50, Broke & Scared to Death about Retirement: How I Turned It Around & You Can Too
This year, I turned 50. I’m at a point financially where I never thought I’d be. When Suzi Orman was on, I used to watch her show and sometimes I just wanted to throw the remote at the TV when she did those “How Am I Doing?” segments.
You know the ones where people would send in all their financial information and ask Suzi, “How am I doing so far? Am I on track to save enough to enjoy retirement?”
She would then grade them: A, B, C, F.
My grade was always an “F”. And the funny thing is, besides one uncle who graduated West Point, is a Vietnam Vet and was smart enough to invest in real estate at an early age, I don’t know anyone who would qualify for an A or B. I know a few who may get a C.
“Are we all that screwed up financially,” I’d think, “or is Suzi out of her mind if she thinks people need that much to retire?”
At any rate, here I am, 50 years old and nowhere near where even I know I need to be.
Note: I think some of Suzi’s numbers were just cray cray, but , I digress.
My Greatest Fear in Life
As a black woman (or African American if you prefer; I prefer Black), getting older doesn’t bother me. I bought into the “good black don’t crack” syndrome long ago. Here’s where I’m coming from with the age thing …
I once heard Dolly Parton say on Oprah, “I didn’t mind turning 40; I just didn’t wanna be fat and 40.” So she said she got plastic surgery.
I get it Dolly! I don’t mind getting old, I just don’t wanna be old … and broke. It’s always been my greatest fear in life.
I’m divorced and haven’t been in a serious relationship for years. Doesn’t bother me.
Never had kids. Don’t regret it.
Fluctuate 5 to 15 pounds up and down in weight. I deal with it and keep it moving.
But this getting older and being broke thing … well it bothers the hell outta me! So like Dolly, I had a procedure done too.
I took stock of just how broke I was — and was gonna stay if I didn’t change things — and created a plan to get my broke behind “unbroke.”
My Plan to Cheat Poverty in Retirement
I grew up poor (financially speaking; emotionally speaking, I couldn’t have had a happier childhood). So, I came to learning about how to handle money later in life.
Once I assessed my finances a few years ago, I realized that I was going to have to make some drastic changes if I didn’t want my greatest fear to materialize.
So I did … and when I say drastic change, I mean DRASTIC! I left America and moved to the Caribbean.
Freelancing from Jamaica: Why I Moved Abroad to Secure My Financial Future
I’ve been coming to Jamaica since 2009. In 2013, I unofficially moved to Negril full-time. I made it official a year later when I registered my freelance writing and publishing business here and got a work permit.
You can visit Jamaica for up to six months at a time within a 12-month period. But in order to be here full-time and work, I had to get a work permit in order to legally operate my business since I don’t have retirement or other sustainable income.
Freelancing for Almost 25 Years
I’ve freelanced full-time since 1993, except for an 18-month stint between 2006 and 2007, when I held a full-time job as a Regional Director of Recruiting for a staffing agency out of Texas.
I was based in Atlanta, charged with building their branch there. My annual salary was $40,000, plus commissions.
And if you’re thinking, “You’ve been freelancing that long and you haven’t saved any money?”
Well before buying my house and moving to Atlanta in 2004, I lived in the expensive-a** mecca that is New York City, right smack dab in the middle of Hell’s Kitchen (Manhattan). I love that city with a passion and would move back in a heartbeat if I hit the lottery.
But, the reason I left is because I did want to own a home. I was trying to make smarter financial decisions. And for a while, it worked out fine.
Then, the foreclosure/financial crisis hit in 2007, and it rocked my financial world — like a lot people. If you have savings and all the trappings of a “middle class” existence, try losing a job and see how long it lasts. That’s what happened to me.
Now back to how I went broke, and found myself starting over.
In America, My Monthly Expenses Were Killing Me
I lost my staffing agency job in 2007 when the housing crisis and the ensuing global financial crisis caused a lot of businesses to go under. I had a huge house, an SUV and all the bills that come with living a cushy suburban lifestyle, ie:
Car Payment: $210
Car Insurance: $75
HOA Fees / Property Taxes/ Homeowners Insurance: $300/Month
TOTAL MONTHLY EXPENSES: $2,770.
Note that these were just my basic living expenses. They didn’t include other expenses like medical insurance, car maintenance, house maintenance, yard maintenance, student loans, life insurance, entertainment, clothing and credit card bills.
Some of these are necessities; some aren’t, and believe me, I kept the non-necessities like buying clothes and entertainment to a bare (almost non-existent) minimum when I lost my job.
I ran through my savings, then borrowed money from my best friend and two family members to pay expenses while looking in vain for another job. But, I was caught in what seemed like a vicious cycle.
My skill set was all over the place, which is not uncommon when you have a long history of freelancing. I tended to be either severely overqualified or severely under-qualified for the jobs I was applying for. And, the jobs I had a decent chance of landing tended to be in sales, which is basically building your own business.
I knew that if I took a job in sales, it would take some time to build up a client base — time I didn’t have with a big ole mortgage due on the first of every month.
To compound my troubles, during this time, I was trying to refinance my mortgage. But because my home was severely underwater, my lender (HSBC) was having none of it. Every month, I was pouring hard-earned (and borrowed) money into an asset — my house — that kept sinking in value.
I bought my house in 2004 at the height of the market. I paid $205,000 for it. When I was trying to get it refinanced, it appraised for less than half of that.
I have never been so stressed in my life!
A Life-Changing Moment
At the end of 2007, after about four harrowing months of looking for another full-time job, in a fit of frustration one day I deleted my resume from my hard drive and decided to go back to freelancing full-time. I haven’t looked back since.
I worked like a dog for two solid years — days, nights, weekends and holidays. By 2009, I’d managed to build a steady income, although it still wasn’t enough to adequately cover my bills, and allow me to save for retirement or afford healthcare.
During this time, I started to really think about what I wanted out of life, and stressing about paying bills and worrying about money in my golden years was the one thing I knew I didn’t want.
While I still have pangs when I look at pictures of my once beautiful home (it was 5 bedrooms, 3 baths and over 4,200 square feet), I know I did the right thing by getting rid of it and moving to Jamaica to rebuild my financial future.
In 2014, my house finally sold as a short sale for $79,000. By this time, I’d paid off my student loans and my car, which I sold when I decided to move to Jamaica full-time.
Since I got rid of the house, I’ve been debt free, which means I’m able to effortlessly save because my expenses are so low here in Jamaica compared to what they were in the states.
My Expenses in Jamaica
I live in a studio apartment. It’s about 350-square feet with a balcony that has 270-degree views of the ocean. My expenses are approximately $900 per month, and that includes food, rent and entertainment!
Following is how they shake out:
Rent: $30,000 JMD (which is about $235 with the current exchange rate). I use xe.com to convert.
Electric: Roughly $25 month
Cable: Approximately $40/month
Internet: $30 month
Phone: $15 month. Most Jamaicans buy “credit” for their phones, which is just a pay-as-you go, aka pre-paid phone plan. As a freelance writer, I’m online all the time and communicate with friends and family mostly via Facebook, so I don’t rack up a lot of a phone charges here.
Work Permit Fees: This works out to roughly $2,500 per year by the time you include all the fees and traveling back and forth to Kingston and Montego Bay to get all the documents you need for the application process.
This is basically paid at one time, so it doesn’t come out of your pocket every month, which makes what you have to cover every month about $200 less than the total stated above.
I don’t have a car here in Negril, which is basically just a little country beach town. One main road winds through it, and you can walk everywhere with no problem. Most Jamaicans take taxis, which charge $130 JMD at the time of this writing; this is about $1.10 per ride.
I’m a marathon runner though and I like to exercise, so I walk almost everywhere. Negril’s infamous 7-Mile beach is about a 30-minute walk away. There are a few spots to swim that are just a 10-minute walk away when I don’t feel like schlepping all the way down to the beach.
The grocery store, bank, pharmacy, fish market, eye doctor, general physician, and hardware store are all within a 10–20 minute walking range. And my favorite bar is only about 7 minutes away. Yes, I’ve timed it!
So everything is very convenient.
Getting on Solid Financial Footing
As I said at the beginning of this piece, I turned 50 this year, and while retirement is closer than I’d like it to be from a financial standpoint, I’m back on solid financial footing and can see my way to a stress-free retirement.
Moving to Jamaica has allowed me to reach some savings goals that I would not have been able to reach had I not done something drastic — like downsize severely and move to a country with low living expenses (even with the 35% flat-tax rate here).
Planning to Live “Tiny”
I plan to move back to the states in 2020. I want to own a home again, but this time I won’t be getting in over my head with a mortgage.
I’m thinking of buying a piece of land and building a tiny house; not ridiculously tiny — but something in the 400 to 600 or 800-square-foot range. One thing living in a studio apartment has taught me after living in such a huge house is that you don’t need a lot of space.
At my old house in Atlanta, I had rooms that were unfurnished and that I didn’t even go in — except to dust and vacuum. And I have a couch in a corner of my apartment here that I never sit on because I’m never in “that corner.”
My goal is to put down at least a 50 percent deposit on whatever I buy again when I return to the states, if I don’t have enough to purchase everything outright — which is what I’m working towards.
This way, my projected social security benefits — lord please let them still be available! — will be more than enough to cover healthcare and basic living expenses, as I’ll never have debt again over and above a mortgage (again, if that’s even necessary).
As for other income besides Social Security, luckily, I’m a writer — a career that doesn’t have an “age limit;” only a “will I still have all my marbles” limit. So even if Social Security is not around, I will be able to make a living, barring any illness.
I write for clients, and I also write and self-publish my own line of fiction and non-fiction ebooks. I’m also a traditionally published author (may more of those contracts come my way!).
As my writing and self-publishing income is ongoing, I’m able to continually save every month. With this plan, I know I’ll always be able to afford the roof over my head, afford healthcare and keep a nice nest egg too.
This gives me peace of mind as I head into the second part of my life — and let me tell ya, there’s no price you can put on that.
Moving Abroad to Save Money: 5 Things to Consider
If moving abroad to save money for retirement (or other life goals) is something you’re considering, following are five pieces of advice to take to heart.
1. Do a Pre-Move Visit: Being in a place on vacation is different than living there full-time, so I’d advise taking a long-term visit, eg, one to three months at least.
2. Find Out about the Tax Structure: One thing I didn’t do before I moved to Jamaica was find out about this. It was a shock to learn that taxes are high here — roughly 35%. And it’s a flat-tax system, so there are no loopholes like we have in the states; hence, it literally pays to do your due diligence.
3. Start Saving 6 Months to a Year Out: It always takes more than you think; it just does. So do a budget, and tack on 25 to 50 percent, which is why I advise starting to save 6 months to a year out, depending on how much you need to sock away.
4. Expect Culture Shock: Even though I’d been coming to Jamaica for almost five years before I made the move, living here full-time has been a culture shock on many levels.
It took me probably six to eight months to get used to things like power and water outages (which don’t happen that often, thankfully); music loudly blaring all hours of the day and night; people cutting in line at the grocery store; etc.
So cut yourself some slack. There’ll be days when you’ll miss your home country mightily, but stay focused on your financial goals.
5. Embrace Your New Lifestyle: Piggybacking on the last point, once you get over the shock, immerse yourself in your new culture as much as possible.
You’ll be happier on a day-to-day basis, and you’ll be richer for the experience — whether you decide to one day move back home, or make your new country your permanent home.
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Would You Consider Moving Abroad to Save Money? Have You Done It?
Why/why not? How’d it go/is it going? I’d love to hear your thoughts. Please share in the comments section below.