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retirement

Osprey - 1-24-2007 at 11:11 AM

But I already bought a Hammock!

Sometimes we have small meetings like these in the atrium but it was late July of 2006 in Phoenix, a scortcher, so they just set up a desk and made a little cubicle in the lunchroom. Introdyne Technologies is a software company with 240 employees. I’m a programmer/analyst. My name is Joe Cummings and I’ve been with Intro for about six years. I’m 30 years old, married, my wife Angie is 31, is a legal secretary for a large law firm in Scottsdale. No kids yet.

This whole week a guy from our pension plan, Earl Winger, was meeting with employees one-on-one for a few minutes each to help us decide how we wanted to invest our current pension funds – only three choices of risk/reward: Low, Medium, High, pick one. I was planning on staying with Low or Medium. The pension guy was friendly, about my age, easy going. He must have gotten ahead of schedule because he took some time with me and I’m sure as hell glad he did.

“Joe, you’re doing quite nicely in Low Risk funds. At the end of last earnings quarter you have accumulated, at today’s rates, the amount of $18,241. Pretty good for a 6 year tech II. You just turned 30 but have you given any thought to retirement at all?”

“Have I? I think about it all the time. Angie and I daydream about Baja every day almost.”

Earl said “Baja? Mexico? That’s where you want live when you retire?”

“Yeah. My family took me there to vacation and fish for as long as I can remember. I love the place, the people, the fishing, the weather, everything about it. Angie was a little afraid of the place at first but now, after the last two or three trips down there, she loves it too. We both look forward to getting away from big city living. Maybe find a little fishing village right on the shore.”

The pension guy was listening but all the time I was talking his fingers were flying all over the keyboard on his fancy laptop.

Earl injected “Any particular little places stand out? You remember any names?”

“Yeah, lots. San Ignacio, Santa Rosalia. Loreto is beautiful, so is Mulege. La Ventana, Los Barriles, Todos Santos. Have you been to Baja?”

Now his fingers were a blur “No. No I haven’t. Do you think you’ll be able to retire at about ago 60 or so, say about 2036?”

“I hope so. I hope I can.”

“I’m gonna print out some 30 year stat sheets for you. We have a huge data base and I do this stuff a lot. You understand anything can happen to change all this – oil is the big thing, oil, the middle-east, wars, famine, who knows. Just factor in that I used reasonable expectations in making these extrapolations and predictions – I raised your salary, taxes, inflation, etc. while using Strippling graphs for Western Mexico for increases in tourism, development, infrastructure and a host of other factors.”

“I wouldn’t set my heart on some of these dream places if you think you’re gonna have to wait until you’re 60. For example Loreto is pegged for 1,300,000 people if the fresh water takes it that far or they find some miracle cure for desal brine problems. Todos Santos will spread south to Cabo San Lucas with 750,000. San Ignacio is not in the base. Mulege, is that how you say that? Mulege and Conception City will be all one municipality and could reach 650,000. That’s not the bad news. It’s gonna cost you almost $2,000,000 for a nice condo, a livable house in those areas, even a small one. The mortgage market all over Mexico will be very aggressive and competitive but to pay down 2mil, to live comfortably, you may have to hope for much bigger salaries or you’ll have to wait until age 74. Compared to your reasonable pension expectations, Social Security, if it still exists, whatever it might be, will be chump change, might pay your condo maintenance fees.”

“Joe, it’s all a matter of priorities. I don’t have to tell you that. I see you’re married. Does your wife work? You have any kids? You own a home here in Phoenix?”

“My wife’s a legal secretary. No kids yet. We’re still renting.”

Earl went on “If your wife has a similar pension fund her sheets might match yours. That changes the whole picture but that could all change if she has kids, decides to give up a career to raise a family. Then again, unless Mexico makes drastic and unprecedented changes in environmental policy the fish will all be gone in 30 years and a lot of people will sell out, move along to leave a little room for those who don’t care about fish or fishing.”

“Joe, if I were you I would try to keep an open mind about this. Aruba is pretty nice, parts of Indonesia are moving slowly, Belize is looking good, still plenty of open spaces in Argentina. I just don’t want you to be disappointed. Well, good luck. Here’s the stat sheets. There’s a line out there. I’d better get back to work.”

Paulina - 1-24-2007 at 11:42 AM

Jorge,

We just sat through a meeting very similar to what you've written. Our retirement goal age is not the same as the one our "investment planner" has in mind, but she'll get over it.

"How much money do you think you'll need a month to live in Baja?" she asked. That was a tricky one. We knew what it cost when we were living there 3 years ago, but drinking habits can change as well as not having to pay for collegio, but it evens out.

Our count down to really living is on.

2197 days to go!!!!

Our daughter hated that 'dumb count down' in the beginning until we told her she could come with us, so she's on board now too. I'll let you know how thats working out in 2200 days from today.

Saludos!
Paulina<*)))><

Cypress - 1-24-2007 at 11:54 AM

Retirement is the beginning of another chapter in the story of your life, better yet, a whole new book! :bounce:

vandenberg - 1-24-2007 at 12:01 PM

Quote:

Originally posted by Cypress
Retirement is the beginning of another chapter in the story of your life, better yet, a whole new book! :bounce:

Disagree, it's just a continuation.

Holland, Canada, California and now Baja. Just followed my nose.

Cypress - 1-24-2007 at 12:17 PM

vandenberg! :bounce:

bajarich - 1-24-2007 at 12:28 PM

All of my life I have run into older people who have told me to live life to the fullest while I young. There are a lot of things you might not be able to do when you get older. My dad died 9 days after reaching retirement. You never know what will happen, so think about doing things now that you might not ever get to do in 30 years. I'm 60 now and I'm glad I did the things I did when I was younger because I have great memories of them, and I can't physically do them anymore. I wish I could have back all of the overtime hours I ever put in that kept me from doing more.

LIFE IS WHAT HAPPENS WHILE YOUR MAKING PLANS!

Cypress - 1-24-2007 at 12:35 PM

bajarich! Well said and good luck! :bounce:

Me to!

bajadock - 1-24-2007 at 01:36 PM

Thanks, as this one is timely for me. Just returned home to Ensenada, after 3 week visit with ailing parents in Florida. They are ok.

I escaped corporate america 2 years ago at age 51. Most asked what my next career would be. I will likely pursue some part-time professional activity in a while, but don't really care about a third car, five star hotels and $50 bottles of wine anymore. Ok, if you buy, that third item is still yummy!

Living here is so much simpler and easier for those who can "let go". That's a very Buddhist thought for a Catholic country, yes?

ALLTHEBEST

Skeet/Loreto - 1-24-2007 at 01:41 PM

Well Girls and Boys, I am 75 years Young and still have not '"Retarted"!!

I started out Poor,worked for other People until I was 40 years old, then decided to go out on my own, made enough money in 10 years to Retire to Loreto, Baja- Lived on about $800 a Month in Loreto for 17 years. Made all the Money i need after retiring from Loreto, moving back to Texas.
The information given about the future of Loreto is discouraging, but Alas! Texas has lots of Wide open spaces with no People, lots of Horses and Wildlife.

My advice if you are 40 or younger, Invest in RealEstate, make some of that money that is going to be Spent where all those People are Going, then find a place without many People and then Retire. Adventure while you are Young and Old- Do Not stop Dreaming.

Keep the Faith, Control your Desires and Keep your Passions within Due Bounds!!

Skeet/Loreto

capitolkat - 1-24-2007 at 02:03 PM

19 months 2 days and a wakeup-- I went to a three day retirement planning seminar last October and it's a real challenge both financially and emotionally. of the 50 or so people in the seminar when asked to fill in a circle representing a typical 24 hour period in retirement with what they would do with their time most couldn't use more than 5 or 6 hours after you gave them 8 hours to sleep. Most had no time for meals, did no physical exercise, had no social time for those types of activities, and nobody but me fished???

We'll start our house in La Paz this fall and have bimonthly trips to monitor progress, have architects hired to supervise construction, and are just now finalizing plans--

My advice-- put every $ you can in tax deferred accounts, IRAS, 401(k), Roth IRA as they grow tax free and don't rely exclusively upon company pension plans, or company stock programs as they sometime s fail with disasterous consequences. Read " Your Money or Your Life" and figure out how to manage income by assiduously counting outgo for an extended period- you'll be shocked where you spend your money. We were. And if you can in any way buy that little piece of paradise now-- do so- just like your advisor said- it won't be getting any cheaper. good Luck!!!!

Hook - 1-24-2007 at 02:26 PM

Quote:

Originally posted by capitolkat
19 months 2 days and a wakeup-- I went to a three day retirement planning seminar last October and it's a real challenge both financially and emotionally. of the 50 or so people in the seminar when asked to fill in a circle representing a typical 24 hour period in retirement with what they would do with their time most couldn't use more than 5 or 6 hours after you gave them 8 hours to sleep. Most had no time for meals, did no physical exercise, had no social time for those types of activities, and nobody but me fished???

We'll start our house in La Paz this fall and have bimonthly trips to monitor progress, have architects hired to supervise construction, and are just now finalizing plans--

My advice-- put every $ you can in tax deferred accounts, IRAS, 401(k), Roth IRA as they grow tax free and don't rely exclusively upon company pension plans, or company stock programs as they sometime s fail with disasterous consequences. Read " Your Money or Your Life" and figure out how to manage income by assiduously counting outgo for an extended period- you'll be shocked where you spend your money. We were. And if you can in any way buy that little piece of paradise now-- do so- just like your advisor said- it won't be getting any cheaper. good Luck!!!!

Agree with all you say, kat. There is no substitute for the tax-deferred savings plans.

One area of real disagreement between retirement planners is this question of just how much you need in retirement. The conventional wisdom was always about 80% of your working salary. But many discover that they actually spend MUCH less than that in retirement. Certainly, that is the case for many retiring in most Latin American countries; that was the general idea moving there in the first place.

Of course it's easy to conclude that if you set yourself up for the 80% figure, then there's lots of gravy built in if you end up spending much less. Problem is, how many years longer must you work to achieve this 80% figure? If it means taking me into my mid-60s.....no thanks.

Naturally, your health and the cost of health care are wild cards that can be tough to figure.

Well done, Osprey !

djh - 1-24-2007 at 02:34 PM

Bajalover - 1-24-2007 at 02:52 PM

WELL DONE TO ALL :!:

I left corporate life at 57 (2yrs ago) because after 25 yrs it just drained the hell out of me. When 4 of the 6 triggers popped on my retirement spreadsheet - in went the resignation letter to the CEO. He called me and asked if I was crazy or had too much to drink. MAN - I'm so happy I quit that life. Retirement is fun - cheap (depending on what you want to do) and exciting.
Will be in Bahia De Los Angeles for a month starting 2/5. Can't wait.
Bought myself a f250 diesel, a 30' classic airstream trailer, internet satellite, hdtv, solar system to power everything and VUALA !!! Instant fun.

Retirement seminars are good if you've got a goal in mind or at least they give you a mind set to begin an investment spreadsheet to keep track of your stuff ---- :rolleyes:

-- but most important is the spreadsheet which shows your withdrawls later on and how you plan on spending your savings. This puts a whole new face on the subject !!
Guys and Dolls - keep living life to the fullest and enjoy that 2 buck bottle of wine. It tastes great on the beach with lobster you just bought from a fisherman !

bajarich - 1-24-2007 at 04:14 PM

A very large percentage of the money I made when I was working was put into savings and extra payments on my house, so when I retired my life didn't change all that much. I always have tried to live within my means, but that doesn't mean I haven't had fun. I have always been active outdoors and my tastes are relatively simple. I look at other people who make a whole lot more money than me and wonder "Why don't they just retire?" It's because they built their lifestyle up to where they can't afford to, and aren't willing to give up anything.

sylens - 1-24-2007 at 06:01 PM

we had initially planned to retire to ensenada in 2006 (after buying our house here in 2000) but the crazy property hikes in central california in 2004 created a situation that made it better economically to sell (at an incredible profit) and move than for me to continue working. hubby telecommutes (works for a large corporation from home via internet) and the arrival of dsl happened at just the right moment. although i no longer work outside the home, i have found myself constantly doing "stuff" and thoroughly enjoying being out of the rat race. :lol:

salud

to my fellow retirees, and keep your eye on the prize for those of you not quite here yet :tumble:

dune155551 - 1-26-2007 at 03:33 AM

Rather general question to those who have "made the move".

Would it be possible to give those who are aspiring to retire to the Baja an idea as to the cost of living/amount required to live there. I know this is a very broad and totally subjective question but I'm trying to get an idea as to when to say "enough is enough".

Specifically looking for how much you budget to yearly living expenses if housing is not included (retiring in Ensenada, the house will be paid off). Modest lifestyle (occasional shrimp taco (of course :tumble:

; dinner out once/week.......no wine but stick to beer; good supply of Pacifico in the fridge, etc).

I know this will very significantly.....just looking for all experiences/opinions to form some ideas.

capitolkat - 1-26-2007 at 07:04 AM

dune-- you have the answers to your question. How much will you(do you) spend on insurance, health and property, how much do you spend on food, clothing,travel, entertainment, car expenses, taxes, how much do you have in reserves, how much can you expect in retirement or income from Soc Sec, company retirements plans, savings income.

if you do the budget you'll know how much you have and what are your current expenses-- Like I said above there is no shortcut to figuring out your outgo -- my wife and I counted every expenditure over $.50 for 6 months-from ------" Your Money or Your Life" and created a strict budget including everythig we found we spent- including -- wine, dry cleaning, church, charity, you name it- we live well, but we know how much we have for anything and have comitted to retiring in 19 months- so that's part of "Your Life" we chose.

It's clear our expnses will be less in Mexico but we have a monthly budget for all the things we know we spend money on--e.g nothing for drying cleaning as my suits will be left in the US and I won't have a shirt with any starch etc., but we'll still have satellite TV , phone, and internet expenses, food, travel but clothing will be much less, but boat and gas expenses will be higher.

if you don't do this kind of analysis- anything else is just a WAG--(wild a**ed guess).

bajaguy - 1-26-2007 at 07:16 AM

Dune......you can stretch your beer budget by drinking your neighbors Pacifico

Paulina - 1-26-2007 at 07:55 AM

Quote:

Originally posted by bajaguy
Dune......you can stretch your beer budget by drinking your neighbors Pacifico

This is very true. If it turns out that you're the neighbor that is so hospitable, be sure to get your deposits back!

Cypress - 1-26-2007 at 08:03 AM

:spingrin

ne more week to go. :tumble:

Retirement will be reality rather than dream. :spingrin:

Osprey - 1-26-2007 at 08:06 AM

Wow! What happened? I wrote this little piece to see what potential future retirees would say to all the future growth. Not one response about the millions more folks who might get here before you do. Did you not read the whole essay? Don't believe my figures? Think all that growth is impossible? Most of the responses were from people counting days, not decades so they don't care about population booms where they are headed but what do the younger Bajaphiles have planned? What are your thoughts, hopes, dreams?

Skeet/Loreto - 1-26-2007 at 08:24 AM

Osprey:
It has been my experience in Life, Especially the past 30 years that a large number of People do not use their Ability to think about the Future, only concerned about the "Instant Gratifiction" in todays' Culture.

There is nothing that we as a Generation can do about the Population.
There is nothing we can do about the movement to Loreto Bay Villages. The Herds of Sheep will still go!

There are some of us who will look and Act on our Future Dreams and make lots of Money and go and do as we Wish. Such as myself who lived in Loreto so long, started seeing what was coming and escaped to another Adventure.

Remember Sheep, Sheep Dogs and Wolves.

Skeet/Loreto

capitolkat - 1-26-2007 at 08:29 AM

Sorry Osprey-- You are right. In 1976 I moved to Nevada and there were less than 700,000 in the whole state. only 2 of the 17 counties had more than 100,000 in population. Now there are more than 2 million in Clark Co and NV has been for most of the last 20 years, the fastest growing state in the country. Las Vegas traffic is a nightmare ( just like phoenix) but anyone who believes that's what's in store for BAja -- I just can't see it. Every time I tell someone I'm going to BAja to live- I get the whole- you can't be serious, they'll take your property away, it's dangerous, what if you get sick or injured, plus the property costs continue to rise- which will turn many away who can't work there and make good money. Plus, there is no tax base to support the infrastructure for new towns , roads, public services and most Americans aren't up for the daily adventure of living in Mexico where the rules are transitory, Manana doesn't mean tomorrow- it means not now. I would guess your financial advisor's projections are based on US data and not Baja, the lack of water, and no way to get to the numbers he proposed without changing the whole culture of the region.

So that's my 2 cents on the future- it will change in Baja but not so that there are hundreds of thousands in Loreto or Mulege.

Paulina - 1-26-2007 at 08:40 AM

Quote:

Originally posted by Osprey
Wow! What happened? I wrote this little piece to see what potential future retirees would say to all the future growth. Not one response about the millions more folks who might get here before you do. Did you not read the whole essay? Don't believe my figures? Think all that growth is impossible? Most of the responses were from people counting days, not decades so they don't care about population booms where they are headed but what do the younger Bajaphiles have planned? What are your thoughts, hopes, dreams?

Ok, here's my quickie reply. Future growth is happening, and has been happening all along. Every trip down there's more and more where there was nothing before.

Will folks get there before I do? No matter where I go, there's always someone who was there before me. I might be that person who is ruining it for the old timer who found the place first, then it will happen to me, kind of like a vicious cycle.

It's not just the people who get there before me that influence the future growth, but the local youth that are growing up with values different from their forefathers. They are the ones who have our retirement in their hands. They will have the ability to change what we've become to love.

The dollar sign is more important than the hand shake we shared with their grandfather over a bottle of tequila as we sat on a vacant lot dreaming of the future.

I'm one of those counting the days. 2195 days to go sounds much better than the amount of years that are hiding within that number. But then again we count the days to every school holiday when we can head 'home' to baja.

I care about the 'gringo' population boom. I guess I'm part of the problem by introducing my children to Baja. My son is in college and so far, (knock on the computer desk) he hasn't expressed a desire to take his buddies down to the house. He's on to other things, but my daughter can't wait to get back to baja. She's the one whos baja future I worry about. What is it going to be like for her in decades? Her baja life now is going to be her "good old days" in baja like mine were in the 60s. If I'm lucky enough to hold on to what I've got, I've left everything I have in baja to both of my kids, but what will it be like for them?

So, I guess that my baja hopes and dreams are to make the best of every trip I can NOW and not wait those 2195 days to really start to live. I was lucky to have lived there for a short 2 years, and miss it greatly, but I had it. I had it and if I wake up tomorrow and a few hundred more tomorrows I hope to have it full time again.

I'm sure theres more that will pop into my head as I'll be thinking of this all day now!

Saludos!
Paulina<*)))><

Don Alley - 1-26-2007 at 08:48 AM

It's not just retirement.
We baby boomers have moved across the real estate landscape like locusts, devouring everything in sight, then moving on to things out of sight. Only, unlike locusts who leave nothing, we leave greatly inflated prices.

Real estate speculation has become the big driving force in our economy. Sales and refinancing of homes is the big cash cow that provides the cash for cars, for boats, for college, for retirement.

Your story reminds me of the newspaper report on the Trump condos in Baja, where one investor said none of the buyers would still own in five years. They were all speculators, middlemen whose conribution to the property was to inflate the price.

Maybe it's all a huge "bubble" that will burst when a new generation does not have the cash or the numbers to sustain the high prices. Otherwise, I wonder how the kids now leaving school will find the cash to own a home, much less a retirement home.

DonBaja - 1-26-2007 at 09:15 AM

I don't really know how to comment on the population growth that is going to happen in our beloved Baja, look how it has changed in just the last 25 years when I first visited. As more and more people are introduced to this great land they too will want to try to obtain a little slice of paradise.

On retirement in general I am a big fan of this website www.retireearlyhomepage.com and I also follow the forums for information about early retirement and financial matters www.early-retirement.org/forums/index.php

longlegsinlapaz - 1-26-2007 at 09:29 AM

Dune155551:

Not sure what time-frame of his life Skeet was talking about when he said he lived on $800 a month, but as far as I'm concerned $800-1,000 a month is still a VERY DOABLE figure. I realize there are a LOT of variables & personal requirements, but it is possible to live comfortably & eat well; pay insurance, utilities, vehicle costs, medications, liquid beverages, vet bills, etc.....once you get the initial cost of a residence out of the way! My thoughts haven't changed on renting during my life....it's money down the tube & into someone ELSE'S pocket! So once you figure out where you want to be, buy or build & let your investment grow over time. My experiences are based on having my now 88-year-old mother down here with me for the first couple of years, as well as on my own for the last 5 years. Without the cost of her meds & Uhhhhhhhh....I'll say liquid libations....my life style actually increased!

I'm not talking a pallet-board room with a dirt floor here either! I'm talking new construction, done smartly, being your own contractor, networking & negotiating for the best materials & labor costs.

The only way that I could afford to retire at age 52 was to move to Mexico! If I'd have stayed in the states, I'd have had to continue working until at least age 62!

One piece of information that I realize not everyone can financially afford to act on...there have been major studies done that prove; for the majority; the older you are when you retire, the shorter your life expectancy. In a nutshell, your body is trained & geared to the stresses of working & the older you are when you retire, the more traumatic your bodies reaction! I worked in a company whose employee headcount equaled the population of La Paz (roughly 180-90,000) and I personally knew three people who retired at or after age 65 & who were dead within a week....one retired Thursday & died of a massive heart attack on Saturday. So the moral of the story is retire young, live long & prosper! :bounce:

I think a lot of people don't take into account the change in lifestyle & make assumptions on cost of living based on their current lifestyle & location expenditures. WRONG!!! Toss out the budget items for work clothes & dry cleaning, as someone else mentioned, gas for commute time; unless of course, you plan on swapping that commute gas allocation for boat gas! Downsize thoughts of housing requirements....you'll be moving to a predominantly OUTDOOR life style. The more you have to clean & maintain, the less time you have to explore your awesome surroundings!! :bounce:

And don't look at this as vacation, it's the next day of your life, and it starts in a different climate, culture & at an entirely different pace!!! It can be whatever you want to make it! :bounce:

And you can probably DO it a LOT SOONER than you THINK!! :bounce:

Bajalover - 1-26-2007 at 09:46 AM

Longlegsinlapaz, Paulina:
You two said it all !!! Your writing should make everyone think and not just give a knee jerk reaction to what if situations. Agree growth can't be stopped and we're the best adapters on earth. Baja really does give a wonderful lifestyle. Thankfully it's not for everyone. :biggrin:

looking for land :biggrin:

Thanks.

Cypress - 1-26-2007 at 10:19 AM

Paulina and Longlegs, That's what I'm thinking. :spingrin:

Mike Humfreville on reitrement, 2004...

David K - 1-26-2007 at 01:36 PM

Posted on Nomad a couple years ago... a great thread follows: http://forums.bajanomad.com/viewthread.php?tid=4821&page...

Hook - 1-26-2007 at 03:18 PM

Longlegs, I couldn't agree with you more except for one point. While renting is, in effect, money down the tubes, renting gives you a very great degree of freedom that also has a value for more than one reason.

First, I read recently that an average time period for a house to sell in Mexico is around two years. Except for exceptionally low priced properties, this seems to jive with what I have noticed on real estate websites from Baja and the mainland. That can be quite limiting to "movin' on" if you are stuck with a house and the neighborhood goes to hell (or even limbo), for whatever reason. It gives you the freedom to move easily away from what Osprey is warning us all about.

Second, it's been my experience that the cost ratio of renting versus owning is very favorable in many areas of Latin America. In other words, rentals are much better bargains that houses for sale. Mexican owners who bought houses/apts for next to nothing (relative to today's pricing) are willing to let houses rent for less than a potential mortgage/trust/insurance/taxes, etc. would run you, especially for a moderately large house.

Of course you could pay cash for a house down here, but that can be quite a bit of cash that's tied up until you sell. As I've mentioned before in discussions like this, we will likely convert all our equity in our stateside house into interest bearing instruments and apply that towards rents in places around the globe. It will end up being many times over a positive cash flow with respect to rent; the money is safe, the investment is rather liquid and requires no maintenance, nor does it have any real liabilities that a structure does. Besides, except in isolated areas, I think we have seen the last of double digit real estate appreciation for awhile. Money to lend is getting tighter, worldwide; the GMAC financing notwithstanding. It would not surprise me at all to see a correction in some areas around the Capes (San Lucas, San Jose and the East Cape).

Of course this is new territory, this renting here and there and then moving on. We have owned for the last 20 years or so, over ten in the same spot. But we like the idea of the freedom. It also gives us the opportunity to visit friends and relatives around the country for extended periods. We think we will like a nomadic lifestyle, since we will be retiring young enough to enjoy it.

We can follow the fish, too.

If we buy, it will likely be in a much more northern clime that is nice during the warm Mexican summers. Or maybe the Abreojos/Asuncion areas? Hey,we're from California; we can stand a little ground shaking!

It's looking like June of '07 for me. The divestiture of unnecessary possessions has started.

dune155551

sylens - 1-26-2007 at 04:24 PM

agree with previous posters regarding 800-1000 dollar per month range once housing is out of the way. btw property taxes annually are hysterically reasonable. we have a 4 bdrm 3 ba house on two lots with lovely ocean view 2 1/2 blocks from beach in a quiet residential fraccionamiento in ensenada and our "predial" (property tax rate) is 1188 pesos (110 dollars) annually :lol:

also, with concrete block construction and our downsizing to move here, we have decided not to carry insurance except on our autos. :smug:

as far as rent vs purchase, a weird thing is happening in our neighborhood. rents are skyrocketing. a two bedrm 1 bath bungalow across the street is listed for 650 dollars a month

and price of gas continues to be lower than in california :tumble:

and, in any case, we drive MUCH less than previously; my husband's commute from bedroom to home office is about three feet. can't beat the traffic either :spingrin:

and i walk to supermarket around the corner for groceries a few days each week. good exercise and also saves gas

we love it here and since moving almost three years ago have been absolutely delighted by our good fortune (and successful planning).

if you have any questions feel free to u2u me. i love talking about the life here :bounce:

TMW - 1-27-2007 at 07:43 AM

["we have a 4 bdrm 3 ba house on two lots with lovely ocean view 2 1/2 blocks from beach in a quiet residential fraccionamiento in ensenada and our "predial" (property tax rate) is 1188 pesos (110 dollars) annually"]

That's why the infrastructure of Mexican cities is so poor.

Cypress - 1-27-2007 at 07:58 AM

Hook. Thinking somewhat along the same lines. :yes:

Renting, if completely sold on an area, buying or building, if not, move to the next adventure. :bounce:

longlegsinlapaz - 1-27-2007 at 09:13 AM

Hook:

As in most aspects of life, different people have different thoughts & feelings on their residence & whether to own or rent.....ergo the phrase "Different strokes for different folks."

I'm a pretty decisive person & I knew La Paz "felt right" for me on my first visit; which was simply a 2-week vacation! Employment circumstances changed my first day back at work after that vacation when my job of 18 years was outsourced! I came back to La Paz within 6 months, bought property & I was relocated & living here full time within a year of buying my first property. My decision on La Paz was researched all to hell & I've never regretted my choice or decision. At the risk of being banned from BajaNomad, I'm a well-anchored person as opposed to being a nomad! I prefer to plant roots rather than wander. I'm also on a limited income & chose to be on the "pay as I go plan" rather than plastic or mortgage.

You're right about the real estate market here....there's no rhyme nor reason to it! Some of the places that were on the market in 1998 when I first started looking for property are STILL on the market!!! I've been exceptionally lucky! I built my first casa & a change in my personal circumstances led me to put it on the market after 3 years. It sold in exactly one year, which surprised me based on the local market, but it was a one of a kind beach-front place, well-designed & well-constructed. I built a second time, also beach-front & when I decided that 7 years of beach-front living was enough for me, I listed it on the internet, giving myself 6 months to find a buyer before I'd be willing to list it with a realtor (I wanted to see if I could keep the typical 10% commission in MY pocket!); I accepted an offer on that place within 4 months!!!!!! :spingrin:

I've done what's right for ME! I've made more good choices than bad. Each of my casas were built with the idea that I'd live there the rest of my days and when I decided to sell, I've been exceptionally lucky, but then I'd built exceptionally smart & well-designed & constructed places. Both sold at acceptable profit & both buyers remain ecstatic with their places. :bounce:

True, some people in the area who've had their places on the market for years with no offers have expressed their dismay at my "luck" through various comments! :lol:

But HEY! It's worked for me! :bounce:

I guess the point being that we all make our personal choices for our own educated or uneducated reasons & we all have to be willing to accept or deal with the outcome. Knowing yourself well enough to make smart choices going in really improves the odds in your favor on the outcome. And I fully acknowledge what's right for me isn't right for everyone! If we feared the potential outcome or were afraid of the unknown, few of us would be here or have made Baja a retirement destination!

Osprey, I realize this thread deviated from your original intent, but it's a good thread, nonetheless! Growth & change are like taxes & death....inevitable!! But each of us can only do our best to go with the flow of the country & culture we migrated to....as opposed to trying to change it to our image of what's best for the either Mexicanos or future generations of retirees. Each of us will have some impact on the future; by our presence alone; what that impact will be in the long term will depend on many factors of our actions....as with anywhere in the world. I try to be a good Baja citizen & remember I'm a guest in this country!

Hook - 1-27-2007 at 10:07 AM

Longlegs,

The building of your own place is defintely the exception in purchasing real estate. We will be exploring this option as we rent about. It gives you the luxury to accept much less than the prevailing market value when you decide to sell. You have made good choices, IMO, for what that's worth.

Really, my original reply was just to point out that there ARE some tangible and intangible benefits to renting.

This is a good thread. I love hearing the details from others who have retired before the traditional ages that government and corporate America would have us believe is "right".

Apologies to Osprey, if he feels this thread has taken a turn for the worse.......

Osprey - 1-27-2007 at 10:16 AM

Not at all. More is better -- I was just surprised that no one even commented on what seems an outrageous population explosion (my own personal fictional future Baja) in places Bajaphiles might have already set their sights on.

Bajalover - 1-27-2007 at 10:40 AM

Sylens, sent you a u2u regarding Baja. brgds.

Bajalover - 1-27-2007 at 11:02 AM

This is a great thread. It makes you think and reexamine your position and what possiblities lie outside of the comfort zone. Longlegs said it all. Make the decisions and moving forward makes our lives exciting, to say the least.
25 yrs of corporate life drains the living out of you and 2 yrs ago I decided to calculate what would happen if I resigned and retired from the working world. Yeah, a limited income definitely impacts what you do - yet I've found my mental state is more relaxed and I've grown to see the value and importance of the family (something I didn't pay attention to before). Results - divorce and 1 daughter which I call regularly in order to build a relationship again. But - we've talked more now than in the 32 yrs she's been on this earth. Life is now becoming fun again and I must say this forum is fantastic to read and add comments to. Anyhow - will be visiting Baja soon and enjoying some good mariscos.

Traveling around the country has been an eye opener because the places where I camped in years past with the family are either gone or have grown to hugh proportions, leaving me to question why I visited the places in the first place. Yet my daughter finds these places fantastic because she sees what she wants to see and do. Same as we did in the past. The next generation (now generation) doesn't necessarily see the population growth because their part of it. Only we see the tremendos differences because we have something to compare it to. The population will grow in Baja just as it does everywhere else. Just maybe not so fast as some statistions may think. So the moral of the story is ENJOY ALL YOU CAN because once you don't enjoy it anymore - what's worth living for then?

Okay - so I've bored everyone - sorry. I really enjoy being part of this forum. tks.

SDRonni - 1-27-2007 at 02:22 PM

My husband, 17 years my senior, retired September 2003. I got tired of getting up in the morning to go to work and hearing him say, "Honey, please keep it down...I'm trying to sleep." So, January 2004, after 30 1/2 years, I retired, too! Now, on many mornings, we look at each other and say, "Let's call in sick today!" He retired late, I retired early.....neither of us has any regrets! Now we're just waiting for our Rosarito Beach condo to be completed next year so we can spend time enjoying it.....though from the sound of some of the threads, Rosarito is certainly not a place many want to go! Our place is north of town, right on the beach, and we are eagerly awaiting its completion...guess we just better learn how to read the street signs...... :tumble:

Osprey

Baja Bernie - 1-27-2007 at 07:54 PM

I love you man! You make folks think and that is so good for the soul.

Love this comment by Long Legs. "I an a rather decisive person"...dud! (meant.............DUH!.........sorry).

Each and everyone of you has contributed very important information to assist those planning to retire in Baja.

I will submit that it is never as simple as you might imagine.
I say this based upon the fact that I got in on the first floor and built two homes in Baja and most of a third..............Had a ball and 'knew' I was way ahead of the curve (still am--just not in Baja). The wife and I were sitting pretty, money in the bank, a steady income, rental property's in the states and in Baja and then the only thing that I do not know how to protect against.........health problems...........and they forced us to sell in Baja and re-balance ourselves in the States because of the access to advanced hospitals.

The worse thing I have ever done in this life was to sell our home in Baja...........why because I am not nearly as active as Baja almost requires you to be and I so miss my Mexican friends.

If you think health problems are something to brush off.....well forget that............ I have had 10 of my very close friends in Baja, 8 gringos and 2 Mexicans move on to more pleasant settings in the past four year.

If you are going to retire in Baja do it now and forget all of the formula's and live.............when you must then return to the States............if you get to stay until they place a stone over your head....................then you have won.

[Edited on 1-28-2007 by Baja Bernie]

SD Ronnie

Baja Bernie - 1-27-2007 at 07:55 PM

Is that where the pebbles make such wonderful music?

longlegsinlapaz - 1-28-2007 at 07:59 AM

Quote:

Originally posted by Baja Bernie

Love this comment by Long Legs. "I an a rather decisive person"...dud!

Uhhhhhhhh....Bernie, did you just call me a "dud"? Even a "dude" would be anatomically incorrect!

Or did ya intend that to be "duh"?? :?:

Dedicating my first cup of coffee to your health this morning! :lol:

Long Legs

Baja Bernie - 1-28-2007 at 08:58 AM

DUH! I just can't remember but of the choices this one seems to be the only one that could apply. Sometimes my fingers get all fangled, then my brain works overtime to get them untangled.............................sadly, this is the usual result............................duh!

I do admire the strenght of your convictions.

I have edited my previous post to correct the fangle it contained.

Confused? DUH! Me too.

[Edited on 1-28-2007 by Baja Bernie]

[Edited on 1-28-2007 by Baja Bernie]

longlegsinlapaz - 1-28-2007 at 10:17 AM

:lol:

On strong meds, are ya Bernie? :lol:

SDRonni - 1-28-2007 at 10:58 AM

Baja Bernie:

No, our place is right on a nice, wide sandy beach...no pebbles.....hopefully the "music" will be just as sweet!

Hook - 1-29-2007 at 09:57 AM

Well, Morgaine, you have certainly had a unusual and probably exciting life, as you approach retirement.

But on the renting vs. owing question, I think your timetable has been a little bit backwards than most of us who built equity while they were working and can now convert the equity into either renting OR owning. Many of us have also taken advantage of the tax benefits of home ownership in the US, as well as the capital-gains exemption on the first 500k of profit (for a couple). For many of us our housing expenses will certainly be going down in retirement, rather than up. Mortgages will be paid off or converted into smaller living quarters; rented or owned.

I would never have considered simply renting during my working career; except until I got up to the point where I could afford to own. But now, with the anchor of a set job being weighed and with many more years of mobility ahead (I'm only 53), low cost renting will give us the ability to see much of the world. Why spend thousands on plane fare and only stay a short time? So many places are rented furnished in other countries so it will be nice to not be moving lots of belongings around either. Will it involve personal sacrifice? Certainly. Just like camping in Baja does.

We've considered simply renting out our house for the positive cash flow it would generate but it simply cant compare to converting the equity to cash and the resulting interest. So many fewer headaches, too.

Also considered doing the house exchange thing. Clearly, this could have some monetary benefits in other countries but, again, the headaches of management and maintenance. And you are stuck with your mortgage that you cant defer by simply renting. I think this scenario might work better for people still working who can get away for a few weeks here and there. Or, for people whose mortgage is paid off. Ours is not.

On the taxes, I think it's unusual that you might actually have MORE of a problem with taxes in retirement than while working unless your tax-deferred investments are so large OR your working income was so low. Even though your tax-deferred income stream will come to you without Fed and State "withholding", I'd rather put away that amount in MY savings instrument and earn the interest, rather than let my Uncle Sam do so.

Finally, I think the axiom about renting for a few months in any area you plan on investing serious cash is still a good one. It gives you the opportunity to get a feel for the neighborhood and to determine growth patterns that you often cant find while cruising the web. And the real estate agents arent necessarily going to be upfront about much of this. You gotta walk the streets and read the local news and talk to the people.

I think the "week here and a week there" while in your working career is a good way to narrow down potential areas of retirement. But nothing replaces good ground research when making a major investment.

I should note that Mexico is certainly not the only country we are considering so our ground research will involve areas we have actually never been. Gotta have more than a few weeks in each locaton for that kind of looking around.

Our long list of countries: Most anywhere in Central/So America, Spain, Portugal, Greece, Italy, Thailand, Australia, Canada and Alaska (at certain times of the year). Maybe even the western Balkans along the Adriatic. Gotta have an ocean close by.

I'm certainly not saying that we wont be buying. But the investment will be considered against the cost of renting.

Life is all about the journey to us, not the destination. We all end up in the same place anyway.

Cypress - 1-29-2007 at 12:10 PM

Hook! Thinking along the same lines, maybe not as far flung, but in line with your ideas.