Why Are People Leaving the US, Part 5

Reason 5: Retirement

This is sort of a blend of #1 (Frustration) & #3 (Seeking Improved Life).  Retirees are both frustrated by healthcare costs and the cost of living on their incomes AND seeking an improved life with the means they have the (world’s) disposal.

But there’s definitely something special about this idea….of a person born, educated & employed their whole life in one country – only to retire and say “I’m done, and I’m moving to greener pastures.

active-seniors-sting

 

Now, if you’re a retiree and are reading this, you might be pissed off at me labeling retirement as “done.”  Maybe you’re right to be mad.  Because being retired should be a new beginning, not the finish line. But unfortunately for some people, retirement means waiting to die.  Yes, a lot of you retire so you can just die. I hope if you’re reading this blog, you’re not one of those people.

Problem: Living off a Fixed Income

If you’re a retiree, or to-be retiree, you’re likely looking forward to a fixed income. Maybe it’ll be your pension, Social Security or you’ll be drawing from one or more retirement funds. Any of these are based on contributions over your working years. Calculated from how much you contributed, not how well your income provided for you.

for some people, retirement can mean waiting to die.  …if you’re reading this blog, you’re not one of those people.

Unfortunately, your income will not provide as much as it would say, back when you were younger and learned how much your pension will be. To answer why, you already know: inflation. Inflation makes the purchasing power much smaller than it was in the many past years you contributed.

In short, your fixed income isn’t adjusted for inflation. (And I know I don’t have to tell you how much inflation has changed prices over the years!)

To better understand purchasing power, recall all the times you heard an old person say “Boy, a dollar sure doesn’t buy what it used to!”  It sure doesn’t.  A dollar bill is still labelled a dollar, but its value is what declines.  Over time a person needs more and more dollar bills to equal the value of the purchase, be it a loaf of bread, a pair of pants or a house.  Yes, we’re talking about inflation. It’s real and it’s different per country. If you don’t like your country’s path of inflation, then ….move.

For retirees, this is an especially painful topic.  Retirees remember how much “penny” candy they could buy for 25 cents.  Now, one candy bar costs a whole %&#*-ing dollar.  Now, go back to all those retirees living on an income that’s been built up by salary or wages of an era long gone, and you have many retirees struggling to scrape by.  Never mind the candy bar, retirees first need affordable medication, housing and canned catfood.

Big Risk: Living off a Fixed Income

Yes, I used the same phrase from “Problem to Fix.”  A fixed income from one country is a risk.  It’s a risk of currency exchange.  By living off of the money from one country in a second country (& currency), you gamble on how that money changes exchange rates.  Say your pension currency exchanges for 10% less against your host country…well, you just lost 10%+ of your income. For most of the developed world, currency exchange isn’t any more violent than inflation.

Mitigating the Risk

Currency exchange fluctuations are a daily, constant change and there’s little in the short-term you can do about it.  Long term, you can lessen this risk by having assets in both countries.  Let’s say you move savings to purchase property in your new host country.  You rent that home out for a little added income.  Now you have savings, equity and added income in your host currency, ad you totally bypass any currency exchange risk.  Nice, huh?

One more thing – there is a risk to mitigating this risk 🙂   You may leave and be left with a new choice – hold the property or move your savings (again).  Look at us- we purchased property while living in Prague (and still own it sold it summer of 2016).  Meanwhile we no longer live there.  So for us, fortunately, both our rental income and mortgage are in the same currency.  So no currency exchange risk when both “in-coming” & “out-going” are the same — a big plus.

Lastly, if your retirement funds or a pension are in US dollars, then it’s fairly easy to retire in a country where your $US will buy much more in your new home country. In some of the most stable, developed Central American countries, your $US has much buying power than back in the States. This saves you money for flying home to see the grand-kids.

 

 

What is Canada’s electronic Travel Authorization (eTA)?

It’s official now….

Canada Requires Authorization to Visit

It used to be, to visit Canada, you just “fly in and visit.” Not any more. Authorization is needed from everyone.

Either you need a visa (old news for about 150 countries) or you need to file an electronic Travel Authorization or “eTA” (this is new for the last 50 countries). Whether a visa or eTA, it must be done before you fly to Canada.

Those Needing a Visa

For citizens of the majority of countries, Canada requires a visa. And that’s still the case for them. If you needed a visa before, you still need a visa now.

But for about 25% of the world’s countries, citizens used to fly in, visit and fly out, -no paperwork or permission needed.

Those NOT Needing a Visa

For citizens from visa-free countries, Ha! You think you can drop in unannounced like some uninvited mother-in-law? No “popping in” to Canada for you, not any more.

In order to fly in, you first need to fill in a tiny bit of online paperwork. And pay $7 (cheap, but a tiny bit annoying).

Enter the electronic Travel Authorization or “eTA” – your visa-free authorization to see Canada.

Welcoming Mexico More

One notable change starting December 1st, 2016, Mexicans wishing to visit Canada will no longer need to apply for a visa, just the eTA.

…on December 1st, Canada will treat both US and Mexico as equals in terms of visitor rights.

That’s interesting, considering Mexicans most definitely need a visa to visit the United States. (Ironic, as a surge of US citizens look to move to Canada, given the recent presidential election.)

Expat Yourself election surge
Expat Yourself visitor surge post election

Soak this up: even as US president-elect Trump promises to build a wall stopping Mexicans from seeking a better life to the north, there was a surge of Americans also seeking a better life to the north. Meanwhile, on December 1st, Canada will treat both US and Mexico as equals in terms of visitor rights. Huh…

How to File an eTA?

You fill in this online form, thanks to Canadian Immigration. Have your passport and credit card ready!

etaprocess

Any Exceptions?

Yes, 3 big exceptions. These people do not need to file an eTA:

  1. If you hold dual-citizenship: Canadian + 1. (BTW, travel with Canadian passport)
  2. If you are already a permanent resident of Canada.
  3. If you’re American.

And a few other exclusive exceptions, according to Canada Immigration:

  1. Her Majesty the Queen
  2. Diplomats
  3. People who flew in just to maintain the aircraft they flew in on

How Many Affected?

About 50 countries are affected. That’s only a quarter (~25%) of the world’s countries. As for how many people…glancing at the list (including China, India, Indonesia, etc.), about 85% of the population.

Oh well, enough said about this topic. Best to you all.

What’s Special About the United States?

You must know the TV show “The Newsroom”? The news production parody from Aaron Sorkin (same guy behind the shows West Wing & Sports Night).

First minutes of the pilot episode have news anchor Will McAvoy (Jeff Daniels) ranting on about what makes the United States the greatest country in the world (spoiler: “it’s not, but it can be”). If you haven’t seen it, google his rant later.

Will McAvoy

Before you balk, no – I am NOT supporting Trump (a.k.a. Mr. “Make America Great Again”). No, not in a million years. Nor am I supporting Hillary Clinton. No, not in a million years.

Sure, America could be great again. But I hold no hope, in either candidate.

Hold your breath for 4 years? No, better still, go away for 4 years.

Whatever happens this November, America in 2020 might just be a place to return to. (Or it might not.)

But no doubt, now is a great time to become an expat yourself.

— Which begs the question, what are you still doing there? Start on your plan, today.

gonein1year-overview

Student Loans Deferred Longer in Canada

Student loans grow out of control during those 4+ years of university. Then you’re expected to repay loans, starting the day after graduation. But with what?

Student-loan-debt1The result? Newly graduated, bottom-rung workers get themselves into serious financial strain.

Sure, some students get lucky with a job offer in their first year. But I think the majority (what, like 80-90%?) of students don’t walk into their first big job right after graduation. [if definitely over 80%, tell me; I’d love to know.] Instead, students take whatever job they can, to scrap by however they can. The first paycheck is not as big as they wanted, but the loan is still demanding payment.

Student Loans Deferred – Until You Can Pay

A new law just passed: students here in Canada can wait to pay back government loans until they are in a good position to do so. Instead of payments starting after graduation, loan repayment starts after you make the minimum salary. Starting November 1st, that minimum is $25,000. That might not seem like much, but it is an income. For most students, just having an income is a big deal.

If you read the article, you’ll see other benefits from this law, namely increased loan amounts. This is good, provided you need it.

Is There a Catch?

It’s not free deferment. There always seems to be a catch, right? The catch here is, interest continues to accumulate. You probably could have guessed that.

So, you don’t want to defer your loans forever.

Then again, you also don’t want to earn under $25,000 forever.

How to Take Advantage of This?

If you’re considering moving to a foreign country to have lower student loans, then Canada just rose in the ranks, didn’t it? I can help you move here. Either through the “Gone In One Year” program, or by phone consultation.

Do these work? Yes, very well. There are several of my clients now living, working abroad as a result.

Yes, I know… “my case is special”? Each one is, that’s where I’m most capable. I think outside the box, come up with the right way ‘out’ for you. Give me a call. Or check out the monthly program to be out in a year.

Moving Money Between Countries as an Expat

Well, it’s official. We sold our flat in Prague! (“Kafkaesque Paperwork” post coming)

Last month, I said we flew to Prague to sign papers to sell our flat. We did, we have, and it’s done. Yes, we no longer own property in the Czech Republic. (Yeah!)

Owning foreign property these past 9 years has been a good adventure for us. And selling it was a great move for us. To best understand why the timing was good, read the end of the last post.

The Problem: What To Do With This Money?

We now have a new “problem.” Lots of money in Czech Koruna. And this money sits in a bank account in Prague. But we want that money in the form of Canadian dollars, in our local (Canadian) bank account. How to get it there?

Continue reading Moving Money Between Countries as an Expat

Timeline to a New Life

Below is a post I first wrote in November 2009. (Whew, how time flies!) I figure it might help a few others with the same questions I had back then.

expat man jumping shipIf you’re thinking about starting over completely new, you may wonder “How long it will take?

Fair question – and here’s my answer: 3 months. Three months is all it takes to drastically change your life, self and all that’s around you. And that’s assuming you have a house, job, perhaps even family as we did. Even as “settled” as we were, it was just 3 months from wondering about getting work overseas to all moved and working overseas.

Continue reading Timeline to a New Life

Non-Verbal Communication

My wife is outstanding at knowing what I’m thinking. She’ll tell me what I’m thinking. In fact, sometimes I didn’t even know I was thinking that. (Sound familiar?)
She knows what I’m thinking because my face reveals a lot while we’re talking. My eyes, especially my eyebrows, how my mouth is formed, where I’m looking – all communicate my feelings at the time. And as I write this, I understand this is probably why my friends enjoy playing poker with me. They watch, they know – they win.
The value of recognizing and reading non-verbal communication is obvious. If you can “read” people’s non-verbal communication, you’ll win. Much more than at poker, of course.
What made me write this? I was writing messages to include in month 6 or 7 of the “Gone in 1 Year” program, and it hit me how non-verbal communication really affects home and poker life. So helpful to be aware of our own face and posture when speaking with others.
Have a great day everyone!

Gone to Canada in 10 Months – Trump edition

Thanks to Super Tuesday results, it’s pretty certain Trump will be the candidate.
And possibly the next President of the United States.

Your Next President? It's Looking that Way
Your Next President? It’s Looking that Way

Do you really want to be there when this happens? …I didn’t think so.

As of today, I’m tailoring my current Gone in One Year program. I’m building for one person: for the American who want to get out of the US, and move to Canada.

What’s the Gone in One Year program? It’s a 12-month (obviously) long set of e-mails, homework, videos and tailored help to get someone living abroad. I’ve lived abroad several times; now I teach others. It’s great.

Faster, Shorter, Uncut

Because moving to Canada for Americans is easier than say, moving to Costa Rica or Czech Republic, this program is faster. It’s 10-months, not 1 year.

It’s also “uncut” and less generalized. When I know you come from X country and want Y country, I can give clear-cut, direct help. In this case, it’s US —> Canada.

Read more on the “US—>Canada” and other 2 plans here.

 

Backpacker Tax – What You Need to Know

A fairly easy “gap year” option for university students is to get a Holiday Work Visa, fly down to Australia and do temp work. Common work is the restaurant/bar scene, farm work or other short-term work. If you’re extremely lucky, work might pop up somewhat related to your degree. The best part of working down in Australia is you earn your wages tax-free. Well, for now…

AUS money

Continue reading Backpacker Tax – What You Need to Know