One of my dilemmas is the difficulty I’ve had with determining where I’d like to live when I retire some day. In fact, I’m having enough trouble deciding where to live next year. While I should probably solve the more immediate issue first, I still think about how I’d want to live in the future.

This year, I started throwing something around 25% of my overall income into retirement accounts. Of course, I wouldn’t be able to do so without the extra side business income. I don’t want to struggle financially when I finally quit the traditional working lifestyle, so I’m trying to prepare for that today while still making the most of my life in the present.

Recently, Sasha wrote about 10 exotic, affordable retirement havens. This type of living would certainly be an option, but what if I want to stay close to my family? Thirty years from now, retiring in the United States just may not be affordable.

Apparently, there’s an option I never considered. The government is selling off its lighthouses, and retirees looking for “adventurous” living are picking them up. After historical societies have had their pick of the best locations, the remainders are made available to private buyers. I’m more of a land-lubber, so this isn’t going to be my first choice, but I find the idea fascinating.

If you have $30,000 to $200,000 to spare and you’re looking for a location with unpredictable weather and… well, water, then perhaps you would consider purchasing a lighthouse and remodeling it. It could be an interesting life.

For the Golden Years, a Bright Idea [Barron's]

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I’m a regular reader of this blog, Get Rich Slowly, Five Cent Nickel, Cheap Healthy Good, and a number of other blogs which encourage me to live more frugally, to save my pennies for retirement.

Save, save, save, they say. And so I am.

Like a squirrel storing up nuts for an endless winter, every spare dime beyond my basic living expenses and occasional indulgences gets ferried into the hidey-hole that is my FNBO Direct account. Granted, there’s not a lot left over, since I’m only barely living below my means at present, but no matter – regardless of its size, I guard my hoard fiercely, watch over it daily, and, occasionally, like today, wonder what it’s all truly for.

Saving patterns are fabulous things to train oneself into, but what is this elusive retirement for which I’m saving? What does it really mean?

The very phrase “retirement” brings to mind a time-worn face looking over a horizon colored by a splendid sunset, over either waving fields of grain or hordes of beaming grandchildren. I’ve seen too many commercials, perhaps, and I like sunsets and all, but I have to tell you, none of it excites me. The very thing I’m working for seems like something I wouldn’t really want at all.

Now, don’t get me wrong – the whole not-working thing seems quite appealing. I’ve got plenty of “take this job and shove it” fantasies to go around, especially on Monday mornings.

I’d love to not have to work, but I don’t really see myself retiring at 40, trading in all my suits for Hawaiian shirts and yachting around the Florida Keys. Though I try, I don’t see myself accumulating a great deal of wealth, especially considering inflation. I believe I will find a way to save enough to sustain myself reasonably well, but not to live some fabulous fantasy life, not here on the East Coast, anyway.

So in reality, I can imagine having a very nice, peaceful week or two off before I become bored and irritable, and I’d probably either be back at work or starting my own venture within a month’s time.

Even after I’m old enough to qualify for the senior citizen rate at the movies, I can still imagine myself craving excitement and wanting to fill my days with new wonders, rather than reliving old memories from my rocking chair. It’s just who I am.

Knowing this, I start to realize that I need a different kind of retirement to save for, a goal that reflects what I’m about versus some one-size-fits-all fantasy. It’s more geared towards gaining new experiences than reflecting upon the past, and that means that, given the very expensive area in which I live, maybe it’s not in the United States at all.

As you know from past entries, I love to travel and feel that I’ve not seen nearly enough of what the world has to offer. When I came across International Living’s article, 10 Exotic, Affordable Retiree Havens, I was intrigued. What if my dream vacation was also my retirement destination? And if the cost of living was cheaper, all the better!

While some spots sound better than others to me, there’s lots to learn about these exotic retirement meccas. The article lists out comparative prices for everything from a bottle of wine to a doctor’s visit, utilities, and rent in all ten locales, but I’ll summarize some of the things I found interesting:

Panama
A man, a plan, a canal…a high standard of healthcare. This plus access to both raw, compelling nature and more refined musical and theatrical events makes Panama a standout. The travel column the article links to outlines an alluring range of options from city-slicking to jungle exploration:

Panama is full of possibilities. Panama is really three countries: glitzy, supermodern Panama City; the cool, inscrutable, slow-moving interior (including jungle and cloud forest); and the varied, surfable, fishable coasts–backpacker-land. Like so many places that are at the center of their geographical area, Panama is a dream factory.

There’s another great article I stumbled across from International Living as well: Panama is a Paradise for Retirees. It mentions a 50% discount program off of just about every cost I can fathom, plus extra perks like a 20-year exemption from property taxes and no taxes whatsoever on foreign earned income. There’s a wealth of information on cost of living as well:

Panama has one of the lowest costs of living in all Central and South America: A U.S.-style home can be built for about $40 per square foot; unskilled labor costs $6.40 per day; a full-time live-in maid costs $120 to $160 a month; a beer at a bar costs 35 cents; a cup of coffee, 30 cents; a haircut and shave can cost as little as $2; an afternoon at a beauty salon is $8; electricity is about 10 cents per kilowatt-hour; water bills are $18 per year; telephone service costs roughly $30 a month; Internet access is $14 a month; wireless is available for a bit more; cellular-telephone service costs about $30 a month plus a per-minute charge of around 22 cents; and cable TV will cost you about $30 a month.

I’ve always dreamt of going to visit jungles, but not necessarily residing there permanently. (You know, hungry jaguars and all.) But it sounds like there’s so much variation between regions that one could live comfortably while still enjoying the occasional expedition. That sounds like a downright thrilling retirement, not passive at all. And with monthly rent around $600 for Panama City, it sounds reasonable as well.

Malta
Say “near-perfect climate” in the heart of the Mediterranean and I’m there, but the 15% income-tax rate for foreign residents, lack of property taxes, low crime rate, excellent healthcare and prevalence of English seals the deal. $80 a month for a maid means I can spend my time out enjoying everything and come home to a spotless abode, too. $25 doctor visits sound pretty sweet as well, though I can hardly imagine getting sick somewhere so beautifully temperate.

Yes, it’s pretty fair to say that my ultimate retirement could look something like this:

HomesInMalta.com makes it all sound very simple and free of hassles, as I feel retired life should be, and the island is simple to travel to and from as well:

Travelling around Malta, whether to the beach, shopping in the city or a night at the theatre is simple. Wherever you are it shouldn’t take you more than 20 minutes by car.

The Maltese Islands are easy to get to from most major European airports, with flight times of 3 hours from London or Amsterdam, and 2 ½ hours from Paris, Frankfurt and Cairo. Flights are very regular and transport from the airport is easy and straightforward.

New Zealand
Imagine retiring in the land where the Lord of the Rings trilogy was filmed! While it can be difficult to qualify for permanent residency, this English-speaking country boasts a low cost of living and tons of gorgeous countryside to explore. No capital gains tax and an average rent of $900 per month is a good incentive to keep my passport current.

I always dreamt of honeymooning there, but I could really see living in New Zealand, enjoying the sort of outdoorsy lifestyle I wish I had the time to live here in the U.S., but with less overhead costs to worry about. One could even follow the example of the Maori and build a mud hut to save even further. That’s not my plan, however.

EmigrateNZ.org has some interesting information too about superannuation after retirement, which sounds rather attractive:

By law, you can work to any age you want to in New Zealand.

If you live here continuously for at least ten years, five of them after the age of 50, you get state superannuation at the age of 65. This is currently worth $249 per week after tax if you’re single or $383 per week after tax for married couples.

It’s not a windfall, but depending on your circumstances, you might be able to receive these monies in addition to your pension from a former U.S. employer. It could be a nice bonus, enough to bring your standard of living in retirement up a level.

This isn’t a bad view either, at any price:

Uruguay
Uruguay “feels like Europe but with Third World prices,” according to the article. Potable water is a must, but the stunning beaches are a definite plus. $35 doctor visits make it livable, but $5 movie tickets make it enjoyable when you’re not out in the great outdoors.

UruguayDreaming.com has a nice piece on the pros and cons of retiring in Uruguay, and lists some of the following perks:

* Permanent residency is relatively easy to get, and new residents can import their household goods tax-free

* The cost of living is half what you’ll find in North America or Europe

* Healthcare is inexpensive and high-quality

All in all, there are some attractive elements to Uruguay as a retirement spot, however the cons mentioned in the article, including crime rates and lack of accessibility for the handicapped are definite concerns. [click to continue…]

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This is the last tip in a 10-part series on purchasing residential rental properties based on my experience.

10. Utilities can use you up, so be careful.

Utilities can be a major issue for landlords if not set up properly. If you supply utilities to your tenants, you are generally not permitted to terminate these for nonpayment or other issues, and penalties can be severe.

Want to keep the bills in your name but have the tenants pay their portion to you? The law does not generally allow you to collect if they default on these sums, so you may risk losing out if the tenant stops paying their portion of the utility. Plus, you are still required to furnish them with these utilities, even if they fail to pay. Unless you can incorporate a flat fee into the monthly rent figure which covers your expenses even as costs continue to rise, it is best to insist that tenants pay utilities directly, under their own name. Then, in the event of default, you are not responsible.

This means that properties containing 2 or more rental units need to have split utilities; separate furnace, hot water heater, meters, etc. It is much easier and cheaper to purchase an already-split property than to try to do this yourself, so this is an important factor when you are looking at multiple-unit properties. Duplicate systems will mean more maintenance costs over time, however.

In addition, you should look into whether a property has gas heat , electric heat or oil heat and understand the issues involved. Electric heating systems can be very expensive, and therefore undesirable for tenants. Oil heat, while better-priced, can involve more system maintenance, since if the oil runs out, the system needs to be bled by a technician before the new oil will enter the system and begin heating. Based on technician availability, this can mean a few days without heat if the tank runs out and you don’t schedule ahead to ensure a seamless transition. Gas heating is generally the simplest to maintain from a landlord perspective, since if the gas company ceases to be paid, they cut off the gas supply, but can quickly reinstate service once payment is received.

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