2016: What a Wonderful Year

January 2, 2017

When deciding when to begin early retirement, a major concern was not running out of money before taking the long dirt nap. The flip side was running out of time, physical or mental capabilities with enough bank left to have done or bought things earlier if I hadn’t been concerned about running out of money before taking the long dirt nap. That’s circular. No worries. It motivates me to just get on with things.

The best part of last year was my heart attack wasn’t fatal. The adventure started at 2:30 one morning in June with the cliche of waking up with my chest in a vice. Banged on a neighbors door for a ride to the ER where they stabilized me before a 135 mile lights and siren ambulance ride to Bangkok. Ever been wheeled straight from an ambulance into a surgery where a squad started working the moment the gurney came to a stop? It was both a major relief and, upon later reflection, concern why they needed so many people. Five subsequent nights in the Cardiac ICU gave me a clue.

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They discharged me on the 11th day with instructions that included exercise. I obeyed.

Ten weeks later it was no big deal to do 3 miles in an hour without rests. That’s been my personal standard for minimum level of fitness for decades. That got boring, so I shortened the walk and added trips up, across, down and back over a pedestrian bridge. Built up to 20 minutes with 2 up and downs on each end before crossing. Yesterday for the first time since June, I did the hill I’ve always used before travel to get in shape for – wait for it – stairs and hills. My rule of thumb has been I’m ready when 5 laps is an effort but not unpleasant or a problem. Yesterday 3 laps met that standard. Could have done more but was concerned about sore muscles (my glutes hurt today). I’ll be ready for the Sydney Harbour Bridge climb(1) in March.

As for the money end of things, it’s great. The Social Security administration deposited my first benefit payment 3 days ago. IRA balance is 117% higher than retirement at the end of 2008 during the global economic shit storm. The non-IRA account, which had to last until I could access the IRA without penalty in 2014, should last until the end of 2017, despite some spending this year on expensive stuff I didn’t need. Details in the upcoming annual Cost of Living post.

Haven’t looked at my bucket list for years. Now seems like a good time.

(1) Top of the bridge is 440 feet above the water. Said to be a nice view. It would be fun. Then I saw the price. IS THIS SOME KIND OF JOKE?! Well… I could afford it. Then I realized it’s high adventure for some people, and thus worth it. I’ve been to 11,800′ in a hang glider, so the price-to-wow ratio of the bridge climb is unappealing. Even without that experience, I doubt I would have done it because cameras are not allowed.

 


Old Man Squinting

December 14, 2016

I’ve finished what was to be the next post. There aren’t enough photos in this blog, so here is something barely worth posting.

Aging eyes and growing cataracts means to read my phone while wearing single focus lenses, I first slide them down nose, then peer over the top. Bigger fonts on a bigger screen was the answer for when I wasn’t wearing reading glasses.

My 3 smartphones: HTC 2011, S4 2013, J7 2016:

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Believe it or not, the J7 is my fifth mobile phone in 20 years.


Australia In March

December 13, 2016

About a month ago I had the idea of spending a week relearning how to fly a sailplane. Why? For the fun of one last fling in the air. For travel with a purpose. For something to spend on with my Social Security checks, which start in January.

Australia and it’s impending summer were the obvious choice. Near Melbourne is a gliderport that’s next to a small town serviced by bus and train. However, its weeklong learn to soar programs were booked well into the months that are way too hot for me. Maybe next year.

But I wanted to get outta town, outta Thailand and outta SE Asia for a couple weeks before my TBD spring trip. The answer kept coming up New South Wales and Victoria in March, the beginning of their Autumn. So I now have a round trip ticket to Sydney for 14 nights. No plan yet except Sydney – somethings – Melbourne – somethings – fly from Melbourne to Sydney.

Maybe the weather will cooperate, allowing a day of sailplane lessons.


My Next Country, Round 2

December 8, 2016

I’ve realized I’m giving higher priority to identifying Spanish speaking countries in which to live not just because I know some Spanish, but because of my investment in learning Spanish. The time and effort it took is what economists call a ‘sunk cost’. To now learn a different language or to stick with English only would throw that all away.

We humans aren’t good at taking a loss at something we thought would pay off, hence the idiom ‘to throw good money after bad’. The smart move is knowing when to cut one’s losses. The smart move for me is to identify the countries that appear to meet my criteria the most without giving excess weight to Spanish speaking ones.

If I had to bet, next spring I’ll visit Portugal.


Oops. Spain is Back on the List.

November 27, 2016

Ah, the dubious pleasures of trying to learn something from the Internet. Didn’t help that I had a 2 spreadsheet errors plus a brain fart. <:-|  I’ll try again.

It took a bleep-load of digging to learn enough about Spanish income taxes to post a meaningful meaningless comparison. I dug some more, verifying from disparate sources. Then I plugged some realistic numbers for income (IRA withdrawal), interest, dividends, capital gains and Social Security into a calculator. I’d owe Uncle Sam about $13,000. No state tax because my domicile is in Florida.

Spanish income tax is simple enough to use a spreadsheet, but the first time I screwed it up anyway. I knew the tax was going to be more from the much higher rates and smaller standard deduction. Also knew the double taxation treaty said I’d owe Spain only the difference between Spanish and US tax laws. That’s $10,600 $8,000 more. (Lower this time because I correctly excluded Social Security.)

Spain has a wealth tax on worldwide assets. Uh, some autonomous regions have a wealth tax. Pensions (which includes IRAs) are excluded from assets. No wealth tax for me in any foreseeable future.

Only $8,000 more in taxes means I put Spain back in consideration for my next country.

The rest is for tax nerds only. I owe it all to an expat blogger in Spain who apparently knows more about taxes than most. The IRS gives Foreign Tax Credits to US citizens who pay taxes to foreign countries on income sourced there. That does me no good because all my income is sourced in the US. Spain and the US have a treaty to prevent double taxation. It says Spain may tax foreign pensions, which means both the US and Spain tax US pensions of US citizens living in Spain. How did that slip through the treaty? The US either let it or fixed it, because in the instructions for IRS form 1116 – Foreign Tax Credit is:

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That turns a US source of income into foreign source income in the eyes of the IRS, qualifying for the foreign tax credit. Of course, there is another IRS form (8833) where one must justify how the foreign country is violating the tax treaty. Pension violations must be common, as 8833 isn’t required for pension based claims. If all this is true, correct and assuming I got it right this time, then my additional income tax cost from living in Spain would be about $400. Woo hoo!

 

 

 

 

 


My Next Country is Not Spain

November 25, 2016

This is not the post you’re looking for.

I should have researched Spanish income tax first. I’ll do it for all subsequent countries. Between paying no tax in the Philippines or Thailand and owing no US taxes between 2008 and 2014, the subject was an afterthought.

It took a bleep-load of digging to learn enough about Spanish income taxes to do a meaningful comparison. I plugged some realistic numbers for income (IRA withdrawal), interest, dividends, capital gains and Social Security into a calculator. I’d owe Uncle Sam about $13,000. No state tax because my domicile is in Florida.

Spanish income tax is simple enough to use a spreadsheet. I knew it was going to be more just from the much higher rates and smaller standard deduction. Also knew the double taxation treaty said I’d owe Spain only the difference between Spanish and US tax laws. That’s $10,600 more on income. But wait, there’s more – from what they Marxistly call a Wealth Tax on worldwide assets. That’s another $7,300 for a total of $17,900 on top of the $13,000 to the IRS. My next country is not Spain.

Between researching expat life in Spain and prepping for travel in Paris, I kept reading about people who rent apartments for 3 months every year, sometimes twice a year. They love Paris or Barcelona or wherever. Seemed obvious at the time they left after 3 months because of Schengen zone visa requirements. Now I’m thinking they want to live there but would rather spend the tax difference towards living there 3-6 months a year.


My Next Country?

November 21, 2016

I’m done with Thailand. Have been for a while. Three main reasons, in no particular order. I’m bored, in need of novel simulation. It’s same-same here day after day. Second reason is given a choice I’d rather live simply in a rich country than have limited choices to spend on in a poorer one. Finally, I can handle the heat but think I’d have a better quality of life if I didn’t have to.

The obvious question, is where to. Spain sits top the list. However the difficulty of getting a long stay visa for a non-EU citizen is daunting. It’s often described as a nightmare. it starts with the usual triple threat of time, cost and the so called requirements not being the actual ones, which, of course, are subject to an official’s personal interpretation, mood and whim.

But wait, there is more. If a Spanish immigration official (in Bangkok) finds something wrong with the application, one must restart the 3+ month process from the beginning. All 3rd party documents submitted, e.g. police record, and their official translation must have been obtained in the last 3 months. Redoing them is both money wasted and an opportunity for the 3rd party to make a mistake.

There is a fifth level of hell. An immigration official in Spain could choose not to accept something the Bangkok based official approved, or he could spot an error made by the Bangkok official. Consensus on Spain expat forums is the less often a Consulate issues a visa, the more likely they did it wrong. Worst case scenario is fly home and start over. Some only have to fly home to get a quick fix.

It seems doable. Might seem less so after a few failures. There may be a plan B. Under Florida law, I’m a state resident. Don’t know if that will be accepted by the Miami Spanish Consulate. I’ll ask. Miami has substantial experience granting long stay visas.

Finally, the sixth and last circle of hell – at least as far as I know. They need to see proof of a years worth of pension (or Social Security) deposits. I applied in time to start receiving benefits Jan 2017.  The SS Administration told me that would be delayed by 4-5 months, but not to worry because the first check will cover all the months from January. I don’t think the Spanish Consulate cares. I do think getting a definitive answer would be useless because evidence of definitive answers from Spanish Immigration are few and far between. Looks like I can apply in Spring 2018 at the earliest.

Time for some Plan Cs.

Argentina has changed so much since I researched it 10 years ago. Many of the hurdles for expats are gone. A big problem is ~40% annual inflation. Recently (2 years ago?) the government bit the bullet by ending massive price subsidies on essentials like electricity. The economic shock waves are still reverberating. The country has it’s own version of Spanish. I don’t think it would make my brain bleed too much.

Then there is Mexico. Long stay is easy, cost of living is low, shipping goods from the US is easy, but then there is the narco violence. In some areas it’s so low it seems as if the cartels and government agreed those would be ‘safer’ zones because the country needs the tourist industry. Living in such a zone might be like living on an island in that boredom would ensue.

Never been to Portugal but the climate, quality of life, cost of living and access to the rest of Europe appeals. Obtaining long stay visas are relatively straight forward and knowing some Spanish makes learning Portuguese easier. Well, I do have time to learn 200 essential travel related words before going next spring…

Finally, among EU countries getting a long stay visa in France is relatively easy. It’s never occurred to me to live there, cost of living is higher than I’d like, I don’t know if I hear well enough to learn how to pronounce French. I did note the language requirement is dropped for applicants 65 and older. However, for me France is a no go for residency. Their tax treaties with other countries say one’s estate is taxed under French law. Confiscatory was the first word that came to mind