Guys, here is an idea I'd like to run by you. First of all, English is my second language, so apologies for any errors.
I am in my early 30s, live and work in the NY area. I have an ok job, salary just over $100k/yr, likely to grow in line with inflation going forward with no guarantee of job security. Not married, no kids, very unlikely to ever get married or have kids. I am debt free, don't own any real estate. All my assets are in 401K, roth IRA, cash, and some non-tax exempt investments in the stock market. I've been too conservative by keeping too much and cash, right now looking at investing more aggressively.
I grew up very poor in a poor country and know how to save money and live frugally. My goal is to retire or semi-retire as early as possible. A more specific goal is to spend some living in a country like Thailand - or whatever will be the best place for me at that time - earning passive income from my investments. Also, I'd like retire many years before I become impotent and senile. To me, the concept of Net Present Value applies to free time and retirement, not only money: the younger I am the more valuable the time I spend retired and/or semi-retired is.
I am very conservative and skeptical about get rich quick schemes, risky business ventures, etc. Realistically, If I aimed to earn enough to retire permanently I would not likely be able to do it until late 50s at best, or probably not even until early 60s, which would suck, because my dick might stop working by the time I reach that age, not to mention all other health problems, lower energy level, etc.
So, here comes the idea: let's say by the time i reach 45 I accumulate enough assets to generate a big enough passive income to live comfortably for about 20 years in a "playground country" like Thailand or the Philippines, and deplete my assets by the time i reach 65. Let's not get into exact numbers right now, but i think we can all agree that the amount i need in this case will be much less than what i would need if i was aiming to retire permanently. What happens when the money runs out, you ask? Here is the idea: I return to the US with a little "safety net" money enough to last for a few months. Then I can live of off Social Security, Medicare, Medicaid, and all kinds of benefits that poor senior citizens get. The idea is to get into a senior care home paid for by Medicaid:
http://www.medicare.gov/nursing/payment.asp That way, shelter, food and health care will be taken care of, and I'll have my social security pension for any other expenses. As I mentioned, i grew up poor and lived in tough conditions, so I don't mind sharing a room with another old fart and eating mush when I'm 65+.
Some current retirees are doing something similar to my idea: not necessarily moving abroad and coming back, but depleting their assets strategically and moving to nursing homes by the time they are eligible. Google "medicaid planning", here is one link as an example:
http://www.centerltc.com/BriefingPapers/3.htm
I know that some of you have already started writing replies about the US economy going downhill, Soc Sec, Medicare, Medicaid and such going bankrupt by the time most of us retire, etc.. Yes, I'm pessimistic too, but I don't think things will get bad enough for the US to become a country where poor seniors live on the street and dumpster dive for food. Medicaid or not, there will likely be a Government scheme paying for senior housing, food and health care even 30-40 years from now. Basically, it's a bet on the US not becoming a third world country by that time. Worst case scenario, even if I end up living on the street and looking for food in dumpsters at 65, I will only have myself to blame and deal with it like a man.
Questions:
- What are the weaknesses of this plan? What are the risks? If you think I'm fucking crazy, say so, but back it up with facts and logic.
- If I'm going to follow the plan, what is the best investment strategy? For example, is it worth maxing out on 401K like i do now? What about Roth IRA?
PS. Let's not get into an ethical debate for now. As far as I'm concerned, I am paying more than my fair share of taxes that pay for other people's retirement (think government employees, for example). As long as I stay within the limits of the law, I have no problem claiming all the benefits i can get at an old age.