Work Abroad

How to Retire Cheaply

Retire early, retire cheap. Most self-help books on early retirement preach that you need US$500,000 to US$1 million in order to retire.


Sure, a million dollars will come in useful if you are looking forward to an retirement full of hair transplants, facelifts, croquet lawns and all the other tacky clichés. You just don’t need that much to give up work though.

Take a lesson from the Sufis who observed that ‘to a starving man, every meal is a banquet’ Let go of the brainwashing of a lifetime and realise that most of the best things in life really are free.

But whlst money won’t buy you love or nice sunsets, it sure helps in the meantime. To retire you’re going to need some kind of a budget unless you plan on working abroad.

Rock Bottom Budget – US$50,000

This is really the minimum amount you can retire on. On this budget, you should stick to the cheapest part of the world – South Asia. India and Thailand have been traditional favourites but other cheap South Asia otions include Sri Lanka, Nepal and Thailand.

Depending on how you invest your money, it’s fairly straightforward to reap a 5-7% return on your retirement fund. This works out to about $2500-$3500 a year. One option here would be to use the cash to put down a deposit on property, do it up and rent it out – there should be enough left for you to live a simple life somewhere cheap.

Medium Budget – US$100,000

Double the money, and you’d be living very well. Invest this and you should see around $7000 a year in interest which you would actually have to put in some effort to spend all this money if you are living in the Indian subcontinent (unless you move to the big cities). You can have an upgraded version of everything in the rock bottom budget, and still save enough to afford a week in Miami every year.

Alternatively, you could also retire to a slightly more expensive place such as South East Asia or Central America. $7000 a year in South Asia gives you the same standard of living as a Swiss living in Switzerland. $7000 in Thailand and Honduras buys you the same standard of living as the average Italian and Portuguese respectively.

Fat Budget – $200,000 or more

This is about all you need really. If you have this much money stashed away, the only reason you are still working is: – you love your job OR – you are supporting 4 screaming kids and a bedridden spouse.

US$200,000 will earn you about US$10,000 to US14,000 a year in interest. You can live well anywhere outside of the industrialised nations on that kind of money. Whether it is Brazil or Hungary, India or Thailand, Turkey or South Africa; you will enjoy a standard of living equal or higher than that of the average American. You can also live adequately though somewhat more humbly in parts of the industrialised world, in say Maine, Andalusia or Queensland.

J. Sim

J.Sim, aka JamJam, is a wharf rat born and bred who went on to become a soldier, teacher, financial and media analyst.