My husband and I have the best of both worlds. We often leave the United States for months at a time to visit exotic locations. We set up a home base on the other side of the globe and settle into the local community. Then, due to visa restrictions or an overwhelming desire to see family and friends once again, we return home to America's stunning Southwest.
People always ask us how we were able to retire early, and here's a boiled-down list of what we tell them:
» Determine your expenses
» Monitor investments and withdrawals
» Get local by living among the locals
» Make a list of all you want to see and do
» Take the leap of faith
While we went into greater detail in the Rule Your Retirement article "Retire When You Want" (September 2004), this space is devoted to talking about how we are able to maintain a home, travel as extensively as we do, and not break the bank. You see, before and during retirement, it's all about choices. We chose to live in an active adult community, and while this may not fit everyone's idea of the perfect domicile, it works spectacularly for us.
Value for Money Spent
I realize that there are some who feel that manufactured houses aren't real homes and that they are inferior places to live, but increased sales tell a different story. The options are endless — you can spend a few thousand dollars or spend millions. You can choose to lease the property or buy the lot and build from the ground up. Because our home is paid for, we are able to roam the world, renting apartments or hotel rooms without worrying about draining our finances.
Some communities offer memberships to country clubs and championship golf courses, and most usually have a long list of amenities that would add up quickly if they weren't covered in our community's "lifestyle fees."
Tax and Insurance Relief
We have chosen to lease the land on which our home sits. It is a common option that many retirees prefer. Some readers, however, have challenged us directly, asking, "How can you not own the property itself? Don't you feel at the mercy of rent rising without your control? Property values always go up!"
Valid issues, yes, but many people don't realize how expensive it is to own a home. The maintenance required and the rising property taxes are expenses that cannot be ignored. We have lived in our current house since the early 1990s, and our lifestyle fees are less than most homeowners' property tax bills. Sure, our lease has increased a couple hundred dollars total, but it is still an excellent value for all of the amenities included. Owning less and being lighter allows us to insure for less.
It is common for developers to attract residents by touting their tax-friendly state. But while some states may have low (or no) income taxes, they might have high property taxes. By not owning a property, you can save thousands of dollars a year — dollars that can be better spent on activities such as travel, gifts for the grandchildren, or hobbies.
Savings on Everyday Costs
Having entertainment and dining options nearby or within walking distance saves a surprising amount on transportation costs. Granted, we do travel the world, but we have done the math — and we only drive about 1,200 miles a year! We save a huge amount on gas and wear and tear on our vehicle. We have even gotten an insurance discount.
Although we are responsible for the maintenance of our home and personal gardens, we don't worry if the pool heater breaks down or if a piece of equipment in the fitness room needs to be replaced.
Safety in Numbers
This last one is particularly true for the female readers of Rule Your Retirement. In our active adult community, I don't fret about my personal safety. Recently, Billy took off for a trip to Mexico, and I stayed home to catch up on some projects. One morning, I found myself awake at 3:30, and so I decided to take an early walk around the community. I felt completely safe, and it never crossed my mind to feel otherwise. In fact, I met other neighbors who were walking their dogs and waiting to catch the sunrise.
Before I sign off, I want to encourage each and every one of you to open your mind to the options — the possibilities — that are available to you. You may just find that a lighter financial weight appeals to you in more ways than you imagined.
For more on how Billy and Akaisha Kaderli retired at the ripe old age of 38, visit the RYR website and check out the September 2004 issue. You can also check out their CD book, The Adventurer's Guide to Early Retirement.
