How much money do I need to retire? This is one of the questions we’re asked most often at Live And Invest Overseas.
Budget is a crucial criterion for anyone considering retirement. The fact is that we’re living longer than ever before, so we need bigger retirement budgets than ever before. If the average American retires at age 62 and aspires to live to age 100 (which 54% of Americans do), then you have to be prepared to finance 38 years of retirement.
How much does 38 years of retirement cost? According to the U.S. Census Bureau, about $2.3 million. The median household income was $74,580 in 2022. If you figure that you need 80% of that income in retirement, your retirement budget should be $60,000 per year (or $5,000 per month). Most Americans’ retirement budgets are much smaller than this.
The average Social Security benefit is $22,884 per year (or $1,907 per month). For many people, that’s not nearly enough for a comfortable lifestyle during their golden years. In fact, it’s just slightly above the 2022 poverty threshold of $17,710 per year (or $1,476 per month). Making a bad situation worse, Social Security will not last for the next 38 years. According to the Social Security Administration, benefits are expected to be exhausted after the year 2037.
What about people who have dedicated retirement savings accounts, like 401(k)s and IRAs? Almost half of Americans are without such an account. Those that do have one are being forced to dip into those accounts to cover the ever-increasing cost of present-day expenses. They’re making “hardship withdrawals,” taking on debt, and reducing how much money they put aside because of inflation. According to a study by Allianz Life Insurance Company of North America, 51% of Americans report taking on more credit card debt to pay for necessities.
Almost 42% of households reported withdrawing from their retirement savings because of inflation. Collectively, these statistics present an alarming situation for older Americans and people on the brink of retirement. A crisis looms on the horizon… Rising costs of living in the United States are a serious threat to quality of life… particularly for people on fixed incomes.
Two-thirds of respondents in a survey by Corebridge Financial say that they fear running out of money more than they fear death. But there’s a simple solution that can change retirement from something to fear to an adventure to look forward to… Retire overseas. Seek out an appealing destination with a lower cost of living… where even on a Social Security budget, you can enjoy a better quality of life… and retire in style.
I know of a handful of places that are friendly on the pocketbook… places where you can live well on $2,000 per month—just slightly more than the average Social Security benefit and a whopping 60% less than the $5,000 per month you’d need for a comfortable retirement in the United States.
These are places that are not only cheap; they also offer great healthcare, safety, entertainment options, welcoming communities, solid infrastructure, and more… all the ingredients that make up desirable, high-quality retirement havens. They’re places where you genuinely want to spend time… where you could be not just financially comfortable but also happy, excited, entertained, and safe. Here’s my selection of 12 havens where you can retire in style on $2,000 per month.
