Waldo Canyon Fire
On June 23, 2012 the Waldo Canyon Fire roared into existence and changed our lives forever. Marc and I just didn’t know it at the time. The fire started the day before Marc’s 50th birthday, and over the next week caused the destruction of the historic Flying W Ranch, 346 homes, and the evacuation of over 30,000 people. It burned over 18,000 acres in the Pike National Forest and adjoining areas and claimed the lives of 2 people who were unable to evacuate in time. (http://en.wikipedia.org/wiki/Waldo_Canyon_fire).
Our house was in area that was not likely to be affected by the fire and I ended up hosting several groups of friends who had been evacuated. When my house filled up, I became a bounce point for others as they were evacuated. People would show up with a car full of possessions and a frantic look in their eye. I would hand them a glass of wine say “It’s just stuff. You are okay. Your family is okay.” And send them into the back yard to watch the puppy play while they figured out their next step. After many bottles of wine and the twentieth time I said to someone “It is just stuff”, I looked around my house and wondered...
“WHY DO I HAVE SO MUCH STUFF?”
On day 3 the wind shifted and the evacuations began moving our direction. When we went under a pre-evacuation notice I called Marc and asked what he wanted me to pack. Aside from the stack of inherited art work, a suitcase and my Search and Rescue backpack, everything we were going to save fit into a Rubbermaid container…with room for a week’s worth of dog food. I looked around the house and realized it could all burn and felt a sense of liberation. In that moment 15 years of ‘the acquisition’ phase of my life ended. I just wasn’t sure what would come next.
When the evacuations were lifted we threw a party which featured a very tasty, very potent alcoholic punch, hence forth refered to as Inspiration Punch. After my fourth glass of Inspiration Punch I came up with a brilliant idea. In fact, it was so incredibly brilliant that I felt the need to announce it to the group with the rather load, albeit slightly slurred, statement “I have a brilliant idea!” Seeing as how everyone else had consumed at least as much Inspiration Punch as I had, they all concurred that my idea was indeed truly “Brilliant!!!”
My Brilliant Idea:
Marc had recently taken a job in Albuquerque, New Mexico and was living in a small apartment and I was still living in the house in Colorado Springs, CO. My punch inspired musing led me to wonder WHY we were living 6 hours apart.
Answer: for work. So why were we working? I came up with 3 reasons we work …and then promptly figured out we didn’t need to work for those reasons.
REASON 1: You work for Money.
REALITY 1: Why did we need money or at any rate why did we need as much money as we were making? We needed money for stuff. But we already had stuff, too much stuff, way too much stuff. I wanted to get rid of stuff, not get more stuff.
REASON 2: You work so you can have an income when you retire.
REALITY 2: We have that now. Marc retired from the US Army after 28 years and we receive a monthly retirement pension now. It isn’t a lot but could we live off it if we change our lifestyle? More to follow on that thought…
REASON 3: You work for health insurance.
REALITY 3: We have health insurance for life compliments of Marc spending 28 years defending America.
Based on that alcohol infused logic, we didn’t need to be living 6 hours apart, spending our lives in a cubicle, living for the weekends and vacations. We don’t have children and due to having moved continually with the military during our marriage, our strongest family ties are with each other. Marc and I have created our own little family unit and are perfectly happy spending our time with just one another.
Convincing the spouse and making a plan...
So I pitched the idea to Marc, and was promptly met with his patented “you are certifiably insane” look. To which I replied “But wait…I made a spreadsheet”. Marc soon came to accept that although he was indeed married to a crazy woman, my brilliant idea might actually be feasible.
The next question became, so if we don’t work, what do we do? I started looking at retirement havens around the world. Central and South America are prime right now, but it seems that most people who retire to those areas move into an ex-pat compound and live the same middle class lifestyle they had in America but for less money. When I read “you can get a 4 bedroom house with a gardener and a maid for …” I dismissed the idea of Central and South America. I didn’t want to live the same suburban life I have now somewhere else, I wanted to live a different life. I want to have an adventure!
In past years, Marc and I have vacationed in Europe on several occasions. These trips are always precision planned to maximize the amount of things we can see and do in our limited amount of vacation time. We often come back from vacation feeling like we need a vacation to recover from our vacation. Wouldn’t it be great to just go travel around Europe, spend a month here, a few months there, a month someplace else…
Reality sets in…the Schengen zone and taxes
What an absolutely fabulous idea!... until I learned about the Schengen Agreement. For Americans the days of backpacking around Europe for a year are long gone. The Schengen zone came into creation in 1995 and it created a single visa zone that encompasses 26 European countries. As an American, once you enter into any one of those countries, you can travel freely within all 26 countries without having to obtain a new visa every time you cross a border. This means you no longer have to get a German visa, and an Italian visa, and a French visa, and a visa for every country you visit… which considering how easy it is to travel in Europe can amount to a lot of visas. The Schengen zone is super convenient if you plan to be in the Schengen zone for less than 90 days. If you plan on staying longer than 90 days you are screwed. After 90 days you have to leave for 90 days before you can come back in. And not leave as in cross the border and come back the next day. Leave as in you only get 90 out of 180 days…period.
To get around this you have to get a resident visa for one of the countries in the Schengen zone. We have a really good friend in Slovenia, and really like Slovenia, so we looked at moving to Slovenia …and that was when the tax wake-up call came in. Getting residency in a country makes you liable for taxes in that country. Since most European countries tax on world-wide income, it doesn’t matter where your income comes from, all income is liable for tax in that country. And European taxes amount to a nice chunk of change. To be fair most European nations have a reciprocal taxation agreement with the United States which generally works out to something like “the U.S taxes will be paid, then that amount will be deducted from the amount owed on the European countries tax”. And in Slovenia that combination would still have consumed 40% of our annual income. While we are willing to change our lifestyle significantly to accomplish this, we don’t particularly relish going back to the starving college student lifestyle. Europe was starting to look undoable…
Then I stumbled upon a convenient post in one of the ex-pat blogs which stated that Hungary doesn’t tax retirement pensions. And Marc’s military retirement qualifies as a retirement pension. A lot more research and a couple of emails to a Hungarian relocation specialist and we had confirmation.
Based on the new tax treaty between Hungary and the United States, which was enacted by Act of XXII of 2010, says the following: Article 17. Section 2/a. ‘The payments made by the United States to a Hungarian resident, based on the provisions of Social Security or similar laws of the United States, is taxable only in the United States.’
So, in short any retirement pension income from the United States is not taxable in Hungary. While we would still be liable for U.S. taxes, we would not be liable for Hungarian taxes. It turns out Croatia doesn’t tax retirement pension either, but you have to own property in Croatia before you can get a resident visa; and there is no guarantee you will get the Croatian visa, which could leave you owning property in a country you can’t live in. (Portugal also enacted new retirment laws in early 2013 but they weren’t in place when we were starting this plan so I don’t know alot about them.)
Hungary’s rules on residency don’t require property ownership. You do have to show proof of ability to support yourself (either via income or significant savings); proof of health insurance; a bunch of other minor items. As we worked our way down the list, we were able to check off each item with a yes and Hungary was looking like a strong possibility. Since we plan to not work and live off Marc’s military retirement, we are also able to avoid a bunch of the requirement for the “work” type visa.
Marc and I have traveled to Budapest, Hungary in the past and really liked the city, but could we afford to live there? There are horror stories about flat prices in London or Paris…and Budapest is just as big a city. It turns out Budapest is a lot more affordable than London or Paris… while it isn’t Eastern European prices (it also isn’t Eastern Europe), we can rent fully furnished either studio or one bedroom apartment (with building fees and utilities) for around €500/month (which with the Average dollar to Euro exchange rate is somewhere between $600-$700/month). If you are interested this is who we are using: Budapest Lets
A year and a half after the fires we departed for Budapest in January, 2014. This site chronicles our adventures and mishaps and is designed to allow our friends and family to keep track of the insanity. Eat, Drink, and Carry a GPS arose from our realization that good food and drink can make a place great, conversely lousy food and drink can ruin even the best of places. And always carry a GPS (or at least a compass)…because it is awkward when you have to eat your friends.
If you choose to follow along, please consider yourself a friend, but understand that the information on this site is just our life and opinion. Please verify any information on this site before basing decisions on it, especialy if you have been partaking in the Inspiration Punch.
Eat, Drink, and Carry a GPS!
Marc & Julia