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.