During my weekend online reading I ran across this interesting article posted by Roger Nusbaum on his blog (http://www.randomroger.blogspot.com/)Here are some extended excerpts:...In 1982 the state of Alaska began to pay a dividend to residents out of something called the Permanent Fund...the fund is funded with oil money which is then managed in the capital markets. The amount of the dividend can fluctuate. This year's dividend was payable in October and was $845 for qualified residents. The dividend has gone down for the last five years. The all time high payout was $1963 back in 2000. $845 is the lowest dividend since 1988. The reduced dividends of late were attributed to stock market losses....Over the last ten years the average dividend has been $1396 per person. ...there is no state income tax in Alaska and the first $150,000 of assessed value is exempt from property tax for people 65 and older....as I read the requirements you can be out of state up to 180 days per year. So three or four months in the desert or Florida or somewhere else and you avoid winter's bite.Here is how some numbers might play out. A quick reminder is that is an idea, as I intended it, for people of modest means who don't spend a lot. Real estate in Alaska is cheaper than most parts of the country. I think it would be realistic to sell a home for $350,000 in many parts of the country, buy a modest house or condo in Alaska for $185,000- $200,000 and a condo in some parts of Florida or the desert with the balance. So maybe eight months in Alaska and four months in some place warmer...(For his example he assumes a couple with a total of $350,000 in a portfolio, and a withdrawal rate of 5%)...More and more retirees will work one way or another. There are numerous health and emotional benefits to working part time after traditional retirement. This could involve consulting, writing, eBay (or other internet venture) or just something you love... It would not take much effort or time to make $500-1000 per month working 10-15 hours per week. If both partners in the couple do this, there is another $10,000-$20,000 per year.So lets see where this couple stands now in relation to their expenses;$2792 Permanent fund dividend$17500 Portfolio Income$15000 Income from part time work$35392 Total(He mentions SS benefits as a likely, but not certain at current levels, addition to the above.)In this example the Permanent Fund contribute close to 10% of a reasonable income need. It makes sense to me that the dividend could increase in the future because of higher oil prices and less volatility in the stock market.There are some flaws here to be sure. The permanent fund could pay out more or less at any time. The fund could theoretically go bust. You'd have to love the great outdoors of Alaska which is not for most people... The point here is not that everyone should move to Alaska. The big picture here is that many of us may need to use some ingenuity to have a financially stable retirement. If stock market returns are below normal and social security is compromised and health costs go way up there will be less people able retire to the country club...
So three or four months in the desert or Florida or somewhere else and you avoid winter's bite.Wishful thinking. Alaska really only has one month of summer--July-- and even during that July it often goes into the 50s. May & June are 'spring', Aug & Sep are 'fall', so winter lasts from October through April (about 7 months). So you'd probably want to plan on spending six of those in FL (or somewhere else warm). It's also plenty dark from October thru April.You'd have to love the great outdoors of Alaska which is not for most people... That's for sure. You probably wouldn't want to live anywhere except Anchorage. Juneau is nice, but 'locked in'--so almost everyone who lives in Juneau has their own plane. (In Alaska there are almost as many airplanes per capita as automobiles per capita in the rest of the country.)There's a very high rate of alcoholism, and a lot of folks who are 'outcast' from other parts of the country end up there.Before I went there, I had heard that in Alaska the ratio of single men to single women is much higher than other parts of the country--when I went there I understood why. There are numerous health and emotional benefits to working part time after traditional retirement.This might be difficult to do in Alaska, as most jobs are scarce. If you could 'tele-commute' you could make it, or work as a waiter/waitress/bartender during the summer months. If you're an R.N. you could probably get good bucks even for part-time work. Last I heard R.N. pay was much higher in Alaska than any other state, as there is a shortage of them there and they're trying to attract more.In this example the Permanent Fund contribute close to 10% of a reasonable income need. It makes sense to me that the dividend could increase in the future because of higher oil prices and less volatility in the stock market.Cost of living in Alaska is very high (despite low housing costs)--cost of food is a killer. IMO the 10% from the permanent fund would get 'eaten up' by the higher living costs. Just imagine the cost of heating your home, even to just a bare minimum temperature to prevent pipe freezing, in such a cold climate.Also, many of the 'amenities' one is used to in the lower 48 are just not easily available there. They only got their first Wal-Mart about 7 years ago, after much begging, and as far as I know, it's still the only one (about 1/2 hour drive from Juneau). Fast food is also hard to come by.Don't plan on making many improvements to your home, because all lumber products have to be shipped from the lower 48 and are extremely expensive. I was quite surprised by this, what with all the forests in Alaska--but all their forestry is protected from logging--individuals are also forbidden to cut down trees on public lands (which is mostly what Alaska is--public land).Just wanted to point out some of the drawbacks--it's not as easy as it might first appear. I'm a nature-lover, and even so, I would not consider Alaska--too desolate.The big picture here is that many of us may need to use some ingenuity to have a financially stable retirement.I agree with this completely, although it's harder and harder to find anywhere that's 'inexpensive'. Rather than Alaska, I would choose Ohio or Michigan, where the loss of jobs has meant lower housing costs, and it's not quite as cold, dark and desolate as Alaska.Just MHO,2old
Hi,I lived in Alaska for 20 years (all of my childhood and then some)...all of it was in Anchorage...I would agree with just about everything that 2old stated...I would have to emphasize a couple of points that 2old mentioned, but didn't hammer home:1) just about everything is a jillion dollars more than in the lower 48...and I mean just about everything (especially food)...2) consider what type of lifestyle that you want...even the "big" city of Anchorage (with a population of about 300k) is pretty small when it comes to any sort of nightlife, concerts, art exhibits, plays, etc...unless you are the Grizzly Adams type or a hermit Alaska may not be for you...Royce
Hi, As someone who lives in Alaska and collects his dividend, i'd say it's not worth it just for the dividend. First, you need to be a rssident for at least one year (may be two), before you can collect your first dividend the following October. Second, you need to factor in the cost to fly in and out, no matter where you live (it's not worth driving more than once or twice in your life). Figure $300-600 per trip for airfare minimum. Third, while it's not quite as bad as others indicated, costs are higher (we do have Walmarts and Costcos). Fourth, figure that as some point, the legislature will place a cap on the dividend and use the rest to run state government (my guess is $1,000 maximum, could be lower). So, I would figure a $1,000 dividend will cost you at least $1,500 to get it. So, you have to have other reasons why you'd want to live here.Calvin
The wife of a friend of mine was the daughter of one of Alaska's Federal judges at the time of statehood. She grew up in Alaska back in the 1950s.No Costcos then! She told me she was forever eating fresh salmon, halbut, crab, clams and such, and absolutely was famished for things like Grape Nuts and other cerials, which were expensive to buy at the time. I hitchhiked up the Alaska highway in 1972. I still remember a guy who lived in Clear, between Fairbanks and Anchorage. He complained about businesses who had work done in Seattle at low cost rather than having it done in Alaska and building the local economy. Then he showed me a beautiful collection of fur parkas and such ---which he said he shipped to SEATTLE each year to get them cleaned and stored at low cost!How do Alaskans feel about the Congress refusing to open up the ANWR for oil exploration? Seattle Pioneer
How do Alaskans feel about the Congress refusing to open up the ANWR for oil exploration?Mixed, but probably a majority would like to see it happen. We have our fair share of environmentalists and if it did pass, I'm sure there would be years of litigation.No Costcos then! She told me she was forever eating fresh salmon, halbut, crab, clams and such, and absolutely was famished for things like Grape Nuts and other cerials, which were expensive to buy at the time. True enough, the fishing is great (I can almost guarantee visiting relatives we'll catch something). Prices are better in bigger cities (pop. >10,000), but there are still places where you have to have your food flown in.I hitchhiked up the Alaska highway in 1972. I still remember a guy who lived in Clear, between Fairbanks and Anchorage. He complained about businesses who had work done in Seattle at low cost rather than having it done in Alaska and building the local economy. Then he showed me a beautiful collection of fur parkas and such ---which he said he shipped to SEATTLE each year to get them cleaned and stored at low cost!Still happens (maybe not the cleaning). One reason is that no one does the work locally and if you have to ship it out, you might as well ship it to Seattle and save money. Calvin
I might suggest Mexico for retirement. We have been down since August and spent between $1750 and 2300/mo. and this includes 650 for rent. $30 gets you the best filet dinner you have had for 2 people including drinks. Where we are the only real change in the weather is dry season, or wet season. The high temps are from 75 to 90. It is really paradise, and because of the moderate temps, no air conditioning, no central heat. I'm sure you have heard of this paradise, but we are living it.
Mexmeme,What part of Mexico are you living in? Are you a pure "gringo" or do you have a bit of hispanic in you? How much Spanish do you speak?Odds are I'll go south of the border when I FIRE, but I don't know if it'll be to Mexico or farther south. Mrs. mazske is from Panama, so that's an option.I'm a blue eyed gringo, but I speak decent Spanish. I deal a lot with local Mexicans, but I've never been to Mexico.
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