Don’t you love “Where Are They Now?” stories? Well, have I got a doozy for you.
In 1988, when I was an editor at Money magazine, I assigned a cover story on Paul Terhorst, a frugal Peat Marwick accountant who retired at 35 in 1984 and wrote a book about it: Cashing In On the American Dream: How to Retire at 35. Last week, I caught up with Paul, now 65, to find out how the past 30 years have gone for him and his wife, Vicki (also 35 when she retired) — and to learn his plans for, what could be, another 30 years.
Can you imagine 60 years of retirement? Paul and Vicki can, gleefully.
“It excites us very much,” Paul said, calling from their $450-a-month rental in Chiang Mai, Thailand, one of the seven best places to retire around the world, according to the new 2014 Retire Overseas Index. “Three of our four parents are alive in their 90s. We’re very excited and fully hope we can live and have vital, exciting lives for the next 30 years.”
(MORE: What 30-Year-Old Retirees Can Teach Us)
Retiring at 35 and Never Looking Back
When they first retired, says Paul, the couple determined that “we wanted to have a good life, rather than just a good job, so we decided to retire and never look back.”
And they haven’t. For the past 30 years, they’ve lived as what Paul calls “Perpetual Travelers” or “PTs,” spending less than $100 a day (sometimes much much less). Over that time, they’ve criss-crossed 80 countries from Argentina to Australia — mostly South America, Europe and Southeast Asia — with periodic stops back to the U.S. to see their families.
Changing Their Early Retirement Plans
But that’s not exactly how the Terhorsts initially envisioned their very early retirement.
At first, they traveled from March through October and spent the rest of the year in their beach condo near Buenos Aires, Argentina (Terhorst worked out of Peat Marwick’s Buenos Aires office before calling it quits).
(MORE: Best and Worst Reasons to Retire Early)
Things worked out swimmingly. Then, the Argentinian economy cratered with inflation soaring (apartment expenses quadrupled), and the country grew more dangerous. “Argentina was getting expensive, which made our apartment worth a lot more money so we could sell it and make a nice profit,” says Paul.
They became true PTs in early 1992 and have been on the road, with no home base, ever since. “The biggest difference between being 65 and 35 for us is that we no longer get incomprehensible stares,” says Paul. “When we were 35 or 40 and told people we were retired, they looked at us like we just arrived from the moon. Now we’re old and gray.”
These days they typically spend a few months in one place before moving on, sometimes longer. Vicki likes to return to the U.S. twice a year, often to visit her parents in Portland, Ore.; Paul prefers going back every two years (typically to see his mom in Los Angeles). So Vicki sometimes visits the states without him.
Homeless by Choice
“I like to think of us as homeless,” Paul wrote on his blog. “Not the destitute homeless, but homeless in that we have no home, no home base and no place to return to. Home, for us, is wherever we plug in our little computer.”
Sometimes they move on when it’s time for a “visa run.” That’s what expats call the moment when their visa is about to expire from the country they’re in.
The Terhorsts have a one-year Thailand visa, which lets them stay 90 days, leave on a “visa run” and then return (even the next day), doing this as often as they want during the 12 months. They’re about to take their next visa run to Australia, where they’ll spend a few weeks in Brisbane and Sydney before returning to Chiang Mai for another 90 days.
(MORE: 7 Best Places to Retire Around the World)
In 2015, Paul says, they plan to hop over to Cambodia and Malaysia, then spend five or six months in Europe and finish in America, with stops in Thailand in between.
The Terhorsts have whittled their possessions down to 10 boxes (in storage near their parents and in Argentina), four data files and no car. “We use walking as our main form of transportation,” says Paul. And — true to Paul’s CPA background — the couple uses Washington state (where Paul’s brother lives) as their address for U.S. residential purposes because there’s no state income tax.
No Longer Living on Their Interest
The Terhorsts have needed to tweak the financial side of their retirement, too. Their original plan was to sell their assets, put the cash in the bank, and live off the interest in a cheap part of the world. At the time, bank CDs paid around 8 percent. Ah, yesteryear.
“We had to change our investment strategy. Instead of living off our interest, we switched to buying stocks,” says Paul. “We cash in from time to time just before our next trip.”
The buy-and-hold strategy has served them well. In words that are reminiscent of Elaine Stritch’s classic Stephen Sondheim song, I’m Still Here, Paul says: “We’ve had three major crashes — in 2000, 2001 and 2008 — and we’ve lived through them all and come out on top.”
Paul says airfare deregulation has been a boon, keeping flights affordable. So has banking technology. “We used to have to cash traveler’s checks; now we can go to any ATM,” he notes.
Now that the Terhorsts are 65, they’re also collecting Social Security, which supplements their income; they started claiming at 62.
Their reason for beginning benefits as soon as they could rather than delaying and receiving larger checks later? “We’re in good health and can enjoy the money today. That might not be true later on,” says Paul. “Plus our benefits are grandfathered in if Congress screws around with Social Security.”
How He Stays Sharp and Curious
The Terhorsts also earn a little pocket money from pieces Paul writes (and Vicki edits) monthly for the Overseas Retirement Letter, where they're Asia correspondents. “It’s nothing that takes a lot of time or energy,” he says. The writing “keeps me sharp about financial matters and keeps me intrigued and curious.”
That newsletter is published by the same organization that named Chiang Mai, Thailand one of the world’s top retirement places — due in no small part to the Terhorsts' recommendation of one of their favorite locales.
I was curious how the Terhorsts have dealt with health matters while gallivanting around the world.
Vicki, as it turns out, just had cataract surgery in Thailand. Paul has been hospitalized several times around the world for various maladies, including a kidney tumor. “We’re both in very good health. I’d say we’ve been very fortunate,” says Paul.
They now have traditional Medicare, “but it isn’t much good to us because Medicare doesn’t cover you generally when you’re traveling overseas,” says Paul. “So we continue to pay for our health care out-of-pocket. But at least now, when we go to the United States, we have coverage and if we get sick, we won’t be devastated financially.”
Their favorite spot over the last 30 years? “We’re PTs, so we stick with the notion that it’s wherever we happen to be right now. If not, we’d go someplace else,” says Paul. But when pressed, he cites Chiang Mai, Paris and — believe it or not — a town in the Ukraine: Lviv. (It’s far from the current troubles and has been dubbed "the European cultural capital you've never heard of.")
Advice for Early Retiree Wannabes
I asked Paul what advice he’d offer others considering retiring early or living the PT life, which he says is “for the select few.”
First, he says, be sure you can swing it financially. Next, “look at the moral value of your life.” By that he means: Determine whether your identity is your job; if it is, an early, vagabond retirement won’t be a good match. Finally, he says, decide what you’ll do with yourself. Says Paul: “You don’t need to be able to plan every day, just have a general idea. Will you travel? Look at birds, which is one of my hobbies? Paint? Take up target practice?”
If you’re one-half of a couple, talk candidly with each other about how much time you’ll spend together and how much apart.
“We decided we’d have significant parts of our lives away from each other,” says Paul. “Not six months apart, but on a day-to-day basis. Vicki has more of a social life than I do. I look at birds, read more books and take online courses. She goes out to coffee with friends or goes back to the U.S.”
The Terhorsts say they’re rarely bored (“no more in retirement than before,” says Paul) and have no intention to stop their world traveling to settle down somewhere. “Our lives just keep getting better and better and happier and happier,” says Vicki.
Looking ahead, Paul says, “Our game plan is: When our bodies break down, we’ll deal with it.”