Have you heard about the new way to retire early? It’s called semi-retiring!
If you’re nearing retirement age or are already retired, you may be thinking about ways to reduce your workload and enjoy a more relaxed lifestyle. Semi-retiring may be the perfect solution!
Everything in life seems to be redefined, and retirement is no different. The traditional retirement, where you retire at age 65 and then do nothing but relax, is no longer the only option.
What is Semi-Retirement?
Semi-retirement is a retirement option where you continue working at a reduced schedule. This could mean working part-time, or it could mean working fewer hours each week.
Basically, with semi-retirement, you’re still working, but you’re not working as much as you used to. This allows you more time to enjoy your retirement without completely giving up your income.
You should note that semi-retirement is different from downsizing, when you reduce your hours or take a pay cut to have more free time. With semi-retirement, you’re still earning the same salary, just working fewer hours.
There are several reasons why someone would choose to semi-retire. Here are some of the most common reasons:
1. They want to enjoy their hobbies and pursuits more
Everyone wants to have more time to enjoy their hobbies and interests. With semi-retirement, you can have that extra time without worrying about money.
As you get older, you may find that your hobbies and interests change. This is natural! Semi-retirement gives you the time to pursue new hobbies or rediscover old ones.
2. They want to spend more time with family and friends.
One of the best things about semi-retirement is that it gives you more time to spend with your loved ones. If you have kids or grandkids, you’ll finally have the time to attend their sporting events or go on family vacations.
You may also find that you have more time to spend with your friends. So whether you want to go on day trips or just have coffee together, semi-retirement gives you the time to do it.
3. Travel is a top priority
Do you love to travel? If so, semi-retirement is the perfect time to do it! With fewer work obligations, you’ll have more time to explore the world.
You can take longer trips and see more of the places you’ve always wanted to go. Or, you can use your extra time to take shorter trips more often. The choice is up to you!
4. Semi-retirees want to give back
Many people who semi-retire do so in order to have more time to volunteer or give back to their community. If you’ve always wanted to do more volunteering but never had the time, semi-retirement is the perfect solution.
You can use your skills and knowledge to help out at a local school, church, or non-profit organization. Or, you can become a mentor to someone who is just starting out in their career.
5. They’re not ready to retire completely.
For some people, the thought of retiring completely is just too scary. They’re not ready to give up their income or their work identity.
If this describes you, then semi-retirement may be the perfect solution. You can still work and earn an income, but you’ll have more free time to enjoy your retirement.
How to Decide When to Semi-Retire
It all depends on what type of lifestyle you want to live. It’s possible when you hit Coast FIRE, Flamingo FIRE, or Barista FIRE, you can start to see if you can semi-retire and live off of your investments.
There is no magic number for how much you need to have saved to semi-retire. However, it’s generally recommended that you have at least ten times your annual expenses saved before you make the switch.
So, if you spend $50,000 annually, you would need at least $500,000 saved before you could semi-retire. This may seem like a lot, but it’s not as difficult to achieve as you might think.
If you’re disciplined with your spending and invest wisely, you can reach this goal in 10-15 years. And, once you reach it, you’ll have the freedom to semi-retire and live the life you want!
It takes discipline to save up enough money to semi-retire. But, it’s possible to do it. If you’re disciplined with your spending and invest wisely, you can reach this goal in 10-15 years. And, once you reach it, you’ll have the freedom to semi-retire and live the life you want!
What kinds of jobs can you consider for semi-retirement?
Almost any job can be a good fit for semi-retirement. It all depends on how much time you want to work and what type of work you’re interested in.
A Few Ideas to Get Started
1. Freelance work
If you’re looking for a way to semi-retire but still earn an income, freelance work may be a good option. With freelance work, you can often set your own hours and work as little or as much as you want.
You can do several different types of freelancing, from writing and editing to graphic design and web development. And, thanks to the internet, you can often do this type of work from anywhere in the world.
2. Retail is always a good option
Another option is to work in retail. This can be a great way to semi-retire because you can often set your own hours and work as little or as much as you want.
And, since retail jobs are usually pretty physically active, they can help you stay healthy and fit. Just make sure to find a job you enjoy so you don’t hate it!
The downside to retail is that it doesn’t usually pay very well. So, if you’re looking to semi-retire and live a comfortable lifestyle, you’ll need to at least be in a management position or own your own store.
3. Start a small business
If you have an entrepreneurial spirit, semi-retirement may be the perfect time to start your own business. This can be a great way to earn an income while still having the flexibility to work when you want.
Of course, starting a business is a lot of work. And, it’s not always guaranteed to be successful. But, if you have a great idea and are willing to put in the work, it can be a great way to semi-retire and live the life you want.
4. Consulting is always an option
If you’re an expert in your field, you may be able to semi-retire and work as a consultant. This can be a great way to earn an income while still having the flexibility to work when you want.
And, since consulting jobs are usually project-based, you can often pick and choose which projects you want to work on. This can give you a lot of control over your work-life balance.
Of course, the downside to consulting is that it can be feast or famine. You may have a lot of work one month and then very little work the next. So, you need to be prepared for the ups and downs.
5. Teaching is a great option
These days you don’t need a degree in education to teach. There are several different ways you can semi-retire and work as a teacher.
For example, you could work as a tutor, teaching small groups or individual students. Or, you could teach classes online. This can be a great way to reach students from all over the world.
Let’s say that you were a nurse; you could teach at a local community college or even online. There are several different options available to you.
What are the Benefits of Semi-Retirement?
There are a number of benefits to semi-retirement. Here are a few of the most popular ones:
1. You can still earn an income
One of the biggest benefits of semi-retirement is that you can still earn an income. This can be a great way to supplement your retirement savings or help you pay for your lifestyle.
2. You can choose your own hours
Another big benefit of semi-retirement is that you can often choose your own hours. This can be a great way to have more control over your work-life balance.
3. Sometimes you can work from home
Another benefit of semi-retirement is that you can often work from home. If you don’t mind sitting in front of a computer all day, this can be a great way to have more control over your work environment.
You must understand that working from home isn’t as easy as it sounds. It can be hard to stay motivated when you’re not in an office environment.
4. It’s possible to focus on your passions and not just money
Before you became semi-retired, you had to focus on earning as much money as possible. But, now that you’re semi-retired, you can focus on your passions and not just money.
This can be a great way to find more enjoyment in your work. And it can also help you feel like you’re making a difference in the world.
5. It can help you transition into retirement
For some people, semi-retirement can be a great way to transition into retirement. If you’re not ready to retire completely, semi-retirement can be a great way to ease into it.
The idea of sitting around all day doing nothing can be a bit daunting. That’s why for many, retirement is something they dread.
But, with semi-retirement, you can still have a sense of purpose. And, you can still feel like you’re contributing to society.
What are the Downsides of Semi-Retirement?
Of course, there are also some downsides to semi-retirement. Here are a few of the most popular ones:
1. You may have to start at the bottom
It’s possible that you’ll have to start at the bottom in your new career. This can be frustrating, especially if you’re used to a high salary and a lot of responsibility.
2. Your skills may be outdated
Sometimes, people who semi-retire find that their skills are outdated. This can be a problem if you’re trying to enter a new field or start your own business.
3. You may not be able to earn as much money
It’s understandable if you get into an entry-level position and you’re not earning as much money as you used to. Just remember, it’s not about the money. It’s about finding a position that you enjoy and that meets your needs.
4. You may have to relocate
If you want to semi-retire, you may have to relocate. This can be a hassle, especially if you have a family.
5. You could feel like you’re not really retired
For some people, semi-retirement can feel like you’re not really retired. And that can be a problem if you’re at a point in life where you want to wind down. It’s easy to find yourself working more hours than you want to.
Conclusion
Semi-retirement can be a great way to enjoy the best of both worlds. You can still earn an income and have more control over your work-life balance. Just remember, there are also some downsides to semi-retirement. So, make sure you weigh the pros and cons before deciding.
For many, the decision to semi-retire is a great way to enjoy a more relaxed lifestyle. But it’s not for everyone. If you’re not ready to retire fully, semi-retirement could be an excellent option. But, if you’re at a point where you want to wind down, semi-retirement may not be the best choice.
It’s all about where you are in life and how you’re doing financially. Talk to a financial advisor if you’re unsure whether semi-retirement is right for you. They can help determine if semi-retirement is a good option for you.
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
There are also many paths to FIRE, and that’s a good thing! By reading this article, you too may find a type of FIRE strategy suitable for your life and circumstances.
So, what are the different types of FIRE? Let’s take a closer look.
This post may contain affiliate links; please see our disclaimer for details.
Traditional FIRE / Regular FIRE
The traditional FIRE movement is about saving as much money as possible and investing it in a diversified portfolio of stocks and bonds. The goal is to reach a point where your investment or nest egg returns are enough to cover your living expenses, so you can “retire” from paid work (although you may still choose to work part-time or volunteer).
This approach is often called the “4% rule” because it’s based on the idea that you can safely withdraw 4% of your portfolio each year, adjusted for inflation.
So, if you have a $1 million portfolio, you could theoretically withdraw $40,000 per year ($1 million x 0.04) and never run out of money.
Of course, there’s no guarantee that the markets will always cooperate, and you may have to adjust your spending if there’s a major market downturn. But over the long run, this approach is quite successful.
The best thing about traditional FIRE is that it’s relatively simple to understand and implement. And, if you start early enough, you can reach this type of FIRE with a fairly modest savings rate.
Lean FIRE is similar to traditional FIRE but with a twist. The goal is still to save as much money as possible and invest it in a diversified portfolio. But instead of aiming for the same amount of expenses, the goal is to retire with a lower lifestyle than you have today.
This could mean retiring to a smaller house, driving an older car, or giving up some of your hobbies and travel. The idea is to reduce your costs to reach FIRE with a smaller nest egg.
Lean FIRE is an excellent option for people willing to make some lifestyle changes to retire early. And it can also be a good choice for people who are risk-averse and don’t want to rely entirely on investment returns to fund their retirement.
Fat FIRE
Fat FIRE is the opposite of Lean FIRE. Instead of retiring on a leaner lifestyle, the goal is to retire with the same (or even a better) lifestyle as you have today. To do this, you’ll need to save a lot of money and invest it in a way that generates high returns. This could mean investing in growth stocks, real estate, or other assets that can generate a high return on investment.
Fat FIRE is a good option for people willing to take on more risk to retire with a better lifestyle. It’s also a good choice for people who want the flexibility to retire early and then go back to work if they want to.
Let’s be honest the average person isn’t going to be able to save enough to retire on a fat FIRE lifestyle. But, if you have a high income and are willing to take a few gambles, it’s possible.
Obese FIRE
Obese FIRE is similar to Fat FIRE, but with one key difference. Instead of retiring with the same lifestyle as today, the goal is to retire with an even better lifestyle.
Some of you might be thinking, “Isn’t that just called rich?” And, well, yes. But the term “Obese FIRE” is usually used to describe people who are retiring with a lifestyle that is far above their current lifestyle.
This could mean retiring to a private island, buying a yacht, or just living in a mansion. But, basically, it’s any lifestyle that most people would consider to be unobtainable.
Obese FIRE is only an option for a very small number of people. But if you have the income and the investment returns to make it happen, more power to you!
Everyone dreams of retiring early and living a life of luxury. It may be your goal; however, it’s essential to know that if it isn’t your reality, that’s okay too!
It’s perfectly fine to live your life in the clouds as long as your feet are firmly placed in reality. So, if you’re planning to achieve obese FIRE, make sure you have a solid plan in place and that you’re prepared for the possibility that it may not work out.
Coast FIRE
Coast FIRE is a strategy for financial independence that involves saving as much money as possible over a short amount of years, then living off the interest once you reach your goal. With Coast FIRE, you save until you reach a predetermined amount by a specific age, at which point you stop saving and let compound interest “coast” you to your desired retirement nest pile.
You could quit your preparatory work and instead take on a part-time job or establish passive income streams to live off of after reaching your financial independence goal, perhaps 80% there. This would allow you to meet life’s essential expenses.
Coast FIRE is a great way to get off to a fast start with active saving and investing, and it can help you achieve financial independence sooner than you might think.
Flamingo FIRE is a new concept that is quickly gaining popularity. The name comes from the Money Flamingo blog, which discusses various ways to achieve financial independence.
Flamingo FIRE refers to the three stages of retirement: semi-retirement, early retirement, and standard retirement. In the first stage, you work full-time to develop a nest egg by saving and investing.
You enter semi-retirement when you reach half of your FIRE number. During those ten years, you don’t need to invest. You can retire if it doubles in 10 years. After that, you can work part-time or a less-paying job that makes you happy till then. Twenty-five times your estimated living expenditures is full FIRE, stage 3. This final stage is when you are truly retired and no longer working.
The Flamingo FIRE concept is an innovative way to think about retirement. It could be an excellent option for those looking for an alternative to the traditional retirement plan.
Barista FIRE
Barista FIRE is where you’re working part-time to pay for healthcare and whatever costs you encounter. For many people, healthcare is their largest expense in retirement.
Paying for healthcare is one of the biggest financial challenges that Americans face. In fact, healthcare costs are one of the main reasons why people say they can’t afford to retire.
One way to pay for healthcare in retirement is to work part-time. This is what’s known as Barista FIRE.
With Barista FIRE, you’re working part-time to cover your healthcare costs. Once your healthcare costs are covered, you can use the money you’re saving to retire early.
This strategy is becoming more popular as healthcare costs continue to rise. It’s a great way to ensure you have the coverage you need while also giving you the freedom to retire early.
Slow FIRE
Slow FIRE is where you’re working towards financial independence, but you’re not in a hurry to retire. The goal is to reach financial independence, but you’re not in a hurry to quit your job.
It’s a good option for people who want to achieve financial independence but don’t want to retire immediately. It’s also a good option for risk-averse people who want to take a slow and steady approach.
The key to making Slow FIRE work is to find a balance between saving for retirement and enjoying your life. You don’t want to sacrifice your lifestyle today in order to retire tomorrow.
But, if you can find a balance, Slow FIRE can be a great way to achieve financial independence and retire on your own terms.
Fart FIRE (or Fast FIRE)
Fart FIRE is where you’re working towards financial independence, but you’re in a hurry to retire. The goal is to reach financial independence as quickly as possible, so you can quit your job and enjoy your retirement.
If you’re the type who loves to throw caution to the wind, Fart FIRE may be the right approach for you. It’s risky, but it can also be very rewarding.
The key to making Fart FIRE work is having a solid plan. You need to know how much you need to save and how you will invest your money.
You also need to be comfortable with the idea of retiring early. If you’re not ready to retire, Fart FIRE may not be the right approach.
It’s important to remember that when you’re trying to speed up the FIRE process, it’s possible to make mistakes. If you’re not careful, you could end up losing everything you’ve worked so hard for.
So, if you’re going for Fart FIRE, make sure you know what you’re doing.
Which type of FIRE is right for you?
Well, the first thing to do is accept that FIRE is a spectrum. There’s no right or wrong answer. You need to find the best approach for you and your family.
If you’re not sure which approach is right for you, ask yourself the following questions:
What are your goals?
How much risk are you willing to take?
How much time do you have to save?
What’s your lifestyle like?
Do you want to retire early or on your own terms?
Once you answer these questions, you should have a good idea of which type of FIRE is right for you.
If you want to retire early, you’ll need to save more money and take on more risks. If you’re not willing to take on as much risk, you’ll need to save more money and plan for a longer retirement.
It’s important to remember that there’s no one-size-fits-all approach to FIRE. You need to find the approach that works best for you and your family.
Conclusion
Almost all of you reading this will want to go the route of traditional FIRE. It makes sense because it’s the most logical and gives you the most control. You can always adjust your lifestyle later on down the road if you want to, but it’s much harder to do the reverse.
Remember, you don’t have to choose just one type of FIRE. You can use a combination of different types of FIRE to achieve your financial goals.
For example, you could use a mix of traditional and barista FIRE to achieve your financial goals. It all depends on your health, age, and desired lifestyle. Whatever type of FIRE you choose, the important thing is to start working towards your financial goals today. The sooner you start, the sooner you’ll be able to retire on your own terms.
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
If you’ve seen our recent blog posts, you’ll know that my wife and I quit our 9-5 day jobs after hitting Coast FIRE. I’m super excited to share more with you about our story with the top 14 reasons WHY we decided to move abroad and semi-retire in China.
As many of you know, traveling with kids can be quite a challenge! We have two kids, a two-year-old and a nine-month-old.
It was super easy and everything went perfectly. If you detect sarcasm, you are correct haha.
But actually, it wasn’t too bad since we had an in-flight bassinet and took a red-eye flight.
We took a 15-hour flight and then quarantined for eight days in a hotel because of the China Covid-19 restrictions at the time. You can see here how the hotel was actually really nice, and the time went by pretty fast.
My wife is originally from China and this was the first time her parents got to see their grandkids; it was such a happy reunion. 🙂
Amidst the trials of travel and quarantine with kids, it definitely paid off and was worth it since we are now the dream life!
To be honest, the top reason we decided to semi-retire in China is that we have more help with taking care of our children.
We haven’t talked about this with anyone, including our own family members, but my wife wanted me to share it in this blog post.
My wife suffered from depression since the late stage of her first pregnancy, and it became more serious as time passed.
The original plan was to have my mother-in-law come from China to help when our first baby was born, but due to the covid outbreak, she could not come.
We also ended up having our second baby, but my wife’s depression became more serious. It was very hard to see her struggle on a daily basis.
I want to add that my wife is very strong and insisted on working full-time while taking care of two kids since she wanted to become financially independent to provide us with a better future.
I won’t go into much further on her depression, but moving to China and allowing her to be with the family has been a huge help, and she is doing much better now.
If we had stayed in the US and continued working and investing, our financial situation would be better, but sometimes money isn’t the most important thing in life. Mental health is.
Her situation got to a point where I knew we needed to make a change. So we decided to move abroad to semi-retire in China and fortunately had enough saved in investments to have reached Coast FIRE.
Now we are living in the Chinese culture where grandparents help with grandkids frequently, so we are grateful for this huge help.
Coast FIRE is a popular retirement strategy involving saving enough money so your nest egg can grow without additional contributions.
Once you reach Coast FIRE, you no longer need to work to save for retirement; instead, you only work to pay for current living expenses.
This allows you to enjoy a more relaxed lifestyle and focus on activities you enjoy rather than working simply to earn a paycheck.
That’s why we decided to quit our 9-5 jobs and semi-retire in China!
Yes, if we had stayed in the United States longer, we could have made more money and created a larger nest egg.
But I want my wife to live a happy and healthy life. These things are more important than money.
My YouTube Video Sharing About Coast FIRE
3. Lower Cost of Living
My wife and I really like the concept of FIRE, and we have seen others stories of people who achieved FIRE and chose to live in places with cheaper living expenses.
We don’t necessarily want to fully retire anytime soon because we enjoy working and pursuing entrepreneurial things. We love the concept though of working hard to reach financial independence sooner than later.
So we saw many people on Youtube that hit FIRE and then chose to move abroad to Thailand, Portugal, Bali, etc…
Since moving to China to semi-retire, we have shared many cost of living short videos. If interested, you can follow us on our social media accounts… just search for “Biesinger FIRE Journey”!
For example, in my wife’s city, you can rent a whole house anywhere from $200-$500 depending on how big and how nice the house and community you want.
This rental price is much cheaper than in Utah, where we lived before moving to China.
We currently have two rental properties in Utah, one is currently renting for $1,330, and the other one is $2,200 a month.
This is a perfect example to illustrate how much you can save just on rent in China!
4. Saftey
According to global time, China is “recognized as one of the safest countries in the world” with low harmful crime rates and people’s sense of safety reaching 98.6%!”
I can definitely attest to this since I’ve been to China in the past and have always felt very, very safe.
Even late at night, you will see many people walking around by themselves because they don’t feel in danger.
This is big reason we decided to semi-retie in China because we want our family to grow up in a safe environment.
5. Experience New Cultures
One of the biggest benefits of moving abroad is to experience other countries’ cultures and get to meet new people.
It still blows my mind to think that China has over 5,000 years of rich history! This country has both modern and traditional architecture, making it unique and appealing.
I have always loved Chinese culture, which is why I chose to study Chinese in high school.
Now I can have the opportunity to live in China and really feel the Chinese culture and charm. It’s an exciting time, and meeting the super nice people here is also so fun!
I cannot wait to keep exploring and meeting new friends!
6. Improve Chinese skills
Studying the Chinese language and culture has been a passion of mine for many years. In addition to studying Mandarin in High School, I also served a 2-year Church mission in Asia and came back to the US to graduate with a minor in Mandarin Chinese.
Now that I’m living in China, I have lots of opportunities to speak Chinese with others. The people are so nice here and get really excited when they see I can speak their language.
The city I’m located in now also has its own dialect of Chinese, so I’m working on learning some of that too, wish me luck. 🙂
My next goal is to get a Chinese driver’s license but to do so, and I have to take a test that only has Chinese characters. The rules for driving are similar to the US, but there are quite a few Chinese characters I need to learn before being able to take the test.
Overall I can already tell my language abilities are increasing, and I look forward to learning more!
7. Helping our Business
My wife and I love personal finance so we started this blog to share our stories and insights on pursuing financial independence.
We love sharing videos and tips on our social media accounts too!
Moving to China was the right decision because it has given us more ideas as content creators and made us different.
8. More Fun
We feel the decision to semi-retire in China has been such a fun adventure.
For example, there are many malls, shopping streets, food streets, night markets, and so much more!
Most everywhere also has places to take kids and have children play. So we are grateful to have so many fun activities to choose from!
9. Yummy Food
My wife missed eating authentic Chinese food, especially when she was pregnant with our two children.
There were some Chinese restaurants in Utah, but most of them were Americanized.
We were only able to find real authentic Chinese food when we traveled to other cities such as New York or Los Angeles, but the price there wasn’t cheap either.
I also love Chinese food, such as boiled beef, fried dumplings, Peking duck, boba milk tea, and so on.
It costs about seven dollars to buy a boba drink in the United States, but now it only costs one dollar in China.
Pretty amazing right?
Tips are also not required or common in China. So if you ever have the chance to visit China, make sure to take time to eat the local cuisine!
10. Rent FREE
My wife is the only child in the family, and Chinese culture is very collectivist. In American society, many children must be independent when they are 18.
For example, most American kids need to pay their college tuition and care for their expenses.
When you live in your parents’ house, sometimes you must also pay rent. This is because the United States’ culture is very individualistic.
There is more freedom but also typically less help financially from others.
In China, it is very common for three generations to live in the same house — grandparents, parents, and grandkids.
Now we are also three generations living in the same house because we live with my parents-in-law, who also help care for the kids a lot.
They didn’t charge our rent either. We offered to pay, but they refused.
My wife also said that this is normal. In China, usually, parents won’t charge rent to kids. Because of that, our expenses are even lower because of rent savings.
11. Cheap and Convenient Transportation
In China my in-laws have one car, two motorcycles, and two electric bikes. So we basically have free transportation which is super nice.
As of now I do not have a Chinese car or motorcycle license so I just drive around the fun electric bikes.
Not only are the electric bikes not expensive, but they also are electric and are thus environmentally friendly.
The transportation systems in China are pretty advanced with high-speed trains. Since my wife’s city here is a bit smaller we don’t have trains but there are a lot of bus stations.
12. Affordable Health Insurance
Fortunately, my family qualified for government health insurance so it ended up costing us only $54 per person for the entire year!
A family of four costs $216 annually.
My family’s insurance for one month is higher than one full year in China – pretty awesome!
Let us know how much Health insurance costs where you live in the comments section below!
13. Many Work Opportunities
Hitting coast FIRE means that you only need to work to cover daily expenses, but your investments are large enough so that they will continue to grow without contributions until retirement age.
So it really is just coasting until you hit retirement.
Since we hit Coast FIRE, we have more flexibility to work on what we want to work on, allowing us to semi-retire in China. 🙂 We still want to work hard and build a wealthy future.
It’s important to invest in assets though. I currently have two rental properties giving us healthy cash flows and actually covering all our living expenses.
Besides this rental income, we are working hard to provide valuable personal finance content on our blog and social media accounts. There are also many opportunities to work in China so no worries.
14. Overall Quality of Life
We feel our overall quality of life has improved because we stress a lot less about money and have more flexibility in our schedules.
A big reason for this is due to the lower cost of living mentioned above.
Back in the United States, we would cut our own hair at home to save money. Now in China, a haircut only costs $4 with no tips required.
It feels nice to have a professional cut our hair but not feel like we’re overspending. Here is a picture of my most recent haircut in China. 🙂
We are also able to go out and enjoy more outdoor food, massages, and other fun activities.
Although the cost for these items and activities is much lower in China, we still have a monthly budget and don’t allow ourselves to spend indiscriminately.
More on our budget to come!
In Conclusion
If you’re looking to semi-retire in China or move abroad, I hope these reasons could be of some help for you!
Although everyone comes from different walks of life, there are clear advantages and adventures awaiting you in another country.
Make sure to check out more articles on this blog for tips and inspiration on achieving financial freedom!
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
My wife and I contacted our student loan provider shortly after the Biden Student Debt Relief Program was first announced last year.
We received a refund from our loan provider but have been waiting to see if the forgiveness portion will eventually get passed, or not. Regardless, the refund was just sitting in my bank account and not being very productive there, so I had to make a decision, I’ll jump into more on that later.
The most current update is that the student debt relief plan is still blocked, and if it’s not resolved by June 30, 2023, the loan repayment freeze will end and payments will continue 60 days after that.
In this article, I will share our process for applying for a refund/loan forgiveness and how it actually turned out to be a great investment opportunity for us.
This post may contain affiliate links; please see our disclaimer for details.
Biden Student Debt Relief Program Details
Those with federal student loan balances on or before June 30, 2022 could potentially receive a refund of up to $20,000. Loans dispersed after July 1, 2022 don’t qualify and private loans do not qualify.
Here are some more eligibility details from studentaid.gov:
Credit: Studentaid.gov
The good news is that since I had paid off my loans during the pandemic (I made payments since March 2020), I was eligible for a refund! Next, I’ll share my exact application process for the refund and forgiveness parts.
Our Application Experience
My student loans were housed with Navient but then moved to a company called Aidvantage. Upon hearing the debt relief announcement, I called Aidvantage to see if I was eligible for a refund.
It was pretty funny because they did not have a formal process yet but took down my request and put me on a list. After calling back and waiting a bit longer, I eventually received a refund for a little over $20,000 since I previously had pell grants.
So I want to add an important note that I only received the refund, NOT the forgiveness. So technically, the $20,000 is still owed as of right now, but the good news is that I don’t have any payments due and zero interest charges.
I submitted my application for the forgiveness portion of the Biden student debt relief program on studentaid.gov, but as mentioned before, it has been blocked, and they are not accepting any more applications at this time.
Here is a copy of the email I received saying I was approved for loan forgiveness, but the pause had been extended.
Why is it an Investing Opportunity
With the debt relief plan continually getting blocked, my wife and I realized it probably wasn’t the best option to have that refund sitting in our regular bank account.
That would increase our high-yield savings balance to about $40,000 and give us about $120 in MONTHLY in interest payments! This is because our high-yield savings account is with CITI bank with an interest rate of over 3%!
Although it may not seem like a lot, those interest payments can really add up, and we could have well over $700 by the time the refund amount is forgiven from our loan provider or we have to pay back the $20,000, but keep the interest.
Why a high-yield savings account?
First: a high-yield savings account is a type of savings account that offers a higher interest rate than a traditional savings account. This can really add up over time.
Second: you can access the money immediately. Let’s say Biden’s loan forgiveness doesn’t go through, I’d still be able to quickly pull out the funds and pay off the debt. It would take longer to pull the money out of a 401k or other investment account, not to mention it would be riskier in those types of investment accounts.
When choosing a high-yield savings account, it is important to compare the features and fees of each option to find the best fit for your needs.
You can find high-yield savings accounts at both online and brick-and-mortar banks.
Many online banks offer higher interest rates than traditional banks, so it is worth considering an online option if you are looking for the best return on your investment. For more, you can visit this article I wrote sharing High Yield Savings Accounts – Should you have one?
A great place to get started with your savings account isCIT Bank. They offer very competitive saving rates with no monthly maintenance fees.
With their Saving Connect Account, you can earn 12x the national average! There are no ATM fees, and you have the convenience of online banking.
If you find yourself in the same boat where you have a refund sitting in your bank account, it may be a good idea to get it moved over to a high-yield savings account. Overall it is considered very safe.
I would definitely NOT recommend putting your refund into the stock market or somewhere with higher risk and volatility. Sorry crypto, maybe next time.
The same principle goes for any extra money you have lying around. Instead of keeping it a low-interest, regular savings account, move it on over to a high-yield savings account.
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
Before breaking down each of the expenses, I’d like to throw in a quick thought on our situation regarding rent in China.
My YouTube Video Sharing the Cost of Living in China
Our Rent Situation in China
My wife is Chinese and is the only child in her family. As you may know, a central part of Chinese culture is collectivism. It’s not uncommon to see three generations living together in the same house – grandparents, parents, and grandkids.
This exact thing happened when we came to China and moved in with my in-laws who were so excited to see our kids for the first time.
We offered to pay rent multiple times but they refused. It’s not common and is actually strange for kids to pay rent to their parents in China. So we are grateful for their hospitality which has allowed us to save money on rent & utilities.
You can see on this chart below from Hofstede Insights how China ranks compared to the US for collectivism and individualism.
Some of the main Chinese visa categories are tourist, business, student, work, and resident. You can visit Chinahighlights.com for a comprehensive list of all the types of visas.
Since my wife has Chinese citizenship, my two kids and I, who have US citizenship could enter China with Q1 (family reunion) visas.
Upon arriving in China, we had to apply for a foreign residence permit from the people’s republic of China. We went to the exit/entry administrations of public security located in my wife’s city to apply.
This permit for me and my two kids will last one year and cost us a total of $185, or $62 per person.
Some big cities will give you a five-year foreign residence permit but my wife’s city is smaller and the longest they can give is two years.
They will not give the full two-year permit at first since they want to make sure everything goes well at the beginning.
The process to apply for a foreign residency permit in China
A lion statue in China outside of the exit/entry administration of public security building
The process for us when first arriving in China was to visit the local police station to have them set up a registration voucher of residence for visitors from overseas.
Since the city we’re staying in is smaller, they did not understand and just took down my wife’s phone number and address haha.
We then went to the exit/entry administration of public security, and they told us that the police station didn’t fill out any registration for us.
One of the head workers called the police station and chewed them out for not doing such an “easy task”.
Originally they were only going to give us 1/2 year permits but since the process took a long time and they saw we were a family they ended up giving me and my kids one year each for our permits.
After one year we can apply again and there’s a good chance we will get a longer permit!
2. Family Insurance: $215 (annual)
Me in the Health Insurance building
My kids and I were able to apply for China Healthcare Security since we had foreign residency permits.
China Healthcare Security is provided by the government and has many benefits such as being cheaper than private health insurance.
So for my wife, me, and two kids our total ANNUAL health insurance costs only $215, or around $54 per person.
The process for obtaining China Healthcare Security took many days and was quite stressful at times. Since we are in a small city there are few people with the needed training to get foreigner information into their system correctly.
Fortunately, the people we worked with were very dedicated and took the time to get everything figured out, woohoo!
3. Gym: $154 (15 months)
One of the gym locations in my city 🙂
Exercise has always been a passion of mine, so I signed up for a gym membership at a place called JiaFu Fitness.
I came to China at the perfect timing because the gym was just celebrating its 10-year anniversary and giving a discount to new sign-ups.
The total cost for 15 months is $154 which is about $10.27 a month. The best part is I have access to all locations, many have swimming pools, and there are no annual fees.
Covid restrictions were lifted here about a month after I started going to the gym. With the lifted restrictions, basically, everyone got sick, so the gym was closed for a couple of weeks.
The gym also closes for the Chinese New Year holiday coming up so for these reasons they are going to give me another month free.
4. Fun: $180
Most of December was spent settling in with the in-laws taking us around to explore the city.
It’s nice being semi-retired in China because we have the flexibility to go out on adventures.
We used our fun money to go see Avatar 2, for arcade games, and for little kid car rides.
Watching Avatar 2 in a Chinese movie theatre!
The biggest expense though was a one-time purchase of a gaming router that cost $115. The whole family benefits from faster wifi though lol.
5. Eating Out: $150
Yummy Chinese foods
One of my favorite things about living in China is the FOOD. There is so much variety to the delicious foods here and so much flavor!
Don’t get me started on the deserts either. I love the shaved ice, mango drinks, and boba drinks, the list goes on probably forever.
Eating delicious desserts in China
In total, we spent $100 as a family of four eating out. We also spend a lot of time eating in and eating my mother-in-law’s delicious cooking which helps us save on costs too.
6. Phones: $20
I am currently on an international plan with Google FI where my monthly payment is $20.
It comes with unlimited wifi texts and calls which is awesome since I can keep in touch with my family in the US.
If not on wifi, it is then $10 per GB of usage. I’m using the Flexible plan, but for more details on all the plans and options you can check out Google FI Plans.
The customer service is truly amazing. They accidentally deducted the wrong amount from my first bill so they gave me a $100 credit.
My wife and I also have phones for use in China with Chinese SIM cards. They are under a family plan and my in-laws insisted on paying for it.
7. Baby Expense: $135
With both of our kids still very young, a lot of our spending for this category went to diapers, wipes, formula, etc.
We purchased these baby items in bulk to help give us a discount and also last for a long time.
Something we noticed is that the price for these baby items is very comparable if not the same as in the US.
8. Living expenses: $460
These expenses include new clothing, toiletries, and other personal daily-use items.
We did not bring a lot of personal items with us to semi-retire in China so we had to buy quite a few things to get settled in.
Summary
The costs for December were really not too bad considering it was a settling-in month and we had a lot of one-time or annual expenses such as the foreigner residency permit, family insurance, and gym membership.
Below is a table showing our semi-retired costs of living in China with the total amount for December equalling $1,449!
Expense Categories
Costs (USD)
Foreigner Residency Permits (annual)
$185
Family Insurance (annual)
$215
Gym (15 months)
$154
Fun
$180
Eating Out
$150
Phones
$20
Baby Expense
$135
Living expenses
$460
TOTAL COSTS:
$1,449
Our December Expenses in China
Please let me know in the comments below if you’d like to see more of our regular monthly spending and budgeting.
Wishing you all an amazing new year! 🙂
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
Greetings from the Biesingers! Welcome to our financial independence retire early (FIRE) blog! We are so excited you are here and to share valuable financial freedom and health content with you. For more information about us, click HERE.
