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.

Get Rid of All Debt and Retire at a Young Age!

If overwhelming with heavy debt is already a fact to you, then the only solution is to get rid of it. Debt won’t go away if you keep ignore it, instead it will become more and more with the adding of interest from month to month, and your options to handle it will become less and less until you need to face the ultimate and the worst option, bankruptcy filing. Don’t let yourself reaches this bad situation; you need to react proactively to find debt solutions that fit your debt situation and get rid of your debt as soon as possible.

Your first proactive action is to find help. Nobody will provide help if you don’t let others know that you are facing a debt problem. If you already stressful with your heavy debt, you won’t be able to have fresh mind to think out a solution to solve the debt problem alone. You should discuss with your family members and your friends to see what other potential solutions to resolve the problem. Their proposals might not be the best for you, but at least you have some direction to go for.

Another better option to find help is to approach professional help. Many people do not know that they may have better option to resolve their debt issue just because they did not explore to the available options which will enable them to choose the one that best fit their needs. There are many debt relief solutions available to help people to resolve their debt problem, but not all will suit your situation and help you get out of debt effectively. You should proactively approach debt counseling services. Most of these services will give free consultation and help you to understand your debt seriousness and what are the potential solutions that you could implement to resolve it.

When you approach a debt counseling service, a counselor will be assigned to handle your case. He can’t help you if he does not understand your current financial situation, so be prepared to honestly tell him your actual situation and let him know all your debt issues and your financial affordability at this moment. Then, the counselor will propose a solution that best fit your financial situation. The solution may involve a debt management plan which is customized to fit your financial at the time. The debt management plan may involve some management fee. It’s your choice whether you want to enroll into the debt management plan or you choose other alternative options.

The bottom line is you have taken an initiative and act proactively to find help to resolve your debt issue. It’s our own responsibility to get a solution for our debt problem. Nobody will be able to help us if we don’t help ourselves.
Article Source:http://www.wearticles.com

Another Great Depression? Bush Admits Officials Told Him It’s Possible

Do you get the sense that top U.S. government officials tell us, the gullible masses, what we want to hear… and Washington bigwigs something else much more sinister?

This week, Federal Reserve Chairman Ben Bernanke told interviewers that the U.S. is NOT facing anything even remotely as serious as the Great Depression. And Bernanke should know: He’s a widely respected scholar who has written extensively on the causes of the Great Depression of the 1930s. Here is what Bernanke said:

Well, you hear a lot of loose talk, but let me just … say, as a scholar of the Great Depression — and I’ve written books about the Depression and been very interested in this since I was in graduate school, there’s no comparison,” Bernanke said in a question period after an address in Austin, Texas. “During the 1930s, there was a worldwide depression that lasted for about 12 years and was only ended by a world war,” he said.

“During that time, the unemployment rate went to 25 percent, at least, based on the data that we have. The real GDP (gross domestic product) fell by one-third. About a third of all of the banks failed. The stock market fell 90 percent.”

BUT THEN, in the VERY SAME ARTICLE, it says that Bernanke told President George Bush they had to act fast to prevent an even WORSE financial catastrophe than the Great Depression. “In a related matter, President George W. Bush said in an interview released Monday that Bernanke and Treasury Secretary Henry Paulson warned him weeks ago that bold action was needed to avert a new Great Depression.

“I can remember sitting in the Roosevelt Room with Hank Paulson and Ben Bernanke and others, and they said to me that if we don’t act boldly, Mr. President, we could be in a depression greater than the Great Depression,” Bush told ABC News.

So, which is it? Is it not even close to being a depression… or it is on the verge of being WORSE than the Great Depression?

Bernanke tells Bush one thing and the public something else.

Retirement Investment Sucker Rally: $800 Billion in ADDITIONAL Bailout Money Sending Dow Surging

Retirement investment money question:  Did the market hit bottom on November 20th… or is this recent rally a bear trap to beat all bear traps?

That is, indeed, the $6 million question.

The Dow Jones Industrial Average has surged 1,200 points in the past five days. It could surge another 1,000 points next week after the U.S. government announced that it would be spending ANOTHER $800 billion to bail out credit card companies.

That brings the total amount spent on this federal bailout to a staggering $5 trillion, roughly equivalent to what the U.S. spent fighting World War II.

Here is the breakdown:

Government Entity/Bailout BILLIONS
Term Auction Facility   $900

DISCOUNT LENDING WINDOW
Commercial Banks  $99.2
Investment Banks  $56.7
Loans to Buy ABCP  $76.5
AIG   $112.5
Bear Stearns   $29.5
(TSLF) Term Securities Lending Facility   $225
SWAP Lines $ 613
(MMIFF) Money Market Investor Funding Facility  $540
Commercial Paper Funding Facility  $257
(TARP) Treasury Asset Relief Program  $700
Automakers  $25
(FHA) Federal Housing Administration  $300
Fannie Mae/Freddie Mac  $350
Zero Interest Rate Policy (ZIRP)  $800
TOTAL: $5,084.4

The problem is, despite this sharp rally-back, the global economy appears to be growing worse by the day, not better.

Government officials from Treasury Secretary Paulson to President-Elect Barack Obama say we’re facing a “once a century” economic crisis:

Unemployment is skyrocketing: The Labor Department just reported that new claims for unemployment benefits jumped to a 16-year high 542,000 – the highest they’ve been in 20 years. That is 52% higher than they were a year ago. Just this week, CitiGroup announced it is laying off 53,000 more workers.

Foreclosures are going through the roof: According to RealtyTrac, home foreclosures soared 25% in October. More than 279,500 U.S. homes received at least one foreclosure-related notice that month. The outlook for 2009, especially in commercial real estate, is even more bleak.

America’s biggest companies are bankrupt: The latest companies filing for bankruptcy read like a “Who’s Who” of American business: GM… Lehman’s Brothers… Washington Mutual… Circuit City… Linens ‘n Things… Frontier Airlines… Kimbell’s… and on and on.

Federal spending has gone berserk: According to a recent tally by CNBC, the U.S. government is spending $5 TRILLION in a desperate effort to bail out bankrupt banks. Even that is doomed to fail: it would take $600 trillion to cover all the bad derivative debts that are wiping out the global economy.

Consumer spending has dried up: Consumer spending… the lifeblood of American business… has dried up. That’s why literally THOUSANDS of U.S. businesses are reporting their earnings are plummeting: Home Depot, down 31%… Target, Lowe’s, down 24%… Kohl’s, down 17%… GM down 36%.

Massive tax increases ahead: Federal, state and city governments are all flat-broke. They are victims of massive overspending, combined with plunging tax revenues. California Governor Arnold Schwarzenegger announced this week an estimated budget shortfall of $11 billion. The U.S. budget deficit this year could easily top $1 trillion. Virtually all arms of government are encouraged by the Obama mandate for “change.” They will quickly raise taxes through the roof. This will drive the current recession into a full-blown depression.

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Dow Drops Another 678 Points! Investors Worry About Retirement Investment Income, Money!

It’s been a rough month for the stock market, no doubt about it! In just the past week, the Dow has plummeted nearly 2,000 points or 18.1%. The S&P has lost 41.8% of its value since its recent high a year ago of 1565.15 on October 9, 2007. More than half of that loss, 25.7%, has come in just the past month!

The question everyone is asking is the same one investors ask after every big market crash: Is it different this time? Is this the time the market will not come back? Are these credit problems so huge that this time the market will go down, and stay down, for a decade or more?

One thing is clear: The bear market decline we’re seeing is, so far at least, about par for the course. There have been five major market declines in the past forty years of 20% or more. We’re near the high end of those declines and we can’t know, right now, how long the market decline will last. Here they are:

1. March 24, 2000, to Oct. 9, 2002. Decline of 49.1%. 5 years to fully recover from bottom of market.

2. July 16, 1990, to Oct. 11, 1990, Decline of 20%. 6 months to fully recover from bottom of market.

3. Aug. 25, 1987, to Dec. 4, 1987. Decline of 33.5%. 18 months to fully recover from bottom.

4. Nov. 28, 1980, to Aug. 12, 1982. Decline of 27.1%. 3 months to fully recover from bottom.

5. Jan. 11, 1973, to Oct. 3, 1974. Decline of 48.2%. Nearly 6 years to fully recover from bottom.

As you can see, a market decline of nearly 50% is hardly unprecedented — and both times it took two years, give or take, to recover. But recover the market did: Following the nearly 50% wipeout after the Oil Crisis of 1973, the market went on to gain 2168% over the next 27 years. Every $10,000 invested in the S&P 500 would have grown to approximately $216,800.

The same thing happened after the Tech Wreck and the 9/11 attacks: People wondered if this time it might be different. After all, the market was absurdly overvalued with all those worthless dot.com stocks. Surely we were headed for Dow 2,000, as many “gurus” told us.

What actually happened? The market did not continue plunging, as the doom and gloomers told us, but it took a very long time to recover, nearly 5 years in fact. After hitting a peak of 1,527 on March 20, 2000, the S&P began plunging lower and lower and then lower still: finally bottoming out at 800.58 on September 20, 2002. The market then began climbing back, eventually recovering its old high just last year (in October 2007). That’s a pretty long recovery period.

The same thing happened with the 1973 Oil Crisis.  The market hit a peak in January 1973 and then began plunging over a period of 19 months, hitting bottom on September 30, 1974.  Then, it began climbing steadily… but it didn’t fully recover its January 1973 highs until July 28, 1980 — or nearly SIX YEARS later.

So: What can we early retire folks learn from all this? Historically, the market does always come back — but it can take five or six years to do so, not months. A drop of 50% is not historically unprecedented. However, drops of this magnitude tend (at least twice!) to require a longer recovery period that stretches over at least 5 years.

Bottom line: We could be in for a long recovery. It’s definitely time to play things safe. If you can avoid selling out right now, you’ll probably end up better off as the market will probably recover (unless “this time it’s different”). If you need money to live on or for big expenses like college, however, you may have to wait quite a while before the market recovers.

The only comfort we can take from all this is that this recent continuing bloodbath is about as bad as it has gotten in the recent past. We haven’t seen a decline in the market of more than 49% since the Great Depression. But anything is possible.

What Will Happen To Money in Investment Income Accounts?

If you have money in an investment account, 401k or similar retirement account, you’re probably panicking right now.

After all, it looks like the world’s central banks are running out of ammo! After dramatic interest rate cuts worldwide, global equity markets continued to crash Wednesday. The Japanese Nikkei Index fell 9.38% in a single day! The Hong Kong index dropped 8.17% overnight. The German DAX fell 6.25%. The British FTSE dropped 5.5%.

The world is panicking as it watches the entire global financial system grind to a dead stop. Stocks are in free fall all over the world! The Dow closed down 508 points on Tuesday but that barely tells the story. The S&P 500 has lost 21.4% in the past 30 days alone… 31% so far in 2008… and 36% since October 2007.

Worst of all, there is no sign the bloodletting is going to stop. Banks worldwide are collapsing. The global economy is grinding to a halt. Unemployment is rising.

Social Security will be there after the coming stock market wipe-out. So will government pensions. The Fed will see to that. Private pensions are a different matter altogether. You cannot count on them. During the 1970s and 1980s, pensions were grossly underfunded. Many major corporations had to put more cash into their pension funds, to bring them up to minimum standards. During the bubble stock market, companies were able to take out that cash, and put stock in its place.

People think their pension funds are solid. Nothing could be further from the truth. If your retirement plan is tied to stock or money market funds— and they all are — expect to take a big hit.

Consider cashing in your retirement or pension plan even if you must pay the tax consequences. Someone once said that money you can’t control is not your money. Get out of any IRA, Keogh, 10K, retirement plan or pension fund. Transfer the assets first into bank savings accounts and then quietly take it out and stuff some in your mattress. Remember, during the last stock market depression, people who had cash in their mattress were kings.

On balance, the dollar is going to continue falling for the next 20 years. America’s balance of trade disaster and the coming global stock market wipeout guarantee this. You absolutely should diversify into foreign currencies.

We are now entering a new era of massive deflation. Real estate, of course, is plunging lower and lower almost everywhere on the planet. Stock prices are in free fall. The prices of most commodities are dropping fast. The Dow Jones-AIG Commodities Index Total Return ETF (DJP) is down 37% since mid-July. Oil has dropped from $140 a barrel to under $90 today.

We’re in for a wild ride the next few months.

The Case AGAINST Early Retirement

The job market is looking pretty grim lately. More than 438,000 jobs have been lost already this year, according to the Bureau of Labor Statistics, and companies across a range of industries, from financial services to retail, have been extending early-retirement packages in an effort to slash work forces.

If you’re offered such a buyout, you’ll face one of the most important financial decisions of your working life: stay on the job or take the money and run.
Strictly by the numbers

The enticements you’ll get to retire early likely won’t offset the drawbacks of spending fewer years at the office. To understand why, you must first understand what you’re being offered. Read more