But all of them, no matter why they’re moving abroad, have one thing in common—they’re all moving away from a place and culture they’re familiar with to relocate to one that’s new to them. Moving abroad is a great way to find out what those unconscious assumptions are and how different they can be in other countries and cultures. The first thing that happens when you leave home...the place you’re used to...and move to a new culture, is that things don’t go as you expect. Your expectations are based on where you used to live...and you don’t live there anymore. Finding the right words for “3/4 inch Philips-head wood screw” in Spanish or Portuguese or Thai can be challenging enough... Finding a store that carries them can be even more challenging. Establishing relationships with locals who can make these day-to-day challenges easier can be a challenge. Combined with patience and a sense of humor, these are the things that keep you young. This is probably one of the most important keys to success when you’re moving overseas. They moved abroad looking for exactly what they had back home at half the cost, and they are invariably disappointed, because the rest of the world isn’t just like the U.S. at half the price. Related Articles The World’s Best Places To Retire In 2017 4 Countries With The Best Healthcare In The World The 5 Top Retirement Havens With The Lowest Cost Of Living
There’s a reason we’re all told, repeatedly, to save for retirement during our working years. Though Social Security does serve as a key source of income for countless seniors, it’s not nearly enough to cover the typical retiree’s living costs entirely. And since pensions are rapidly becoming a thing of the past, it’s up to us, as individuals, to take savings matters into our own hands.
In fact, you’ll often hear financial experts tell you to sock away 10% of each paycheck for the future. And that can certainly do a lot for your long-term savings. But seeing as how retirement is often a costlier prospect than most people imagine, it begs the question: Is saving 10% of your income really enough, or do you need to up the ante?
How far will a 10% savings rate get you?
To get a sense of whether saving 10% of your income consistently will suffice in covering the bills, we’ll need to see what sort of numbers we’re talking about. The average annual salary in the U.S. is currently about $56,000, so if we take 10% of that figure, we arrive at a yearly savings of $5,600, or a monthly savings of $466.
Now let’s talk return on investment. A stock-heavy portfolio is likely to yield a 7% or 8% average yearly return, while a less aggressive portfolio might only yield 5% or 6% — or possibly less. The following table shows what a monthly contribution of $466 might amount to after 30 years based on your investments’ performance:
Average Annual Return Over 30 Years
Total Value of Retirement Savings*
You can’t help but notice the difference between an 8% return and a 4% return. While a $633,000 nest egg might very well allow you to pay the bills in retirement, especially when coupled with Social Security, a $313,000 nest egg will offer a lot less buying power.
Another thing to keep in mind is that the above calculations assume a 30-year investment window. But what if you don’t start saving right away?
Say you begin saving 10% of a $56,000 salary at age 45, and that you continue doing so for 20 years. Let’s also assume that your salary goes up 3% each year, and that you increase your contributions to stay at that 10% target. Even if your investments yield an average annual 8% return, by the time you turn 65, you’ll still only have $332,000 for retirement, because your savings window will only be two decades long. And if your investments yield a 4%…