Very interesting comparison. I wonder what is included in the living expenses and assumptions. For example, what type of visa does this require to get health care, what is the assumed inflation, assumed investment return, US tax burden, etc. As well, can someone really expect to live in a 2 story on a hill town into their 90s?
I’ll do a behind the scenes of the software and assumptions at some point. This was ultra simplified and basic. The assumed returns are in the 7% range. But I agree, anything more than maybe 5 yrs out is an educated guess! 😂
Nice Analysis. I’d wish the soft has an option to live in other regions where cost of living is different and don’t qualify for the 7 % tax break. We looked deeply into our upcoming move and decide to swallow the pill, and don’t move to the 7 % regions. It is preference. I cannot not even imagen how to spend 1500 dollars/monthly in expenses. The assumption of not paying rent is amazing. I just realized that there are important factors to consider: 1. Very low Real Estate taxes and 2. Much lower than Italian interest rates. 100,000 bought house would be similar to having 500 additional monthly income or as 5 % return on investment! Not bad. The problems: How to get to Italy, how to adapt to a new life style and, yes, learning the language.
I was wondering as well about the $130k house. So they'll still have the $500k, but only $370k of it will be liquid. Also I don't see any additional income from interest being calculated.
The 2 401k's are investing in a 70/30 stock/bond mix of index funds. There's an assumed return of about 7% for those. Also, any money not spent on monthly expenses is assumed to be invested. Hope that helps!
Hello everyone from Campania, a region whose capital is Naples. I advise American pensioners to choose the internal areas of Campania to buy a house or simply rent it to live there as retirees...I'm talking about towns in the province of Avellino and Benevento. Quiet towns close to the cities of Benevento and Avellino which have around 60 thousand inhabitants....there are hospitals, clinics, shopping centres, festivals, fairs etc. and the cost of living is low. Furthermore, with an hour's train ride you can reach Naples... At the port of Naples in 30 minutes you can go by hydrofoil to Capri, Sorrento, Ischia and the Amalfi Coast, or simply stop in Naples and have lunch for a few euros. ..For example a "wallet" pizza and a drink, 5 euros. Cappuccino and dessert, three euros. Naples is a city with over a million inhabitants....In the case of advanced hospital care, there are cardiology centers, cutting-edge centers for cancer treatment, etc.
Thanks for adding these details! I'll look into this area for a future video. Would you be willing to chat about the area? If so, send me an email to: tommy@traveltirement.com Thanks!
thank you …. Health insurance - a big deal Can you run a scenario to include that ? I assume US eg Blue Cross health insurance does not carry over to Italy (or Europe) I hope I am wrong 😊
If you retire to Italy and become a resident, you can qualify for their healthcare in 90 days I believe. Then healthcare is very affordable. You’d need a temp policy that covers €30,000 for that period while waiting for national healthcare. Those cast a few hundred bucks.
Great help , but not sure if I’ll have so much money… I can’t work cause of disability so not much in savings.. state pension will still be paid( from UK) and with have the sale of my home, a little from my dad and some from my partners dad. What’s the least amount of money you could survive on in Italy
For the Elective Residency Visa aka retirement visa, you need to show at least €32,000 per year of “passive income”. So pensions, social security, investment income, rental income, etc.
How does this couple pay for buying the 130K house in Italy? Do they have the money for it or do they get a loan? And why can’t they buy a cheap house in the US as part of one of the scenarios?
They buy it using the bank money and some of the investments. They could buy a cheap place in the US, but what fun would that be!?! Joking. That’s just the scenario I came up with for this video.
My wife and I are tentatively planning on early (55-ish) retirement to Italy, but have one big question\conundrum. Neither of us have a pension and we are unsure about keeping our current home as a rental after we leave. Is there a definitive way to find out whether or not having sufficient funds in our 401ks would satisfy the passive retirement requirement?
Hey Tommy. Love your show. If my only income is Social Security, will that be taxed in Italy? And if I am a dual US/Italian citizen and buy a residence in one the eight 7% tax regions, would I pay 7% for the first 10 years then revert to the higher progressive tax rate? My understanding is that the US and Italy have a no double taxation agreement?? Thanks for your help.
First, Italy and US do have a double taxation treaty. Second, yes your tax rate would revert to normal progressive system after 10 yrs. Lastly, I'm chatting with an Italian accountant to get some answers about SS in Italy. I've heard both yes and no to it being taxable. Thanks for watching!
When you retire to Italy on the 7% flat tax, would you still incur the global wealth tax or would that apply after the 10 years along with the progressive income tax?
It’s from Right Capital, but it’s currently only accessible by financial planners. I’m working on a way to make it available to my audience. More to come!
@@RetireToEurope So, if I already had a paid for place in Italy, then the couple could do this same thing on $370,000 in investments and savings, right?
Sorry, I strongly disagree. You project 24 year time horizon. Tax regime in Italy is 7% for 10 years. It will skyrocket to 40% to 50% after that. Italy is only a 10 year -- play. Then you have to wait 1 to 3 years to cash out of your House to make your next jump at age 75 .. Carl. ( CFP )
Did this software factor in Italian income tax on their SS income? If so, did it use the 7% tax regime or make an allowance for living in other parts of Italy?
Unfortunately, this software is based on US taxes. So the Italy illustration was using the same rates as in the US. I'm working on a way to more accurately portray the Italian taxes, including the option of the 7% flat tax for 10 yrs. Thanks for the question.
Strong argument in favor of living in Italy! Thank you for this.
Indeed!
Or to at least consider expat retirement. Italy is not the cheapest country, but, well, it's Italy!
Love this video, im actually Italian American and turning 40 this month. I want to retire in Italy.
Thanks for watching! You have plenty of time to plan your escape. 😄
@@RetireToEurope true lol 😆
Wow, your calculator is great. Very informative, u hv a new subscriber!❤
Thanks and welcome aboard!
My best place is Sicilia, good quality food, and not too expensive. Thank you for the video.
Thanks for watching!
Really enjoyed the case study and also the question/answer info in the comments section. Thanks for keeping us all informed
Thanks for watching Lauren!
Thank you so much for this video. It was very interesting.
Thanks for watching!
Such a great approach to planning for retirement; thank you so much!
Any chance you could run similar scenarios for USA v Ireland and USA v Portugal?
I’m focused on Italy + France right now, but maybe in the future. 👍
Just found your channel and can't wait to learn.
Welcome aboard!
Great video! Keep it coming, i just subscribed.
Thanks for watching!
Excellent...thank you!
You are welcome! Thanks for watching.
Very interesting comparison. I wonder what is included in the living expenses and assumptions. For example, what type of visa does this require to get health care, what is the assumed inflation, assumed investment return, US tax burden, etc. As well, can someone really expect to live in a 2 story on a hill town into their 90s?
I’ll do a behind the scenes of the software and assumptions at some point.
This was ultra simplified and basic.
The assumed returns are in the 7% range.
But I agree, anything more than maybe 5 yrs out is an educated guess! 😂
That point about hills is well taken - my ancestors are from Genova, but it doesn't look like a topography for the faint of heart (or legs).
Nice Analysis. I’d wish the soft has an option to live in other regions where cost of living is different and don’t qualify for the 7 % tax break. We looked deeply into our upcoming move and decide to swallow the pill, and don’t move to the 7 % regions. It is preference. I cannot not even imagen how to spend 1500 dollars/monthly in expenses. The assumption of not paying rent is amazing. I just realized that there are important factors to consider: 1. Very low Real Estate taxes and 2. Much lower than Italian interest rates. 100,000 bought house would be similar to having 500 additional monthly income or as 5 % return on investment! Not bad. The problems: How to get to Italy, how to adapt to a new life style and, yes, learning the language.
Thanks for this comment. Well thought out!
excellent video, very informative. access to the calculator would be helpful to run "what ifs"
Working on it!
thank you for the quick response. i subscribed to your channel and look forward to future content.
Appreciate you being here Carlos. 😁
So does the software change the 7% tax to 50% tax after the 10 years? The 7% tax is only 10 years
This software is US based, so this case-study is using US taxes for the whole thing.
I’m experimenting with ways to reflect the taxes better.
I was wondering as well about the $130k house. So they'll still have the $500k, but only $370k of it will be liquid.
Also I don't see any additional income from interest being calculated.
The 2 401k's are investing in a 70/30 stock/bond mix of index funds.
There's an assumed return of about 7% for those.
Also, any money not spent on monthly expenses is assumed to be invested.
Hope that helps!
Hello everyone from Campania, a region whose capital is Naples. I advise American pensioners to choose the internal areas of Campania to buy a house or simply rent it to live there as retirees...I'm talking about towns in the province of Avellino and Benevento. Quiet towns close to the cities of Benevento and Avellino which have around 60 thousand inhabitants....there are hospitals, clinics, shopping centres, festivals, fairs etc. and the cost of living is low. Furthermore, with an hour's train ride you can reach Naples... At the port of Naples in 30 minutes you can go by hydrofoil to Capri, Sorrento, Ischia and the Amalfi Coast, or simply stop in Naples and have lunch for a few euros. ..For example a "wallet" pizza and a drink, 5 euros. Cappuccino and dessert, three euros. Naples is a city with over a million inhabitants....In the case of advanced hospital care, there are cardiology centers, cutting-edge centers for cancer treatment, etc.
Thanks for adding these details!
I'll look into this area for a future video. Would you be willing to chat about the area?
If so, send me an email to: tommy@traveltirement.com
Thanks!
Yes.....I will do it soon
thank you ….
Health insurance - a big deal
Can you run a scenario to include that ?
I assume US eg Blue Cross health insurance does not carry over to Italy (or Europe)
I hope I am wrong 😊
If you retire to Italy and become a resident, you can qualify for their healthcare in 90 days I believe.
Then healthcare is very affordable.
You’d need a temp policy that covers €30,000 for that period while waiting for national healthcare.
Those cast a few hundred bucks.
Great help , but not sure if I’ll have so much money… I can’t work cause of disability so not much in savings.. state pension will still be paid( from UK) and with have the sale of my home, a little from my dad and some from my partners dad. What’s the least amount of money you could survive on in Italy
For the Elective Residency Visa aka retirement visa, you need to show at least €32,000 per year of “passive income”.
So pensions, social security, investment income, rental income, etc.
We Wii have that, but don’t want to spend to much on property..
@@RetireToEurope
How does this couple pay for buying the 130K house in Italy? Do they have the money for it or do they get a loan? And why can’t they buy a cheap house in the US as part of one of the scenarios?
They buy it using the bank money and some of the investments.
They could buy a cheap place in the US, but what fun would that be!?!
Joking. That’s just the scenario I came up with for this video.
My wife and I are tentatively planning on early (55-ish) retirement to Italy, but have one big question\conundrum. Neither of us have a pension and we are unsure about keeping our current home as a rental after we leave. Is there a definitive way to find out whether or not having sufficient funds in our 401ks would satisfy the passive retirement requirement?
Sent you an email!📧
Thank you!
I subscribed to you channel and found your website but how do I find this "calculator?"
It's a software I will be offering at some point. Working out the best way now.
Hey Tommy. Love your show. If my only income is Social Security, will that be taxed in Italy? And if I am a dual US/Italian citizen and buy a residence in one the eight 7% tax regions, would I pay 7% for the first 10 years then revert to the higher progressive tax rate? My understanding is that the US and Italy have a no double taxation agreement?? Thanks for your help.
First, Italy and US do have a double taxation treaty.
Second, yes your tax rate would revert to normal progressive system after 10 yrs.
Lastly, I'm chatting with an Italian accountant to get some answers about SS in Italy.
I've heard both yes and no to it being taxable.
Thanks for watching!
When you retire to Italy on the 7% flat tax, would you still incur the global wealth tax or would that apply after the 10 years along with the progressive income tax?
Only after the 10 yrs. With the 7% tax you don't have to report foreign owned real estate or financial assets. Only income.
What is the software you are using for your scenarios?
It’s from Right Capital, but it’s currently only accessible by financial planners.
I’m working on a way to make it available to my audience.
More to come!
@@RetireToEurope- understood - thanks - It's not cost effective to an individual, if it were available.
I would hope there is something like this out there for the 'regular Joe' investor trying to plan for retirement.
New Retirement has a nice software for free. Then paid for some extra functionality.
@@RetireToEurope- Thanks for the tip. Happy New Year!
Where did they get the 130,000 to buy the house?
Comes out of the bank and investment money.
@@RetireToEurope Then aren't they're retiring with $630K? $130K to buy a house + $500K to live on.
@@Calipeixegato No, the $130k is coming out of the $100k in the bank and some of the $400k 401k money.
@@RetireToEurope So, if I already had a paid for place in Italy, then the couple could do this same thing on $370,000 in investments and savings, right?
Likely, yes 👍
Sorry, I strongly disagree. You project 24 year time horizon. Tax regime in Italy is 7% for 10 years. It will skyrocket to 40% to 50% after that. Italy is only a 10 year -- play. Then you have to wait 1 to 3 years to cash out of your House to make your next jump at age 75 ..
Carl. ( CFP )
No worries Carl. 😎
Why not move to Tenesee instead.
Because, um, Italy! 🇮🇹😁
Did this software factor in Italian income tax on their SS income? If so, did it use the 7% tax regime or make an allowance for living in other parts of Italy?
Unfortunately, this software is based on US taxes. So the Italy illustration was using the same rates as in the US.
I'm working on a way to more accurately portray the Italian taxes, including the option of the 7% flat tax for 10 yrs.
Thanks for the question.
That's a flawed case study
It’s a hypothetical, not real.
Thanks for watching!