How to Retire at 50

I should think for most people the opportunity to retire at 50 is a blissful dream. A chance to do all the things you've always wanted to do but couldn't because work got in the way taking all your time and precious energy. Just imagine the time to write that novel you have always wanted to write, time to learn the guitar, get fit or just read and relax. Also, no more wretched office politics and no more to having to bow to ones more powerful but not necessarily more competent than yourself. No more Sunday evening angst, no more Monday morning blues, no more petty humiliations that seem to be such a part of the corporate life and most of all no more making a rich man richer and not being thanked for it. I am 50 years old and I have done just that: retired, except I did it at 49. Yes to retire at 50 is a very worthwhile dream but how to do it? But the answer to this seems obvious: have loads of money. Whilst this is true it doesn't really answer the question but there is a way to retire at 50 without having loads of money.

For someone to retire at 50 with low mortgage and debt repayments and even with a reasonable downsized life would still probably need at least $50,000 p.a. This would require a total saving amount of approximately $1,000,000 and with a generous 5% interest on this. This will of course obviously vary depending on someone's personal circumstance but it's a basic figure from which people can make any adjustments where necessary. However, this figure of a million dollars probably represents the lowest possible amount and it's probably only enough for one person. To have a $1,000,000 in the bank after 20 years of saving with an interest rate of 5% on money already saved a person would still need to stash away about $700,000 over this time. This would require an annual saving of $35,000 or $3000 a month. Such a high level of saving is probably completely beyond the means of virtually everyone. It would seem the only way to generate this amount of money would be to steal it, marry it or win it. You certainly won't get make this amount simply by working for it. Therefore, it would appear, at least initially, that for the vast majority of normal working people to retire at 50 is an impossibility.

However, there is a way to retire at 50 but with only a meager $250,000, the generation of which over 20 years is entirely feasible. But there is a caveat over this: to retire at 50 with only $250,000 in the bank you have to move to a cheaper country. This is the solution to the problem and if you want to retire at 50 with $250,000 you are going to have to move.

The first problem therefore, is to generate $250,000 over 20 years. On examination it's actually not too difficult. Firstly, there is profit from a property. If you buy a property at the age of 30 for say $100,000 dollars then by the time you come to sell it 20 years later, the dollar return including profit and that part of the property you have completed mortgage payments on will easily give you a $170,000 return (if the profit on a property is higher than this then obviously you will have to save less to make the quarter of million dollar goal). This then leaves you having to save $80,000 over 20 years to make the necessary quarter of a million dollars, or if you include a 5% interest on monies already saved, you will probably only need to save $65,000. Over 20 years this equates to a saving rate of $3250 p.a. or $270 per month. This is an achievable level of saving. Although this still requires foresight, discipline and planning. It would be a good idea for example if your partner had the same idea as you, that you have had your children by the time you are 30 and that you keep focused and forgo the expensive and often unnecessary temptations that society seems to want foster on us. In other words, don't buy that Ferrari, keep the Armani suits to a minimum and may be not take that extra trip to China. Also keep all debts low or non existent and put the credit card in the closet where it belongs. It's also a good idea to buy the right property. Remember all the pretty baubles that we are offered don't actually make us happy, but freedom does, retiring at 50 does and the chance to live your life how you want to and not at the whim of your boss does.

So you are involved in high fiscal discipline and you are approaching 50 and your kids are gone but which country to move too and how much does it really cost to live in these places? There are many cheap countries to move to such as the Philippines, Mexico and Malaysia but I have chosen Thailand to move too which for me is a better place to live. However, to retire here with $250,000 still requires a downsized simple life. In Thailand you can buy a pleasant two bedroomed bungalow for $30,000 (in the north of Thailand only but not in Bangkok or the islands where property is expensive). A car is also a necessity in Thailand but they are expensive because of the high tax and a reasonable quality car will probably cost you around $20,000. This then leaves you $200,000 in your offshore bank account with a 5% interest rate giving you $10,000 a year. This equates to $27 a day and living in Thailand on this with a mortgage and debt free existence is easy to do. A meal in a high quality restaurant for two is about $12, a much cheaper one but still with exceptionally tasty food is $3, a litre of petrol is $1 and such necessities as TV-cable is around $50 a month. Food from a Thai market is exceptionally cheap whilst western food from a supermarket is not cheap it still fits very easily into the daily budget. Of course it does depend on how you want to live your life, it is very easy to spend money in any country and the cost of beer in Thailand is high around $3 and if you want to live permanent party lifestyle then it would be very easy to spend your budget. Therefore, living a retired life in Thailand still requires a disciplined financial existence. Monthly spending in Thailand is approximately $645 a month or $7740 p.a. leaving $2260 for other uses. However, if extra cash is required then a westerner living in Thailand can always teach English. Also, it is obviously important for a person to keep up their pension payments and being 50 means there is only 15 years from pensionable age which means it is possible to dip into the nest egg for extra special expenses because the pension is not too far away.

The trend to retire to other countries is increasing and there are plenty of cheap countries to discover where the dollar goes a very long way. Finally it must be emphasized that retiring to another country is interesting, exciting and most of all fun and it sure beats the commute. This then is how to retire at 50 or you just may prefer to stay home and work until you are 65.