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. Read the rest of this article »

I truly despise the terms “Black Friday” and “Cyber Monday” and how the retail industry has created these days in an effort to rationalize outrageous spending on these particular days as if it should be accepted as an integral part of the holiday season. Cyber Monday did not exist until retailers created it, and as I expected years ago, the surge in online sales in the weekend and Monday following Thanksgiving has become a self-fulfilling prophecy.

That being said, I know I am spending more money on non-essential products this year. I’ve “upgraded” my living situation to “above bearable” and provided myself with some toys to keep me entertained—while still living below my means. Am I a reflection of a broader trend or are my spending habits going against the rest of the world this year?

I have some questions for readers, so please oblige me. Are you spending more this year than last? If so, why? Do you expect to find good deals on or around Black Friday, and will you spend more if you do? Will you wait until the last minute to hold out for more deals before the holidays?

On Monday I began debunking retirement myths with the help of Money Magazine with the first seven of 13. Today I’m presenting the remaining 6 common errors in thinking.

Myth #8: Your house can finance retirement. I’ve said this before—your house is not a retirement plan. Real estate investments are another matter; unlike other investments, the house you live in provides your shelter and is harder to cash in. You have to live somewhere. In order to start seeing the value of your house in cash, you have to downsize. Another option, a reverse mortgage in which you slowly sell your equity back to a bank, will leave you with no asset to leave to your heirs.

Myth #9: You’re too old to start saving. This is pretty straightforward. It’s never too late to start putting away money for retirement. Of course, it will be much more difficult to amass significant savings starting within earshot of the end of your career, and some sacrifices will be necessary. That might mean downsizing your house and socking away the difference or cutting back expenses.

Myth #10: Short-term market swings don’t matter. This is the mantra of the long-term investor. The daily or monthly ups and downs are irrelevant because over the long term, the stock market provides returns higher than inflation. The truth is that as you grow closer to when you’ll need to access the cash value of your portfolio, those short-term swings can be devastating. That is why your asset allocation, the mix of investments, is important. As you approach retirement, your portfolio should include a smaller portion of stocks and a larger portion of low-risk investments like bonds.

Myth #11: Top priority is the kids’ college. If you can’t fund your own future as well as your children’s education, you have to make some choices. You could always borrow money for your kid’s education while you can’t do so for your own retirement. Now, you could change some of your expectations, such as an adequate rather than dream-fulfilling retirement home or state schools rather than Ivy League schools for your kids, but when it comes down to it, your own needs come first. At least that’s what the financial community generally believes.

Now you can hope that if you help your children pay for an excellent education, they will get excellent jobs with excellent paychecks, and will use their funds to support their parents in retirement and old age. But no matter how much you spend on an education, that’s never a sure thing.

Myth #12: Decent savings plan = early retirement. Early retirement itself is almost a myth. You’re going to have to be very aggressive with savings and investing if you intend on ending up with a portfolio that’s going to allow you to live off its own income for 30 to 40 years or more. Are you saving one third of your pay after taxes? If not, you’re not on the path to early retirement.

Myth #13: You’re bound to mess up your 401(k). 401(k)s can be easy, but with companies offering a multitude of options, and in some cases making it difficult to determine the true cost of funds, it has become much easier to make a mess. Companies have countered this by offering financial guidance for their employees enrolled in the retirement investment plans. Companies often automatically enroll new employees in 401(k) with default options, which are usually good enough if never touched, only increased, to keep a solid investment plan in gear.

Myths exist because they resonate with enough human minds to be able to convince people of their truthiness without much support.

I was stuck in traffic this morning, so I turned off my music and tuned to my state’s “own radio station,” New Jersey 101.5 FM to listen to the traffic report. I was hoping to determine how long I’d have to be sitting in my car before arriving at work. Before the traffic report, the morning talk show host mentioned that the station is sponsoring a seminar this coming weekend to help attendees gain control of their financial lives.

The tickets are only $10, and from the looks of the uninformative seminar website, the seminar will be hosted by Eric Scott (the station’s news reporter and vice president of the station’s parent company’s news department), with special guest “Jersey Guy” Ray Rossi (co-host of an afternoon show that’s only slightly annoying and occasionally humorous) and sponsored by David Lerner Associates, Professional Planning Services, Financial and Educational Services, and an insurance agency of Genworth Financial.

How much do you want to bet that the purpose of this seminar is for these companies to sell investment and insurance products rather than giving sound, personal, personalized financial planning advice? Of course it is; why else would they be willing to offer the seminar such a low admissions price? The seminar will pay for itself by products and services purchased and contracted on the spot.

I would go just to see how hard the sell is, but I already have plans for Saturday.

The richest individual in Asia is a 26-year-old Chinese woman whose wealth comes from a family company. Yang Huiyan’s father created Country Garden Holdings Ltd., a real estate development corporation, and its stock offering made billionaires of several of its primary investors. Yang’s total wealth is estimated at $16.2 billion.

The China list’s rankings change sharply from year to year, reflecting the rapid evolution of the booming economy, which expanded by 11.9 percent in the most recent quarter. This year, there were 20 new names among the list’s top 40 richest people, Forbes said.

It’s starting to look like the “Land of Opportunity” is not the United States, but Asia.

Richest person in China is 26-year-old woman [CNN Money]

If you’re creative with words (and perhaps video), SmartMoney has a contest for you. The magazine wants to come up with another term for “retirement,” considering how its meaning has changed over the years.

Today’s retirees are more active than ever, moving forward with their lives and pursuing a wide variety of interests and passions. Suggesting retreat and withdrawl, the word “retirementâ€? no longer does this lifestage justice.

If you can provide the winning word, which may be presented in the form of a video, SmartMoney will award you an annuity valued at $100,000. The magazine will also publish a feature about your and your winning word.

Hey, I’d like to see a Consumerism Commentary reader run away with the grand prize. If you intend on entering the contest, or even if you don’t want to enter but consider yourself a capable wordsmith, leave a comment here with your suggestion.

Enter the contest at SmartMoney’s Retire “Retirement” website.

Yesterday, a bill that was signed into law will help emerging students pay for the cost of their education. There are several facets to the new law, so here’s a summary of the major talking points.

The maximum Pell Grant, which is awarded to students based on financial need, will increase from $4,310 to $5,400 per year over the next five years, starting with $4,800 next year.

20 years ago, a Pell Grant would cover 60% of the average public university tuition cost.

The interest rate for subsidized Stafford loans is dropping to 3.4% over the next four years. If you qualify for a subsidized Stafford loan, the government pays the loan’s interest for you while you are in school. The new law has no effect on unsubsidized Stafford loans.

Struggling graduates can benefit from a new formula to determine their repayment schedule. If you qualify, your lower payments will be based on 15% of your annual discretionary income. This applies to private loans as well, not just government loans.

If you plan on teaching and commit to the profession for at least four years, you can qualify for an additional $4,000 a year in grant money. These grants will revert to loans for anyone who gives up on the education industry.

For being such a wonderful customer, Verizon Wireless is offering me the chance to increase my talking habits in turn to increase the chance I’ll go over my plan’s limit and pay for excess “overage.” Yes, they sent me a reward of 100 free anytime minutes, which I will retrieve from a special website for people like me.

Unfortunately for them, I am always under my limit, so this reward is nice but wasted on me. These 100 minutes are “good” for 60 days, at which point any unused bonus minutes will expire. I might as well not even bother.

I also received another rebate check from Citi as a result of my continuous use of my Citi Dividend World MasterCard, which at some point I should switch to a Driver’s Edge Platinum Select MasterCard. That’s an extra $200 I can use for… savings, I suppose.