Everybody's situation is unique but there are a lot of us in the same boat...more or less.
This article appeared in my Google news this morning about a couple struggling to get by who received some advice from Dave Ramsey, a well known financial advisor.
Here's the set up: ¨One 70-year-old woman recently called into a podcast seeking advice for her dire savings situation. Still working and with no clear plans to stop, Janice from Oklahoma City laid out her economic state for the host of The Ramsey Show, a financial advice podcast. Basically Dave says sell your house which is worth $250,000 and a fun car (a roadster worth $10,000). They would still have a paid for truck. They also had $25,000 in cash. Use that money to pay off the house ($27,000) and the rest of their debt including rising medical debt. By selling their $250,000 home and downsizing to a condo, which he estimated would cost $100,000, they could pay off their debts quickly. According to Realtor.com, there are a number of condo options available in Oklahoma City for less than six figures.¨
Getting rid of debt was key, Ramsey said. “With no debt at all, you can make it,” he said. “It’s not gonna be pretty, but you can make it.” Amen !
With no debt, you can get by on a fairly small amount of money each month. That's my first advice to everyone at whatever stage of retirement planning you might be. Have a strategy that gets you with NO DEBT by the time you are in your late 50´s or 62 at the latest.
Hopefully, like this couple you will have your home free and clear.
What I don't like about Ramsey´s advice is he doesn't mention leaving the US for a lower cost of living country where you can live a higher standard of living than you are now.
Ramsey suggests selling the house and buying a $100,000 condo. I looked at Realtor.com and yes there are a number of condos in the 100k range, with 800 to 1.100 SF and some look nice. If they sell for $250,000 with the other sales and cash they have, they are going to have over $100k to buy in a country like Colombia where you can buy a brand new apartment (condo) for about $100 to 150k, same size.
Or better yet, the rental market in the US is hot. Why not rent that $100k condo and rent something similar or bigger in Colombia ? Keep the extra $100k+ in a money market or other investment fund in the US.
Then, start getting your Social Security. It's a married couple. They should be getting enough to live BIG in Colombia.
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