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Cactus Jack

The Five Year Plan

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I understand you are going to rely solely on your social security for income.  If you can manage it add $10 to $20 a payday additional social security to the person who will have the largest social security payment upon retirement.   Over five years this should increase your pay out. 

 

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20 hours ago, Cactus Jack said:

Well, it would be interesting if the Chapala folks would contribute. This could be very informative to people like us.

This in a way reminds me of "gentrification," a term I first heard in the mid-80's in Chicago. Where there more money flowing in following the locals, everything goes up. We've seen it a lot, several times, in Las Vegas. Everything comes in waves, and it's hard to predict the future, given our experience with 2008. So where do we go from here?

Are there areas away from Ajijic to pioneer? What are you guys hearing from people who are moving down? Are they more flush than those of us on SS? Duh, okay, how much? :D

Those of us with limited resources value the free advice, esp the honest opinions that have weighed both sides.

Best wishes

PS: Just announced, SS will rise 2% next year, the first cola rise since 2012. That will help a lot of folks.

Hi, most of the northwest side of the lake is either Chapala or Jocotopec. Ajijic is part of Chapala. When I first came I expected to see very discrete areas but it is really a line of closely linked neighborhoods. Places, such as Ajijic, that have distinct identities, do so because they have their own Catholic church and plaza.

i think you will struggle to live here on only SS. It is not the budget, it is the surprises--the incorrect  $3,000.00 USD electric bill or the $8,000.00 US heart stint when the IMSS stint came with only a 2 year factory guarantee. In the first case we appealed to CFE, who only gave us a payment plan. We now have solar panels--which meant we had to have the money up front. In the second case, our friend got loans from friends and he is still alive and kicking.

Colombia is probably a better financial bet, but I love Mexico. Have you considered Guanajuato? It is a fantastic, beautiful, and energetic small city. I suspect that it is more affordable than the Chapala area.

I lke the idea of storing your belongings for the first year.

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Those living on SS can not live the high life in the Ajijic Gringo Bubble, paying high rent in U.S. dollars for a beautifully furnished home, travel, and eat out daily in gringo-priced restaurants. You can rent a sparsely furnished, Mexican-owned house and bit by bit furnish it from yard sales, the Facebook sale pages, and hunting bazaars for the occasional bargain. You can eat out regularly if you choose or cook delicious meals at home. Since you are on a five-year plan, I would skimp and save as large a pot of emergency funds as I could manage. That money will buy you peace of mind and an occasional splurge. I have lived here for nine years on SS and have managed to help those less well off  than me and build up a slush fund in my checking account for small emergencies. I am comfortable and happy. I do not have many of the luxuries others might consider essential to their happiness but I am happy and very grateful to be living the life I have made here. 

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Xena, great advice. Maybe others that have little more money should also take some of your advice.

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21 hours ago, seoulguy said:

So, I'm wondering what kind of budget you would propose for SS alone. And I wouldn't get too excited about the 2% COL.

(I hit the little black box called "Quote this.")

I see a lot of articles that say "Retire here on $1000 a month!" A better headline would be "How to live in a box under a bridge." A large percentage of Americans have been in a downward spiral for decades. The only pension plans are for government employees. Setting any kind of reasonable budget five years in advance is unreasonable, but we gotta do it, right? Let's double the headline amount and call it $2000 a month. That's about where we are now; we'd like to live close to how we do now, but we know that might not be doable. Our rent is $750. We'd be happy if we could cut that but still be comfortable.

In the US, the only real variable is housing. A Big Mac costs the same in Dallas, LA, and Who-the-hell-knows, FL. Taxes--income, personal, property--are all pretty much the same. If all of those are lower, so is the standard of living. Since we're talking about retirement, job income does not come into play, other than at arm's length. If they pay more, it costs more, but is worth more. A rising tide improves the view. What we are studying is the sliding scale--cost vs comfort.

This is subjective. Everyone has a different idea of comfort. None of us wants to live in a tent. (Some might, but we can safely call them outliers.) But we all have some idea of what is acceptable, and what requires sacrifice. I've read and seen videos of people saying you can live on a hundred a month in Mexico, but I would expect that to be at the level of those who come north for a better life. We can call that an outlier as well. We do not expect to live in a gate community. We have no illusions of being able to live in a recreated US. Somewhere in that mess would be a range we can all agree would make us okay. Maybe not great, but okay. Living on SS alone isn't ever going to be great.

We're studying that range. If we have a budget of $2000 US a month, and we want to maintain a middle-class quality of life, how far away can we get from gringos without losing contact? Is it even possible, meaning we have to become Mexicans, or Colombians or Nicaraguans? Or Vietnamese?

The longer we can prepare, the less stress we'll encounter. Knowledge is power.

Thanks for the forum to think this out. 

:)

 

 

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19 hours ago, El Saltos said:

The prices of real estate may be up but they're not yet at the level they were in 2005/6.  There's plenty of affordable housing here.

Now that's a piece of good news. May we never again see the housing bubble again. A whole decade of hard work was completely lost. This is why so many of us are looking for a life raft. After 2008, with nothing changing, a large segment of my generation--the sixties kids, at the tail end of the boomer generation--is starting to see dark times ahead. More than half have less than $10K in net worth. This is a paradigm shift just ahead, and nobody is reporting on it, talking about it. Numbers can be a frightening thing. So any good news is worth elevating.

Is anyone building housing in the area? Do you see more new people coming in, or more leaving? What does a modest house look like in Chapala, and what would rent be? 

Thanks for your patience. We've got a lot of questions.

Don and Terrie

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Some responses indicate just a little misinformation.

Others, just innocent ignorance.

A few, downright elitism.

Just come on down and give it a try, assuming you can qualify for a residence visa at your nearest Mexican consulate in your home country.  Yes, you can live happily on less than what the consulate will require you to prove.  Just avoid as many of those “surprises“ as possible.  Then, you will get old, really old, and maybe start running out of resources & have to go back north for Medicare or the VA.....like me...sadly. But it was a great ride for over 13 years.

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3 hours ago, AutumnDreams said:

I understand you are going to rely solely on your social security for income.  If you can manage it add $10 to $20 a payday additional social security to the person who will have the largest social security payment upon retirement.   Over five years this should increase your pay out. 

 

I think I should pay attention to your post, but haven't a clue what it means. Can you rephrase it? Thanks.

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1 hour ago, Prudent said:

Colombia is probably a better financial bet, but I love Mexico. Have you considered Guanajuato? It is a fantastic, beautiful, and energetic small city. I suspect that it is more affordable than the Chapala area.

I lke the idea of storing your belongings for the first year.

It's the surprises you can't plan for that keep you up at night. Nothing we can do about the unforeseen, if we have no cushion. That's life.

I'm not at all done with studying Medellin. After the first of the year, we'll plan our first recon. That will probably be a trip to Chapala. The second would then be Medellin. I just found out a friend at work moved back from Ajijic, so that is a big plus sign for Chapala. Terrie doesn't want to live in a city. She wants some space around her, but she also has higher standards than I do, so we negotiate.

:D

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17 minutes ago, Cactus Jack said:

how far away can we get from gringos without losing contact?

I do it. I have not seen a gringo (except at the US Consulate) in a year. I live in Guadalajara.

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1 hour ago, Xena said:

Those living on SS can not live the high life in the Ajijic Gringo Bubble, paying high rent in U.S. dollars for a beautifully furnished home, travel, and eat out daily in gringo-priced restaurants. You can rent a sparsely furnished, Mexican-owned house and bit by bit furnish it from yard sales, the Facebook sale pages, and hunting bazaars for the occasional bargain. You can eat out regularly if you choose or cook delicious meals at home. Since you are on a five-year plan, I would skimp and save as large a pot of emergency funds as I could manage. That money will buy you peace of mind and an occasional splurge. I have lived here for nine years on SS and have managed to help those less well off  than me and build up a slush fund in my checking account for small emergencies. I am comfortable and happy. I do not have many of the luxuries others might consider essential to their happiness but I am happy and very grateful to be living the life I have made here. 

Xena, would you like to be my new best friend? :)

Honestly, that is exactly what I would love to be saying in ten years. It would appear you have walked the path I'm seeking. Thank you so much for the reply, and keep an eye on the thread, if you will. You are the resource we need in every place we look at. Can you give a ballpark on what your neighbors are spending for your lifestyle?

1 hour ago, Xena said:

Ajijic Gringo Bubble

 LOL! You should get a royalty for every time somebody uses it.

I think of it as rings around the center. As the center expands, the rings get farther out. You must be in a middle ring, closer to the natives than the enclosed center. In Las Vegas, we call them locals.

 

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27 minutes ago, Cactus Jack said:

 

Is anyone building housing in the area? Do you see more new people coming in, or more leaving? What does a modest house look like in Chapala, and what would rent be? 

Thanks for your patience. We've got a lot of questions.

Don and Terrie

Yes, new houses, apartments, and condos are going up all the time.  There is no typica house here since homes have been being contructed here for nearly 500 years!  Look at the real estate and rental pages available on the web.  Just Google Ajijic Real Estate or Chapala Real Estate, or rentals to get an idea of the range of homes here.

Lately we have more arriving than leaving.

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21 minutes ago, RVGRINGO said:

Some responses indicate just a little misinformation.

Others, just innocent ignorance.

A few, downright elitism.

Those are fair points. The only way to know is to go there. But at a thousand dollars a trip, it would be a setback to go to the wrong place. And without hard data, everything is subjective. I haven't seen any elitism, but I wouldn't be surprised if there wasn't a strong prejudice against people who aren't well-off. I probably would feel the same way about me if I had more money.

I am fine with garage sales and thrift stores. I can be happy in modest circumstances. It takes a bit of effort, but the results are worth it. Thanks for your opinions.

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27 minutes ago, Tiny said:

I do it. I have not seen a gringo (except at the US Consulate) in a year. I live in Guadalajara.

What's your story? Where are you from and how did you make the transition? Your experience is most valuable.

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16 minutes ago, El Saltos said:

Yes, new houses, apartments, and condos are going up all the time.  There is no typica house here since homes have been being contructed here for nearly 500 years!  Look at the real estate and rental pages available on the web.  Just Google Ajijic Real Estate or Chapala Real Estate, or rentals to get an idea of the range of homes here.

Lately we have more arriving than leaving.

Even Craigslist:Guadalajara has rentals in Chapala. It's a good source for market information. Thanks for the reply. I've lived in many boom towns. They have energy. I've lived in towns that haven't grown much in a hundred years. They have their charms, too. 

That's good news for the community. Unfortunate for those at the bottom of the  cohort. They are being driven out by rising rents. I hope the indigenous people are getting some of the pie.

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My story is a story of connections (what you hear and who you meet). I am from the mid-west USA. Though work I heard about the area from several people from here. After retiring, I came here on an extended visit, all the time making new connections. I actually married one of my connections. (I don't think that will help you. hahaha). 

The point is don't think that the place you move to, is the final place you are going to live. It is just like any other city you move to. Go make your connections.

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42 minutes ago, Cactus Jack said:

Even Craigslist:Guadalajara has rentals in Chapala. It's a good source for market information. Thanks for the reply. I've lived in many boom towns. They have energy. I've lived in towns that haven't grown much in a hundred years. They have their charms, too. 

That's good news for the community. Unfortunate for those at the bottom of the  cohort. They are being driven out by rising rents. I hope the indigenous people are getting some of the pie.

Just to add perspective:  I've lived here more than 12 years.  It's never been and is not now a "boom town."  In the area between Chapala and Jocotepec there are more than 100,000 people.  The foreign population is maybe 7 or 8% of that.  The gringo view is a narrow, incomplete view representing only gringo houses, places gringos shop etc..

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1 hour ago, Cactus Jack said:

I think I should pay attention to your post, but haven't a clue what it means. Can you rephrase it? Thanks.

I know of no way that one can contribute 'more' to Social Security other than to work longer. With "401's", etc, there is a provision for, in one's last 5 years of work, to contribute more than the normal government mandated maximum. That 'may' apply to an IRA also, I just don't know. But what that does is 'just' put more away untaxed... which is good, but....

The BEST way to increase one's SS payment is to.....  don't start using it at 62 for sure but also don't take it at the current 'full retirement age' of 66. For every year one doesn't take it past there, one reaps an additional 8%. You can do the math as to what that would mean if one didn't 'cash in' until they are at the mandatory age of 70. That 32% is a very meaningful amount of increase!

But all of this is moot if one for some reason can't continue to work or just doesn't want to. But it is a 'choice' that one gets to make.

see:  http://www.reuters.com/article/us-column-miller/how-social-security-can-help-you-play-catch-up-on-retirement-idUSKBN0LG1M720150212

 

 

 

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41 minutes ago, Tiny said:

The point is don't think that the place you move to, is the final place you are going to live. It is just like any other city you move to. Go make your connections.

Very good advice. It's the process, focus on the process. Enjoy the surprises. :) Congrats on the marriage.

35 minutes ago, El Saltos said:

The gringo view is a narrow, incomplete view representing only gringo houses, places gringos shop etc..

No matter where you go, it's the same. Perspective is line-of-sight.

I think this is an important part of decision-making. I doubt anyone can get the "feel" of the place by visiting. One way would be to establish friendships or connections before arrival. Getting shown around the place would be the ideal for a better perspective.

Another is to be open to the bad stuff. In my work as a casino dealer, I would be hard-pressed to find just one person who could describe it. Everyone sees some portion of good and bad. But, again, hearing from locals is next best thing.

20 minutes ago, RickS said:

For every year one doesn't take it past there, one reaps an additional 8%. You can do the math as to what that would mean if one didn't 'cash in' until they are at the mandatory age of 70. That 32% is a very meaningful amount of increase!

As much as I would like to deny it, I have to be honest. I hate it, but I will end up waiting until 70. I'm still in good health, and my wife doesn't retire until I'm pretty close to 70, so what's another year or so. My job sucks, but it's not paving or roofing.

Thanks for the very good advice, and the good math figuring. Plus the additional 401K contributions, would helps considerably. I just keep having to remind myself that my grandparents were the first generation who didn't die at their job.

*Trivia alert--The average life expectancy at the beginning of Social Security was 65 years 9 months.

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5 minutes ago, Cactus Jack said:

Very good advice. It's the process, focus on the process. Enjoy the surprises. :) Congrats on the marriage

Thank you. It is going on 18 years.

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About health insurance:  I agree with the poster who suggested getting rid of Medicare Part B once you're sure you want to retire outside of  the U.S. for the long haul, since you can't use it here and it really adds up.  There are those who are extra cautious and continue to pay for it "just in case" they need to move back to the mother country in the future.  You know how risk averse you are, or aren't, and what lets your sleep well.

There are two Mexican health care options other than private insurance:  IMSS, which won't cover pre-existing conditions without a waiting period and has yearly fees increasing with age.  There is Seguro Popular, which does cover pre-existing conditions from the beginning and has lower or no fees, depending on your circumstances.  Then, there is "out of pocket", and the physicians charge so much less than they do in the States that many people just do that.  Many people use a combination of the previous options:  IMSS or SP as a backup, but out of pocket for minor needs.

Comment on "Gringo Bubble":  this is generally reverse snobbery on the part of people who don't live in Ajijic.  As you will see for yourself when you visit, the Ajijic population is in fact, primarily Mexican and there are many very modest dwellings.  The true "bubbles" are mostly found in the various gated communities all over the Lake Chapala area.  Nothing wrong with those,  and they have a lot to offer the residents in amenities. Personally, I prefer living right in town, walking distance to everything.  Each to his or her own.

Wishing you the best of luck in finding your happy home.

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9 minutes ago, Tiny said:

The only problem is for the ones that need it before 70.

I'm going to make an assumption. People who are planning to do what we are talking about are in good health. I would think it's going to take "youthful energy" to pull up stakes and move around the world. For the rest, it's an option.

34 minutes ago, RickS said:

You can do the math as to what that would mean if one didn't 'cash in' until they are at the mandatory age of 70. That 32% is a very meaningful amount of increase!

Extremely useful. It's the difference in a struggling lifestyle and one with some amenities. I bookmarked that two year-old article. I think it still applies, and in the future will go up in value. Unless their is a recession, which really could affect those of us still working.

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6 minutes ago, Tiny said:

Thank you. It is going on 18 years.

No kidding?! That's excellente, amigo!

You probably have a different perspective which we'd find useful. What do you see with people like us moving to Mexico? Where do you see us struggling? Language? Customs? Assimilating?

Thanks. Sounds like you've found a way.

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