Retirement: The devil you know or the devil you don't

A recent survey shows that inflation is causing some older Americans to delay their retirement plans.

Inflation for February ballooned to 7.9%, a new 40-year high, and most consumers expect prices to continue to rise over the next 12 months.

Concerns about the future are compounded by recent stock market drops and the war in Ukraine.

Meanwhile, other Americans are taking a different approach.

We ran into a longtime local friend named Paul last week. He owns a relocation service that helps people from the U.S. and Canada move their possessions to Ecuador. In fact, his company moved our belongings here over a decade ago.

When we inquired how business was going he replied,”Fantastic!”

We wanted to know if his customers were coming to Cuenca, leaving, or both.

He said, “They’re coming. They tell me with prices going up, the ugly politics, and now the war in Ukraine, there’s too much uncertainty. They’ve had enough and want a 'más tranquilo' (more peaceful) life.”

His comments were an interesting contrast to objections we’ve heard for years about the idea of moving abroad.

These objections come from people who know it’s a great solution to their financial concerns. That sticking around means having to make uncomfortable lifestyle sacrifices. Or constantly worrying about outliving their nest egg.

Yet they can’t bring themselves to pull the trigger. Why?

All sorts of reasons, excuses, and rationalizations are offered. But digging deeper, it almost always boils down to one thing.

Fear of the unknown.

Or, as Paul said, “too much uncertainty.”

This is fascinating, because it means people are making totally opposite choices—leaving the country or staying put—for exactly the same reason.

Too much uncertainty.

What’s the difference between these two groups? Basically, a mindset of being reactive versus proactive.

Reactive individuals feel powerless to change their circumstances. They use phrases like “I can’t…” and “If only...”

They’re the ones from the survey cited above who say to themselves, “With these higher prices it looks like I’ll have to keep working longer.”

Their habitual behavior is responding to events that have already happened.

Those with a proactive perspective, on the other hand, have learned to anticipate and prepare for change accordingly. They take responsibility for their lives and don’t blame outcomes on circumstances or other people.

The famous author and speaker Stephen Covey says about proactive people, “Their behavior is a product of their own conscious choice, based on values, rather than a product of their conditions, based on feeling.”

If you have an interest in living abroad, which camp of uncertainty do you embrace?

The devil you know?

Meaning your current not-great-but-not-terrible situation with inflation, politics, war, and whatever next crisis is inevitably around the corner.

Or the devil you don’t?

The leap of faith required to leave that life behind, abandon the status quo, and start fresh in another country.

The challenge with the first choice is that as life in the U.S. continues to change more rapidly, it’s becoming harder to assuredly “know” much of anything.

Think back to only five years ago. Who could have predicted the riots, impeachment, COVID-19, schools closing, soaring housing prices, and highest rate of inflation in four decades?

The devil you don’t know is the one we’ve been living for the past 12 years. The “más tranquilo” life that Paul’s clients are seeking.

We can report that if they choose wisely (that’s where we can help) they will find it. Sure, pandemic lockdowns and restrictions happened in Ecuador like everywhere else on the planet.

Yet daily life doesn’t change a great deal here or in most popular expat destinations. We joke that if we left Cuenca and didn’t return for years, not that much would be different.

Maybe a new mid-rise condo building here or restaurant there.

Some might find that boring. We take comfort in the constancy.

Ironic, isn’t it? Fear of the unknown keeps many people from moving abroad. Yet the very predictability and certainty they see slipping away all around them is waiting for their arrival on foreign shores.