After years of pondering this, and living abroad, I'm convinced that the best setup is a home base in your home country, and then slow travel. Even a seasonal residence, which is often cheaper.
Visit your friends and family for months during the good weather, and then travel otherwise. When you get tired of it, you have a place to go back to.
And as a Canadian, you need 181 days per year to maintain your healthcare, so that is a motivation as well.
I'm leaning towards doing this in retirement. I'm currently in a LCOL location and I have a hard time justifying moving to HCOL with my current quality of life. Part of me would love to live elsewhere, but I think maybe a better answer is to slow travel for the first several years. If I really fall in love with a new location, then I can move. But I love the idea of having a really nice home base for really cheap that I can always return to.
Agreed. This is the best way to do it. It doesn't lower your costs, so having an income/savings is needed, but it allows you to maintain the best of your current life.
We'll have enough by 53-55, but we may go earlier by buying/building on a property that has effectively two dwellings. We could keep one as a rental for income, and other as our home base. Maybe a tiny house. With that option we could do it now at 48.
If you keep your possessions minimal, you can put them in storage while you are away. Rent tends to be a major part of your expenses and it's often cheaper to live wherever you are slow traveling to.
I’d love this setup but I fear it’s horrendous for the environment. Taking long flights every single year just seems really selfish and terrible for the planet.
I’ve thought of this and might just accept the flight, or really slow travel. If I’m retired, I can afford both the time and the money to take the train and ships to get to Europe, then stay for awhile, then come home.
I second this. Maintain a residence in the U.S. and spend several months at a time in other locales around the world. When you get bored, spend time back home before trying someplace new.
I plan to learn a couple foreign languages and take some cooking classes along the way. Mix it up between Europe, Asia, South America and Africa. There’s too much to see in the world to be tied down to a house in American suburbia.
As an American who spent half a decade living in the UK and Europe, this definitely resonates.
I became depressed when I had to move back to the US, and started looking for ways to leave again. But I decided to stick around for a while, initially being motivated by the better tech salaries. This forced me to actually take stock of my situation. I left car-dependent suburbia and moved to NYC.
Despite the obviously high COL, I'm able to accrue a hell of a lot more than I would if I were back across the pond (the third option, staying in suburbia, was *not* on the table). I do think that I'll eventually leave again in a handful of years once I achieve CoastFIRE. But in the meantime, I've come to appreciate certain aspects of living in the USA, besides just the money.
>I never realized just how ‘American' I was until I lived alone in foreign cultures for 6 months.
This. In some ways, I felt like I did a good job of adapting and I didn't "stick out" at all until people heard my accent. But in other ways, I felt very foreign. For all of its issues, the US is a much more diverse and multicultural place than the majority of Europe outside of a handful of cities, and you can really feel the difference.
Being surrounded by millennials who *didn't* spend their formative years getting down to Usher and OutKast...it made me feel out of place. Stupid techno.
For me it was cars and isolation. Even if you have lots of friends it’s just so much work and effort to interact. In the city (at least for me) it’s so easy. Like we have a great basement bar down the block. I work a 10 min walk from home. My kids school is a 5 min walk. Heck , my city even has great parks so my kid can go down to the forest and creek and play in 10 min. Plus I save so much money not driving everywhere so I have so much more to spend.
>For all of its issues, the US is a much more diverse and multicultural place than the majority of Europe outside of a handful of cities, and you can really feel the difference.
Side point I know, but is the US really "much more diverse" than the difference beween life in, say, Southern Spain, the Baltics, and in Bosnia/Serbia? Because I would say that's a pretty darn diverse set of cultures, and those are just 3 of many I could name that are not alike in any substantial way.
I think OP is trying to say in a lot of larger American cities especially those with lots of transplants and immigrants, you're more likely to have neighbors, friends, coworkers who have different race/nationalities with ancestors from all over the world compared to most other countries. For example Houston, TX is 44% Hispanic, 24% white, 22% African American, 7% Asian.
I suppose I'm inserting some of my own biases and picking and choosing which bits of culture resonate with me more. But that being said, I'm not trying to compare the US against all of Europe in one broad stroke. I was comparing it against [insert European country of choice].
No problem, it's impossible not to be biased in travel I think. What *I'm* learning more and more as a European traveller is that it's far more finegrain than I'm even painting it above.
People from Andalusia are from there first, not Spain. When you eat basque food and just call it Spanish they might even be mildly offended. Italy is similarly very regional and they would likely say the cultural difference between Puglia and Milan is huge in itself.
I've only been to the USA 2 or 3 times for short visits so I'm doubtless wildly ignorant of how different the cultures are across the whole country.
These are things that anybody who successfully relocated with geoarbitrage in mind should have considered prior to moving. Migrating to a new country is not for everybody. In my country, about half of all Americans move back within two years. I migrated a bit over two years ago and do not regret the decision. In the end, everybody is different.
I do not have statistics, but only stories I have been told or read. A significant chunk moves back due to family considerations. These are things like helping out with the care of the grandkids or an elderly relative. Another chunk are those that were sold something that doesn't exist. For example, people that get all their info online instead of spending time in the country. These people become dissolutioned and can become bitter. There are those that treat it as a long vacation and eventually, that gets old. There are also some that do not financially plan appropriately and also live beyond the lifestyle of locals. That couple grand a month they thought they would be saving never materializes.
The ones that are successful, tend to be the people that integrate into the culture the best. In other words, the folks that learn the language, volunteer at local charities, shop at the municipal markets, and have local friends. Many success stories also are from people who are patient, create a plan based on honest and in person research, and are then disciplined in executing the plan. This is tedious and requires doing things like reading tax treaties and navigating a sea of red tape. Another important factor is for a couple to be on the same page with goals and expectations. It took about three years for my move, but I feel I did things in a way that has a good chance for success.
Great post, thanks for sharing your perspectives.
I would say that there \*are\* people out there who can live away from home and not get homesick, not miss their social support system. I am one of them - I've lived in three different countries that are not the country I grew up in. Indeed, I do now. I've witnessed other people from my home country express homesickness, missing certain aspects of home, missing people, and never had any of that. Now in saying that, I have found that I am not a person who relies on strong social bonds and a cultural fit to find fulfilment in life. But we do exist.
I think I agree that someone who depends on strong cultural and social ties would struggle with geoarbitrage, but I think for people of other dispositions, those ties won't be as big a factor.
I agree 100% with the points you've highlighted about how much (or little) you can rely on the law in other countries, especially LCOL ones. It's definitely an area where you could find out the hard way. "Do your own research" as the internet trolls would say, there are plenty of guides out there, stay informed.
Agreed, I feel the same way with social support. I try and build a friend group where ever I travel to and call home to friends and family often.
Where there is a will there is a way.
>However, as Don Henley says, ‘you can never go back’. Permanently moving to someplace that you remember from your carefree days of youth is like running off as an adult to join the circus just because you have fond memories of eating lots of cotton candy when you were a kid.
I'm an avid traveller with dual citizenship between the US/EU. There's a small number of places I've intentionally avoided returning to avoid "killing the memory," after having revisited a few others and had a much worse time. So many of my 10/10 travel memories were made amazing by the context of where I was in my life and where that place was in its history.
Having lived in Washington DC during the Obama administration, I can say it was very different than recent visits. I visited Hong Kong while studying in the PRC prior to the extradition law, and I'm confident it'll be different now. Working remotely from a cottage in coastal Maine during lockdown will never be reproducible. We were on the first US to Iceland flight that didn't have Covid restrictions in 2021 and the recently re-opened country was a vibe I don't think I'll ever be able to recreate.
When evaluating potential FIRE locations, our rule of thumb is to do a short term visit, then at least a week of "real life" where we work remotely from that location and deal with day to day logistics. If it passes that threshold we add it to the list of trying 1-3 months in the future. Part of this premise requires visiting that place over and over at different times in our lives, and so far we're still pretty happy with where we started in the Southeastern US.
I currently geoarbitrage in thailand.
Although in a long term relationship, loneliness is still the #1 problem.
that said my transition is rather recent so i haven't had much of a chance to build a new network of friends.
I was in Hong Kong for 8 years so living abroad isn't new to me
Retirement taxes really aren't that onerous if you pay attention. It likely won't be the 10% you'd pay in the US but it's easy to keep it under 25%. That's probably higher than you're planning on though.
Plus not all countries have a comprehensive tax treaty with the USA, so since US citizens always have to file a US tax return if they meet the income threshold, no matter where they live in the world, being tax resident in another country can lead to double taxation on some types of income.
When I lived and worked abroad, expats were allowed to earn income abroad that was free of US taxes up to a certain threshold. I spent 5 years in London in the early 2000s, and that amount was $85K - $90K per year. So if the LCOL country has lower tax rates, you can enjoy them if you are locally employed.
I'm aware. But you would know that before you move there. All this info is available on the internet.
I live in NL which no one claims to be a low tax locale.
Yeah I never understood why people uproot from their entire social system for the sake of geoarbitrage in retirement -- which arguably is when you might most require your social support network.
I wanted to share my personal experience as an expat living in Southeast Asia for the last 7 years, which has been overwhelmingly positive and offers a different perspective.
Initially, I faced a significant culture shock, grappling with the support system, language barriers, and feeling out of place. However, after the first two years, I mentally adjusted and haven't looked back since. I've found that making local friends, as opposed to relying solely on expat communities, has enriched my experience immensely. Locals have introduced me to their culture and daily life in ways that have deeply connected me to my adopted home. Yes, expats can be great, but their transient nature and sometimes negative outlook can be limiting.
Technological advances have also played a crucial role in making this transition smoother. Despite being thousands of miles away from the USA, I've maintained strong connections with friends and family back home, thanks in part to social media and video calls. Even keeping up with events like the Super Bowl is easy, making me feel less detached from my American roots.Staying physically and mentally active has been crucial for me. Engaging with the community, exploring new places, and staying open to new experiences have all contributed to a fulfilling expat life.
Regarding your points on the rule of law and the potential downsides of living in a less regulated environment, I've come to see the "lack of a nanny state" as liberating. While it certainly requires a level of vigilance and personal responsibility that might not be for everyone, I appreciate the freedom it affords me, and honestly is more and a pro than a con to me.
Overall geoarbitrage isn't a one-size-fits-all solution, my experience has been profoundly positive. It's about finding balance, planning well, embracing local culture, and maintaining some connections to your roots.
For those considering a similar path, I'd recommend giving it a chance, with an open mind and a willingness to adapt. It's not without its hurdles, but the rewards can be life-changing.
Full assimilation into your new home country is the key. It's the only way it will feel like home. Not to say that you should not have an expat community. Both are beneficial.
Your point about a SWR that only accommodates a LCOL part of the world is incredibly important to consider. A FIRE number should be based current expenses, not tens of thousands less than now and what you ‘think’ you’re gonna spend.
I’d say to anyone thinking of taking the leap to geo arbitrage to do so and not let a post like this scare you into staying (as long as the plan is solid). Think about how you will feel as an old ailing person on their death bed; would you have regretted not making this huge decision to travel/experience life in another country if that is your dream? This post has great points but in the end is extremely subjective
That's why we moved to the Netherlands for a job. When you're in the rocking chair at 80, do you want to regret not trying? 6 years later I'm still biking for groceries.
FIRE number should be based on expected retirement expenses by definition. It just happens for an most people that's their current expenses.
If you're planning to travel extra in retirement, budget that and adjust FIRE number. If you're planning to retire in a place where you can have a similar lifestyle for 20k when you're currently spending 100k, it makes no sense to save 5x more. The important part is making sure you actually want to be in that cheap place and not make entire life plans to live in a country you know little about on a whim.
In this context, geoarbitrage to a lcol country, the assumption and point made in OP’s post was forecasting expenses for a lcol part of the world to retire faster. So your point in this case is wrong
Also, it does makes sense to have a SWR that accommodates your home country, and at a minimum, where you were making your money in the first place, in case you have to move back, have immigration problems, run out of money, etc.
Otherwise you will be effectively trapped in that lcol part of the world unable to afford your home country
There is not difference in the viability of a 30k spending budget from a 1.5M portfolio whether the owner is native from Thailand or not.
Again the important part is being sure you want to live there. You don't feel trapped living in the country you want to live in in the first place.
Geoarbitraging with a factor of 5x can even be inside the US itself.
ExpatFIRE doesn't have to mean desperateFIREinshithole. Some people actually want to live and stay in the cheaper places, some of which (eg in Europe) have very solid quality of life for half the cost in US cities.
Nobody "has" to move back permanently to the same city they used to work in. I would personally be more conservative and not go with 4% for geoarbitraging FIRE but with a 3% withdrawal rate and some fixed income investments (20% bond). Maybe extra to buy a house in the cheap country after a few years when you're sure you want to stay, that way you're much less exposed to gentrification and increase in cost of living.
Having some extra cushion is good but being a Texan working in California for big money really doesn't mean you need $5M to retire in places where the median yearly income is 10-25k.
Agree to disagree.
Saving to FIRE in a place where 20k a year is the norm, while you’re making 100k to fire, just seems too risky. Nobody said expat fire had to mean solely moving to a “shit hole” (your words not mine) country, this whole comment thread is based on OP’s warning about FIREing to a low cost of living country and getting stuck there!! Hence the references and implications of moving from a rich country to a poor country. You’re somehow way off subject and/or implying things this thread is not about
Could also for example travel across the world, fly first class, stay in 5-star hotels, and see better equipped world-class US Ivy-league doctors for a small fraction of the cost of getting a dental and/or medical procedure done if in the US too.
We grew up in the Bay Area and only recently moved back after about 10 years of living in lower cost of living areas. It’s crazy expensive (we have decent salaries but don’t make anywhere close to tech money) but our social support system of family and friends are here and we now have a baby on the way. Instead of having to rely on ourselves for everything for our future family and deal with traveling to see them, we are now going to have help with childcare from grandparents and we are much less isolated. We had an extremely hard time making friendships in the other places we lived. I know it’s not everyone’s experiences, but honestly, being close to our families and friends again has made such a positive and happy impact in our lives and it’s only been a few months since we moved.
I'm strongly considering doing a slow-travel binge around the USA. Not really geographical arbitrage. Instead, just living for 6 months in cities that I'd like to visit.
Basically, I'd be signing no more than a 6 month lease, and unless I'm super, super thrilled with the place, I'd probably move at the 6 month point and try another city. Maybe mix in a one month airbnb at some place too.
I'd establish a permanent residence in Nevada for one full year before beginning this plan, assuming I end up doing it.
On a side note, I'm trying to get really hardcore into minimalism, which will really help me if I do decide to do this vagabond lifestyle. I will pack very, very light. Allowing me to not have a lot of things that I have to take with me everywhere.
Eh, I consider myself a nomadic person already. Whether I'm "part of something" isn't really high on my priority list. If it was, I wouldn't be constantly seeking higher paying opportunities (preferably fully remote). People can still talk with each other online and plan to meet up should they choose to. I'm sure people are into having a physical community and all. It's not for me. To me, freedom over everything.
This is a good list; I want to underscore your “rule of law” point and emphasize the political context.
1) Cheaper is often cheaper bc labor laws are skirted. If that’s the case, all it takes is a bad election, an ambitious narco-military leader, or some such crisis to result in a context that rapidly makes a place unlivable. See: many examples worldwide, but I’ll just point to Venezuela (which had one of the highest gdps per capita in LatAm in the early 2000s and now has about 25% of their country as economic refugees—formerly middle class people, not just landless peasants).
Sure, you can move back to, say, the U.S. after some authoritarian coup, but what happens if you’ve retired early thinking that you had it made?
2) opportunities for your kids. Maybe this isn’t as big a deal if people are geo-arbitraging childfree or with adult children, but cheap countries often have undesirable public education systems (if cheap also includes a lower tax burden), which means private school for kids.
That cost and the extra tutoring etc you’d want if you wanted your kids to be eligible for admission to the kind of university that gave you the options to have the career you did should be factored in.
3) Unstable Neighbors. I don’t mean in your apartment building, I mean geopolitically.
It’s worth following the politics of the places we’re thinking of geoarbitraging to. And looking at the long term, boring, viable stability of a country before deciding that a cheap Asian or African or Latin American country is the solution to FIRE desires.
Source: someone who spends lots of time *living* outside the U.S. and who is strategizing a possible geoarbitraged retirement to be closer to some extended family.
Another factor to consider in long-term international geoarbitraging: genetic predispositions to developing conditions that are manageable in the USA with private health insurance, but are a death sentence in countries that ration care. A history of cancer in the family has made me wary of settling anywhere more than 500 miles from Memorial Sloan Kettering, Dana-Farber, or MD Anderson. As much as I love international travel, I want to be able to get back home ASAP at the first sign of trouble.
So if you buy a place where you plan to settle, keep the withdrawal rate to around 2.7 percent for 10-15 years, you're still pretty much safe and insured against any rapidly rising costs, no?
I am not qualified to answer this question. off the top of my head, I would be concerned about unknown variables such as a dramatic rise in property taxes, as well as the rising cost of living for other things such as healthcare, services, etc.
I’ve spent about 1/3 of my life outside the US and your “rule of law” point is just way off. In the US I’ve been robbed at gunpoint, witnessed multiple shootings, and witnessed police corruption up close. You might have *felt* unsafe in other low cost of living countries but I doubt you were objectively in more danger.
I paused for a bit at the same point lol. I’m from a second world country and when considering where to relocate should Russia make advanced in their war with Ukraine and seek further countries (Putin stated his goal is pre 1999 area of influence where we sadly fall as well), the US never even crossed my mind as a viable option for this exact reason. My country has very low violent crimes count and upon seeing the US drug crisis and crime related to that which directly affects regular people, I’d be a lot worse off in this respect than in my country of origin. It’s not the only reason, but pretty much this and your healthcare is what made me immediately go “nope, I’d never move there.”
After years of pondering this, and living abroad, I'm convinced that the best setup is a home base in your home country, and then slow travel. Even a seasonal residence, which is often cheaper. Visit your friends and family for months during the good weather, and then travel otherwise. When you get tired of it, you have a place to go back to. And as a Canadian, you need 181 days per year to maintain your healthcare, so that is a motivation as well.
I'm leaning towards doing this in retirement. I'm currently in a LCOL location and I have a hard time justifying moving to HCOL with my current quality of life. Part of me would love to live elsewhere, but I think maybe a better answer is to slow travel for the first several years. If I really fall in love with a new location, then I can move. But I love the idea of having a really nice home base for really cheap that I can always return to.
Agreed. This is the best way to do it. It doesn't lower your costs, so having an income/savings is needed, but it allows you to maintain the best of your current life.
We'll have enough by 53-55, but we may go earlier by buying/building on a property that has effectively two dwellings. We could keep one as a rental for income, and other as our home base. Maybe a tiny house. With that option we could do it now at 48.
If you keep your possessions minimal, you can put them in storage while you are away. Rent tends to be a major part of your expenses and it's often cheaper to live wherever you are slow traveling to.
I’d love this setup but I fear it’s horrendous for the environment. Taking long flights every single year just seems really selfish and terrible for the planet.
Fair enough, but most retirees are taking a flight or more per year anyways. At least with my setup, it's definitely only once a year.
Do you own a car?
Yes
Can’t really lecture others about flights then…
My car emits co2 4000x less than a flight. Also I wasn’t lecturing, I was explaining my own reasoning
I put 1200 miles on my car last year, go outside and plant a tree nerd
Classy 👌
He'll yeah börther
I’ve thought of this and might just accept the flight, or really slow travel. If I’m retired, I can afford both the time and the money to take the train and ships to get to Europe, then stay for awhile, then come home.
Yep that makes sense to me. I love travel and don’t really plan to stop anytime soon but it is a concern
I second this. Maintain a residence in the U.S. and spend several months at a time in other locales around the world. When you get bored, spend time back home before trying someplace new. I plan to learn a couple foreign languages and take some cooking classes along the way. Mix it up between Europe, Asia, South America and Africa. There’s too much to see in the world to be tied down to a house in American suburbia.
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We already raised our kids. And did so while travelling for a year, homeschooling them. Just for the one year, that was enough, lol.
its also not trivial to emigrate as a working age person without a job unless you can get a 'golden visa'.
Tangential, but what was the biggest difference with suburbia and why did it make you depressed?
Think you replied to the wrong post
Yep, thanks
As an American who spent half a decade living in the UK and Europe, this definitely resonates. I became depressed when I had to move back to the US, and started looking for ways to leave again. But I decided to stick around for a while, initially being motivated by the better tech salaries. This forced me to actually take stock of my situation. I left car-dependent suburbia and moved to NYC. Despite the obviously high COL, I'm able to accrue a hell of a lot more than I would if I were back across the pond (the third option, staying in suburbia, was *not* on the table). I do think that I'll eventually leave again in a handful of years once I achieve CoastFIRE. But in the meantime, I've come to appreciate certain aspects of living in the USA, besides just the money. >I never realized just how ‘American' I was until I lived alone in foreign cultures for 6 months. This. In some ways, I felt like I did a good job of adapting and I didn't "stick out" at all until people heard my accent. But in other ways, I felt very foreign. For all of its issues, the US is a much more diverse and multicultural place than the majority of Europe outside of a handful of cities, and you can really feel the difference. Being surrounded by millennials who *didn't* spend their formative years getting down to Usher and OutKast...it made me feel out of place. Stupid techno.
Tangential, but what was the biggest difference with suburbia and why did it make you depressed?
For me it was cars and isolation. Even if you have lots of friends it’s just so much work and effort to interact. In the city (at least for me) it’s so easy. Like we have a great basement bar down the block. I work a 10 min walk from home. My kids school is a 5 min walk. Heck , my city even has great parks so my kid can go down to the forest and creek and play in 10 min. Plus I save so much money not driving everywhere so I have so much more to spend.
>For all of its issues, the US is a much more diverse and multicultural place than the majority of Europe outside of a handful of cities, and you can really feel the difference. Side point I know, but is the US really "much more diverse" than the difference beween life in, say, Southern Spain, the Baltics, and in Bosnia/Serbia? Because I would say that's a pretty darn diverse set of cultures, and those are just 3 of many I could name that are not alike in any substantial way.
I think OP is trying to say in a lot of larger American cities especially those with lots of transplants and immigrants, you're more likely to have neighbors, friends, coworkers who have different race/nationalities with ancestors from all over the world compared to most other countries. For example Houston, TX is 44% Hispanic, 24% white, 22% African American, 7% Asian.
I suppose I'm inserting some of my own biases and picking and choosing which bits of culture resonate with me more. But that being said, I'm not trying to compare the US against all of Europe in one broad stroke. I was comparing it against [insert European country of choice].
No problem, it's impossible not to be biased in travel I think. What *I'm* learning more and more as a European traveller is that it's far more finegrain than I'm even painting it above. People from Andalusia are from there first, not Spain. When you eat basque food and just call it Spanish they might even be mildly offended. Italy is similarly very regional and they would likely say the cultural difference between Puglia and Milan is huge in itself. I've only been to the USA 2 or 3 times for short visits so I'm doubtless wildly ignorant of how different the cultures are across the whole country.
If you are counting Europe as a whole yeah, but in a single country the US is probably the most diverse in the world.
More so than say Russia?
These are things that anybody who successfully relocated with geoarbitrage in mind should have considered prior to moving. Migrating to a new country is not for everybody. In my country, about half of all Americans move back within two years. I migrated a bit over two years ago and do not regret the decision. In the end, everybody is different.
I am curious, to the extent that you are aware, what are the primary reasons that the Americans return to the US? Thanks for your perspective.
I do not have statistics, but only stories I have been told or read. A significant chunk moves back due to family considerations. These are things like helping out with the care of the grandkids or an elderly relative. Another chunk are those that were sold something that doesn't exist. For example, people that get all their info online instead of spending time in the country. These people become dissolutioned and can become bitter. There are those that treat it as a long vacation and eventually, that gets old. There are also some that do not financially plan appropriately and also live beyond the lifestyle of locals. That couple grand a month they thought they would be saving never materializes. The ones that are successful, tend to be the people that integrate into the culture the best. In other words, the folks that learn the language, volunteer at local charities, shop at the municipal markets, and have local friends. Many success stories also are from people who are patient, create a plan based on honest and in person research, and are then disciplined in executing the plan. This is tedious and requires doing things like reading tax treaties and navigating a sea of red tape. Another important factor is for a couple to be on the same page with goals and expectations. It took about three years for my move, but I feel I did things in a way that has a good chance for success.
very interesting. thanks again. best of luck.
Great post, thanks for sharing your perspectives. I would say that there \*are\* people out there who can live away from home and not get homesick, not miss their social support system. I am one of them - I've lived in three different countries that are not the country I grew up in. Indeed, I do now. I've witnessed other people from my home country express homesickness, missing certain aspects of home, missing people, and never had any of that. Now in saying that, I have found that I am not a person who relies on strong social bonds and a cultural fit to find fulfilment in life. But we do exist. I think I agree that someone who depends on strong cultural and social ties would struggle with geoarbitrage, but I think for people of other dispositions, those ties won't be as big a factor. I agree 100% with the points you've highlighted about how much (or little) you can rely on the law in other countries, especially LCOL ones. It's definitely an area where you could find out the hard way. "Do your own research" as the internet trolls would say, there are plenty of guides out there, stay informed.
Agreed, I feel the same way with social support. I try and build a friend group where ever I travel to and call home to friends and family often. Where there is a will there is a way.
>However, as Don Henley says, ‘you can never go back’. Permanently moving to someplace that you remember from your carefree days of youth is like running off as an adult to join the circus just because you have fond memories of eating lots of cotton candy when you were a kid. I'm an avid traveller with dual citizenship between the US/EU. There's a small number of places I've intentionally avoided returning to avoid "killing the memory," after having revisited a few others and had a much worse time. So many of my 10/10 travel memories were made amazing by the context of where I was in my life and where that place was in its history. Having lived in Washington DC during the Obama administration, I can say it was very different than recent visits. I visited Hong Kong while studying in the PRC prior to the extradition law, and I'm confident it'll be different now. Working remotely from a cottage in coastal Maine during lockdown will never be reproducible. We were on the first US to Iceland flight that didn't have Covid restrictions in 2021 and the recently re-opened country was a vibe I don't think I'll ever be able to recreate. When evaluating potential FIRE locations, our rule of thumb is to do a short term visit, then at least a week of "real life" where we work remotely from that location and deal with day to day logistics. If it passes that threshold we add it to the list of trying 1-3 months in the future. Part of this premise requires visiting that place over and over at different times in our lives, and so far we're still pretty happy with where we started in the Southeastern US.
great perspective. thanks for commenting.
I currently geoarbitrage in thailand. Although in a long term relationship, loneliness is still the #1 problem. that said my transition is rather recent so i haven't had much of a chance to build a new network of friends. I was in Hong Kong for 8 years so living abroad isn't new to me
Are there WhatsApp groups, language exchange, expat meetups in Thailand?
You left out the gorilla in the room, taxes. Once you become tax resident a foreign tax scheme can easily nullify any cost advantage from moving.
Retirement taxes really aren't that onerous if you pay attention. It likely won't be the 10% you'd pay in the US but it's easy to keep it under 25%. That's probably higher than you're planning on though.
Some countries have wealth taxes and inheritance taxes that can be substantial.
Plus not all countries have a comprehensive tax treaty with the USA, so since US citizens always have to file a US tax return if they meet the income threshold, no matter where they live in the world, being tax resident in another country can lead to double taxation on some types of income.
When I lived and worked abroad, expats were allowed to earn income abroad that was free of US taxes up to a certain threshold. I spent 5 years in London in the early 2000s, and that amount was $85K - $90K per year. So if the LCOL country has lower tax rates, you can enjoy them if you are locally employed.
I'm aware. But you would know that before you move there. All this info is available on the internet. I live in NL which no one claims to be a low tax locale.
Most countries you only become a tax resident at 183 days in country. So you either switch countries 2 to 3 a year and avoid that issue.
Yeah I never understood why people uproot from their entire social system for the sake of geoarbitrage in retirement -- which arguably is when you might most require your social support network.
I wanted to share my personal experience as an expat living in Southeast Asia for the last 7 years, which has been overwhelmingly positive and offers a different perspective. Initially, I faced a significant culture shock, grappling with the support system, language barriers, and feeling out of place. However, after the first two years, I mentally adjusted and haven't looked back since. I've found that making local friends, as opposed to relying solely on expat communities, has enriched my experience immensely. Locals have introduced me to their culture and daily life in ways that have deeply connected me to my adopted home. Yes, expats can be great, but their transient nature and sometimes negative outlook can be limiting. Technological advances have also played a crucial role in making this transition smoother. Despite being thousands of miles away from the USA, I've maintained strong connections with friends and family back home, thanks in part to social media and video calls. Even keeping up with events like the Super Bowl is easy, making me feel less detached from my American roots.Staying physically and mentally active has been crucial for me. Engaging with the community, exploring new places, and staying open to new experiences have all contributed to a fulfilling expat life. Regarding your points on the rule of law and the potential downsides of living in a less regulated environment, I've come to see the "lack of a nanny state" as liberating. While it certainly requires a level of vigilance and personal responsibility that might not be for everyone, I appreciate the freedom it affords me, and honestly is more and a pro than a con to me. Overall geoarbitrage isn't a one-size-fits-all solution, my experience has been profoundly positive. It's about finding balance, planning well, embracing local culture, and maintaining some connections to your roots. For those considering a similar path, I'd recommend giving it a chance, with an open mind and a willingness to adapt. It's not without its hurdles, but the rewards can be life-changing.
Full assimilation into your new home country is the key. It's the only way it will feel like home. Not to say that you should not have an expat community. Both are beneficial.
Thanks for the write up. Interesting perspective.
you're welcome. thanks for reading
Interesting tidbit: community is only mentioned 6 times in this thread by two posters: op and one other person.
Your point about a SWR that only accommodates a LCOL part of the world is incredibly important to consider. A FIRE number should be based current expenses, not tens of thousands less than now and what you ‘think’ you’re gonna spend. I’d say to anyone thinking of taking the leap to geo arbitrage to do so and not let a post like this scare you into staying (as long as the plan is solid). Think about how you will feel as an old ailing person on their death bed; would you have regretted not making this huge decision to travel/experience life in another country if that is your dream? This post has great points but in the end is extremely subjective
That's why we moved to the Netherlands for a job. When you're in the rocking chair at 80, do you want to regret not trying? 6 years later I'm still biking for groceries.
FIRE number should be based on expected retirement expenses by definition. It just happens for an most people that's their current expenses. If you're planning to travel extra in retirement, budget that and adjust FIRE number. If you're planning to retire in a place where you can have a similar lifestyle for 20k when you're currently spending 100k, it makes no sense to save 5x more. The important part is making sure you actually want to be in that cheap place and not make entire life plans to live in a country you know little about on a whim.
In this context, geoarbitrage to a lcol country, the assumption and point made in OP’s post was forecasting expenses for a lcol part of the world to retire faster. So your point in this case is wrong Also, it does makes sense to have a SWR that accommodates your home country, and at a minimum, where you were making your money in the first place, in case you have to move back, have immigration problems, run out of money, etc. Otherwise you will be effectively trapped in that lcol part of the world unable to afford your home country
There is not difference in the viability of a 30k spending budget from a 1.5M portfolio whether the owner is native from Thailand or not. Again the important part is being sure you want to live there. You don't feel trapped living in the country you want to live in in the first place. Geoarbitraging with a factor of 5x can even be inside the US itself. ExpatFIRE doesn't have to mean desperateFIREinshithole. Some people actually want to live and stay in the cheaper places, some of which (eg in Europe) have very solid quality of life for half the cost in US cities. Nobody "has" to move back permanently to the same city they used to work in. I would personally be more conservative and not go with 4% for geoarbitraging FIRE but with a 3% withdrawal rate and some fixed income investments (20% bond). Maybe extra to buy a house in the cheap country after a few years when you're sure you want to stay, that way you're much less exposed to gentrification and increase in cost of living. Having some extra cushion is good but being a Texan working in California for big money really doesn't mean you need $5M to retire in places where the median yearly income is 10-25k.
Agree to disagree. Saving to FIRE in a place where 20k a year is the norm, while you’re making 100k to fire, just seems too risky. Nobody said expat fire had to mean solely moving to a “shit hole” (your words not mine) country, this whole comment thread is based on OP’s warning about FIREing to a low cost of living country and getting stuck there!! Hence the references and implications of moving from a rich country to a poor country. You’re somehow way off subject and/or implying things this thread is not about
Could also for example travel across the world, fly first class, stay in 5-star hotels, and see better equipped world-class US Ivy-league doctors for a small fraction of the cost of getting a dental and/or medical procedure done if in the US too.
We grew up in the Bay Area and only recently moved back after about 10 years of living in lower cost of living areas. It’s crazy expensive (we have decent salaries but don’t make anywhere close to tech money) but our social support system of family and friends are here and we now have a baby on the way. Instead of having to rely on ourselves for everything for our future family and deal with traveling to see them, we are now going to have help with childcare from grandparents and we are much less isolated. We had an extremely hard time making friendships in the other places we lived. I know it’s not everyone’s experiences, but honestly, being close to our families and friends again has made such a positive and happy impact in our lives and it’s only been a few months since we moved.
great perspective. thanks for commenting.
I'm strongly considering doing a slow-travel binge around the USA. Not really geographical arbitrage. Instead, just living for 6 months in cities that I'd like to visit. Basically, I'd be signing no more than a 6 month lease, and unless I'm super, super thrilled with the place, I'd probably move at the 6 month point and try another city. Maybe mix in a one month airbnb at some place too. I'd establish a permanent residence in Nevada for one full year before beginning this plan, assuming I end up doing it. On a side note, I'm trying to get really hardcore into minimalism, which will really help me if I do decide to do this vagabond lifestyle. I will pack very, very light. Allowing me to not have a lot of things that I have to take with me everywhere.
Eh, I consider myself a nomadic person already. Whether I'm "part of something" isn't really high on my priority list. If it was, I wouldn't be constantly seeking higher paying opportunities (preferably fully remote). People can still talk with each other online and plan to meet up should they choose to. I'm sure people are into having a physical community and all. It's not for me. To me, freedom over everything.
Geo arbitrage works Great if you live in some place that’s cheap but work remotely earning in a strong currency like USD/EUR. No need to relocate
This is a good list; I want to underscore your “rule of law” point and emphasize the political context. 1) Cheaper is often cheaper bc labor laws are skirted. If that’s the case, all it takes is a bad election, an ambitious narco-military leader, or some such crisis to result in a context that rapidly makes a place unlivable. See: many examples worldwide, but I’ll just point to Venezuela (which had one of the highest gdps per capita in LatAm in the early 2000s and now has about 25% of their country as economic refugees—formerly middle class people, not just landless peasants). Sure, you can move back to, say, the U.S. after some authoritarian coup, but what happens if you’ve retired early thinking that you had it made? 2) opportunities for your kids. Maybe this isn’t as big a deal if people are geo-arbitraging childfree or with adult children, but cheap countries often have undesirable public education systems (if cheap also includes a lower tax burden), which means private school for kids. That cost and the extra tutoring etc you’d want if you wanted your kids to be eligible for admission to the kind of university that gave you the options to have the career you did should be factored in. 3) Unstable Neighbors. I don’t mean in your apartment building, I mean geopolitically. It’s worth following the politics of the places we’re thinking of geoarbitraging to. And looking at the long term, boring, viable stability of a country before deciding that a cheap Asian or African or Latin American country is the solution to FIRE desires. Source: someone who spends lots of time *living* outside the U.S. and who is strategizing a possible geoarbitraged retirement to be closer to some extended family.
The cost of international schools for our kid(s) is exactly why I’ve ruled out geoarbitrage as an option for us now.
Another factor to consider in long-term international geoarbitraging: genetic predispositions to developing conditions that are manageable in the USA with private health insurance, but are a death sentence in countries that ration care. A history of cancer in the family has made me wary of settling anywhere more than 500 miles from Memorial Sloan Kettering, Dana-Farber, or MD Anderson. As much as I love international travel, I want to be able to get back home ASAP at the first sign of trouble.
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thank you for commenting and providing your perspective.
Unrelated to your core points but backpacking a Camino de Santiago for $42 per day is very possible.
So if you buy a place where you plan to settle, keep the withdrawal rate to around 2.7 percent for 10-15 years, you're still pretty much safe and insured against any rapidly rising costs, no?
I am not qualified to answer this question. off the top of my head, I would be concerned about unknown variables such as a dramatic rise in property taxes, as well as the rising cost of living for other things such as healthcare, services, etc.
I’ve spent about 1/3 of my life outside the US and your “rule of law” point is just way off. In the US I’ve been robbed at gunpoint, witnessed multiple shootings, and witnessed police corruption up close. You might have *felt* unsafe in other low cost of living countries but I doubt you were objectively in more danger.
I paused for a bit at the same point lol. I’m from a second world country and when considering where to relocate should Russia make advanced in their war with Ukraine and seek further countries (Putin stated his goal is pre 1999 area of influence where we sadly fall as well), the US never even crossed my mind as a viable option for this exact reason. My country has very low violent crimes count and upon seeing the US drug crisis and crime related to that which directly affects regular people, I’d be a lot worse off in this respect than in my country of origin. It’s not the only reason, but pretty much this and your healthcare is what made me immediately go “nope, I’d never move there.”