How to retire abroad plus expert advice for nervous investors
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By Lauren Young
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Do you dream about living overseas when you retire? My husband and I like to talk about our ideal retirement spot. We both like the idea of a beach with mountains nearby.
Oh, and he needs good sushi.
I want culture and community.
My friend Jill’s latest retirement obsession, meanwhile, is a small town in Spain. (I can’t tell you the name because she doesn’t want her secret to get out.)
It’s easy to dream. But moving to another country is no small step. Yet it is one that many have already taken: At least 5.4 million Americans lived abroad in 2023, according to the Association of Americans Resident Overseas.
The magazine "International Living" recently released its 2024 Global Retirement Index, ranking locales around the world according to a variety of criteria. Costa Rica is first on the list while Portugal, Mexico, Panama and Spain round out the top five.
One big reason for such a move: thestrength of the U.S. dollar in foreign countries. Most Americans are far behind on retirement savings, so if they can find a location with a much lower cost of living, the math changes immediately.
Here are tips for anyone considering locales abroad for their retirement years. Also, it’s fun to fill out this Expatsi survey which suggests places to retire.
Where do you fantasize about living in retirement and why? If it’s in another zip code or even on another continent, have you taken a test-drive yet? Write to me about the experience at onthemoney@thomsonreuters.com.
LIFE AND LEGACY
Every day I log onto Facebook and it feels like someone I know has lost a person dear to them: A parent, a grandparent, a sibling, a friend, a colleague. I look at those posts carefully because I am interested in other peoples’ lives. (I guess that’s why I’m a journalist.)
While I never met former Google executive Susan Wojcicki, I’ve read enough about her since her death at age 56 to know she was a force. Many people I respect have shared the kindest words about her legacy as a leader, mentor and innovator. She was a working parent (with five kids!) who made family a priority.
My favorite tribute post is from a former Reuters reporter, Aaron Pressman. The human side of technology is often lost in the rush for fame and fortune, Pressman writes in this magnificent reflection, which I implore you to read.
The memory of Susan Wojcicki should remind us to be our authentic selves.
WHAT I’M READING AND WATCHING
Foreign tourism to Portugal has best first half ever
How to avoid online scams and what to do if you become a victim
Stonehenge's hefty Altar Stone came all the way from Scotland
The dramatic turnaround in millennials’ finances
Shrinking cash cushions may pinch US consumer spending
What we lose when we lose a pet
US expects billions in savings from Medicare drug price cuts of up to 79%
VIDEO OF THE WEEK
AI Weekly: Google's Pixel power up. From Google's AI power-up to Elon Musk's EU data dispute, this is AI Weekly. Watch here.
THE PROBLEM WITH 401(K) MATCHING CONTRIBUTIONS
When you are saving for retirement in a 401(k) account, the standard advice is to put aside enough to capture your employer’s matching contribution. That makes sense, since the contribution represents a risk-free 100% return on every dollar you save.
The match is intended to be an incentive that encourages saving – but recent research shows there are better ways to get people to sock away their money. In many cases, the current structure of matching programs actually contributes to pay inequity – and they are not the most powerful incentives available to employers.
“When we first created an employer match, we thought that was the carrot — the incentive that would get people to participate,” said Fiona Greig, global head of investor research and policy at Vanguard and co-author of a recent research brief on matching contributions. “But now we have a much heavier hammer.”
That hammer, she said, includes the rise of plan features like automatic enrollment, auto escalation of contribution rates and higher initial default contribution rates.
The problem is that employer contributions tend to benefit higher-income earners.
Here are some ideas to level the playing field for retirement savers. Do you agree or disagree? Let me know your thoughts at onthemoney@thomsonreuters.com.
EXPERT ADVICE FOR NERVOUS INVESTORS
Things have calmed down, but some of you may still be worried about your portfolio amid recent market volatility. If you are still queasy, the best advice I can offer is: Keep calm and do nothing ... with a few caveats.
Yes, the markets have seen wild swings in the past month on recession fears, an AI correction, the Japanese yen, the U.S. election and basically anything else investors can find to blame.
Research shows that reacting to short-term market moves never works out well for investors. And that’s why I simply do not look at my accounts whenever the market takes a dive. During the pandemic, I swear I did not peek at my retirement money for more than a year!
Here are four worthwhile links to calm your nerves and provide insight:
As always, personal finance expert Ron Lieber offers up words of wisdom about market mayhem and bad investment decisions. (The comments are quite, er, interesting!)
And while the U.S. Federal Reserve cut interest rates amid stock swoons in the past, my colleagues Ann Saphir and Dan Burns look into the chance of a rate cut happening now. (Spoiler alert: Unlikely, they say.)
Suzanne McGee writes about the ETFs that offer investors the chance to swap some stock market upside for downside protection.
Obviously, some folks might see a downturn as a buying opportunity or a time to take advantage of tax-loss harvesting. There are always exceptions to staying put.
The bottom line? Think carefully before you make any big financial moves.
A$K LAUREN
Do you need to refinance your mortgage? Are you in the market for a new car? Send your money questions to onthemoney@thomsonreuters.com, and I'll tap my extensive source network and braintrust for expert advice.
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Reporting by Lauren Young; Editing by Mark Porter
Tin mới
Khước từ trách nhiệm: các tổ chức thuộc XM Group chỉ cung cấp dịch vụ khớp lệnh và truy cập Trang Giao dịch trực tuyến của chúng tôi, cho phép xem và/hoặc sử dụng nội dung có trên trang này hoặc thông qua trang này, mà hoàn toàn không có mục đích thay đổi hoặc mở rộng. Việc truy cập và sử dụng như trên luôn phụ thuộc vào: (i) Các Điều kiện và Điều khoản; (ii) Các Thông báo Rủi ro; và (iii) Khước từ trách nhiệm toàn bộ. Các nội dung như vậy sẽ chỉ được cung cấp dưới dạng thông tin chung. Đặc biệt, xin lưu ý rằng các thông tin trên Trang Giao dịch trực tuyến của chúng tôi không phải là sự xúi giục, mời chào để tham gia bất cứ giao dịch nào trên các thị trường tài chính. Giao dịch các thị trường tài chính có rủi ro cao đối với vốn đầu tư của bạn.
Tất cả các tài liệu trên Trang Giao dịch trực tuyến của chúng tôi chỉ nhằm các mục đích đào tạo/cung cấp thông tin và không bao gồm - và không được coi là bao gồm - các tư vấn tài chính, đầu tư, thuế, hoặc giao dịch, hoặc là một dữ liệu về giá giao dịch của chúng tôi, hoặc là một lời chào mời, hoặc là một sự xúi giục giao dịch các sản phẩm tài chính hoặc các chương trình khuyến mãi tài chính không tự nguyện.
Tất cả nội dung của bên thứ ba, cũng như nội dung của XM như các ý kiến, tin tức, nghiên cứu, phân tích, giá cả, các thông tin khác hoặc các đường dẫn đến trang web của các bên thứ ba có trên trang web này được cung cấp với dạng "nguyên trạng", là các bình luận chung về thị trường và không phải là các tư vấn đầu tư. Với việc các nội dung đều được xây dựng với mục đích nghiên cứu đầu tư, bạn cần lưu ý và hiểu rằng các nội dung này không nhằm mục đích và không được biên soạn để tuân thủ các yêu cầu pháp lý đối với việc quảng bá nghiên cứu đầu tư này và vì vậy, được coi như là một tài liệu tiếp thị. Hãy chắc chắn rằng bạn đã đọc và hiểu Thông báo về Nghiên cứu Đầu tư không độc lập và Cảnh báo Rủi ro tại đây liên quan đến các thông tin ở trên.
