Retire Early, Move to New Zealand and Enjoy Life to the Full

Americans who have grown weary of George Bush’s big government conservatism — and who will soon grow weary of Barack Obama’s even bigger government liberalism — are beginning to look for greener shores when considering early retirement.

One possibility: New Zealand.

New Zealand is a stunningly beautiful South Seas paradise, about the size of California, with only 4 million mostly-friendly people who speak English, are polite to a fault and who welcome retirees with a little money to invest.

Best of all, the Kiwis even have a special program that allows new immigrants to forego taxes for the first four years — and taxes after that are lower, on average, from what Barack Obama has proposed. Americans living overseas are, of course, taxed on all worldwide income regardless of where it originates — although the first $87,000 in foreign sourced income is not taxed — but early retirees can use a variety of strategies to reduce their tax burdens.

To get an idea of how Kiwis themselves view early retirement, here is a letter to the editor from a New Zealander contemplating a “sea change” to the beach:

I am 60, my wife is 62. We have a home in Auckland and a holiday home down at the beach. Recently we have been thinking of getting out of the rat-race, selling up and retiring to a life of bowls, fishing and gardening. We figure that if we start now, as long as we stay healthy, we can live comfortably and extend our retirement by five years.

We calculate that if we sold our house and paid off the mortgage on the beach house, we could move there with about $600,000 to invest.

We are conservative so we would place most of it on term deposit in the bank, providing a return of about $24,000 a year after tax.

We think we could enjoy a comfortable lifestyle on about $36,000 a year, so we would top up our investment income by reducing our capital by $12,000 a year.

In three years time, our capital would still be over $560,000, and then my wife would start receiving her NZ Super and our capital could be preserved from then on. Two years later I too will receive my super at which time the household income would be over $45,000 a year after tax.