Older workers face a new concern expressed by a Financial Times reader as "Catch-55." The reader says those over 55 "will have to carry on working past normal retirement age because there won't be enough money in our pension pots. Yet we get eased out to make way for younger people." Catch-55.
Ways to deal with Catch-55 have been suggested. You could brazen it out by implying you might sue your employer for age discrimination. You could take a pay cut by reducing your hours and use the free time to develop new pursuits. Those same pursuits should still entertain you when you retire.
I'd like to offer another approach -- namely: You could move overseas.
Those facing Catch-55 approach the end of their careers, meaning no need to worry about a move overseas limiting your career options. So why not see if you could get an overseas assignment? I'd say all -- well, maybe nearly all -- workers could benefit from an overseas job, whether they face Catch-55 or not.
Cushy expat packages used to be common enough. The employer paid moving expenses, helped with the transition, subsidized housing, cars, and private schools, and paid for plane tickets back home every year. We see far fewer of those fat expat packages today. But, even if you have to make the move overseas on your own, I'd say that the idea is worth serious consideration at this stage of life.
One big reason has to do with the cost of living. Some places around the world are seriously affordable (Thailand, India, Ecuador, and Nicaragua, for example). By that, I mean these are places where you could live comfortably on less than $1,000 per month. If you were to establish a life in one of these super low-cost destinations while working, you'd be in a great position when the day came finally for retirement. And, living in one of these ultra-affordable spots, that day could come much, much sooner.
But there are many other great reasons to move abroad, beyond the cost of living. A new life in a new country is a chance to make new friends, learn a new culture, have an adventure, and enjoy greater flexibility. I think this last, flexibility, might be the most important reason of all. Live abroad, and you tend to strengthen your ability to get used to anything life might throw at you.
Nassim Taleb, in his book Antifragile: Things That Gain From Disorder, recommends we set up our lives to profit from disorder rather than to avoid disorder. "The irony of the process of thought control: The more energy you put into trying to control your ideas and what you think about, the more your ideas end up controlling you." Move overseas, and you'll run into so many new ideas, and have so little control, that you'll break the cycle.
In the 1960s and 1970s, the Peace Corps was a great opportunity for this. The Peace Corps took wide-eyed young people, gave them some language training, and dropped them into Third World countries. In most cases, something surprising happened, and many who spent time in the Peace Corps later went on to become successful entrepreneurs, teachers, traders, builders, etc. Somehow the flexibility these kids learned in the Peace Corps led to more success later in life.
During the crash of 2007 and 2008, many of us lost huge amounts of our net worth. Curiously, those who lived abroad seemed to cope better. "We can always move to Thailand," became a common refrain.
At the time we could only wonder if the investments would come back. They did, as it turned out, but those living overseas through this uncertain time weren't really worried. They knew they could move to Thailand or another super-cheap country. How bad could it be? Not bad at all, provided you have the flexibility to act.
One of my favorite stories involves a friend who retired to India. India presents many challenges, but, done right, India can be very, very cheap. My friend saw his elderly, miserly, widowed, grumpy retired father struggling through bitter North Dakota winters. My friend uprooted the old guy and moved him to the beach at Goa, India. He set Dad up in a comfortable, modern rental, hired a couple of servants who took care of all his needs. Those servants quickly became treasured company. Dad paid for all this with about half as much money as he'd been spending in North Dakota. The old man enjoyed his final days with people pampering him, far from the cold, lonely, winter world. He died a happy man.
My husband and I have been living outside the States for more than 16 years. We're beginning to think about our very long-term plan. Should we buy insurance, should we prepay somehow, for someone to take care of us when we're ga-ga? That's an idea that could make sense, but we don't think it's the strategy for us. We think we can roll with the punches when the time comes. And we have a list of countries where we think we could live well, comfortably, and secure, for the rest of our lives, including France, Panama, and Colombia. Our "ultimate plan" is still some years down the line, but the point is we feel comfortable that, when the time comes for the end game, we'll be able to construct an expat life that will suit us.
Yes, it's much easier for us to feel that way because we've already been living the expat life for some time. But that's not the point you should take away from this. The point is that those facing Catch-55, and the rest of us, too, can often live better by moving abroad. Adapting to a new culture leads to greater flexibility and a resulting confidence that comes with it.
If it all falls down, expats will do better. In the meantime, as an expat, you could be enjoying the time of your life.
Tennessee's cost of living is the second lowest in the country, just behind Oklahoma, according to data collected from the Council for Community and Economic Research. And the Tax Foundation puts Tennessee's state and local tax burden as the third lowest in the nation. Tennessee also ranked among the best in the country for access to medical care, and its weather is warmer than average.
Besides jazz and beignets, Louisiana offers retirees an excellent combination of low taxes (the Tax Foundation ranks it as the fourth lowest in the nation) and balmy weather. Louisiana has a 30-year average temperature -- that includes both winter lows and summer highs -- of 66.7 degrees. That's higher than every other state except Hawaii and Florida. It also has better-than-average access to medical care and a relatively low cost of living. One major knock on Louisiana, however, is a crime rate that's among the highest in the nation. The FBI says there are 4,244 property and violent crimes per 100,000 people in Louisiana.
The Mount Rushmore State may not be on many retirement wish lists, but it should be. What it lacks in warmth, it makes up for in a variety of ways. South Dakota has the lowest crime rate in the nation. The Tax Foundation also says South Dakota residents have an estimated state and local tax burden of 7.6 percent, which is lower than every other state except Alaska. Its temperatures are on the chilly side, with a 30-year average of 46 degrees -- about the same as New York and Colorado.
One of the strongest benefits that Kentucky offers retirees is an extremely low cost of living. The Council for Community and Economic Research, or CCER, which collects data on the relative costs of groceries, housing, utilities, transportation and health care in communities across the U.S., found that retirees in Kentucky are paying less than many of their counterparts across the country. Bankrate, which analyzed CCER's data, found that Kentucky boasts the fifth-lowest cost of living in the nation. The Bluegrass State also has warmer-than-average temperatures and a crime rate that's slightly lower than average.
Mississippi is just another Appalachian state to make the list... sensing a trend here? The Magnolia State is not just one of the warmest in the U.S., it also has relatively low state and local taxes and a lower-than-average cost of living. Those factors make Mississippi an accommodating place for retirees, even though its crime rate is a little higher than average. It also has only 178 doctors per 100,000 people -- one of the lowest physician-to-resident ratios in the nation, according to the U.S. Census Bureau.
Virginia isn't just for lovers. It's for seniors looking for an all-around good place to settle down. The Old Dominion is better than average in most categories that Bankrate considered, including cost of living, warmer temperatures and access to physicians. With only 2,446 property and violent crimes per 100,000 people, Virginia has one of the lowest crime rates in the country. Throw all of that in with Thomas Jefferson's Monticello, Colonial Williamsburg, the Blue Ridge Parkway and other gems, and you have one of the best states in the U.S. for retirees.
Retire in the heart of Appalachian coal country? Absolutely. West Virginia ranks No. 7 on Bankrate's list of great retirement states for three main reasons: It has a lower-than-average cost of living, boasts a lower-than-average crime rate, and residents also have better access to hospital beds than the national average. And then there are the intangibles: The mountain ridges that ripple across the state are home to countless trout streams and hiking trails; its vistas look like something sketched by Thomas Kinkade; and temperatures are right in the middle range for U.S. states. Last year, temperatures in Charleston, West Virginia, ranged between a low of 12 and a high of 103 degrees Fahrenheit, and the 30-year state average is about 52 degrees.
Home of the Robert Trent Jones Golf Trail, Alabama boasts a trio of benefits that retirees may find alluring. It has some of the lowest local and state taxes in the nation. Its cost of living also is relatively low, especially for a Gulf Coast state. And its temperatures are among the warmest in the U.S.: Its average annual temperature of 63 degrees compares favorably to the national average, which is more than 10 degrees lower. However, Alabama has relatively high crime rates, with 4,026 property and violent crimes per 100,000 people (compared to the national average of 3,253). And access to medical care isn't as good as the national average.
The Cornhusker State ranks at No. 9 on Bankrate's best list for several reasons. Nebraska residents have excellent access to hospital beds, according to the Kaiser Family Foundation, and FBI statistics show that its crime rate is slightly lower than average. Its cost of living also is one of the lowest in the country, according to the Council for Community and Economic Research, which tracks the cost of groceries, housing, utilities, transportation and health care in most major U.S. cities. The state and local tax burden is near the national average at 9.7 percent, according to the Tax Foundation. And its 30-year average temperature is about 49.2 degrees, which is colder than the national average.
Yes, it's frigid there. The 30-year average annual temperature in North Dakota is around 41 degrees, making it the coldest state in the continental U.S. If you can handle the cold, North Dakota could be an excellent place to settle down. Consider its access to hospital care. There are five beds available for every 1,000 people in the state, according to the Kaiser Family Foundation. That's tied for second-best in the country. North Dakota also has the second-lowest crime rate in the nation, and the state and local tax burden, which takes into account income, sales, property and other taxes, is at a relatively mild 8.9 percent of income.