The Freedom of Exile

Most people do not like change.  They prefer to stick with their familiar habits and familiar ways. The benefit of course is that one has a better idea of what to expect if one does not change. The downside is that one usually retains the problems one had before.

In the title of this blog I included the word exile which is usually thought of as a punishment, “Possibly never seeing one’s home or country again.” The benefits or freedoms associated with exile are often ignored. Many people in this country live in areas that carry an extremely high cost relative to other areas of the country.  According to cost of living research by the US Census Bureau, the city where I currently live, Nashville, TN has a cost of living index of 88.9 (with 100 being the national average) as compared with a cost of living index of 121.4 for Seattle, WA or 216.7 for New York (Manhattan), NY. If one is going to be making a large life change anyway for retirement, perhaps exile is something to consider if you live in a high cost city.

Imagine what your life would be like if you suddenly found that your costs of living were ‘on sale’.  For some who would choose exile from their locales, this could mean experiencing ‘sales’ of 10%, 33%, or over 50% for their regular life expenses. I would suggest that having one’s expenses reduced could be one of the best methods available to increase the likelihood of a successful retirement.

Another form of exile, that may be considered, is downsizing. Does a couple or a single person really need 2,500+ square feet of space to live comfortably? Or is this extra space realistically sitting relatively unused other than as a private museum for rarely used items? If one is not willing to consider renting out rooms to boarders, perhaps it is time to consider a smaller place. The benefits could be substantial in terms of decreased property taxes as well as potentially smaller utility and maintenance costs, and in some cases a smaller mortgage payment as well. I have known several people who decreased their property tax and utility costs by over $1,000 per month simply by downsizing. This does not take into account the $2,000 per month that they saved by no longer having to pay a mortgage on their home. How would a $3,000 decrease in expenses effect your retirement chances or your ability to do some other things that you may desire?

A more extreme option being taken by a number of retirees is to leave their country. Unsurprisingly, there are a number of places in the world where the cost of living is substantially less than the United States. The benefits available may be less, but the cost is less as well. Many people say that they would want to travel in retirement. What better way to truly get to experience something different than to live in a completely different place and take day trips or weekend getaways from there? Many people often cite concern for access to medical care when living abroad. I grant that though this is a concern, it may not be as large of a concern for someone who is in relatively good health than someone who is not.  How would your life look if you were able to live for less than $1,500 per month in a retirement paradise, whether that be cool temperate mountains or by the ocean? If health concerns became more of an issue, one could move back.

I did not mention that exile had to be permanent. It does not have to be. It could be for as short or as long of a period that wanted, though the benefits would tend to compound over time and every change has a cost. If the change is for too short a duration, then it may cost more than not having made it at all. To be able to experience the excitement of a different culture whether in the same city, in the same country or abroad while having a very low withdrawal rate from one’s retirement portfolio could be an exciting option for many retirees. It could make their retirement more sustainable. Perhaps exile is not such a bad option after all…


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