As The Boomers Retire...

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Posted

This is a copy and paste from the Introduce yourself section. I'm pretty new to these forums and it was late at night, I didn't read the rules etc etc so I'll start out again. :blonde:

 

I've been visiting PI for many years now since flying into Clark as a pilot with USAF outta Kadena. Love the place. But I'm currently undertaking some research for retirement spots around the world. So I will be working on a different experience of the country than as a previous tourist. Hope to build up a comprehensive program of information for the 71.5 million baby boomers a large percentage of whom are going to be dramatically underfunded and unready for their lives of retirement within the US, Australia and other first world countries.  I guess this is ground that's been covered multiple times over but hope to add some new perspectives to it.

 

I am writing a sort of memoir which as mentioned in my above post I hope to help lead me into a partial solution to the Tsunami that is coming at us, the baby boomer generation where I am on the tail end. Most of us are currently very underfunded for retirement. In the US we no longer have the traditional retirement defined pension benefit as it has been replaced by various defined contribution schemes. This has tied our retirement funds to the vagaries of the equities markets, Unlike the booming 80’s and 90’s for our parents, for us we’ve had the dot com bubble, GFC and loss of housing equity and 2015 Chinese affect. Who knows how unhelpful the markets in the next coming years are likely to be towards giving us some sort of return with which to live on but congratulations to the first week of 2016, they’ve already closed downwards. If you haven’t saved much you really are going to be destitute, if you’ve saved a fair amount, you are going to be suffering a great reduction in standard of living. We no longer have a great deal of hope for a decent social security payout for most of us who are American.

How are these for depressing statistics?

The AARP recently found in its Retirement Confidence Survey that most Americans over the age of 50 have an unrealistic view of their retirement financial future. A recent study by Fidelity investments showed an average 401(k) plan of only $91,000 with balances for some very long time savers as high as $251,600. Because of the longer time span over which you need your investments, industry experts have listed a 4% withdrawal as the maximum for not using up all your funds. If you take a look at the above average savings balances you can see that most people will retire with annual  income between $3640 and $10000.  (Given the poor showing in the markets, the 4% is likely to be highly optimistic)

 

Is it any surprise that in a recent poll, 80% of today’s workers don’t believe they will achieve financial security in retirement and even worse, 75% agonize that they are not likely to be able to count on social security to provide them with even a basic income.

The actual truth of the matter is that the US Government Accountability Office has found that as many as half of all American households headed by someone 55 or older have absolutely no retirement savings at all.

 

Even for Kiwis or Australians the picture isn’t so hot. I personally will have access to some Australian/and/or NZ pension. I also have some Superannuation saved up. But with all the funds available to me from these 3 countries, I really don’t aspire to a very high lifestyle given how expensive it is to live anymore in a first world country.

 

And so I am contemplating once again looking towards the emerging world to see whether there is a real decent alternative for me that doesn’t mean I must work full time at a job that I don’t like until I am in my 70’s. I use the word again because I have had a chance to tryout living in Belize Central America, following a dream at that time about 10 years ago on a real lovely 75 acre jungle property. The dream didn’t work out but I learned some extremely valuable lessons from that experience. If I get the chance I might try to post these at some time in the future. 

As mentioned above, I know PI quite well by now but really only as a tourist. I’m hoping to get a chance now to get to understand the country as a potential retiree and I am hoping that I can get some insights into how someone who is considering it as a retirement destination can come to understand the reality versus the dream. I am older than I was when I went to Belize and probably cannot recover as effectively as I did at that time. This reality is even more important for older retirees. 

 

Any and all relevant inputs into this dilemma as they relate to retiring to Philippines from members will be valued here. In return I will be happy to share more of my research as it develops.

 

 

 

 

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Posted

Welcome to the forum Beep.

 

There is just about every type of topic and information about retirement in the Philippines here. Some have been addressed to ad nasium lol. Everything from housing to safety to what budget you need to live in your lifestyle to different types of visas.

 

If you don't see what your really looking for and have a specific question about one of the many topics here. Please feel free to start a new topic and ask away. We have a lot of great guys and gals here who would be more that happy to answer them. One tip though, this is a very active board. Once you start a topic, check back often, you will probably start getting responses in minutes, not days and hours like other forums.

 

:cheersty:

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Posted (edited)

Right. Here's my narrative, see what you might find similar.

 

I'm a born Aussie. Got my US Citizenship in 1975.  I was able to retain my Aussie Citizenship, but with an expired passport. I filed in Canberra, "resumption of Citizenship" and got that around 1995. I filled my 10 years residency from birth to age 17. And segments there after. I worked in the USA, getting SS now a bit above minimum, plus child allowance. I'm due my OAP since Nov 2014, but have not yet reported back. Probably this year.

 

1989 I was flush with cash from working in the Middle East plus investments. I got a plantation with a house in Kandy, Sri Lanka, 25 acres, but hard to manage without 3 full time workers.  As it stands today it is under the name of my ex wife. Managed by her brother. My cut is to be allowed to go there and stay as I like, which I have done from time to time. Otherwise a lost investment except it will pass to my oldest daughter (she is a Sri Lankan/American).

 

From the 80's until 2011 I was cashed up, hardly a worry. I was single, played golf 3 days a week, even mingled with a few celebs, girls in both hands, until it crashed.

 

I went from XXX milion pesos down to 150 (One Hundred and Fifty)about 2 months before my pension due date.Brought down by a woman and it was not my first time.

 

The kids sent me a small amount and I chilled in Sri Lanka until a got a few pension checks ahead.

 

From 2011-2015, with help from Gina, well known to this forum, we came back. We got married, have 2 kids and have built a small house. With the application of the Aussie pension should be able to buy a car.....that will be in 2 years more than 6 years from the crash.

 

So what did I learn? At age 66, it does not make much difference how much you hold in cash. The important thing is your monthly income and how long it will run, and for the dependents how long will you live.

 

Sri Lanka doesn't offer much if anything for a western ex pat retiree. I was there off and on over 20 years, so I can find my way, don't mind the food, but the Philippines offers much much more.

 

Call this Part One, will continue later.

Edited by chris49
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Posted (edited)

I suspect that the OP is "preaching to the choir" here. Most of us know the issues. With few exceptions none of us have the retirement savings to live a flush live in our Western home countries. That is unless you are one of the fortunate few who paid off your mortgage. 

 

That being said the biggest obstacle to retirees coming to the Philippines or any comparable 3rd world country is cultural and environmental.

 

A couple years ago my self-employed sister was on the verge of bankruptcy and didn't know what to do. I suggested she consider retiring to the Philippines. She rejected that immediately because of the cultural differences and the climate. She was willing to lose her house and everything rather than take that leap. Most Americans feel the same. Fortunately my sister's situation is a bit less dire now.

 

For me it's no brainer, and not just because of the economic factors.

Edited by davewe
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Posted

Thanks for the post Chris49. Maybe in a future post I'll discuss a past experience I had investing in a large jungle property in Belize and some really valuable lessons learned from that when the dream failed.

 

Considerations for Boomers…

 

Unless you are illegible for some sort of company or government pension upon your retirement, you will be solely responsible for your monthly income either from work you do or from money you have put away somewhere (less a pittance from Social Security or Aus/NZ pension). In the early 90’s a mathematical rule was developed and labeled the 4% rule and has been used frequently as a guide for what is needed in retirement. The 4% rule states that retirees who withdraw 4 percent of their initial retirement portfolio balance, and then adjust that dollar amount for inflation each year thereafter, should have created a paycheck that lasted for 30 years. This came out of the reality that most of us are going to live a lot longer then our parents.  What it means is that for instance if you have $500,000 saved for retirement, 4% of $500000 is $20000. You can withdraw $20000 per year for 30 years safely in retirement.  The idea is for you to decide how much you are going to need to live per year and multiply that by 30 to come up with your retirement number. This is an important formula because it is insuring that you are not dipping into your capital, an action that can very quickly erase your life savings.

 

Some thoughts on this.

 

The 4% rule may be less useful as current boomers retire as a result of the low interest-rate environment that is prevalent in most developed economies. Investing money in fixed-income investments offering current yields will move the 4% rule down by at least a couple of % perhaps even achieving a negative return after inflation. To do better then this we need to look beyond many fixed income investments.  And yet this is a period in our lives when we are most vulnerable to the uncertain equities markets and the concomitant risk increase.

 

So what we need are some alternatives for us to be able to keep a conservative portfolio, pay us some sort of income stream reduce risk through offering some of the diversification benefits of stocks and most importantly hold up in the long term against inflation.

 

Any ideas on this?

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Posted
Any ideas on this?

 

Beep, there are many topics about the different methods our members use for income streams. Everything from guaranteed pensions to running a Sari-Sari store out of their home. The different formulas that each have arranged that meet their needs. We even have one member (JJ) who is considering setting up several retirement communities here for Filipino/Americans (pick your country) to return with their retirement plans. I encourage you to take a peek at some of his posts. :cheersty:

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Posted

Both posts are so applicable. Davewe is completely correct. Most of the difficulty is cultural isn't it. Comparing the noise, dirt smell lack of order etc.etc to a place like Brisbane  or most developed cities is like comparing chalk and cheese. So many feel they would rather sleep on a street in Austalia than make a move. But they are getting set up to do just that. My dad died of Alzheimers in a very unpleasant situation in the US. I always thought he would have been happier to have been in a 3rd world country where his money would go so much further and he would have more and better personal care. Thus the post by Scott H is so relevant. Retirement communities that take some of the cultural shock out of it really seem to be the answer.

 

The question is are there any being set up presently in the PI (geared to Westerners) and if so where?

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Posted
The question is are there any being set up presently in the PI (geared to Westerners) and if so where?

 

I had built a website for JJ who had listed many retirement homes of different standards, mostly around Manila. The website was hacked and nothing I did stopped it getting hacked again but that's another story. JJ after spending maybe a few years or more researching the subject, travelling to different retirement villages in the Philippines eventually decided to give up on the project. He is now travelling around the US, I contacted him the other day and he rarely has internet connection so for the most is not available. There would be quite abit of info on this forum related to retirement homes for westerners but you did say you did not want to read much so if you're expecting members to do your homework for you;whatever your thinking will probably fail.  

 

What is your purpose for the research you are doing?

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Posted
Retirement communities that take some of the cultural shock out of it really seem to be the answer.

 

Don't think that will fly at all unless in the case of husband and wife. Even then, the Philippines is so highly westernized (with major cultural differences underlying), I just don't see a need for it.

 

So many feel they would rather sleep on a street in Austalia than make a move. But they are getting set up to do just that

 

Plenty of Aussies and American's never been out of their own country. Unless you have travelled a bit, like you, most of us, the mind set is different. After set up, living on around $1000 US or slightly over, or about $1600 AUD, is very highly manageable for those of us with overseas experience. To others, it would not be enough.

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Posted
the baby boomer generation where I am on the tail end

 

The Baby Boomers have pretty much reached freedom 55 age or older and its Gen Xers who are approaching retirement age now.  (Gen Xers are the children of baby boomers born between early 60s and early 80s).  With Boomers living longer and Gen Xers wanting to retire early its going to be hard for those on a fixed income.

 

Welcome to the new age.

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