Side hustles for older expats might not be on your radar, but most countries want immigrants to come with their own income streams. While yes, other countries can be less expensive than the US, many expats find they like or need to have extra income. As an older person, what considerations should you take into account?
Retirement income is supposed to be made up of three legs: Social Security benefits, pension(s), and savings. Today, most US citizens have less than $10,000 in savings and only about 20% of workers have an actual pension plan. (Remember those?)
Even if you have “done everything right,” worked all your life, saved for retirement, many people had their savings wiped out in the real estate crash and subsequent recession. In the US, medical bills, even with insurance or Medicare, can go through your savings like a buzz saw.
Many of us Boomers, for whatever reasons, found ourselves starting over from scratch. With less energy, but perhaps greater wisdom.
Still, retirement seems like a moving target, more like a mirage.
The Siren Song of Cheap Living Abroad
The average Social Security check in the US is around $1,400. Moving overseas to a country where your retirement dollars (read Social Security) go further starts looking more and more attractive. A 2020 Yahoo! Finance article, 35 Countries Where Your Social Security Check Goes Furthest can give you some places to start.
The article lists out monthly expenses for each of the countries. Looking through the list, I can tell you that the numbers are most likely on the low side. Two years of global inflation and a hot real estate market will do that. Add in that we might consider reducing our standard of living a bit, but face it, if we can avoid sacrificing comfort, we will. The idea behind moving to another country is to maintain or even improve our standard of living for the same amount of dollars spent.
What the article doesn’t factor in is that even if the monthly expenses are affordable, there are minimum income and reserves requirements that you need to show in order to qualify for resident status. That will vary by country but it may become a factor in any future decision on where to move. For example, to qualify for a residency visa, Portugal requires that you can show income, either passive or from a remote job, of about $775 per month and reserves of approximately $8,500. (It’s tied into Portuguese minimum wage and of course, Euro to dollar fluctuations.) Italy wants you to have approximately $2,500 a month in provable income, Costa Rica was $1,000 a month in passive income, last time I looked. For some, your Social Security check will cover all or most of the income requirements. You may or may not have the reserves.
So how much does it actually cost to live in Portugal?
For context, here are the Yahoo! numbers for Portugal compared to my current numbers. (I’ve changed Euros to US dollars for the comparison. Right now the exchange rate is $1.05 to the Euro.)
Rent*: $611.94 $ 900.00
Groceries: $195.61 $ 210.32
Utilities: $112.41 $ 136.71
Transportation: $ 43.87 $ 58.89
Total monthly expenditures: $963.83 $1,305.92
*Rent is for a one-bedroom apartment averaged between a city center and out of center locations. My rent is for a two-bedroom, waterfront apartment outside of a small city. I can live in a smaller, cheaper place. For the $150 or so a month it would save me, the cost in happiness would be huge. It might also involve climbing more stairs, something that becomes increasingly difficult as you age. I was extremely lucky in finding my rental. I know I pay more than what a native Portuguese citizen would pay, but I would be paying in the $2,000 (or more) a month range for this location and size apartment in the States.
I also pay about $150 a month for private insurance (includes dental). Once you are a resident, you can participate in the national health care system for free or perhaps there are very low co-pays. However, the prevailing wisdom here is that if you haven’t paid into the system, it’s rude (and a bit skeezy) to use it. Private insurance here is inexpensive compared to the US and gives access to a less overworked network of private physicians, labs, and hospitals.
These numbers don’t include eating out, entertainment, travel, clothing, etc. Add your lifestyle choices accordingly.
What If Your Retirement Income and Savings Won’t Stretch Far Enough?
I spoke with a gentleman who went through an expensive divorce in his late 50s. He said, “I don’t have time to rebuild that nest egg. So I am building income streams that will equal the interest I would have had from that lump sum.”
Oh boy, did a light bulb go on in my head!
His strategy was creating income streams by buying, fixing, and renting duplexes. He knew real estate investing, he knew his numbers, and he had a plan. If I were still living in the States, I might do something similar.
If that is not the avenue for you (and believe me, landlording is NOT easy), you will need to create some sort of income stream that does fit your skills, abilities, and will bring in the money you need.
Very few people aspire to being Walmart greeters in their 80s. (There are some extroverts working who truly do thrive on seeing people every day.) Most of us would like to be able to relax, spend the majority of our time doing what we want, and not worry about the bills.
We may not be able to rebuild a nest egg, but we can create income streams.
Enter the Side Hustle for Older Expats
But not just any side hustle. Building parameters into your search for a side hustle can save you from false starts and perhaps even throwing good money at bad opportunities.
The first parameter is that the side hustle needs to bring in a minimum amount of money. You can do the maths and decide what that amount is. But if you’re going to work at something, make sure it is worth the doing, i.e., it will bring in what you need.
The second parameter is how much time it will take to make your goal minimum amount. You don’t want to work 40 hours a week in your retirement. Is this something you can devote 10 to 20 hours a week (or less) and bring in the money you need? Is this something that can become passive income in the future?
Third is your physical abilities. Could I stand on my feet as a cashier for eight hours a day? Maybe. Would I be exhausted at the end of the day? Definitely. Can I see well enough to drive an Uber at night? Nope. Can I lift a 70 pound package? A tray of drinks? If you’re in great shape and you see a physical side hustle as a way to stay in shape, go for it. Just remember that it won’t last forever.
The fourth parameter is physical presence. It’s for those of you who want to live abroad or who may be housebound. Do you need to be physically present to work this job? If so, it’s not for you. One of the few good things to come out of the Pandemic was the reality that many jobs can be done remotely. People are now familiar with virtual meetings and most enjoy the convenience of waist up dressing. (Just me?)
So, the object of our search is to find a side hustle that brings in the money we need, doing something we can do well and enjoy doing, utilizes one or more of our hard-earned skills, that doesn’t take up the majority of our time.
That’s a tall order. Let’s face it, we have been searching for some variation of this unicorn most of our adult lives.
If you receive my weekly newsletter, you know that I have discussed how to uncover your “#1 Thing” and make that into an income stream. In the next few months, I’ll be exploring various remote work, “side hustles” and small businesses that fit the bill for those of you who are interested in supplementing your retirement, creating a remote income stream (if you’re thinking about becoming an expat), or looking for a new way to earn real money. There won’t be any pie-in-the-sky, “press the easy button” involved. Real life doesn’t work that way. I hate that.
Here’s my first suggested side hustle. Of course it’s about freelance writing! It fits all the parameters and I know it works.
Have you thought (for reals) about writing for a living? My book, Start a Professional Writing Business, gives you an overview of the business, what you need to get started, writing niches to choose from, and what you can expect to make. Just $2.99.