Living in Peru

[Kuttappan]

Lol........

[Lima Busy]

I read recently that it is expected that 10% of “babyboomers” will retire overseas in the next 15 or so years. Within that figure (based on my observations) a large percentage will be single males.

In my own case (56/male/ER'd) it made sense financially to move to a city similar to NYC, but with better climate and much lower cost. I had not planned on getting married and having children again but sh*t happens!

In the USA (I planned my retirement,managed my portfolio) and otherwise spent an inordinate amount of time pondering my future. After my divorce/dot com bubble/etc. I changed my priorties and decided to forget about all that and “live life” every day and collect “experiences” instead of “dollars”.

In the back of my mind (having maxed out SSI) in my thirties (I stopped paying) and new that the benefit would be there for me at 59 1/2 (now 62). I also mistakenly assumed that if I died with a “young widow” she would collect “my benefit” for the rest of her life and my children under 21 (½ benefits).
This is a popular (urban legend) here in SA, that has benefited many an old codger!

The subject came up over coffee at a local cafe recently and I had to do further research!

Much to my “chagrin” I learned that my son can only collect until 18-19 and my wife is not entitled to my “benefits” until she is 60 (another 30 something years)! With a few exceptions.

GOTTA LOVE EXCEPTIONS!

I learned that my Son is entitled to ½ (my full) benefits when I turn 62 and my wife as a caregiver also will start collecting half (until son is 16). If I file and suspend (waiting till 70) to collect my full benefit, I will essentially be getting my (age 66 benefit) for 8 years (starting at 62) when it runs out (for wife & son), leaving me with a much higher benefit for future years as well as dramatically increasing my wife's survivor benefit.

ALL GOOD SO FAR!

The next problem is my wife will only be 40 (when I am 70) and it will be 20 years before she can get either a spouse or survivor benefit.

HMMMM!

GOTTA LOVE THOSE DAMN KIDS!

Yup, the answer is to have another child when my son approaches 16!

SO, WHATS LOVE GOT TO DO WITH IT???????

[Lima Busy]

I use Skype and live video feeds from there. No problem.

Suerte!

Polvo

Live video feeds? your watching Cholotube for chrissakes!

[Lima Busy]

I have a girlfriend + maid. Both who live with me.

Sly

I have a wife and 20 year old twins who live with me so I probably rate my life as 8.5/10.

You need to add health insurance and ALCOHOL to that my friend! Unless you gave up the whiskey!
suerte,
LB

[El Jugador]

Thanks Sly, y Polvo.
I VPN into my work everyday so need a fast connection.

[Polvo]

For anyone who knows me...Knows I do not leed a typical lifestyle......
My costs
USD Soles @3.2
Rent $1,600
Food $800
Maid $250
Elect $100
Dinners 2 x week x 3 persons $700
Taxis $100
Personal $600
$4,150 per month S/. 13,280

Sly

And all the free pussy you can eat!!

Suerte!

Polvo

[Polvo]

if any of you guys work remotely from your laptop from cafe z or another location near miraflores, can you run a test of the internet speed. at http://www.speedtest.net/. not sure it will work. works fine in the us.
just was curious what type of upload/download speeds you are getting compared to us.

thanks.

i use skype and live video feeds from there. no problem.

suerte!

polvo

[Sly One]

903 and 89 kps distance 1150 miles.

sly

[El Jugador]

if any of you guys work remotely from your laptop from cafe z or another location near miraflores, can you run a test of the internet speed. at http://www.speedtest.net/. not sure it will work. works fine in the us.
just was curious what type of upload/download speeds you are getting compared to us.

thanks.

[Lima Busy]

LB,

I was curious to know what your opinion is regarding the different types of visas and having the freedom to come and go as you please.

I read somewhere that if you have an investors visa ( you invest $10,000 or more in peru) you are audited everytime you leave the country for possible leins or debts owed to people. Is this true ?

Also do you think if I butterflied from place to place(in SA) that it would be less of a hassle then applying for a visa in each place? How realistic is it to think you can do this for years?

I ask these qustions because what if someone moves to lima and decides it isn't the place for them. Would I need to undo what has already been done or can I just leave without notification ?

I think the comments regarding the "risks" associated with living in lima are valid. If an earthquake ever hit lima it would be a total disaster...far worse than hurricane katrina. Would a tsunami be able to reach miraflores ie. parque kennedy from larcomar? I can see that happening in san miguel for sure.

A lot of questions to answer in one post!

Visa's
Many types but the only ones that would interest most retiree is "Rentista".
You can qualify with a guaranteed payment of $1,000 per month from a pension/trust/SSI/disability payment.

"investor" this requires starting or investing in a company ($25,000) with a business plan approved by Peru and requires you create 5 jobs in the first two years.

It is better not to invest for residence as there is no "tax treaty" with the USA and you will trigger a 30% tax on "WORLDWIDE INCOME".

Notwithstanding, In order to leave the country like a "work visa" you will have to submit a form showing all taxes are paid. Debts like mortgages are different (I have) and do not require a form.

You only need a "turist visa" to move around from country to country. Different regs in different countries, ex. in Peru overstaying your visa incurs a fine of one dollar per day in Colombia it is $200 dollars a day. I know guys that have been living in Lima for 20 years on tourist visa's as they work all over the world but live here.

Once you do settle down you do not want the hassle of living on someone else's schedule!

If you do not like living here and have not bought anything, you leave whenever you want and only risk your apartment security deposit (2 months).

Tsunami risk is not in Miraflores/Barranco/etc but in the beach areas below the cliffs and the popular beach towns just south of here were we all go on the weekends.

Quakes, the big one!
Experienced many here in Lima with only minor damage and we had an 8.2 in 2007 100 miles away that rocked us pretty hard. New buildings in the upscale area's are designed to take a 8.0 direct hit. But this risk is the same here and in Chile,Ecuador,Colombia and NYC, I might add.

[Artisttyp]

LB,

I was curious to know what your opinion is regarding the different types of visas and having the freedom to come and go as you please.

I read somewhere that if you have an investors visa ( you invest $10,000 or more in peru) you are audited everytime you leave the country for possible leins or debts owed to people. Is this true ?

Also do you think if I butterflied from place to place(in SA) that it would be less of a hassle then applying for a visa in each place? How realistic is it to think you can do this for years?

I ask these qustions because what if someone moves to lima and decides it isn't the place for them. Would I need to undo what has already been done or can I just leave without notification ?

I think the comments regarding the "risks" associated with living in lima are valid. If an earthquake ever hit lima it would be a total disaster...far worse than hurricane katrina. Would a tsunami be able to reach miraflores ie. parque kennedy from larcomar? I can see that happening in san miguel for sure.

The $8000 a year travel money would be a must have. I would need to get out of there for at least 3/4 months a year. Then there are problems that arise with holding on to your apartment etc.

An ideal situation would be to spend the winter months in the DR but the DR has serious issues as well. The number two leading cause of illness in the DR is "leptospirosis" which is an illness aquired from food tainted with rat [CodeWord140]. I have no idea what number one is.

All these places I am considering have problems. Ideally I would rather be in america cerca 1970's even the 80's. Although the older I get the more I respect time. I'm tired of being limited here in the USA. Why waste time. Why not venture out of your comfort zone and live instead of hunkering down in the US just trying to get by. It's depressing.

All of you that live in foreign countries took a bold move and I have alot of respect for you.


Vick Picks - I would say colombia is similar to argentina. It can be very cheap or very expensive depending on where you go. This summer I was in medellin with a 1600 to $1 exchange rate then a few months later at 2400. I don't have to tell you that the 2400 exchange rate made for a much better time. How awful would it be to move somewhere then have the same problems as you had in the states. These places change at the drop of a dime.

The 1600 exchange rate gave me the lifestyle that I had in the late 80's here in new york...meaning I could eat out for $10/12 maybe see some movies hit some budget pfp but it is far from the glamorous lifestyle that we all dream of. Take into account you need to start from scratch all over again friends lovers jobs hobbies etc.

I think one needs to see what comes out of this economy. Anything can happen.

[Lima Busy]

LB, thanks for all the effort you put into this fine report.
Once you meet the income limits then the key, and it is a huge key is the the value of the dollar if your income is US based.Right now it is at a very good exchange rate.
i have been looking at the same thing in Colombia, and the dollar is strong there also. Maybe some gold would help if the dollar gets weak?

Thanks,
The problem I had was putting the excel worksheet into ISG and so I realize it is difficult to read and make sense of.

If your income (SSI or Pension is US based) than the value of the dollar relative to the currency of the country you live in is of concern except for dollar based economies such as Ecuador or Panama.

If you have liquid assets of ($800,000) and can generate a LT return of 5% + inflation in your adopted countries currency, you could maintain this lifestyle as well. If you only had $700,000 you could buy an apartment (100k) and only need 600k for the same lifestyle. The caveat being by buying, you take on more political risk and unlike Colombia there are no restrictions on taking your money in and out of Peru. (subject for different discussion)

It is obvious that the Dollar will lose it value (as will most fiat currencies)in the future and a certain percentage (normally 10% is recommended) should be in the physical asset(gold). Personally I would go much higher but now you run into storage risk and typically 6-10% transaction cost.

As the worlds fifth largest producer of Gold this has shielded Peru somewhat from the global recession (2008 official growth of 9.8%) and Jan 2009(annualized 5.6%) before the effects of the $3 billion stimulas.

Remember that real estate prices for now are in Dollars(no official reason) and many of us are perplexed as to what would happen to R.E. prices if the dollar lost it's value.

This is a topic of great interest to those considering retirement. My thinking runs counter-intuitive to the others as I believe if prices do not rise (as the dollar falls) then the market will refuse dollars and force conversion into Soles.

6 years ago when I decided to retire here (the economics) were far simpler. We new R.E. in the USA was peaking/ stocks were in a bull market/oil and other dollar denominated commodities were booming as the dollar weakened.

We new Peru R.E. was cheap by any measure (did not know it would double so soon) and by most measures it is still undervalued.

LB

[John Gault]

I am pretty sure that the majority of members are “baby boomer's” and many are married. If you do not fall into the first category or if you also fall into the second category, DO NOT READ ON!

Being a single baby boomer looking towards retirement in any of the developed economies is not very appealing unless you fall into the Multi-Millionaire category ( 3+ million). Likewise if you are destitute or have limited savings and no pension or Social Security, your choices are pretty much limited to Haiti!

If on the other hand you have worked hard/invested wisely/saved judiciously and were fortunate enough to dodge the recent financial bullet, Americans have choices from Mexico to Chile. While the bulk of the retired Americans will be driving around there 55+ communities in there golf carts with there 55+ wives, how will you fit in?

I have never seen a discussion “Single Retirement” and this is probably as good a place as any!

I retired in Lima at 49 after getting “laid-off” from my former retirement in NYC at 37. Subsequently I got married and had a son and am now Semi-retired for the foreseeable future!

People will tell you Lima,Bogotá,San Jose,Panama City or maybe even the DR. I will only address Lima as it is my town and others can feel free to discuss other countries in their appropriate threads.

Many factors come into play Weather/Cost of Living/Quality of life/Safety/Political climate/Medical and Dental care. Climate change is an issue as well and it has and will continue to affect you (where ever) as it effects us. Lima is experiencing cooler summers and it is starting to rain occasionally. CAM will experience much more frequent and severe hurricanes and Jungle areas more flooding severe thunderstorms etc.

Lima is susceptible to earthquakes and tsunami's along with any country on the pacific coast and Volcanic activity can effect many countries in the region as well.

In many large cities “having a girlfriend or 3” is not a problem if you are financially secure/active/attractive/personable and so it is with Lima (probably more so with 9 million plus people)!

If your reading this you have more than likely been here and know if a coastal desert city is for you. You probably are aware that health/dental care is top notch if you have PRIVATE INSURANCE and has a reputation for the “Best food” in all North and South America.

But what about money? I have seen guys try to live here on $2,000-$10,000 a month and the closer you are to $2,000 the less chance you will have the quality of life you require. I did some rough calculations below and $3500 a month is a good number if you can live with the following.

A nice non-oceanfront apartment 5 min walk to town or the beach add $800 more for oceanfront.
A yearly travel budget of $8,000
a very good “international coverage” health policy.
Other assumptions:
Sol/dollar 3/1
Three months security $2,000
Furnishing $8,000
Country club member $6,000
Car $20,000
Starting capital = $15,000-$40,000

Monthly budget
Rent 2100
ELectric 30
Gas 30
Cable^Internet^phone 220
food cost break & dinner 400
Maint & tax. apartment 250
housekeeper 2x weekly 150
Health Ins 700
home ins 50
Cell phone 60
Menu-5 times week 200
restaurant 700 2x per week
Misc.Dates/drinks/movies 3000
Dental 100
Country club dues 300
travel 2000 4 x per year
presents 300 Liquid Assets
5% return
Total expense/ Soles 10590 127080 450000 800000 surplus
Dollars 3530 37112

$3530 40000 287.5
SSI or pension payments$1500 $18000
shortfall $2030 21712.5 22500 787.5



If you have a pension/SSI of $1500 a month then you would need $486,000 in liquid assets (400,000 after initial expenses) earning 5% to accomplish this. If you have no pension or are retiring early you would need $800,000 liquid assets to accomplish the same.
Suerte,
LB

LB, thanks for all the effort you put into this fine report.
Once you meet the income limits then the key, and it is a huge key is the the value of the dollar if your income is US based.Right now it is at a very good exchange rate.
i have been looking at the same thing in Colombia, and the dollar is strong there also. Maybe some gold would help if the dollar gets weak?

[Sly One]

For anyone who knows me.

Knows I do not leed a typical lifestyle.

But I still concur with Lima Busy.

I have a girlfriend + maid. Both who live with me.

I live in a rented 3 bedroom apartment overlooking the ocean.

On a standard of living scale I live about an 8/10 very good.

My costs
USD Soles @3.2
Rent $1,600
Food $800
Maid $250
Elect $100
Dinners 2 x week x 3 persons $700
Taxis $100
Personal $600
$4,150 per month S/. 13,280

Sly

[Lima Busy]

I am pretty sure that the majority of members are “baby boomer's” and many are married. If you do not fall into the first category or if you also fall into the second category, DO NOT READ ON!

Being a single baby boomer looking towards retirement in any of the developed economies is not very appealing unless you fall into the Multi-Millionaire category ( 3+ million). Likewise if you are destitute or have limited savings and no pension or Social Security, your choices are pretty much limited to Haiti!

If on the other hand you have worked hard/invested wisely/saved judiciously and were fortunate enough to dodge the recent financial bullet, Americans have choices from Mexico to Chile. While the bulk of the retired Americans will be driving around there 55+ communities in there golf carts with there 55+ wives, how will you fit in?

I have never seen a discussion on “Single Retirement” and this is probably as good a place as any!

I retired in Lima at 49 after getting “laid-off” from my former retirement in NYC at 37. Subsequently I got married and had a son and am now Semi-retired for the foreseeable future!

People will tell you Lima,Bogotá,San Jose,Panama City or maybe even the DR. I will only address Lima as it is my town and others can feel free to discuss other countries in their appropriate threads.

Many factors come into play Weather/Cost of Living/Quality of life/Safety/Political climate/Medical and Dental care. Climate change is an issue as well and it has and will continue to affect you (where ever) as it effects us. Lima is experiencing cooler summers and it is starting to rain occasionally. CAM will experience much more frequent and severe hurricanes and Jungle areas more flooding severe thunderstorms etc.

Lima is susceptible to earthquakes and tsunami's along with any country on the pacific coast and Volcanic activity can effect many countries in the region as well.

In many large cities “having a girlfriend or 3” is not a problem if you are financially secure/active/attractive/personable and so it is with Lima (probably more so with 9 million plus people)!

If your reading this you have more than likely been here and know if a coastal desert city is for you. You probably are aware that health/dental care is top notch if you have PRIVATE INSURANCE and has a reputation for the “Best food” in all North and South America.

But what about money? I have seen guys try to live here on $2,000-$10,000 a month and the closer you are to $2,000 the less chance you will have the quality of life you require. I did some rough calculations below and $3500 a month is a good number if you can live with the following.

A nice non-oceanfront apartment 5 min walk to town or the beach add $800 more for oceanfront.
A yearly travel budget of $8,000
a very good “international coverage” health policy.
Other assumptions:
Sol/dollar 3/1
Three months security $2,000
Furnishing $8,000
Country club member $6,000
Car $20,000
Starting capital = $15,000-$40,000

Monthly budget
Rent 2100
ELectric 30
Gas 30
Cable^Internet^phone 220
food cost break & dinner 400
Maint & tax. apartment 250
housekeeper 2x weekly 150
Health Ins 700
home ins 50
Cell phone 60
Menu-5 times week 200
restaurant 700 2x per week
Misc.Dates/drinks/movies 3000
Dental 100
Country club dues 300
travel 2000 4 x per year
presents 300 Liquid Assets
5% return
Total expense/ Soles 10590 127080 450000 800000 surplus
Dollars 3530 37112

$3530 40000 287.5
SSI or pension payments$1500 $18000
shortfall $2030 21712.5 22500 787.5



If you have a pension/SSI of $1500 a month then you would need $486,000 in liquid assets (400,000 after initial expenses) earning 5% to accomplish this. If you have no pension or are retiring early you would need $800,000 liquid assets to accomplish the same.
Suerte,
LB