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Suit yourself, but I'd say moving to another country adds another complication to your situation.
And an American CPA won't be able to help with this, either. You need an expert on the tax treaty between the two countries and both countries' frequently-changing tax systems. Those are few an far between, but of course I'll get one if the situation warrants it. I think this is a little far afield, though, no?
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Read up on annuities. Forbes had an article just today, listing pros and cons, many aren't tied to inflation, and you can't pass them onto heirs without a special rider. There are also articles about the insurance industry creating new products to insure 401-Ks (much like FDIC or PBGC).
*shrugs* Of course you have to be careful in selecting them. Adjustments for inflation mean a lower return, but there are lots of applicable products out there. I'm not worried about using an annuity as a legacy - it's just to cover basic expenses and hedge longevity risk. The rest of my money will be more than enough (and to be honest I'm not too concerned with leaving a large estate anyways).
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*When I talk about these things, I'm also thinking of millions who worked up to barely middle class, with no pension plan or profit sharing or 401-K. Even saving 15% of their lifetime earnings + SS payments won't necessarily cover "basic living expenses".
Social Security actually covers most basic living expenses if you're at lower middle class. Combined with modest savings, it's not too bad. It's all relative, here - one man's retirement might cost a lot more than another's.
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Some did, some didn't, don't be so hasty in painting everyone with a broad brush. It's not a sob story for a 40 yr old executive who gets laid off, loses health insurance after expensive COBRA runs out, and gets prostate cancer. It's not a sob story for a 50 yr old janitor whose hours get cut to part-time and he can't afford health insurance, or his heart meds.
I didn't write the Time article, but all those stories put in personal stories. Call them what you will. Even one of our more conservative members here has bought a new house, new car, new furniture, taken several vacations, and has admitted he's got no retirement savings yet. Maybe he'll have a run of bad luck and you can call that a sob story, but not everyone thinks bad things may happen when they're young.
(You and I are probably more vigilant and anal about those things than other members I can think of. That might be an interesting thread, come to think of it....)
I already mentioned that I admit there are some legitimate hardship cases, and there's definitely a place for government support of the disadvantaged in extraordinary times (e.g. extended unemployment/health benefits etc.). But just looking at capital flows makes me think that most people are just stupid.
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I happened to work for a large hospital system that had an opt-out of SS, with its own defined-contribution/defined-benefit pension plan. It had operated for many years quite well, and employees were very happy with it (several even retired on it) until the supreme court decided it was against the constitution to opt-out of SS. Many unhappy and angry people who lost several quarters of eligibility for future SS, even though we got our money back with interest when the fund had to close.
And your point...?
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Sure, but if 25-30% goes toward housing, 10-20% toward health insurance or medical costs, another x% off college loans, add in an auto and insurance, plus food.....depending on the area, job, and age, saving 15% (as Lewk suggested) can be a budget buster. That's why many young college grads are living back at home with their parents. That's why many people are underfunded for retirement, or think they can make it up "later".
Simply relaying things I've read. Probably depends on school loans, generous family who can give nice wedding gifts, as well as attitudes about saving. Not every new college grad lands a $50,000/yr right out of school, with employer perks, or lives in town with family, or has family that gives kitchen supplies or smart phones at Christmas....etc. Some kids start out heavily in debt, with no assistance from family, and can only get a job at Starbucks.
Okay, let me crunch my numbers exactly for you. Assuming my wife doesn't have a job and we're paying her student loans and insurance:
Rent: 38%
Medical costs: 11% (this is a guess based on what I think it would cost to add her to my plan and our approximate premium/copay spending now)
Other insurance: 3.5%
Food/expenses: 22% (generous)
Loans: 9% but we'd get back quite a bit in taxes, so call it 7%.
Total: 83.5%
That's assuming we'd keep our pretty nice digs and my shitty income. Taxes would be pretty small given our income and marital status - so we'd probably still have 5ish% to sock away. It wouldn't be hard to lop a 3-4% of gross off our rental expenses, and 2% of gross off our food expenses, so we're talking 10% extra now. Not where it should be, but a good start. Also, given that the loans (8% of gross) are what enabled the wifey to have the current job, it's a bit misleading to include them.
Let's assume I'm single - I have the numbers I was using then, and they're much better:
Rent: 17.5%
Medical costs: 1% (maybe)
Other insurance: 8% (being married has its advantages)
Food/expenses: 11%
Loans: 0
Total: 37.5% of gross
Of course, taxes would be higher, maybe getting to a combined rate of 20% (including state taxes), but that still leaves a whopping 40% of my salary to play with. Now, I didn't actually have that much money back when I wasn't married - I paid a lot of money for travel, some luxuries, and paid off some debt. But it would not have been particularly difficult to save - I saved about 10% of my salary a year despite the fact that I knew that my salary would be 4X higher and then some as soon as I graduated. I could have easily doubled that by being more conservative with my spending.
If I had a real job, halve those percentages. If my wife had a real job (which she does), cut them in 3. It's not hard to save money. It just requires careful priority-setting. (Note I'm not talking about genuinely poor people who really can't make ends meet. I don't expect them to save much. That's not a hallmark of the young urban college graduate, though, unless they got a useless degree, in which case I have no sympathy.) Even making $40k a year is plenty for a young single person in most cities, and a decent college degree should get you that. Average student loan load is something like $20k with generally decent interest rates and repayment plans - figure about $200-250/month. That's not so crushing.
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You're misunderstanding, my quality of life is okay (because I was anal), but I look around my town at recent college grads floundering, the elderly afraid, newly retired looking for work again, manufacturing that left, pensions that got busted. My state in general (which can't meet its bond obligations and is broke, btw) and millions in the country weren't "equipped" for this Great Recession, let alone for retirement. Some even followed what was considered a moderate strategy, but they've blown thru savings, borrowed from 401-Ks, lost their homes, can't find a job, and basically lost a decade. That's why it's an unusual time, with so many people adjusting to a new normal and STARTING OVER.
As above, I think people are idiots who are momentum investors, unreasonably optimistic about returns and risk. They bought too much house or underfunded their pension plans. They didn't keep adequate reserves. They overleveraged. They had far too high consumption rates and far too low savings rates.
A company that was run the way most households are run would be broke very quickly.
