When I write about retirement planning or saving for retirement in general, one reply I often hear is, “But I don’t want to retire! I enjoy my work.” That’s a sentiment I can relate to personally. I enjoy my work a great deal, and I hope to continue doing it for as long as I can.

So, for those of you in a similar situation, what should you be doing differently from other investors?

Should You Save for Retirement Anyway?

You may enjoy your work now, but will you still feel that way when you actually reach the age where most people retire? Betting your future livelihood on the assumption that you won’t change your mind is a risk that doesn’t seem wise to me.

Naturally, the level of this risk is affected by your current age. If you’re 62 and have no desire to retire, that’s one thing. Being 32 and having no desire to retire is another. The likelihood of changing your mind at some point in the next three decades is much greater than the likelihood of changing your mind in the next three years.

In fact, if you’re in your twenties or thirties, I’d suggest saving as if you planned to retire at a typical age, regardless of whether you currently intend to do so.

Once you begin to close in on 65 or so, if you still feel no desire to retire, then at that point, it likely makes sense to start scaling back your annual retirement savings. (Or, depending on how much you’ve accumulated by that point, it could make sense to stop saving completely.)

How Long Will You Be Able to Work?

Even if you never end up wanting to retire, it’s important to recognize that you might not get a say in the matter. Layoffs occur, even to valuable employees. And in an era where age discrimination is an (unfortunate) reality, finding another job isn’t a sure bet.

Alternatively, even if your employment prospects never pose a problem, your health might. Depending on the work you do, there’s a good chance that at some point your body simply won’t allow you to continue the same level of productive output.

To neglect saving because you assume you’ll be able to work as long as you want puts you at risk of a meaningful decline in living standard later in life.

Roth IRA or Traditional IRA?

As we’ve discussed before, the question of whether to contribute to a Roth or traditional IRA is primarily a function of how you expect your tax bracket during the withdrawal stage to compare to your current tax bracket. (If you expect it to be higher later, go with a Roth. If you expect it to be lower, go with a traditional IRA.)

Naturally, if you expect to continue earning income well into what many would consider their retirement years, your late-in-life tax bracket is likely to be higher than that of many other investors. As such, a Roth IRA becomes relatively more attractive.

Don’t Forget About Insurance.

Lastly, if you work well into your 70s, you’re going to have different insurance needs than investors who retire at age 60 or 65. If you’re planning to continue working (and you expect to be reliant on that income), you’ll probably want to keep a disability insurance policy active. And, if anybody other than you will be relying on your extended-career income, you may also need life insurance longer than most other investors.

For the Baby Boomer generation, the current economic recession has meant both reduced investment accounts and impeded prospects for continued employment. In fact, many Americans are facing the prospect of retiring with social security as their primary means of income.

Naturally, most people do not want to see their living standards decline dramatically in retirement. As a result, many people have begun to ponder retiring overseas — particularly in the developing world — as a way to maintain their standard of living, or perhaps even elevate it.

While retiring overseas is an option, it’s not a perfect solution. Poor countries have many problems. The poorer the country, the more problems: poor infrastructure, political instability, and perhaps most importantly, economic instability. Further, poor countries might even suffer from periodic currency devaluation (as a result of defaulting on their debts).

Where You Can Retire

As a foreign retiree, you are essentially an immigrant. That means you will require a special visa to settle indefinitely in a new country. Most countries in the world do not have retirement visas and therefore make it next to impossible for foreign retirees to settle in their country. The United States, for instance, does not have a retirement visa program.

However, some countries around the world, particularly in Latin America and Southeast Asia, have created special retirement visas for foreigners. These countries believe that retirees with state pensions — such as social security — are a revenue generator, and they have made it possible for this group to settle permanently in their countries.

So which countries are best for a person to retire to? If you are approaching retirement with considerable assets and income, the list of countries you can retire to is considerable. If you are facing a retirement with low income, you really can only retire to the developing world. Developed countries are simply too expensive.

Best Places to Retire Abroad: Limited Income

Most of the following countries suffer from periodic currency devaluations, political instability, and poverty. But, on a limited income, they’re the best of the bunch.

Costa Rica: In many ways the most politically stable and economically vibrant country in Latin America (with the exception of Chile), this country is extremely popular with American tourists. It’s outlook is certainly bright, and it boasts a large number of nature preserves for those interested in a more ecologically friendly country for their retirement.

Malaysia: The most developed country in Southeast Asia outside of Singapore, this country is affordable and far more stable than its neighbor Thailand. It has a developed retirement visa program, and it boasts pristine beaches and wilderness. Beware though, that its conservative Muslim government is known for restricting the rights of some ethnic minorities.

Uruguay: One of the most affordable places to live in the Americas. It has a relatively low crime rate, and a politically stable government. However, its small economy can be dramatically affected by the volatility of its neighbor to the South, Argentina.

Panama: This progressive Central American country probably has the most economic incentive programs for foreign retirees. There are discounts for shopping if you are over a certain age, you can import some goods duty free, and you pay no tax on all foreign income. The Panamanian economy also uses the dollar as its currency. Beware the high humidity and somewhat-high crime.

Nicaragua: This is another Central American country trying to attract western retirees looking for a lower cost of living. Nicaragua is quite poor, but it is stable and has a rapidly growing economy. For those trying to get the most bang out of their buck, it may be ideal. But beware the lack of sophistication and high levels of poverty.

Best Places to Retire Abroad: Higher Income

France: A stable, strong economy with great healthcare and of course great scenery. However, it doesn’t come free, and this country has the highest cost of living of any retirement destination on this list. But if you can afford it, go for it.

Spain: Spain has great infrastructure that is improving by the day due to government investments. It has low crime and decent healthcare. While it’s cheaper than France, it’s still far more expensive than anywhere in Latin America.

Italy: Italy, particularly in its Southern and rural regions, is more affordable than France and Spain, but in urban centers it can get expensive. It’s famous for its ineffective bureaucracy, which can make applying for a retirement visa a headache. Infrastructure can be spotty in areas as well.

Portugal: The most affordable part of Western Europe, it is a country that is growing in popularity as a retirement destination. While it is cheaper to live there than other places in Europe, that affordability comes with a price: economic instability.

New Zealand: The ideal place for an American to retire. It’s cheap, has a diverse ecology, and English is the national language. The problem is that New Zealand’s retirement visa program literally costs millions of dollars in order to qualify. If you can afford it, and are not comfortable living in a country where English is not widely spoken, go for it. For others interested in New Zealand, a snow bird alternative — liveing in the country on a tourist visa for up to six months a year — will be the only realistic option.

Do Your Research

Retiring overseas is not easy. It is not a matter of simply picking up and moving. It requires research and a well thought out plan. It helps if you speak the local language of the country you plan to live in. And it is best if you visit the country before moving.

Visit the country, and see how far your budget will really go. Explore the country thoroughly in all seasons of weather to determine whether you can handle the climate. And ask other expats, particularly those from your own country, about their experiences and for their advice. Most importantly, however, make use of common sense when approaching an overseas move. If it sounds too good to be true, it probably is.

About the author: Rick Todd writes at Expat Investing, where he covers such topics as whether retiring abroad is right for you and how much it costs to retire overseas.

Last weekend, I read Larry Swedroe’s latest book The Only Guide You’ll Ever Need for the Right Financial Plan. (Excellent book, by the way, for the intermediate/advanced investor.)

One point Swedroe makes repeatedly throughout the book is that you need a “Plan B” if you’re going to be investing in risky securities like stocks. Specifically, you need to be prepared for a scenario in which:

1. Stock returns over your retirement are far less than their historical averages (and lower than the returns you were planning on), or
2. You face an unlucky sequence of returns — namely, a bear market at the beginning of retirement — that leaves your portfolio at just a fraction of its original size while you still (might) have 20+ years of retirement to go.

In other words, you need to have a specific plan for what you will do if it looks like your portfolio is no longer going to be able to sustain the rate of spending that you originally planned on. For example, “If our withdrawal rate gets above X% before age 70, we’ll _____.”

“Plan B” Options

The most likely forms of backup plans are simply ways you can cut your spending or increase your income. For example:

• Take vacations half as often,
• Sell your home and move into something less expensive, or
• Get a part-time job or start a business.

Investment “Plan B”

But what if you don’t want to go back to work or significantly reduce your spending? Is there any way to adjust your portfolio so that it can fund a higher withdrawal rate?

Moving more money into stocks may work — if you get lucky and the market comes roaring back just when you need it to. Or, it could backfire completely if the market continues to perform poorly.

Moving a large portion of your portfolio into TIPS would reduce your risk. But their payout is rather low. An all-TIPS portfolio is unlikely to sustain a withdrawal rate that’s already unsafely high.

In short, if you’re looking at a dangerously high withdrawal rate and you’re absolutely unwilling to cut spending or go back to work, annuitizing your portfolio may be the only way to ensure you don’t outlast your money.

Of course, as we’ve discussed several times here, annuities have their own drawbacks:

• The money won’t go to your heirs,
• You lose control of the money (which can be a problem if you’re faced with a sudden, unexpected expense), and
• Annuities are still not 100% risk-free.

Plan B Stinks. What’s My Other Choice?

What if you’re unwilling to cut your spending, unwilling to get a job in retirement, and unwilling to annuitize your portfolio?

If that’s the case, then you probably shouldn’t be taking investment risk at all. I’d say that your best bet is to use a portfolio comprised largely of TIPS and to plan from Day 1 to use a very low withdrawal rate.