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How to Enjoy an Early Retirement Living Abroad

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When presented with the raw numbers of the expat lifestyle, most people shake their head in disbelief. They think it just isn’t possible to have the same standard of living and amenities as back in the United States for a mere $8,000 to $10,000 per year, but the reality is that it is very much the truth. In fact, it is the primary reason most travelers are choosing to have a base of operations outside of the U.S. As of 2010, the median cost of living (according to the U.S. Census Bureau) for a single, working adult is around $25,000 per year. When you compare 25k to 8k-10k per year, the numbers don’t lie. That extra money could be yours for an early retirement…so long as you are willing to take it.

The median wage (again, according to the U.S. Census Bureau) as of 2010 was the same: $25,000 per year. That is take-home pay, after taxes. The pre-tax number is just above $36,000 dollars. But the other benefit most people don’t know about is the fact that when you live abroad as an independent expat you don’t have to pay the same tax rates that you do while living in the United States. Choosing a country that has a tax treaty with the U.S. means you can pay the local rate of taxes in your chosen country rather than the higher rate back home, effectively allowing you to retain even more of your salary and thus obtain an early retirement.

Most countries outside of the industrialized West still have all of the same amenities and luxuries that people in the “first world” countries have, but the cost of living is significantly lower. As a general rule, places like Colombia, Bulgaria, Mexico, Italy, Greece and beyond hover between the $8,000 and $10,000 range, which means you can head there as an expat with your pre-tax salary of $36,000 per year and live accordingly. What this means for the savvy digital nomad is that you can put a significant portion of your income back in your pocket rather than merely breaking even year after year as you would back home.

The cost of living in other countries doesn’t only apply to those people who are still part of the active work force. Pensioners living on a monthly allotment of around $1,000 per month can take advantage of the expat lifestyle just as easily, and they actually have been for years. When the cost of living in a country like Mexico is around $600 to $800 per month, you can use your $1,000 per month to enjoy the tropical destination and an early retirement, rather than barely scraping by. And since universal healthcare is the norm in most countries around the world, you don’t have to worry about paying thousands for medical care and medicine.

Another benefit of living abroad as an expat is reducing your working hours due to the fact that the cost of living is so much less. However, there is another alternative, which is what many working professionals are already doing. Namely, working their normal working shifts of 8 hours a day for the next three to five years, but instead of needing to spend all that money on the median cost of living as described earlier, the vast majority of that money is going straight into your savings. When coupled with the fact that you can find three to four bedroom houses in places like Italy, Mexico, Guatemala or Colombia for a mere $35,000 on average, you can very easily set yourself up to enjoy an early retirement by the time you are 30 to 35 rather than waiting to turn 60.

Adventures are only part of what you can expect living as a digital nomad abroad. There are so many opportunities in the world that it’s hard to find just one, which is why you should explore them all through living as an expat.


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