in Paypal then I transfer it to USAA.


PROPERTY OWNERSHIP: It is my opinion that a gringo should not own property for the first one or two years in a foreign country. For several reasons. First, you are like a lamb. You don't have a clue about the real estate markets or who is scamming you or what the true value of property is and whether it is going up or down in value. I recommend do not make the mistake of seeing such cheap prices and thinking its a good deal. Just because it would be worth a $1 Million in the US doesn't mean its worth the $50,000 they are asking for it in El Pueblo Boondockos.
Second, you need to spend at least 1 or 2 years in the community to know if you like it. I have been very fortunate to live one month or more in 5 different regions of Colombia BUT I still don't know FOR SURE which region and which city within that region I want to spend the rest of my life.
I remember before I moved from US to Colombia that I was gungho for Medellin. Nothing else would suit me, I had to be in the City of Eternal Spring. So, I lived there 3 months and couldn't wait to get out. Thank God I only signed a 3 month lease. If I had bought a house, assuming I didn't overpay for it in the first place, I would probably still be trying to sell it for what I paid for it.
Third, ESPECIALLY if you are moving here and marrying a woman you met on the Internet and you've had exactly 17 days together during your various vacations. DON'T let this woman OR HER MOTHER tell you to buy a house in the neighborhood THEY pick out. Listen to their advice, yes, but be cautious. They could well be fronting for their cousin or uncle who is trying to unload a white elephant an an ungodly price. Remember, when you have a falling out with your wife her family is going to back her 100%.
Rents are cheap here. Rent a nice little place and live here for a while. Get a feel for the place, see if you like the people, see if you can tolerate the climate and the food, and the music.
Even after being in Colombia since 2009 I still wonder if I might like Peru, or Ecuador, more. Maybe its just me, and I'm fickle, but thank god I've not bought property here yet, because sure as shooting i would wind up finding some other place I like better.

[Micky]

I spent several hundred hours looking at property all over SA before ever getting on the airplane.  You can get a very good idea of REAL values by doing your OWN research.  That will NOT substitute for being there,  but it will give you a very good ballpark on the market,  where ever that may be.  Myself,  I would listen to all information,  but I would NEVER even begin to consider buying without a total investigation of my own,  period.  Wife,  mother,  brother in law,  they do not count,  my money,  my balls in the vice. Andy mentioned about the price and one thinking this would be worth a hundred times more in _______ USA.  Well it is NOT,  it is where it is and no one should judge the price/value by anything other than that. One thing that Gringos can blame themselves for,  paying over market prices BECAUSE they think in terms of a low price tag relative to what they normally see.  A beach lot that is forty kilometers from Barranquilla with a price tag of $30 K U.S. is NOT a deal when the market value is $15 K U.S.,  but a vacationing Gringo well plunk down the 30 in a hurry BECAUSE that lot in California would be $500,000. And that type of thing is played out time after time.

Micky

[thekfc]

As to how much money it would to live overseas have a lot to do with what kind of lifestyle would you like/want to live.
Everyone's lifestyle is different, some people can live comfortable on $15,000 a year while some will need $50K as a minimum.

I have a friend whose father (retired) is living very comfortable on $20K a year in HK - he owns a house & have all the "essentials" that he need (A/C, LCD TV, internet, etc,). So I would say it have a lot to do with your lifestyle, how much you will spend/willing to spend and how you plan to live -  as a "local" or as a ........
 
I too have been considering moving to the PI part-time and have been "checking" what the cost of living would be.  Personally, I would "set up" a small business via the wife to offset the month cost or to have a little extra income.

I think (for me) the biggest cost would be the cost associated with initial move & setting up, from there the monthly expense should drop.

[Researcher]

      Hey Mickey, is there a danger of buying property in Colombia only to find out the folks that sold it didn't really own it? I have heard of problems with knowing for sure the property is clear of any kind of ownership issues in other countries.

      Researcher

[Jeff S]

The answer is to have a retirement business. Something you can do there to support yourself or at least or supplement your income. I'd forget about having a brick-and-mortar business there, though for the same reason it's inadvisable to jump into real estate - too many unknowns getting started. With a computer, a high speed internet connection and a paypal account you can be in business anywhere - and just about anyone can make a thousand or two a month, part time at it. You can write, teach, program, buy, sell, all kinds of things.  You can live in any country in the world for two grand a month, given your bills are paid off, including the US. In some better than others.