The 3 Things Scaring Us the Most in Our FIRE Plans
Divided Thoughts on Life in PanamaThere’s a lot of excitement in the R2R household about moving to Panama next year. As you’d expect, there’s also a little fear about some of the unknowns, but nothing too crazy. As our eight-year-old daughter said to Mrs. R2R, “Remember, mom – this is an adventure. There will be pluses and minuses no matter what we’re doing.” Love that kid. I think that about says it all. She’s got the right idea and it’s the same attitude we’re all going in with. So that’s the easy part. It would also great if we all got down there and loved it. That’s the dream and hopefully, that’s the outcome. We have a vision that we’ll adjust to the cultural differences and enjoy living in a new country we’ll be able to call home. But we’re also not blind to the fact that this is going to be much different than living here in the States – extremely different. Working in our favor is that we’re a pretty easy-going family and it takes a lot to really throw us off… we generally just kind of roll with things. On the flip-side, it’s really not too bad if we decide to come back to the U.S. if we realize that it’s just not the life for us either. We’ve already thought about Tennessee as a possible U.S. retirement option. We’ve been there for vacation a couple of times and loved it there. It seems to generally make the lists as a good retirement state with no state income tax, a low cost of living, lower than average health care costs (as far as the U.S goes!), and weather we could be happy with. Although the numbers in our FIRE plans are based around living here in the States, it would still be a lot tighter than it would be while living in Panama. Regardless, we could make it work and still be just fine. So that wouldn’t be a game changer either. However, there’s a third possibility that could be a much tougher pill to swallow. What if we have a split decision? What if one or more of us love it in Panama and don’t want to leave while the other person (or two) hate it and want to head back to the States? That has the definite potential to make for a rough outcome. And the likelihood of this happening is really not that slim. Three of us going to a foreign country, leaving behind all friends and family, and changing everything in our lives at the same time… there’s bound to be some mixed opinions in this recipe! We did set a few basic “rules” to help us plan for this to a degree from the start though:
- We give it at least a year
- It’s an adventure – we have to try new things and give everything a chance
- Two out of three votes to move back wins
The Unknowns of Health CareI think this is going to be the big question mark for most everyone considering early retirement. The cost of health care in this country is insane and stupid. I don’t think there’s anyone that can disagree with that statement. No one knows what’s going to happen in the future, but I’m guessing that things can only get worse before they get better. Maybe the joint effort between Amazon, Berkshire Hathaway, and JPMorgan will either come up a good solution or open the eyes of others enough to bring about change in a different manner. Something’s going to have to give at some point. Most folks in the U.S. along with employers subsidizing health care are feeling more than a pinch right now. Something’s got to change. Or is that just me seeing the desperation of people and trying to have a glimmer of hope? I’m really not sure. Either way, the most difficult part of early retirees’ FIRE plans here in the U.S. tends to be figuring out a way to cover the costs of health coverage. The reason? Nobody knows what to expect. It’s pretty crazy. Now, our situation is slightly different than most. With our move out of the U.S., we get to “escape” from a lot of the health care fun we have here. Health care in Panama is good, but very cheap – my favorite combination! In fact, many expats in Panama don’t even have health insurance. That’s not going to work for us though. I think I’d feel a little too naked without having any coverage. Plus, we’re going to be bouncing back and forth between Panama and the U.S., especially for that first year before we apply for residency. So our plan is to get expat insurance. As long as we stay out of our home country (the U.S.) for half the year, expat insurance will cover us both in the U.S. and in Panama (along with most other countries throughout the globe). That should work great for us… it’s so much cheaper than getting insurance through the market (assuming no subsidies) and gives us full coverage wherever we’re at. However, if we decide to move back from Panama for whatever reason, we have a new fear. We’re now going to be in the same boat as most early retirees in that we’ll be subject to the health coverage in the U.S… ouch! We did include some best guesses on costs in the U.S as part of our FIRE plans. But like everyone else in the entire country, we don’t really have a clue what it’s going to be even a couple years into the future. For the time being, I’d like to think that we’d end up using a health care sharing ministry like Liberty Health Share. These programs were exempt from the Affordable Care Act (ACA) and offer a viable alternative with some concessions. But will they stay exempt? Will Obamacare be changed or repealed at some point completely? Will health insurance go up or down… unfortunately, nobody knows. And these questions can go on for the next few decades before we’re even eligible for Medicare. If we don’t end up liking Panama but prices continue to increase dramatically, we may be stuck there because we couldn’t afford to move back. So for the time being, this subject makes us pretty uneasy and is definitely one of the things that scares us about our FIRE plans.
Figuring Out Home SchoolingAlthough there’s not anything stopping us from doing so, we decided not to go after residency right off the bat when we move to Panama. The reason for this is mainly the cost. It will likely cost us between $5,000 and $7,500 for the attorney and everything we need to do to make it happen. Although we’ve encompassed this cost in our FIRE plans, we want to make sure it’s the right place for us first. Why throw down that much money with the possibility that we might hate living there and move back after a year? Because of that, we need to play by the tourist rules. And those rules mean that we can’t be in the country for more than 180 days at a time and we’ll need to stay out for 30 days to reset the clock. And just to complicate things, our U.S. driver’s licenses are only good for 90 days at a time there. Fun, right? In a nutshell, until we decide to apply for residency, we’re going to be making a few trips back to the States. Because of that, schooling our daughter for at least that first year isn’t going to work. So… we’re planning on homeschooling our daughter for at least that amount of time. The good news is that we’re experts when it comes to homeschooling. The bad news is that I’m a big, old, fat fibber and we don’t know diddly about it. We’ve already decided that I’ll be doing most, if not all, of the teaching (best of luck to our daughter!). And right now, Mrs. R2R has been digging into some of the different curriculum choices out there. Even though homeschooling is looked upon as a little less crazy than people used to view it, it’s still not something that most folks are doing. And because of that, it’s not as structured as regular schooling is. That can be a benefit in that we’ll have a lot more freedom and flexibility in our daughter’s education. But that also means that we’ll have to figure out a lot of this as we go. I’m sure we’ll manage and based on the support we’ve already been getting from others in the community who’ve done this, I’m betting it will actually be a great thing. However, it’s still a big unknown to us and we all know that unknowns tend to be a little bit scary.
Everyone’s going to have different fears in their FIRE plans as they make their way closer to their new freedom, but these are the three things making us a little uneasy right now. I’m a little weird in that I actually like change. It’s not that I get bored with the same-old, but rather that I’m intrigued to see what will happen if I change things up. So, this little bit of fear is actually something I’m Ok with… we’ll call it an adrenaline rush. Hopefully, Mrs. R2R and our daughter will feel the same on this upcoming adventure!
Is there anything in your own FIRE plans that scare you?Thanks for reading!! — Jim