This week, I will be writing a series of posts on retirement, something I’m trying to sort out while I make some career decisions.

The tricky part about retirement planning is that none of us has a crystal ball to see into the future. I may want a little two bedroom condo and a motorcycle, but I’m assuming that a) I’ll be alone; and b) I’ll be healthy. I have no way of knowing how long I’ll need to have money for because I don’t know when I’ll die.

According to Statistics Canada, as of 2009, the average life expectancy for a woman in Canada was 82 (it varied by province, but the highest was 84). When I plug my family history and lifestyle numbers into this life expectancy calculator, it tells me I may be able to expect to live to 103. 103?!? Well, that’s a little longer than I was planning for. Good to know. When we ran Bruce’s numbers, they were higher than I expected too – he should live to about 90. That’s 10 years more than I really expected. I’m happy, especially if it actually happens. But it means we should plan for it.

So that means, even if I retire at 65, I need to plan to fund my retirement for 38 years. That’s a long time. Hmmm… I may need to revise my planned retirement date. I’ll work on that decision tomorrow.

So if I want a two bedroom condo (or apartment, I’m not fussy) in a warmer location than I currently live, how much will that cost, and what services do I want to ensure are available?

Location, location, location

The Canadian city with the warmest average temperature during the winter is Victoria, British Columbia. Using a basic cost of living comparison calculator, living in Victoria is approximately 20% more expensive than living in Winnipeg. The biggest difference is housing. Based on a couple of online retirement calculators I’ve used, we need far more money saved than we are on track to have to live in Winnipeg, never mind Victoria. We will probably require at least $6,000+ per year of pre-tax income to maintain the type of lifestyle we have now. At this point, at our current rate of savings, we will run out of money before I turn 80. That’s not good.

So Victoria may be out. I would love to live in the southern United States – Nevada, Arizona, Utah, New Mexico. Except… I’m Canadian, and getting permission to love there permanently is difficult, time consuming, and expensive. Living in the US 5 or 6 months a year like my parents do is more realistic, but health insurance is a major cost. We’ve pretty much ruled out this option without even running the numbers.

At 40 years old, if I’m pretty sure we can’t save as much money as retirement calculators tell us we need to fund the type of retirement I’d like, what do we do?

It all comes down to location. I’ve started researching retiring outside North America. Our retirement money can potentially stretch a lot farther if we are willing to move to a country like Costa Rica, Nicaragua, Ecuador, or Belize. (There are lots of other options too, but right now we are focused on Central and South America). At first glance, some of these countries offer everything we appear to be looking for, at a price we can afford. How much they cost depends on which country, which city, and what lifestyle you want. Coming later this week, a whole post looking at different options and countries, and exploring what it would mean to retire to another country.