Retirement

Photo courtesy of @FriskoDude

I’ve been on a blogging hiatus for a few weeks because I’ve been on holiday in Thailand.  One of the things that amazed me about the country is that it’s not only beautiful but it is also extremely affordable (except for air travel to and from the USA!).  So for those looking to live large on a small budget, one idea that might sound impractical but in practice is eminently doable is to move to an emerging market like Thailand and practice a bit of geoarbitrage with your greenbacks.

There are many expats in Thailand that are employed as teachers, by non-governmental organizations, or retirees and they are able to live in one of the most magical places on earth for a fraction of what it would cost stateside.  Even in Bangkok, easily the most expensive habitation in Thailand, it appears that people are able to get by on as little as $1000-$2000 a month (and probably divide that in half for the rural areas).

Consider this:

You could rent a beachfront two bedroom townhouse apartment for $300-$500 a month. A maid would clean your place for $3-5 a day.  Your utilities run about $100 a month. You eat delicious Thai cooking  for $1-2 per meal.  Splurging on pricey meals might run you $5-10.  When your friends visit they can find awesome family run hotels for less than $25 a night. The only downside is that some of your costs (beer, gas, cars, groceries) are somewhat comparable to Western prices, but despite this many people are able to get by on 25% to 50% of the salary they would require living in the US.

Thanks to Living Richly on a Budget for including this post in the Carnival of Personal Finance

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Believe it or not, it’s time to start preparing for 2011.  One of the critical questions for financial planning for 2011 is what is the new 401k contribution limit going to be for your 401k or other retirement plan?

The 2011 401k maximum contribution will remain at $16,500 in all likelihood.

The IRS doesn’t offer a figure on its website, but it does mention that future increases in the tax deferred ceiling for 401k contributions will only occur due to increases in the cost of living adjustments (COLAs) .  This index is down year over year, so it’s unlikely we’ll be getting a bump up.  This means that the maximum on Roth IRA’s will also stay the same.

Below you can see the historical contribution limits:

 

10/28/2010 Update: The IRS announced last week that the 2011 401k max contributions will stay the same next year at $16,500 so my prediction played out.

 

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