How to Grow Your Nest Egg During Retirement

This Way, You’ll Get Richer and Richer as the Years Go By…

Are your retirement years going to be spent penny-pinching to afford your next bill?

That, apparently, is a real fear for many Gen Xers and baby boomers, according to new research from Cerulli Associates. Their big worry is the possibility of outliving their assets.

There’s a solution here, but of course, I’m going to tell you about it later in this dispatch.

Here at the top I’ll say, “I totally get it.”

Retirement is dreadfully expensive.

The Fidelity Investments 2022 Retiree Health Care Cost Estimate shows that a 65-year-old couple today can expect to spend a combined $315,000 on healthcare across their retirement years.

Yes, those costs are arriving piecemeal over the years, so monthly Social Security paychecks and whatever nest egg a retiree has will cover some of the expenses as they occur.

But the vast majority of Americans near retirement age don’t have anything remotely resembling $315,000 saved… so their addiction to oxygen is going to cost them magnitudes more than they’ve squirreled away.

Moreover, inflation—even if the Federal Reserve were to bring it back down to 2%—means costs are compounding higher every single year. And Social Security cost-of-living raises don’t necessarily cover retiree inflation because healthcare costs and the cost of insurance are rising at a faster pace.

So it is, then, that those close to retirement—or who have just recently joined the Early Bird Special cohort—rightly fear that their waning days will be counting where every penny goes.

But as I regularly say, it doesn’t have to be that way.

An entire world—literally—offers up a fabulous retirement at cheaper prices.

You just have to wrap your mind around the idea of spending that retirement outside of America.

I’ll be doing that myself in retirement, which for me is technically just 10 years away at this point. In 2033, I’ll turn 67, full Social Security retirement age. And my plan, I can assure you, is to spend my retirement in Europe, where life is easier and the healthcare is equally as good or better… and available at a far cheaper cost than I would face back in America.

Retirement in Europe is a primary reason why I’m now in the process of moving to Portugal.

I want to obtain Portuguese residency and a Portuguese/European Union passport that will then allow me to spend part of my retirement on the beaches of Greece, part in the Provincial French countryside, and part along the languid coastlines of Spain and Portugal.

Or maybe Europe isn’t what you’re looking for…

I get that for some Americans, Europe is a bridge too far. Or to be geographically more accurate, an ocean too far. They don’t want to be so far removed from kids and grandkids. They want the ability to return Stateside quickly.

So, let’s focus on opportunities closer to home.

I want you to see just how much richer your life can be, and how less worrying the future can be, when you spend your retirement living a far more enjoyable and less costly life south of the border.

Let’s take, for example, San Miguel de Allende, a leafy, hilly town in the center of Mexico. It’s widely regarded as one of the safest cities in the country.

Apparently, you need about $59,000 per year after taxes to live comfortably in San Antonio, Texas, or about $4,900 a month. That same lifestyle in San Miguel de Allende is less than $3,500—29% cheaper. What could you do with an extra $1,400 per month in retirement?

Let’s jump across to Playa del Carmen, a stunning, beachside Caribbean city with a highly walkable central core with tons of shopping and restaurants. We’ll compare it to Pensacola, Florida, a popular beachfront town in a state with no personal income taxes.

A comfortable life for retirees in Pensacola is $40,000 per year, according to the local newspaper, the Pensacola News Journal. We’ll call that $3,330 per month. That same, comfortable, beachy Pensacola lifestyle is $2,100 per month just 630 miles south in Playa del Carmen. Again, what would you do with an extra $1,200 per month?

Also, the average Social Security check is $1,800, but the average check for someone who retires this year is $3,500. So, in Florida, you’re barely covering your costs.

In Playa del Carmen, you’re comfortably covering your costs with 40% of your Social Security income unspent. That’s the power of wrapping your mind around the idea of living overseas.

If you want to learn how to unlock your overseas retirement, check out International Living’s “What’s the Best Way to Go Overseas?” Roundtable. At this online event, which begins at 12 noon Eastern time today, IL’s live-overseas experts will share their insights about moving to the world’s most sought-after retirement destinations. (As a Field Notes reader, you can attend for free. Simply click here to join.)

Here’s the bottom line: You can live a richer, less expensive, more carefree retirement overseas. And if you choose some place like Mexico, or Belize, or Costa Rica, or Panama, you’re a hop, skip, and jump to family back in the U.S.

Plus, you don’t have to worry about skimping and saving on life’s basic necessities.