It’s still a very serious situation for retirees. Stories and reports of the economic crisis continue ad nauseum in the traditional news media because bad news sells. “If it bleeds, it leads,” as they say. But the future is not fixed in stone. Individuals are free actors and are able to make choices that impact their lives in positive ways. Whether they do or not is an interesting study in human nature. More on that later, but for now let’s examine the current circumstances for retirees and explore options for a brighter future given the reality that currently exists.

Ernst & Young reported in July of 2008 that three out of five (60%) middle class retirees would outlive their financial assets if they didn’t cut back on spending significantly.

Please stop and imagine this scenario for a second - a life in retirement where you worry every day, all day, that you will live longer than your money lasts?

What would you do? How would you allocate your precious resources? Would you cut back on food or medicine? Both perhaps? The thoughts of a life like this are just plain frightening.

Is the situation any better now 24 months later? The markets are certainly up from their low points, but the math is ugly when it comes to gaining back a loss. In 2007, the S&P was trading at a high between 1450 and 1550. By March of 2009 it was down to 750. Today the S&P sits at 1050, up 40% from the March low but with 45% more to climb to reach the 2007 high. It’s going to take a lot of earnings to justify that kind of rally. (Note: a 50% drop requires a 100% gain to break even).

Unfortunately, the news is probably worse long term.

Stock prices are largely governed by supply and demand. As the Baby Boomers begin to sell off their vast holdings of stocks, who is going to buy them? If the supply of shares in the market goes up dramatically, surely prices will fall once again. They must unless the next generation is: 1) willing to pay more for them, and 2) has the cash to do so. Both considerations are seriously doubtful.

The other major source of funding that people planned on for retirement was the equity accumulated in their homes. Many retirees expected to sell their appreciated home asset and use those funds for a new acquisition in a warmer climate. Whatever was left they were going to bank for additional income in the golden years. We all know what has happened to the values of most homes in North America. Retirees planning to free up cash for a retirement purchase will likely find the amount they receive disappointing and not nearly what they anticipated or needed for retirement.

This analysis of the existing financial reality for retirees is short, simple, and understandably hides many complexities and nuances. But it is generally the current state of affairs. How we deal with this reality is up to us as individuals.

My dear friend Susan Clancy, a Harvard PhD psychologist and professor at Harvard’s Business School in Central America, INCAE, says there are basically two types of people. The first kind externalize cause and blame others and outside forces for what happens to them. The second type of person internalizes cause and accepts responsibility for what happens to them. Numerous studies show that people who accept personal responsibility are far happier than those who don’t. It just makes sense, doesn’t it? When we actively make choices, we set our course for a desired outcome. Sure, circumstances can get in the way, but when we set goals and work to achieve those goals, the odds of success are greatly increased.

The bottom line is that you and I don’t have to leave our future in the hands of the uncertain and volatile real estate and stock markets. There are concrete things that we can do to take control and assure a higher quality of life in retirement
(or anytime) for less cost.

E&Y says cut back. You don’t have to. There are far better options.

Enhance your lifestyle and spend far less. Sounds too good to be true doesn’t it? The simple fact is that my wife, two daughters and I have been doing this for the past 8 years. Our quality of life is truly phenomenal living here in Latin America. It’s not just possible, it’s actual. Millions of North Americans are already living and enjoying this far better lifestyle. Right now! You can too.

Just one example is enough to highlight the incredible benefits of life “south of the border.” A full time housekeeper costs less than $5 per day. What this means for you is…

No more chores……. Ever.

Imagine never doing laundry, sweeping, mopping, washing dishes, and cleaning bathrooms ever again. Imagine the freedom you will have once released from these mundane, time consuming, menial tasks. Freedom to walk the beach, golf, bike, make new friends, dance under the stars, take up a hobby you never had time for, read, write, take an online university course, e-mail friends, create photo albums for the grandkids, volunteer several hours per week and find meaning in helping others. Just this one very affordable change will make a huge difference in your quality of life.

Can a couple live on $1000-$1200 per month? Sure. In fact we have a complete budget including actual recipes of North American meals to show just how simple this is. E-mail me for a copy of the budget if you’d like to see the reality of living a better life for less. Budgets@ecidevelopment.com

If you have $2000, $3000, $4000 or more per month for retirement, the quality of life you can enjoy in Latin America is tremendously enhanced. The Gringo Life stories written about our family’s eight years in Latin America hold a rich treasure of lifestyle observations and anecdotes for people considering a move overseas. You can find them at www.MikesGringoLife.com

Cost of living is one factor. Acquiring a new home is another. For some folks who are thinking years ahead, perhaps a home site is the easiest first step. For example, you can secure your future for as little as $29,000 for a ¼ acre lot in Belize, an English speaking country with over 180 miles of Caribbean coastline. A residential condominium 150 yards from the beach starts under $100,000. Top floor units with views of the ocean begin in the mid $200’s.

Perhaps a Southern California climate is more appealing with both beach and golf. Homes near the club house and less than three minutes to the beach by golf cart start under $100,000. A home on a golf course, hole #8 to be specific, can be yours for less than $140,000. Luxury ocean front condominiums start in the high $200’s. Title insurance is available for the ultimate peace of mind. Financing is also offered to bring these properties into the realm of affordability for the vast majority of North Americans.
The ECI properties are world class. Infrastructure and amenities are already in place as you can clearly see. But please remember to use caution when considering property ownership overseas. Latin America is the land of buyer beware. Many of the standards in North America (like hot water) are extras and not even thought of south of the border. You need to be sure that your new home will make your quality of life the one you expect and deserve.

A simple set of 15 “must ask” questions are available to you by e-mailing questions@ecidevelopment.com. If you are armed with this powerful information, you’ll make far better decisions about what is right for you. We have some excellent answers to these questions, so please be sure to hold us up the same scrutiny.

I encourage you to take charge of your life and your retirement future. Decide today that you want to spend less for a far better quality of life. If you know this is something you already want to do, e-mail us and reserve a home site or home today. If you are just starting out, request a free Informational Handbook so that you can begin your homework and the process of deciding what type of lifestyle, amenities and climate you’d like best. Handbook@ecidevelopment.com

But please, more than anything, decide to do something. Your actions are what change your future and no decision is actually a decision to let the winds of fate carry you along. We owe ourselves more than that, don’t we?