# Expat road to Retirement



## snowbeavers (Mar 19, 2013)

Basic Info:

Newly wed couple living abroad, I'm 36 and she is 33. We would like to retire in about 20 years. No kids yet but most likely in the next year or two so we'll have added costs later. 

*Assets*

Passive investment portfolio of index funds: $156,000 (USD)
Emergency Cash: $14,000
Car: $15,000 (depreciates very little in this country)


*Liabilities:*
Credit Cards: $0.00 (pay off each month)

*Total:* 
185,000

*Monthly Income (yearly increases of 3%):* 
$6950

*Other sources of income:*
Flight allowance: $4200 (yearly)
Pension allowance: $5000 (yearly)


*Monthly Expenses:*
Rent: $300 (it is subsidised by our company)
Food: $500
Gas/Car: $120
Maid/Gardener: $240
Utilities: $120
Entertainment: $250
Travel: $300
Retirement contribution: $2000

*Total monthly expenses:* $3830


These numbers will probably change as we end up moving from country to country. Keep in mind that we do not own any property so thus, we need to not only save for retirement but also housing costs in the future. 

Goal: by 2024, retire with a portfolio of 1.6 million.


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## Rainey (Mar 18, 2012)

Is your monthly income figure gross or net? 
Either way, if the key to financial success is spending less than what you make....you don't need any advice from this forum.
That said, speaking as a former expat, kids changed our calculations in ways we hadn't imagined. When we were living in Europe the adventure of it all was the exciting part (weekends in Italy and skiing in the Alps didn't hurt either). After we had kids - to our surprise -- we found ourselves wanted the boring familar stability of a Canadian childhood for them both.
We did meet expats who were lifers on the road and brought their kids along for the ride, but its not for everyone.
Our friends still think we are mad walking away from the tax free cash and the lifestyle, but we haven't regretted it.


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## kcowan (Jul 1, 2010)

Just beware that the lifestyle that you have as an expat will costs much more when (if) you return home. BIL moved from a hilltop mansion in the Caribbean to a 3 bedroom bungalow in Scarborough. I returned from France as a rich man but it did not last.

Meanwhile congratulations on LBYM. If you can keep it up through family et al, you might retire to a 3rd world country and continue the dream.


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## Ponderling (Mar 1, 2013)

My wife and I lived overseas for 4 year posting just as first son was born. 

Car was paid for. Work gas was paid for, all housing costs and utilites, apart from long distance telephone.

We said that this was too good to be true. For the long run we lived as though life cost us just like it did living at home.

Paid for the gorceries, took some modest vacations in non vacation season on seat sales (you can't go to Australia and just make day trips), and saved like mad. 

Came home with $140,000 saved. 

Modest mortgage on a modest 40yo home in the GTA close to work, so wife could stay home for 6 years in total with the boys. 

That money saved overseas was the nest egg that drove is to the great position we are in now.


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## snowbeavers (Mar 19, 2013)

@kcowan Thanks for sharing. We assume that we'll always live overseas but I'm sure kids will change everything. Part of me misses Canadian life and I would want my kids to at least experience this at some point.

@Rainey The figure is net as taxes are paid for. Yes, I think after having kids I might yearn for a bit more stability rather than adventure so who knows what will happen.

@Ponderling Just curious, were you able to continually save at the same rate after you came home?


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## Ponderling (Mar 1, 2013)

No, former investment savings went to paying off mortgage of the house we bought.
We did pay off about a 180k mortgage in a little more than 6 years, and kept the RRSP account filled each year along the way. 
Most of that time was with wife home with the kids. There were some (self imposed) very lean years in terms of mad money along the way.


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## Rainey (Mar 18, 2012)

Wow, your base costs take up just over 1/4 of your net income. 
Stick it out for another 20 years and you'll have 2.6 M. Easier said than done.

Similar to ponderling we came home with a big bag of cash -- and promptly spent the lot on a car, and some desperately needed renos.
And similar to ponderling our savings rate declined, but of note is that our net worth has grown handsomely while back in Canada but through home equity and pensionable time. 

My sense of it looking back is that the oddles of "mad money" available while we were living overseas gave us the feeling of doing very well financially. But this was a bit of a psychological trick as our actual networth really didn't surge compared to our life in Canada.


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## snowbeavers (Mar 19, 2013)

Update so far. 

We recently got a new job with significant pay increases. Our yearly retirement contribution will be approximately 45,000/year (plus employer contribution of 10k/year). Assuming we stay there awhile, we are hoping to to retire at 55 with a nest egg of around 2.5 million.


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## derp (Feb 23, 2014)

In my experience, working as an expat has been extremely lucrative and it is an experience I strongly recommend to others. The sooner in your career, the better, as the financial gains will only compound over the following years.


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## snowbeavers (Mar 19, 2013)

Since it's a New Year, I thought I would come in and do a quick update. We have recently moved (still overseas) but to a better location with a better salary/package. We are expecting our first child who is due this coming August which will drastically change our lives.

We do love our jobs and being able to travel to some of the most beautiful places in the world, 3 months off a year, housing allowance, flights home, it almost feels like we are semi-retired already which is nice. Of course the sacrifice is giving up the safety net of Canada/US along with being close to family (also a positive sometimes .

*Assets: *
Portfolio A: 161,000 USD in index funds (average rate of return 7.5%)
Portfolio B: 12,000 USD (wife's US portfolio)
Portolio C: 7,000 USD (company portfolio..company adds 15% of our salary each year)
Portfolio D: 10,000 USD (son/daughter's college fund...annual addition of $2,000 per year)
Car: 27,000 USD
Emergency Cash: 15,000 USD

*Total Assets: 217,000USD*

*Total Liabilities: none *

*Combined Monthly Income (net): $9700*
Other income(yearly flight home): $280
*Total: $10,030*

*Monthly Expenses:*
Rent: 0 (company provided)
Food: $600
Gas/Car: $120
Car payments (interest free): $1350
Insurance: $120
Internet: $80
Electricity: $50
Entertainment: $200
Maid: $300
Travel: $300
Pension: $400
Gym: $70
Storage: $40
Misc: $200

Total Expenses: $3790

*Net monthly: $6240*

So we are doing okay overall. We are aiming to put away around 30K-40K into our retirement portfolio (portfolio A) each year, although with a newborn on the way, we need to make sure we have enough cash for a lot of additional expenses. It will be interesting to see where we are at same time next year. Initial calculations look like we are probably not going to hit 2.5 million unless we both work full-time past 55. However, I think a nest egg of 1.7 million is probably more realistic.


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## cougar (Oct 15, 2014)

Congrats on the baby coming and on your increased earnings/savings-it sounds like you are doing a great job of saving!


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## snowbeavers (Mar 19, 2013)

Another update to the diaries, can't believe it's been 17 months since my last post. Our daughter was born happy and healthy and is almost 9 months now. We've stuck to our plan to tuck away some money for her college with a Vanguard account and have 13,000 USD in there so far!

We've moved to a larger house now so we have some added expenses but have been really fortunate in that the local currency has devalued and we get paid in USD so we've saved a lot of money over the last couple of years. 

We've got way to many investment accounts and bank accounts (across 3 countries) which makes it difficult to keep track of everything but here it goes...
*Assets*: 
Portfolio A: 171,000 (USD)-lost some money due to CAD/USD exchange as well as not much growth in equities/bonds
Portfolio B: 13,000 USD (wife's US investment account)
Portfolio C: ~20,000 USD (my company investment account, company puts in 10%/year to my 5% year)
Portfolio D: 17,000 USD (wife's version of above)
Portfolio E: 13,000 USD (daughter's college tuition investment account...Vanguard)
Cars: 29,000 USD (2 cars)
Cash: 5000+17,000USD=22,000 USD (should really put this in a high-interest account)

Total: 285,000 USD

*Combined Monthly Income:* $10, 900 USD (net)...will increase in August to 11,200

*Monthly Expenses: *
Rent+levy+electricity+water: 300
Food: 400
Gas/Car: 80
Insurance: 100
Internet: 70
Entertainment: 150 (ha, we never go out anymore 
Maid: 275
Daycare: 275
Pension: 400
Travel: 400
Misc: 150

Total: 2,600

*Net Monthly: $8300 (USD)*

So we seem to be saving a lot due to devaluation of living costs (food, utilities) but then paying extra for daycare plus a bit more for housing. We have taken out the gym memberships since we weren't going and the big expense is our car payments are done! 

We hope to increase our contributions to portfolio A and look at increasing income through HISA.


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## My Own Advisor (Sep 24, 2012)

Impressive work in a few short years.

Congrats on the healthy and happy family addition :biggrin:


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## snowbeavers (Mar 19, 2013)

Thanks guys!

We've taken some pretty expensive holidays lately which has eaten into our savings but overall, still doing okay. We have another baby due in 5 months so we'll need to start a college fund for her once she is born. 

Some growth in the last few months
Quick update: 
Portfolio A: 192,000 USD
Portfolio B: 13,545 USD
Portfolio C: 27,000 USD
Portfolio D: 20,000 USD
Portfolio E: 13,691 USD
Cars: 27,000USD
Cash: 26,000 USD

Liabilities: 
None

Net worth: 319,236 USD (Growth of 11% in 5 months). 

Our overall goal is to have between 1.5 million and 2 million in 18 years to retire with. Looks like we are on track so far.


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## snowbeavers (Mar 19, 2013)

We are still doing well financially and starting to see the benefit of compounding interest. It really is the 8th wonder of the world! We have had our second child which has been great but busy. We are in a good place to continue saving lots in my 40s (hope to retire by the time I am 55). We are trying to save and invest around 35K-45K each year. 

Portfolio A: mix of 61% index stocks (VCE, VTI and VEA), 31% fixed income (XBB, VSB, BND) and 7.5% VNQ: $236,000 USD
Portfolio B: $15,147 (VTI and BND)
Portfolio C: $31,000 (company pension)
Portfolio D: $22,000: 401K-company pension
Portfolio E: $18,501 (529 Vanguard college saving fund)
Cars: $26,000
Cash: $20,000

Liabilities: 2500 credit card (pay off each month)


Net worth: 364,883 USD


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## snowbeavers (Mar 19, 2013)

Seeing how we are nearing the end of the 2017, I thought this would be a good time to do an update. 

It's been a good year overall and a great year financially. We have 2 young kids now and doing well as a family of 4. Although financial security and health is great, I am grateful for lots of things beyond monetary/material things and trying to enjoy the road ahead of us. Out of all the the expenses we have had, some of the expensive vacations have been well worth it (Europe, African islands, US).

Quick snapshot, in 2017 (all USD): 

-saved and invested $37, 000 (combined retirement portfolio)
-saved and invested $20,000 (employer match)
-main portfolio grew from $195,824 to $261,581 (Jan 1 2017-till Dec 20 2017)
-Total net worth grew from 312,000 to 421,960. 
-Got raises in our jobs for about $7000 (combined)
-College savings funds grew to 33,000 (contributed 12,000 this year)

Major expenses: 
-Family vacations about $8500
-New computer $2200
-Lots of baby expenses ??

Our financial goals is to partially retire in about 10-12 years or so (just one of us working to pay the daily bills) where I'll be 50 years old.


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## snowbeavers (Mar 19, 2013)

Thought I would do another update. 

Assets (USD): 
Main portfolio (ours): $266,678
Wife's: $16,354
Children (Education): $41,440
Wife's work pension: $37,000
My work pension: $42,400
Cash: $24,000
Car *SUV: $18,000
Car *other SUV: $6400

Total: $446,796

Liabilities: 
Credit card (pay off each month): $4781

*Total Net Worth: $442,015 USD* . *($568,885 CAD)* . (5.6% increase since December 2017)

We had an expensive vacation over March break (around $4500) and more holiday expenses coming up in June/July (US/Canada/Switzerland). 

Overall, we are in good shape. We are both getting 3.5% increases in salary after the summer. We are trying to save at least 40-50K per year (including company pensions) but we could probably save more if we tightened up expenses. I've done some different scenarios but we should be able to reach our goal of $1,631,000 USD by 2034. We'll see if we at least partially retire earlier. I'm tempted to move back to Canada at some point so that our kids get to experience a Canadian childhood and this could be our retirement destination.


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## snowbeavers (Mar 19, 2013)

Almost a year since my last update. 

Assets (USD): 
Main portfolio: 300,760 (up +12.7%)
Wife's private investments: 17,841 (up 9.09%)
Children (education): 44,192 (up 6.64%)
Wife's work pension: 47,000 (up 27%)
My work pension: 49,000 (up 15.5%)
Cash: 14,094 (down 41.2%)
Car: SUV: 16,500
Car 5500

*Total: 488,760 (654,449 CAD). (increase of 10.6% since April 2018)*

Overall assessment: Not a bad year considering a really bad 2018 in terms of overall returns. 2019 has been more forgiving and erased some of these loses from late 2018. Savings has been fairly constant with putting away roughly $50,000 per year. Looking at 2029 as a year of early retirement or at least partial retirement if everything stays fairly constant. I'm turning 42 this year so hoping to retire early at 52.


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## snowbeavers (Mar 19, 2013)

*November 2019 Update*

2019 continues to be a great year in terms of returns. A couple of updates, I got a new job and we will be moving to a new country next year (mid year) and downsizing to 1 income temporarily so will need to be a lot more frugal with our spending. It is a better move professionally longterm for us though and a better place to raise a family so we are excited about the change.

Assets (USD):
Main portfolio: 342, 839
Wife's private investments: 19580
Children (education): 52,271
Wife's work pension: 54000
My work pension: 52,213
Cash: 23,000 
Car: SUV: 11,500 (recalculated resale value)
Car 5000
Other cash: 2000

Liabilities: none (credit card averages 2500/month but we pay off each month)
*
Total: $559,203 (742,902 CAD) (increase of 12.5% since April 2019)*


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## Longtimeago (Aug 8, 2018)

As someone who retired at age 43 snowbeavers, I always concentrated on income, not capital. If someone can generate 10% return on their capital they will need half the capital of someone who only generates 5% on their capital obviously.

From when I started to plan my retirement, it was investments I was therefore determined to find, not just higher pay or spending less, etc. They all matter but depending on which you start out prioritizing will change how you perceive everything else. I retired with what many people would say was 'not enough capital'. That's the age old question of early retirement, 'do I have enough'. I pulled the plug when I had enough income from investments to live on because my investments were paying more than the average returns. I needed less capital.

I do not believe in drawing down capital in retirement either. My net worth today is greater than it was when I retired 29 years ago. Again, I live on the income my capital generates, not off my capital. Many people think that when they retire the world stops turning in that they are going to follow some 'Safe Withdrawal Rate' scheme that sees them drawing down their capital till they die. I don't agree with that at any age but there is no doubt that the earlier you retire, the less sense it makes since the more time you are likely to have for it to go off the rails.

I believe in never, never, never touching the capital. So, I must live off the income the capital provides and that of course will vary each year and depending on what I invest the capital in. It isn't static, I have to continually change it. Basically, every year I look at where I am, what will happen to my income if I change nothing and what options do I see for ways to get a better return on investment if I can find any. So every year my investments and income may differ.

That leads me to 'how much income do I need?' I work on a basis of a 'Rule of 3s' in this regard. One third for expenses, one third discretionary spending, one third for savings. That gives me a 'cushion' of as much as 66% loss in income and I will still not starve or be sleeping on the street. A cushion is particularly important if you have income derived in another currency from the one in the country you are living in. Given your working overseas, that may apply to you. It applies to me and I can tell you that even with two 'stable' currencies such as CAD and GBP which I have income in, the exchange rate has varied by as much as 25% in the last 10 years. Imagine a drop of 25% of your income just from that and what it will mean if you do not have sufficient cushion to absorb it. The same is true if I happen to have an investment that was paying quite well but comes to an end and I cannot find another alternative that will pay as well. I have to be able to absorb a lower income in the next year.

So you are doing well in terms of savings and I guess what I am trying to say to you is that it may now be time to start spending more time and effort in looking at what you are doing regarding investments and maximizing your returns. If you only have $1.7 mil invested at 10% it will still give you more income than $2.5 invested at 5% remember. It's income that matters, not capital, at the end of the day.


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## Longtimeago (Aug 8, 2018)

I should have added snowbeavers that one thing I see many retirees having trouble with when it comes to determining, 'how much is enough', is that they have real difficulty differentiating between a 'need' and a 'want'. I need a flush toilet but I do not need 2 of them even if my wife would like separate bathrooms. I feel a car is pretty much a necessity but I do not need a new one every couple of years. It may seem like common sense but not everyone has common sense unfortunately and with some things they really do have difficulty seeing that it is not a need.

Most wannabe retirees actually 'need' much less than they think they do in terms of income. A good book to read on the subject is 'Your Money or Your Life'. It is arguably the book that started the whole 'early retirement' idea going. https://www.mrmoneymustache.com/2012/12/18/your-money-or-your-life/


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## Ponderling (Mar 1, 2013)

I see I chimed in a while ago on this thread. Glad saving, investing, living in moderation and family life see you well.

We now have oldest kid still at home, but doing first year of college, youngest one a bit mired half way thru high school. Health RESP account is starting to be tapped to apy for college.

My wife retired from former full time stressful job for the last 1.5 years, and is now busier and happier than ever. 

I still plug along working full time. 17 more months and I can be very close to the drop 7 worst years and qualify for the maximum CPP payout. 
Not huge, but a nice component to retirement income that is so far pledged to be inflation protected. 

Current net worth wrapping equities and market value of paid for house together is about 3.3M


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## snowbeavers (Mar 19, 2013)

Longtimeago said:


> As someone who retired at age 43 snowbeavers, I always concentrated on income, not capital. If someone can generate 10% return on their capital they will need half the capital of someone who only generates 5% on their capital obviously.
> 
> From when I started to plan my retirement, it was investments I was therefore determined to find, not just higher pay or spending less, etc. They all matter but depending on which you start out prioritizing will change how you perceive everything else. I retired with what many people would say was 'not enough capital'. That's the age old question of early retirement, 'do I have enough'. I pulled the plug when I had enough income from investments to live on because my investments were paying more than the average returns. I needed less capital.
> 
> ...


Thanks for some good advice. Sorry just saw this message 12 months later! I agree with not touching the capital if at all possible. However, it is extremely challenging to control your rate of return and going down riskier roads to attain a higher rate of return (in retirement) wouldn't be worth it in my opinion. I'm comfortable making the "average" 7%. My question is what do you do in times of negative return? You have to touch your capital in those circumstances right?


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## kcowan (Jul 1, 2010)

snowbeavers said:


> I'm comfortable making the "average" 7%. My question is what do you do in times of negative return? You have to touch your capital in those circumstances right?


7% is too high for many years in the future. We have revised our assumption from 8% to 7% to 6%, which is 3% dividends and 3% capital appreciation, without any provision for taxes. In down years, we spend the surplus we saved in the up years (more than 6%) and then cut back on spending to make the 6%. Taxes are an expense item.


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## snowbeavers (Mar 19, 2013)

New country and new job and surviving the pandemic. We are doing well with our long-term financial goals so far. Just turned 43 so still on track for early retirement or semi-retirement in my 50s.

Update for 2020 (in USD):

Main portfolio: 462,300 (65% equities and 35% fixed income and REITs)
Wife's pension: 101,000
Kids education funds: 67,000
Work pension (new): 8,361
Cash: 31,171

Liabilities: none

Total net worth: 643, 751 (823,746CAD)


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## snowbeavers (Mar 19, 2013)

We have been doing well overall, despite the global pandemic. The bright side is that we have really cut down on normal travel/holiday expenses to go home but of course, the downside is that we are missing being with family in Canada for another year  

Financial goals: I'm in my mid 40s now and still planning a semi-retirement in 10 years with around 2,000,000 in assets and possibly move back to Canada. We are trying to save and invest around $60,000USD/year. My wife wants to continue working though as she is a bit younger than me. 

*Latest update (July 2021):* 
Main portfolio: 540,200
Wife's pension: 112,000
Kids educational funds: 81,609
My pension (new): 16,884
Car: 17,000 
Cash: 9,000 

*Total: 796,793USD (994,397CAD..should be a Canadian millionaire at the end of the month!)*
Liabilities: none (credit card gets paid off each month). No mortgage as we rent (company provides)


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## snowbeavers (Mar 19, 2013)

*Final update for 2021:*
It was a good year financially as we crossed the 1M mark. Thought I would feel differently but really no strong feelings, fireworks or celebrations...just some financial security I guess. Kids are happy and we live a comfortable life. Looking back at my first post, I had planned to retire in 2024 but I don't plan on doing this. Love my job right now but perhaps in 5-8 years may look at it then.

We did little travel and didn't make our normal summer trip home which probably saved us 12-15K. Did a little dabbling with cryptomining but only as a hobby and not a real investment but not even including this in figures below.

*Update for Dec 31 2021:*
Main portfolio: 577, 862 (up 25% in a year)
Wife's pension: 130,000 (estimate)
Kids educational funds: 87,052
My pension new: 24,009
Wife's new pension: 7,333
Cash: 21,695
Car: 16,000

*Total: 851,519 USD (1,075,770CAD)-up 29.17% since last December.*
Liabilities: none (credit card gets paid off each month). No mortgage as we rent (company provides)


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