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When is enough, really enough?


Paul

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Yes IPLI you are correct in that there is no specific rule from Centrelink regarding self funded retirees and where they live. However, the ATO does have say in how much tax non-residents of pay on any income derived from an Australian source.

 

There was a previous thread on this about a month ago. Basically there are a number of 'tests' you have 'pass' regarding your 'residency' before you can claim the tax free threshold (currently $6000 pa). If you don't pass these tests, you don't get the tax free threshold, PLUS pay a higher % tax (I think 29% rather than 16.5%).

 

Be careful its a very grey area indeed and totally ambiguous.

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I've been here over 2 years now. I sold everything I owned back in the states because I wanted to be here when my son was born, and I am not comfortable with a long distance relationship, I want my wife next to me at night. After 2 years, I realize that I cannot earn anywhere near enough to survive comfortably here, I am tired of not having the quality of food I am accustomed to, I am way to young to hang out, drinking with the other foreigners and getting fat, my son deserves the opportunity's that America has to offer, and getting my wife US citizenship now while I still have a few bucks will allow us greater flexibility in the future. I never thought I would say this, but bring on the winter! I am going straight up to the mid-western area, where they measure the snow in meters. I look forward to feeling -40 below on my skin, after dealing with this crap humidity. I guess I am just not old enough yet to really appreciate this climate. I don't think I will ever be that old. I still have 20+ good working years left in me, so I am off to the land of milk and honey, to grow my own money tree. I don't regret one minute of the past couple years, If I had to do it over again, I would change nothing. This has really been an eye opening experience for me, to say the least.

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I am 36 and after visiting Cebu,i have decided that as soon as my small debt is payed off i will be engaging in a 6 month holiday,6 month work routine via australia to Cebu,till i am old enough or saved enough to stay in Cebu longer.

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Yes IPLI you are correct in that there is no specific rule from Centrelink regarding self funded retirees and where they live. However, the ATO does have say in how much tax non-residents of pay on any income derived from an Australian source.

 

There was a previous thread on this about a month ago. Basically there are a number of 'tests' you have 'pass' regarding your 'residency' before you can claim the tax free threshold (currently $6000 pa). If you don't pass these tests, you don't get the tax free threshold, PLUS pay a higher % tax (I think 29% rather than 16.5%).

 

Be careful its a very grey area indeed and totally ambiguous.

If you're talking about super, then there is no requirement to stay in Australia. The only exception would be if you had a Self Managed Super Fund, though not sure of the details. As for the Australian Age Pension; yes, you normally have to have lived in Australia for two years continually prior to moving overseas (for it to become portable).

 

Andrew

 

Geez, I'm confused now. I thought there was only super here. The reason why I'm not that in the know about this is that even though I was born in OZ I lived over seas most of my life and only came back here a few years ago. So I really need to understand all this, any websites etc that will explain everything. I also have only ever had one job here for 3 months, all the other time I have been self employed. I only have around $5,000 in my Super.

 

What I thought was the deal is that I would be entitled to my Super (my $5,000 and whatever else I had deposited plus interest) when I'm 65. Also when I'm 65 I'm able to get a pension, what I thought is about the same as the dole? But if I lived in the Philippines I would have thought I would not be able to get the pension part!

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Superannuation in Australia IS very confusing, add to that all the tax rules that apply to super and you really need an accountancy degree to understand it. If you want good accurate advice you should see a registered financial adviser, however independant advice is not cheap.

 

If you're a member of an industry sperannuation fund and your employer is paying the super guarantee levy on your behalf (currently 9% but is likely to up to 12% in the near future), then some of these funds provide free advice to its members. From what you say this seems to be your situation but check with your payroll office to see whether it applies to you.

 

I'll have a go at explaining the broader picture on Australian superannuation and maybe address some of your issues.

 

Depending on when you were born you are able to get access to your super contributions (employers + your own contributions) when you are over 55 (born before 1960 - the age limit goes up retrospectively after that date) and not gainfully employed. That's important because your can't get access to these funds if you are still working in Australia.

 

Additional to that is the Australian Age Pension which is available to most Australians when they reach 65. Kenny seems to be the expert on this.

 

But they are two separate sources of retirement income, your own super plus the age pension. And it depends on your retirement payout on whether you are entitled to receive the full Age Pension as its income and asset tested.

 

There are a myriad of other issues, eg tax on super, which will only confuse you further for the moment.

 

I hope that explains it enough for you to understand the basics.

 

Cheers

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Maybe Next Yr

What a great topic ... it's right where I am, when is it enough? I'm close to retirement and close to finishing my commitments in the states (basically less than a year left on paying off my ex's house and funding my youngest's college). After those commitments, I have enough to retire in PI ...$2k+ from SSA without even touching any savings ... I'd really love to be in PI with my sweetie, who I've visited 4 times in the past 1 and 1/2 years ... BUT the following are my personal thoughts: ;)

  1. It's hard to stop working, it's all I've know for 36 years ... often keeps me sane
  2. I'm making good dough and the job is flexible (I'm basically my own boss, as long as I deliver what is needed, which I often define myself ... but the stress probably isn't healthy for me)
  3. I love the hot weather, (but hate the mosquitoes)
  4. Haven't found the right spot yet ... Cebu is pretty dirty
  5. Not sure if I know what I'd do with myself ... no real hobbies, except exercise ... spent most of the past decades raising the kids (suburban dad).
  6. If I didn't like it and decided to come back and live in the states, then I might need a few more bucks than I have stashed away to live the lifestyle I'm accustomed to.
  7. If most of the expats that I might find are like many of the men on this form, I'll be in good company, that's for sure.
  8. Found a great lady, she might be the one for the rest of my days!
  9. Haven't made any filipino friends (except here in the states) beyond my girl's family.
  10. Pickup and leave my previous life behind ... it's gonna' take some balls to do it! :yahoo:

Anyway, I'm thankful for this forum ... helps me sort out some of my thoughts about this topic!

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dc3driver

Paul's topic is aptly named. Please read this book if you have the chance if you have any doubts about retiring. Their thesis is "When is enough enough"? When will you have enough to reach financial independence & be able to do what you want? A great read & confidence builder.

 

Your Money or Your Life

Transforming your Relationship with Money and Achieving Financial

Independence

Author: Joe Dominguez and Vicki Robin

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Rocketman

I'm in a similar situation as you PJD. Spent several years thinking about, then planning my retirement and will do so next month at 53. I'm at ease with my decision. The biggest motivator is the realization that I only have 1 life - I know, I'm a bit slow. I love my work and am naturally at the peak of my earning potential. Yup, I could make a lot more and save, but for what? Every year that I wait is 1 less year to enjoy life the way I want to do it now. I've been single for a long time and hope for that 1 woman I can enjoy life with. I'll bet many, if not most expats feel the same.

 

I also love the Asian culture so 1 of my hobbies will be to travel whenever and wherever I choose and with good company. I will learn to scuba dive, work with an orphanage, learn the language, learn to play guitar, and play golf with a group I've met through the years of visits. It really helps to have locals as friends. I'm sure I'll find other things to do once there, but I do wonder sometimes how it will be to go from a very busy life to retired in the RP. I can't wait to find out!

 

When it comes to money, I know I'll be fine, but there's always a question and many "what ifs." Yeah, coming back home might be difficult to have the same life BUT what traveling Asia has taught me is I don't need all of the things we hold important. Although those things were good motivators for me during my working life and I wouldn't have wanted to do it differently.

 

When I remind myself that I only have a limited amount of years left, whatever that number might be, I'm at peace with my decision and can't wait to get on the plane December 19!

Edited by Rocketman
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  • 6 months later...
Paul

Just thought I would bump this up as a reminder...

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Panzertotem

In 2008 my house in Oklahoma burned down in a wild fire while I was in Iraq. I had insurance but it didn't really cover much. When I came home , the only thing I had was a 1/4 lot with a slab and my Harley that I had in climate controlled storage. Guess what I did...I took a month of leave, put most of my gear in the storage unit, got on my bike, and rode from Oklahoma City to Bangor, Maine then to Las Vegas and back to Oklahoma city. After 3 weeks on the road, I rented an apartment, bought a bed and a couch, and never looked back.

 

I believe that "stuff" becomes a prison for people. The fear of loosing their "stuff" keeps them from living their dreams. I lost everything to that fire, but I have come to realize that I also gained my freedom. I retire in 1462 days, and on that day I just might light a match and walk away. I'll bring my Harley with me though.

 

 

 

feck YEAH DUDE!!! Thats what I'm talkin about!!!!

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SkyMan
It's hard to stop working, it's all I've know for 36 years ... often keeps me sane
You get over it. Trust me.
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  • 4 weeks later...
zulethe

I too can attest to the stuff doesn't equate to jack theory. In 2008, I had just gotten divorced and was literally out of my mind.

 

I started to hit the bottle heavily and lost my GS-11 job with the VA but thankfully preserved my good record.

 

I threw away everything that I couldn't sell within a couple of weeks and left to teach English in Korea. It was liberating to say the least and not one day goes by when I miss my "stuff."

 

The only reason I came back to the states was that there's a new (since 2009) GI bill that pays for one's school as well as a monthly stipend.

 

I'll finish my masters in social work next year and will probably end up in the Philippines while working a few months of the year in Korea.

 

Unfortunately, my rich mother just bought me a brand new car with cash so now I've got more "stuff" to worry about.

 

At least we are fortunate enough to know what it's like to have stuff. I know that the less I have, the less I worry about and the more I focus on just enjoying life.

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shamgod41

I just want to state clearly what a lot in this thread have implied but not said explicitly: Early retirement is great if you stay active and productive. Some foreigners retire in the Philippines and sit around day after day boozing with other foreigners.

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