STARTING OUT
THE IDEA (year one plus a few) and our story:
At this narrative start, I believe it is between 2014 and 2015 (I can’t confirm)
I thought I better start keeping track of this before it gets away from me. In actuality, it already has. I think we’ve been playing around with the idea for a few years. We worried about retirement since our mortgage at the time was underwater. Ever since we had moved from Colorado to California in 2000, we had suffered financially. We hit the height of the market and bought a box size condo, one bedroom, one bath – 650 square feet – basically all we could afford (after a four bedroom, two bath, two story house). We had seen what the market was doing in Oakland and had already lived through it in Denver. The only way we were going to get a larger place was to trade up. So repainting, re-carpeting and staging the condo, we sold it two months later for a two bedroom-two bath condo, and for more than we bought it for. Then that condo after a makeover, which sold two months later and a third which sold 9 months later. Our fourth buy in 2001 was a warehouse loft that was exactly our style and size. The problem then was that although we had qualified for the larger place, it was at the top of the market at the time and then we got hit with the taxes on the sale of the previous three condos because we didn’t know we could avoid them by having a third party handling the funds through the transactions.
Our accountant told me later that I was brilliant in real estate but a moron on taxes and he was right. Now we had a huge mortgage AND an equity we had to take out to meet the taxes. We were barely making it month to month and things kept getting added to the cards. Same story was happening with most of America. So looking down the line, we knew that retirement was not far off and no solution for affording it. All the online stories about how cheap it was to live abroad began to look like our only hope.
We kept poking at the subject, looking at a variety of countries and talking about it. The fact that our parents were gone and we had few siblings left seemed to make us feel afloat already. Then we bought a few recommended books and began to read in earnest as the next few years rolled by.
Suddenly G stated in 2013 he would retire in a year but we weren’t in good financial shape. I had stopped working when we moved to CA because it coincided with my parents becoming ill. I had not worked since. So at this time, unemployment was still high, my skills seriously outdated and my age worked against me. We’d been on G’s income alone. So, now what were we to do? The first thing that had to happen was increasing our income. We did this by renting out our loft and moving into a standard apartment, using the difference to stabilize. We were no longer hemorrhaging but nowhere near ready for retirement. The market improved enough six months later to actually sell the loft, a bit more than breaking even. We had more room to sneeze.
We still weren’t sold on living overseas permanently but just finding a U.S. place to retire was going to be difficult. G had specific requirements; he wanted on the west coast, not inland, no further than an hour from a major airport and no further south than Santa Barbara. This didn’t leave a lot to work with. It was going to be around San Francisco, Portland or Seattle. We had two small condos from other cities we’d lived in, which we didn’t want to sell and they had equity we could use. I started the paperwork on getting the equity lines set up and G worked on borrowing from his IRA. It was risky and scary but possible to accomplish.
SF was out of the question financially and so was Seattle. The areas surrounding Portland had the only possible affordable homes but its market was recovering and moving very fast. I found a furnished apartment to rent in Vancouver, WA for 30 days which was just on the other side of the Columbia River, about a 10 minute drive from Portland. Driving out alone, I had my laptop, my stack of online/MS listings and the name of a Yelp recommended realtor. I drove around both states, eliminating areas that would not be a good match for our needs before meeting with Tim, a fabulous realtor, to see a slew of new places. G joined me to see the final set. We were unsuccessful in our bids in the fast market and returned to CA. Then Tim called with one just pulled off the market that he thought would be a good match. So we again drove straight there, where we met him and toured it. We made the offer, above the asking price, it was accepted and it closed, although it was quite a torturous closing. In the end though, we had a retirement home and we managed to keep it the same way we’d kept the two condos we owned. We used a property management company who rented the house out long term and took care of its maintenance.
With that in hand, you would think our overseas exploration would be over. The only real issue was how to pay off the cards we were sitting on before G actually retired. In budgeting it out, we could manage it in about a year. If he worked two years, the second could be used to create a savings. What a novel idea. As we began to repair our financial picture, it occurred to us that we didn’t necessarily need to chuck the idea of living overseas. We were healthy, we loved to travel and there were many places that we’d love to see. To travel on a tight budget after we’d just begun to repair our financial picture didn’t seem prudent. But with all three properties rented, we were not out of pocket too much. Perhaps if we could rent a small furnished apartment in one of the many countries touted on those web stories. They were cheaper than the apartments we were renting here at home. If we got one cheap enough, we could see things we couldn’t if we were bouncing back and forth between the U.S. and overseas, staying in hotels. We could move back when we were ready since we still had our retirement house in WA. This seemed quite possible and really, really exciting.
And that is how it began.
THE FIRST THREADS
Of course, now we had a lot of research to do. Actually, that is a massive understatement. There were WAY too many blogs and forums on line. It seemed my exact questions were hard to find answers to and some couldn’t be found at all. With so many people who had done this before, why wasn’t there a manual for accomplishing this? There were great nuggets everywhere but buried under incredible amounts of information. That is when I decided that I should really write things down that we discover as we go, since this whole process is twisty and time consuming. As I write the process that we work through, I will keep a separate to-do list that is hopefully easy to follow. The narrative will serve as our own memories and an in depth reference for the bullet list of steps to take.
SO WHERE TO?
We were looking at the top recommendations on countries to live in, when on a limited income. Neither of us were interested in Asian countries. We had enjoyed Hong Kong; we loved the food, the sights and the people but the language was daunting. We were personally more comfortable in Western Europe. We had been in Portugal, Spain, France, Ireland, England and Scotland. Cuenca, Ecuador and Panama were on the top of the web discussions. If we were to see something new, these locations seemed good choices. G spoke Spanish (I say fluently, he says he can “get by”) and although I no longer spoke it, I understood a small amount and could relearn it. But those locations were isolated from other areas we wanted to see. We would still be spending a lot of money on airlines. A few years ago, I had tried to plan a trip for our 40th wedding anniversary. I had mapped out traveling through Italy by train. Train travel is a passion of ours and was an affordable way to move about in Italy. In re-examining my old notes on this, it was clear that living there would not only give us a chance to really see the country but its train system would make visiting neighboring countries easier as well. At this point we began to zero in on Italy as our destination.
One very clear piece of advice was to know what made you comfortable in your living choices. Too many people would simply move to live on less, without fully researching whether their choice of destination was right for them. We do have an advantage in that we do not plan to make the move permanent. We also won’t be so tight that we would not be able to return or relocate to another area overseas, if we later chose to do so.
We looked on the web for apartment rentals and found that they were within our budget range. Being one who can plan too much, I was pleased that we could arrange a cheap furnished apartment before we even arrived. UNTIL I read nightmares of travelers arriving to discover they were locked in a year’s lease on a place that did not match its web description. The furniture would be shabby, the neighborhood loud and they would be farther from basic stores than originally told. The blogs all said that you would find something better suited to your tastes if you did so in person. Many rentals that were their favorites simply had signs in the windows. At least we could see some that we might rent short term, while looking for a longer situation. We already were well aware that the living arrangements would be vastly different from ones we were used to in the U.S. as far as amenities but there were some things that we would want to avoid in any case.
NUTS AND BOLTS
It was a long way to determining what part of Italy we’d like to live in so we turned our attention to the process of getting there. How would we bank, what about our taxes, what were the visa restrictions, what to do with our U.S. obligations since life in the states would be on hold – were some of the many questions we were developing. We were constantly gathering articles, looking at blogs and web sites pertaining to every piece we could think of.
The first big question I had regarded the visas. The American Embassy was geared for incoming, not outgoing citizens, which was new to me and really underscored my ignorance. All my questions would have to be answered by the Italian Embassy, I thought. However, it is the Consulates which handle the visitor visas. And apparently they don’t appreciate you coming completely unprepared. I read about the Schengen Treaty which allowed us to travel without restriction for up to 90 days in the specific countries named in the treaty. Did that mean if we traveled out of Italy, say to Greece, that the 90 days started a new count? Did returning to Italy take up the 90 day count at the time we left or start over? This would make a difference on how we were to stay overseas for a large length of time. It was difficult to find a clear answer until I came across a comprehensive guide to the treaty. The 90 days involved ALL of your travel in a six month period outside of the U.S., regardless of which country you were visiting.
Clearly this would not work as a long term plan. What was needed for Italy (after checking the Italian government website) was a National Visa (NV), type ‘D.’ This was a long term travel visa suited for our situation. Not for permanent relocation or change of citizenship. The form for applying was located on the website. But the information regarding the treaty was not clear, nor was the mechanics of traveling through the provinces regarding our visa. I came up with a list of questions which would be modified each time I could answer it alone, through research online. I found that the Italian Consulate would conduct a face to face interview when it came time to apply but as I’ve already indicated, getting our basic questions answered before the appointment was recommended. In some cases people simply turned the entire process over to an agent because it was too difficult to navigate. But finding someone who did that and did it well was another issue.
Banking would be integral to our move. Having time to pull this together, we would be better off establishing an account at U.S. banks that would work for us during our stay overseas. There were clearer blogs and articles regarding the financial end of traveling. The advice pooled stated that two banks were recommended in case one account was ever compromised. Finding a bank that was fee friendly for global travel was imperative. Closing credit cards was discouraged. It was best to use them occasionally, then paying off the entire bill, just to have an emergency fund available. And a great piece of advice was to designate someone in the states to have a financial Power of Attorney; because in a crisis, you would need someone who was authorized to act in your behalf. It could be specific and limited but enough to cover some basic actions. We decided on one of our siblings that we knew we could trust to jump in, if need be but we also had a long term accountant firm that would have been our second choice. We found one U.S. bank that had a relationship with an Italian bank and was globally fee friendly, which made good sense for us. The second bank was Charles Schwab, which was used by many travelers for the same reasons.
AN INTERRUPTION
OK, a major interruption. We’ve jumped a few years ahead.
Now, as I sit down, three years have passed. Each year was to be G’s last year but it was pushed back in 6 month increments. My resolve to keep tabs on the shifting goals and to do lists, much less the gargantuan amounts of websites I visited, clearly did not occur. I did have some success in paying off debt to where we had one card with debt, at the end of 2016.
The big bang theory had nothing on the scale of events which affected our finances. Within one year, at the end of 2017, we now had a debt 7 times larger. And this time, is he really, really, really retiring? As a matter of fact, at this writing, his last day is tomorrow and I’m struggling to piece together, for this narrative, the trajectory which occurred to land us where we are.
Last note, our sights were on Italy. We took a trip to Venice to celebrate our 40th anniversary, June 2014. It was not the train trip I had originally planned. We had a fabulous time, had wonderful meals and met some incredible people. Seemed a good choice. Obviously we wouldn’t be living in a large city like Venice because of the high rents but Italy had the rail system and was central to the other countries we wanted to visit.
So what happened? A couple of pieces fell into our path, which were not anticipated. That said, you must know above all else that you have to be flexible and be able to adjust to changes.
The financial pieces which occurred were bound to happen anyway and in retrospect, it was a stroke of luck that it happened before we left the states. The house we had bought in Vancouver, WA for our return from living in Italy, was heavily damaged in a storm. As we spent funds repairing the roof and other items, we knew that we needed to sell the house. The property management company couldn’t handle that extensive work and we couldn’t have done the repair work living so far away. Then, in selling the house, there was a deadline in re-investing the proceeds in another property. The situation was favorable in that, although we bought the house during a climbing market, here, three years later, the market was at a higher point and we sold it at a profit. The unfavorable part was that we had 45 days to declare what property we were purchasing next and as I said, the market was high. Not only were there no condominiums on the market in Vancouver, there were scarce amounts available in most large cities in Washington at the time. We had picked Vancouver because it fit G’s original wish list, our budget as well, plus it had no income tax and was 10 minutes away from Portland, with no sales tax. A retirement haven. In the end, we bought a condominium in downtown Portland, with little time to spare. A state that does have income tax and as well, very high property taxes – at the height of the market, at a price more than the targeted. It cost us some borrowing but it was done and it was a self contained condominium, easily rented and managed. Other financial impacts included re-situating a relative in need and three surgeries (mine) which were not life threatening but required maintenance.
Another significant piece that played into our designs came during a trip to Europe in 2016. G had surprised me with a vacation trip to see the German Christmas markets, which we had always wanted to do. He was apologizing for delaying his retirement once again. The river cruise he picked, traveled from Koln to Basel, Switzerland and we rented a flat in Paris for the week following the cruise. It was an absolutely magical vacation. In Paris we overlooked Notre Dame and listened to its bells toll on Christmas day. G no longer wanted to live in Italy, He wanted to live in Paris. I certainly couldn’t argue because we both loved it. And it went hand in hand with the next piece. But like in any country, we would have to avoid areas that wouldn’t suit us well – like towns too isolated, too hot in the summer (inland or too far south), too cold in winter (north, near the Swiss border, northern inland).
The next piece to impact was the realization, as he was delaying his retirement again, that G was basically afraid of retiring. He felt he would not be engaged enough to escape depression from leaving his deeply loved profession. I personally had invested heavily in the preparation of a road we’d both mapped out. If he had stated this previously, there were many decisions that would never have been made. I was working on illustrating children’s books (unpublished but locally loved), having started my third and would have been fine continuing that vein. But we sold our place, bought one out of state and the third book sat languishing on a work table in a rental while I hunted through websites for the move overseas. It was possible to stop that process, try to regain our footing and find a place to own again in this spot. But for me, I had invested all of my mental energy in this idea and was not the person I was five years previously.
Compromising by moving the idea from Italy to his preferred France helped him with this fear and the fact that we would both need to learn French, as an added dimension, would keep us mentally on our toes. With a knowledge of Spanish, Spain and Italy would have had somewhat of a comfortable cushion. Without a car, we would be walking, busing or by train, therefore also physically engaged.
In other words, the where and when goals were completely changed.
STARTING OVER
The actual point where we had the heart to heart conversation regarding his fear of retirement, came in late fall of 2017. The final adjustment of a retirement date was set to March 3rd, 2018. Although we had become accustomed to the idea of living overseas, none of our research had involved France as the destination. There was much work to be done.
What had we already accomplished during the years in which the retirement was delayed? We had moved our bank accounts to U.S. overseas fee-friendly banks, had two different banks as recommended and had opened overseas fee-friendly credit cards, closing those that were not. We had a power of financial attorney to step in if we needed, in the U.S. We’d sold one of our cars. We had sold 90% of our belongings in consignment shops and yard sales as we did not want the expense or worry of a rented storage. The condo we had bought in Portland had a large storage unit which was not included in the lease to our tenant. Using a spare room where we rented, I taped out the storage unit’s dimensions and we began to pack the core items we chose to keep. If it couldn’t fit in that space, we simply couldn’t keep it. Although we did not have children, we passed any family ‘heirlooms’ worth keeping onto nieces and nephews in advance.
One last financial item we accomplished, which we had never done, was having a comprehensive financial plan done for us by a financial planner. It was one of the best investments we made to ensure that we were financially prepared for our retirement. It put our minds at ease in many ways that we were truly prepared for this journey.
Aware that from this point forward we would be traveling at light speed, we began to do absolutely everything we could do, as soon as it was possible to do it. Packing, selling, giving away, closing obligations, making a point of getting together with people that we personally knew we would most likely not see again. We’d been in the area for 18 years and when we returned it would be to another state, so we needed to start saying goodbye.
twokiddosoverseas.com 