Can I Quit in My 50s and Move to Europe?

Summary

Podcast Summary: Can I Quit in My 50s and Move to Europe?

Jill on Money with Jill Schlesinger
Episode Title: Can I Quit in My 50s and Move to Europe?
Release Date: February 12, 2025
Host/Author: Audacy
Description: Host Jill Schlesinger, CFP®, delves into often uncomfortable and controversial money and investing topics without the financial jargon, ensuring listeners gain actionable insights to optimize their financial well-being.

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1. Introduction to Early Retirement and Relocation

The episode kicks off with a listener call from Rob in Seattle, who is contemplating early retirement at 56 and a significant life change—relocating to Europe, specifically France. Rob seeks advice on the feasibility of his plan, given his current financial standing and future aspirations.

2. Listener Rob’s Financial Profile and Retirement Goals

Personal Background:

• Age: 56
• Marital Status: Single, with no children or dependents.
• Current Employment: Earning $108,000 annually.
• Retirement Accounts:
  • 403(b): $625,000 (pre-tax)
  • Roth IRA: $135,000
• Other Assets:
  • Condo: Valued at $525,000 with a $200,000 mortgage, expecting to net $250,000 upon sale.
  • Inheritance: Part of a wheat farm expected to generate approximately $10,000 annually.

Retirement Plan: Rob aims to retire within a year, sell his condo to fund his move to France, and live there on an estimated $3,000 per month. He also plans to utilize $24,000 from his sick time converted into a Health Savings Account (HSA) upon retirement.

Notable Quote:

Rob (04:38): "When I retire, I will be able to cash out a certain amount of my sick time and put that into an HSA, which would be about $24,000."

3. Financial Analysis and Advisory Discussion

Discussion Points:

• Income vs. Expenses:
  Rob currently manages a bank balance fluctuating between $4,000 and $8,000 monthly. Upon moving to France, he estimates his living expenses will decrease to $3,000 monthly from his current $5,000.

• Retirement Accounts Access:
  Rob inquires about accessing his 403(b) early under the Rule of 55, allowing withdrawals without penalties since he's over 55.

• Inheritance and Additional Income:
  The anticipated income from the wheat farm is minimal ($10,000/year), raising concerns about its sufficiency in supporting Rob’s retirement.

• Risk Assessment:
  Mark and Jill express concerns regarding the sustainability of Rob's plan, highlighting potential risks such as inflation in Europe, market downturns affecting retirement funds, and the long-term viability of living solely on the planned income.

Notable Quotes:

Mark (09:57): "So, Rob, you're working now. How much do you earn?"
Rob (03:20): "I am great, thanks. Nice to be here, Jill and Mark."

Mark (15:40): "If you do do it, we want pictures, right?"

4. Evaluating the Feasibility of Rob’s Plan

Key Insights:

• Sustainability of Withdrawals:
  Mark recommends a cautious approach to withdrawals from the 403(b), suggesting starting with $4,000 monthly instead of the $3,000 Rob intends, to preserve the retirement funds longer.

• Emergency Funds and Contingencies:
  The hosts stress the importance of maintaining a cash reserve to cushion against unforeseen expenses or extended stays in retirement. They suggest not depleting retirement accounts too rapidly to maintain financial flexibility.

• Alternative Plans:
  Rob has a backup plan to work for a friend in the Midwest if his European venture doesn't pan out, adding a layer of security to his financial strategy.

• Delayed Retirement Benefits:
  Discussion touches on Social Security benefits at age 70, which Rob estimates to be $4,000 monthly, aligning closely with his projected expenses in France.

Notable Quotes:

Mark (10:54): "Rob, you're so young. If you're willing to take on this risk, you've got to decide which risk scares you more."
Unknown Contributor (13:43): "I would not be draining those retirement accounts if I was. [...] Let those continue to grow."

5. Risks and Recommendations

Identified Risks:

• Market Volatility:
  Early withdrawals expose Rob to market fluctuations, potentially depleting his retirement funds faster than anticipated.

• Cost of Living Adjustments:
  Unexpected increases in living costs in Europe due to inflation could strain his budget beyond the planned $3,000 monthly expenses.

• Longevity and Health:
  Without dependents, Rob bears full responsibility for his financial and health-related needs in the long term.

Recommendations:

• Gradual Transition:
  Instead of outright retiring and moving, Mark suggests a phased approach—possibly delaying retirement by a year or two to bolster savings and reduce financial strain.

• Diversification of Income Streams:
  Exploring additional income sources, such as part-time work or investments, could provide a safety net and enhance financial security.

• Reevaluation of Assets:
  Assessing the true value and income potential of the inherited wheat farm is crucial to ensure it contributes effectively to Rob's retirement plans.

Notable Quotes:

Mark (14:12): "You can do all the research you want until you're there and living on the ground."
Mark (15:53): "If you do do it, we want pictures, right?"

6. Conclusion and Final Thoughts

The episode concludes with a consensus that while Rob's dream of retiring early and relocating to France is ambitious, it carries significant financial risks. The hosts emphasize the importance of thorough planning, maintaining financial flexibility, and considering incremental steps toward retirement to ensure long-term stability and peace of mind.

Final Quote:

Mark (16:11): "Rob, just you don't have kids or dependents doesn't mean there's no risk. You know, there's risk to you."

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Key Takeaways:

• Thorough Financial Planning is Crucial: Early retirement, especially with significant life changes like moving abroad, requires meticulous financial assessment and contingency planning.

• Maintain Flexibility: Preserving retirement funds and having backup plans can safeguard against unforeseen financial challenges.

• Evaluate Risks vs. Rewards: Balancing the desire for a fulfilling retirement lifestyle with the practicalities of financial sustainability is essential for long-term success.

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For more insights and personalized financial advice, visit jillonmoney.com and explore the wealth of resources, including podcasts, blogs, and a free weekly newsletter.

Transcript

[Jill Schlesinger]

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[Mark]

Welcome to the Jill on Money Show. It is Wednesday, February 12th and we are here trying to help you make better financial decisions. Maybe just to kind of coach you along your game. We're just being there for you, propping you up, maybe giving you some constructive feedback. And you know there's a lot of stuff going on in the universe that is out of your control. Many of the issues we talk with you guys about, we really want to focus on the things that are within your control. And so if you would like to get a better handle on those things, why don't you get in touch with us? Go to jillonmoney.com click the contact us button Let us know if you'd want to come on the air with us live. While you're on the website, you've got to check out all the content. We've got another podcast. We've got a radio show, we've got a blog, we've got resources, and we have a free weekly newsletter comes out every single Friday. Mark does a great job with that. Okay, right now, let's go to listener Rob, who's on the line from Seattle. Hello, Rob. How are you? What can we do for you?

[Rob]

I am great, thanks. Nice to be here, Jill and Mark.

[Mark]

Excellent. What's going on?

[Rob]

Well, I am thinking of retiring early about a year from now. I'm 56 years old, and I'm wondering if I can pull this off.

[Mark]

Okay, well, let's see. Are you married, single, partnered, single, no.

[Rob]

Kids or anything like that?

[Mark]

Boy, these singletons with no obligations. The world's your oyster, man. Of course, as I like to say to my sister about her kids, she's like, oh, you have so much freedom. I'm like, yeah, but I'm gonna be old and alone and no one will take care of me, except maybe Mark's son. That's why I'm gonna try to really suck up to him as I get older. So, Rob, you're working now. How much do you earn?

[Rob]

$108,000.

[Mark]

Are you gonna be entitled to a pension?

[Rob]

No.

[Mark]

Have you squirreled away a ton of money because there's no college education or no kids eating up all your money? What's going on in your savings?

[Rob]

I've saved a reasonable amount of money, I think. I didn't get started, you know, the earliest, but certainly within, you know, the last 10 years, I've been squirreling away a lot more money.

[Mark]

Okay, so do you have money in retirement accounts or non retirement accounts or both?

[Rob]

In retirement accounts, I have. In my 403, I have 625,000.

[Mark]

Pre tax. Right.

[Rob]

Pre tax.

[Jill Schlesinger]

Yep.

[Mark]

Okay.

[Rob]

Outside of my employer retirement account, I fully fund a Roth.

[Mark]

Okay.

[Rob]

And I have 135,000 in that.

[Mark]

All right, great. And any brokerage accounts.

[Rob]

I don't have any brokerage accounts.

[Mark]

Savings, like boring, safe money.

[Rob]

Boring, safe money. My bank account floats between 4 and 8k a month.

[Mark]

Okay.

[Rob]

When I retire, I will be able to cash out a certain amount of my sick time and put that into an HSA, which would be about 24,000.

[Mark]

Okay, wait, sick time to an HSA? 24,000 at retirement. Okay, got it. Regardless of when you retire, right?

[Rob]

Yes.

[Mark]

Okay, Got it. Anything else like, you have rental property that you own any other way that you will have income in the door if you were to retire early?

[Rob]

I will inherit part of a wheat farm.

[Mark]

What?

[Rob]

Yeah, my. That's my mom's side of the family, so I have one brother. And when my mom passes, my brother and I will inherit. Not big.

[Mark]

Okay. You know, I mean, you know what I'm thinking? I have, like, a vision in my head of those, like, massive plots of land in the middle of the country where. Where. I just think that's all you. What's the wheat farm worth right now?

[Rob]

It's not a big operation. My guesstimate is that I would probably get about 10k a year.

[Mark]

Okay, but you wouldn't sell it. Like, does it have some value beyond that?

[Rob]

It has value. It's dry land, wheat farm. I don't know what the value of it would be. I wouldn't be that inclined to sell it because it's been in the family. I mean, I'll be the fourth or fifth generation.

[Mark]

Well, then what happens to it with you? You. You've really shirked your responsibility. You have no heirs. Does your brother have heirs?

[Rob]

No.

[Mark]

What?

[Rob]

We are not farmer kids. The wheat is farmed for us.

[Mark]

Okay. All right, whatever. 10 grand a year, that's gonna be, like, a tiny bit of money. So.

[Rob]

Yeah, got a condo.

[Mark]

How much is it worth?

[Rob]

About 525. I owe 200. And my plan would be to sell it. And I think. I'm estimating fairly conservatively, but I think I would net 250 out of it.

[Mark]

Okay, and that 250, that's what you. What would you do then? Like, what's our game plan? If in a year, if you say, I want to retire right next year, I'm done, and you sell your condo and you got 250 grand, what happens next?

[Rob]

Moved France.

[Mark]

Ooh, you talking of something fun for us. So if you were to move to France, have you investigated this? Like, where would you move? And also, do you have an EU passport for any reason? Is the other side of your family not wheat farmers, but, I don't know, French winemakers. Do you have any EU passport possibility?

[Rob]

No possibilities there, but I have done a lot of investigation about what it takes and what it costs to move there.

[Mark]

What do you think you spend right now? Just as you live your life in Seattle, what do you spend on an annual basis?

[Rob]

On a monthly basis, my nut is 4,600amonth.

[Mark]

All right. Mind if I say 5,000amonth? It's just Easier for me. And do you think you will have similar $5,000 a month if you move to France?

[Rob]

No. I have done a lot of cost estimating, and I think it'll be 3k a month or 36,000 a year.

[Mark]

Okay. And so would you. Do you think you're gonna. I know this, like, forever's a long time, but you want to move and want to be, like, there for a while. In other words, this is not like a year or two and come back, right?

[Rob]

True.

[Mark]

Okay.

[Rob]

I do have a backup.

[Mark]

What is it?

[Rob]

A good friend of mine would like me to come work for him, and he lives in the Midwest, and that would be a possibility if things didn't work over there. I don't have any intention of coming back to the Pacific Northwest.

[Mark]

Well, right. You're like, I've been in yucky weather for a long time. I love it. And thank you very much, I'm done. So this plan, is it predicated on you retiring early and having no other income? Would you try to make some money working online, doing something, you know, I don't know, just having some money coming in to defray the $3,000 a month in costs that you will be spending?

[Rob]

I would like to fully retire.

[Mark]

Boy, you're fried, aren't you?

[Rob]

Geez, I am actually pretty fried.

[Mark]

Okay, so we need three grand a month net, Right. You say, I'm going to sell the house for 250 grand. So we know that you're kind of set there. So is the game plan that you would say? I'm just going to, you know, figure it at so 57. So for, let's say three years, we need to get 40 grand out of that account, right? Right. 40 grand each year, just so you have a little extra money. And so that way you're kind of halving, like, the condo proceeds. You're going to use half of those proceeds in the first few years before we get to the time when you can Access your traditional 403. Is that about right?

[Rob]

I do have a Rule of 55 thing going on here, so I can pull from my 403, on the other hand.

[Mark]

Why? I mean, I'm just saying, because you have that big chunk of money. Yes. You're not going to invest it. Do we need to have that as, like, what amount of money must we leave in cash just to, like, chill out?

[Rob]

I would like to retain that as cash or equivalent, just in case. I plan on renting for a year just to kind of see if this is really going to stick. I Have more of an owner mentality. I would be inclined to buy something and it would be nice to. It would be nice to have that. To buy something.

[Mark]

Okay. But you would always have those costs locked in at around three grand a month. Right. Even if you bought something. So then if you invoke the rule of 55 on the traditional 403, you would pull the money out that you need. So let's say each year you're not making any money. So it's like not that big a deal. You could pull out 50 grand, 60 grand, I don't know, it probably is 50 grand for you and that's about it. And pay the tax that's due and live on the rest, right?

[Rob]

Yes.

[Mark]

Okay. Yes.

[Rob]

Our fancy employer uses one of the big companies as our administrator and they have this fancy software system that is a Monte Carlo based system.

[Mark]

Love the Monte Carlo.

[Rob]

Based on the things that I've told you now, minus the condo, that's not in that system, they say that in a significantly below average market I could pull out 47, 49amonth or in an average market, 5,100amonth. That seems kind of high.

[Mark]

Seems high to me. I would err. The reason why that works is if the market's going up, but if you're in a downdraft, then it's also saying like you should actually take out money. And I don't think you want to live that way.

[Rob]

Yeah.

[Mark]

So I agree over time, that's true. But I wouldn't do that. I wouldn't start with that as my premise.

[Jill Schlesinger]

Okay.

[Mark]

So I would be more like four grand a month is what I would start with. Okay, okay. And that's how I would start. And four grand a month, this should do it. Now you're going to pull money out and at some point we, you know, you're going to, you know, plow through this money. Right. The traditional 403B is going to be gone. So here's what's going to happen. Let's say over 10 years, you're retired, right? 10 years, that account is done, the 403. So you don't even get to required minimum distributions, but you're going to exhaust that account just for fun. Okay. You'll still have your Roth and you'll still have your hsa and you'll have either a bunch of money that you're like, oh, I never found anything I really liked. I'm a long term renter in France. And the 250, we would have probably invested some chunk of it or you'll have something you own, but you're still living in that same. At that same level. What's your Social Security benefit at age 70?

[Rob]

At age 70, it's 4,000amonth.

[Mark]

So it's pretty close. You know what? Here's what I think. I think this is tight. I don't know what Mark thinks, but, I mean, it kind of sort of works. If everything goes great, if anything goes wrong, you are going to have a problem. And so what is the thing that could go wrong? You know, a year from now, you're retired, everything is great. You're like, oh, 3,000amonth is what I thought. But then actually we have some strange situation in Europe where there is inflation again and your costs are more like 35, $4,000 a month. The markets have collapsed, you're freaking out, and now you're like, I don't want to plow through my 403B. So that is one piece of it. The other piece of it is that you, you know, you're really young and you could live a long time. So, Mark, what do you think? Do you think this is a doable plan or is this a doable plan for the. For, for now, until we, like. What do you want to do with this? This is a. This is a toughy one for me.

[Unknown]

Yeah. I mean, I certainly wouldn't do it under your scenario. I. I would not be draining those retirement accounts if I was. I'm not saying don't do this, but if you're going to do it, the way I would do it is you sell the condo, you have those proceeds, you use that money to get to France to live, to do what you want to do for the next one, two, three years. See, if this is going to work, you leave your retirement accounts alone and let those continue to grow. That's the way that I would proceed. And then you figure out, okay, I'm going to stay in France or I'm going to go work for my friend in the Midwest.

[Mark]

I mean, look, there's the thing that I think is smarter about doing it is you can do all the research you want until you're there and living on the ground. And you don't know really what's going on until you're in it. So, I mean, I don't have a problem, though, Mark, if he wants to just do, you know, try to take four grand a month out of his 403B, you don't have to do it four grand a month, forever. You can do four grand a month for a year and see where you are and preserve the possibility, because maybe that 250, he's going to need to go move back to the Midwest. I do think for you, you're so young. If you're willing to take on this risk, you've got to decide which risk scares you more. Not having the cash or starting to reduce your 403. Is there any way that we can get you to kind of delay this for a year or two so that you can beef up that savings even more?

[Rob]

I could. I mean, my employer doesn't want me to leave.

[Mark]

Would your employer be willing to have you work remotely from France for a while? No, that was my choice there. You know, it's too tight for me. I've outlined the risks for you. If you, you know, even if you just delay till you're 59, just a couple more years, I think it really does work better in that environment. I would start stockpiling a lot more cash. And I would also find out what this wheat farm situation is all about. Because if maybe you're wrong. Maybe it's like not ten grand a year. Maybe it's twenty grand a year for all you know.

[Rob]

True.

[Mark]

We want to incorporate that. We're wimps. Yeah, I hear you.

[Rob]

I share the same concerns, but I want to make a change in my life.

[Mark]

Well, then move to the Midwest.

[Unknown]

We're not saying don't do it, but it's, you know, it's just not a slam dunk.

[Mark]

Yeah, exactly.

[Rob]

Yeah.

[Unknown]

But if you do do it, we want pictures, right?

[Mark]

Exactly. And we wanted the address.

[Unknown]

And an address. Yeah, I mean, I get it. You know, it's just like, you know, one of those things. You only live once. Right. You want to do this, but, you know there's some risk involved.

[Rob]

Yep.

[Mark]

And just you don't have kids or dependents doesn't mean there's no risk. You know, there's risk to you. I just like to have more options, and I feel like we may not. We're cutting it so close that that may rob you of some options in the future. Okay, Makes sense.

[Rob]

Makes sense.

[Mark]

All right, good. All right, gang. You ready to move to France? Gonna hang out with Rob and get in touch with us. Go to jillonmoney.com, click the contact us button. Of course. Let us know if you'd be willing to come on there. Because, by the way, if Rob sent this as an email and just sort of said, you know, all these things, I don't know, I'd have to really hear in the voice, like what's happening? So that's one of the reasons we like to hear from you. You can always change your name. Don't worry, we're cool with that. You can subscribe to us on the Odysee app or wherever you find your favorite podcast. Try to lift someone up. Change your work, change your wealth, change your life. Thank you for listening. We'll talk to you tomorrow.

[Jill Schlesinger]

For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been complex, time consuming and expensive. But imagine if real estate investing was suddenly easyall the benefits of owning real, tangible assets without all the complexity and expense. That's the power of the Fundrise Flagship Real Estate Fund. Now you can invest in a $1.1 billion portfolio of real estate starting with as little as $10 4700 single family rental homes spread across the booming Sun Belt, 3.3 million square feet of highly sought after industrial facilities. Thanks to the E commerce wave, the Flagship Fund is one of the largest of its kind, well diversified and managed by a team of professionals. And now it's available to you. Visit fundrise.com jillonmoney to explore the fund's full portfolio, check out historical returns and start investing in just minutes. Carefully consider the investment objectives, risks, charges and expenses of the Fundrise Flagship Fund before investing. This and other information can be found in the Fund's [e-mail] flagship this is a paid advertisement.

[Mark]

Every week on the MOF podcast, we share stories that are funny, strange, heartbreaking and above all, true.

[Rob]

I myself have been married for 56 years, unfortunately to four different women.

[Unknown]

It turns out the people I was.

[Rob]

Looking for all my life is what.

[Mark]

You people would call nerds. Follow and listen to the moth on the free Odyssey app or wherever you get your podcasts.