Spending the first three years of your retirement as a Peace Corps Volunteer might sound like a crazy idea, but it’s also a surprisingly sound financial one. Serving your country while assisting the people of a developing country can potentially improve your financial position by $100,000 or more.
Eliminate Spending Needs
The focus of most retirement planning strategies is on how you can save more for retirement. What if, instead of saving money to cover your living expenses during your retirement years, you could completely eliminate all living expenses for the first three years of “retirement”? Eliminating $100,000 of living expenses during your first three years of retirement has the same impact as saving an additional $100,000. And, as we all know, saving an additional $100,000 isn’t easy to do.
Suppose that you and your spouse are healthy 63-year-olds with savings, or a pension, that will generate $35,000 in income per year. In addition, you have Social Security income to support your retirement lifestyle. You are ready to leave your jobs, but are unsure as to whether or not you have quite enough money socked away. You’d feel a lot better about retirement if you had an extra $100,000 tucked away in savings.
What if, instead of having to wait until you have saved that amount of money, you could put yourself in a situation where your spending needs for your first three years of retirement were zero? Then you would not need that extra $100,000. How can you do that, you ask?
By becoming a Peace Corps volunteer.
No Bills Equals Savings
Before leaving for your host country, you’ll get things in order by selling your car (no car insurance, payment, taxes or maintenance costs), renting out your house with utilities, including heating oil, not included (to cover the mortgage if you have one). You can use the rental income from your house to cover furniture storage costs and your property taxes. You will have no bills, meaning your expenses are zero. That $35,000 per year you thought you needed for your retirement stays in your account, growing to $105,000 in savings over the course of three years. On top of this, your social security is deferred for an additional three years. This means that when you do begin receiving social security payments, the check value increases by about 15 percent for the rest of your life.
Reasons to Join
Let’s be clear: financial reasons should not be your primary motive for joining the Peace Corps. It’s not an easy job. Their tag line is, “It’s the toughest job you’ll ever love.” You should only join the Peace Corps if you want have a desire to serve your country and help the people of a developing nation. But if this appeals to you, and you are reasonably healthy and have some useful job skills, they would love to have you.
Peace Corps Volunteers receive free housing and comprehensive free medical insurance. You also receive a stipend to cover living expenses at the local level in your host country, and your spouse can serve along with you. The Peace Corps requires a two-year commitment, but high performing volunteers are eligible to extend for a third year. You’ll find that you can live modestly by local standards and not spend a cent of your own money.
In addition, by serving in the Peace Corps you will have contributed to the mission that John F. Kennedy defined in 1961 to promote world peace and friendship, a mission which seems even more important in today’s world. Along with helping the people of a developing country, you will have had one of the peak experiences of your life. And last, but certainly not least, you’ll have lots of stories to share with your grandchildren, who may shift from thinking you are slightly boring to thinking you are really cool.