Same Job, Different Country: The Savings Math

By Neil Solomon · 2 min read

Picture a couple named Naomi and Dev, both forty-nine. Together they earn $180,000 a year from remote work, and after taxes, housing, cars, insurance and everything else, they save about $28,000. They have saved about that much every year for a decade.

One winter evening, Naomi takes the same $180,000 and starts a second column. She wants to know what it would do in another country. She does not change the jobs. She changes the address.

Where $180,000 goes in a year, in two places (an illustration)

The second column assumes that part of their pay is excluded from income tax because it is earned while living abroad, which some countries allow. It assumes they rent a good apartment in a walkable city and give up one car.

A number like that leaves out some trade-offs. Part of the saving comes from things that cost less. Part comes from things Naomi and Dev would stop buying, such as a second car. A few costs go up. Naomi adds a line for flights home and for an accountant who knows two countries’ rules, about $10,000, and the second column still leaves $90,000.

Over ten years, with no growth at all, the first column leaves $280,000. The second leaves $900,000.

The couple in the second column work the same hours at the same jobs. What differs is where the money goes before it reaches the savings account.

A couple in their forties might use the difference to retire earlier. Someone nearer retirement sees the same lower costs as a smaller lump sum. That is what the number on our calculator shows: the money you would need on the day you retire, in each country, at the way of living you pick.

You could draw your own two columns. Put your year at home on one side and a year in a country you are curious about on the other. Housing and insurance often move the most, so they might be the best lines to start with.

What would your second column show? Tell us in the comments. Someone reading may be holding the same two columns.