Leaving our jobs to move abroad has to be one of the worst kept secrets in the world. We’ve all but sent out emails to our respective employers about the change we are about to make. Adventure and travel are much higher rungs on our ladder than climbing our way up the corporate ranks. Geoarbitrage is a natural step up in this thought progression. (How many ladder metaphors do you think I can fit in one paragraph?). Anyway, we are going to break down our costs to retire in the Mediterranean.
Geoarbitrage is a fancy word for taking advantage of lower cost of living areas. It is also a large part of our retirement plans. We are interested in seeing the world, but we are also focused on lowering our sequence of return risk. If you have no clue what the hell that means, don’t worry, you aren’t alone. The first couple years of retirement are the riskiest. This is due to living solely on your portfolio while it’s also trying to grow. The moment you retire, at least in ‘early’ retirement, your portfolio be the lowest it will ever be during your retirement years. A big market drop in this scenario can spell disaster for your retirement plans. Because at that point, you aren’t living off the growth, but the principal that you’ve invested in the past. This obviously hurts your future gains as you’re trying to get back to the starting point. Living on less than you typically would is prudent advice for the first couple of years. Or, at least being aware of this risk in case of a market pullback.
This is where our retirement plans come in. Moving abroad has been in the back of our minds ever since we found out about the FIRE movement. With our ties to Cyprus (Emily’s dad is from there and she has a significant amount of extended family there) it seems like the perfect place to take advantage of this lifestyle that we are creating for ourselves. Two of the most common questions we get are: “How much does it cost to retire in the Mediterranean?” and “Why would you want to leave the US?” Well, I’m going to try to peel back the layers of the onion on those answers here today. However since we don’t actually live there yet, you’ll just have to trust me. Or more aptly, trust the internet and my research.
Cost of Living in Cyprus
One of our favorite sites is: The Earth Awaits, it gives a breakdown of the cost of living in different locations around the world. You can filter by continent, cost, pollution, temperature, language, internet speed, and more criteria. The cost of living breaks down housing, groceries by item, internet, hell, even movie tickets if that kind of thing tickles your fancy. Our planned location in Limassol, Cyprus and our current location of Huntsville, AL are eerily similar on cost. Limassol comes out $1 ahead at $1,506. However, this doesn’t take into account that we are going to be crashing at Emily’s grandparents mother-in-law apartment. We are still paying them rent, which makes Limassol nearly $500 a month cheaper. Food is also $100 cheaper per month, so those odds are favorable.
To retire in the Mediterranean, and particularly Cyprus, means that healthcare is much more affordable. With the universal healthcare there, a visit to a regular physician will set you back $4. Similarly, a visit to a specialist is a whopping $8. That is a far cry from the health insurance crisis we would find ourselves in if we stayed in the States, and were not gainfully employed by corporate assholes. Here, even with the maximum subsidies, we would be paying $142 a month before we ever stepped foot in a doctors office.
Limassol is also much more dense, with the city only being 17 square miles, compared to Huntsville’s 217 square miles. This makes walking, biking, and public transportation much easier which will save us a bunch on getting around. On top of this, we’ve already been looking into a used (no shit…) vehicle, and surprisingly, you can find plenty of good vehicles in the sub $4k range. We are used to having cars well under this range: our ’97 Camry and our ’07 Versa
So, housing, food, healthcare, and transportation are sorted. We even punched into the budget that we would splurge a little on alcohol, meals out, and extra fuel for exploring and still came in at $1,079 a month. It’s not all rainbows and sunshine though, electronics, and other ‘necessities’ are more expensive there. So, we plan to get new phones and a new laptop before we hop the pond.
Why We Want to Retire in the Mediterranean
Keep Up With the Jones’
Here’s where the information gets a little more subjective. First off, we love the United States. We have had tons of opportunity, and a life that we couldn’t imagine had we grown up somewhere else. Accumulating wealth is easier in the US of A. However, it’s not as great of a place to maintain it. There’s societal pressure, advertising, the instagram lifestyle, and the expectation of keeping up with the Jones’ constantly trying to convince you to part ways with your hard earned dollars. There’s also an infatuation with being overworked. People constantly brag about how busy they are, how little sleep they’re getting, and how much time they spend in the office. That shit’s for the birds.
Pace of Life
We think the island life would suit us a little better, which is part of our motivation to retire in the Mediterranean. Especially in a time where our efforts are no longer focused on accumulating wealth. Life in Cyprus seems to be a little bit slower paced, except the driving…those people are maniacs. People aren’t clamoring to get to work so they can have more money for nicer things. They’re clamoring for their coffee breaks and longer lunches. Many businesses close earlier, or take a few hours for lunch during the summer months. By law, the minimum vacation time granted by employers in Cyprus is 20 days. The US does not have any laws mandating vacation time. 28 million Americans don’t get any vacation or holidays, and the average person gets 10 days of vacation per year.
Another thing is that we hate the cold. Our winters are mild in North Alabama, with a few weeks of freezing temps, and the occasional snowfall, but still. We. Hate. It. It’s also hotter during the summer in Huntsville than it is in Cyprus. So, we are getting the worst of both in Huntsville. Cyprus has an average high of 61 degrees in January. Compared to an average high of 50 degrees in Alabama (that still seems high). From June to September, the average high is 90+ in Alabama, while the same time period 86+ in Cyprus, with the average temps never getting to 90 degrees.
You might find this next part surprising, but according to “Freedom House”, an ‘independent watchdog organization’, Cyprus is more free than the United States. What does that mean exactly? I don’t know, but they’ve got numerous metrics like freedom of the press, freedom of the internet, political rights, etc. that they use to come up with a score. I’ll be damned, the ‘Land of the Free’ is getting out freed by some small island in the Mediterranean.
Speaking of Cyprus’s location, it may be surprising to hear that not only is crime lower in Cyprus than it is in Huntsville, but the life expectancy is also higher than in the US in general. We could expect to live 4 years longer in Cyprus than we would in Alabama.
Wait a second, you’re telling me that by moving we can expect to live longer, safer, healthier, cheaper, free-er?, happier lives in the warmth? I’m starting to question why we haven’t already quit our jobs and pulled the trigger on moving abroad. We are excited to retire in the Mediterranean, even though we know it won’t be a cure-all. Everyday I work, I resist the urge of going out in a blaze of glory and expletives. However…there will come a time that the burden is just too much for my mortal shoulders to bear, so stay tuned.