A household with a $7 million net worth, including approximately $6 million in liquid investments, may be able to retire very comfortably in China. The answer depends less on China’s average cost of living and more on the family’s choice of city, international school, housing, private healthcare and international travel. Preserving the ability to return to the United States also requires a more conservative plan than simply calculating how much it costs to live in China today.
The Relevant Number Is $6 Million, Not $7 Million
For retirement-income planning, the most relevant figure is the approximately $6 million held in liquid investments. The remaining $1 million of home equity contributes to net worth but does not automatically produce spending money. It becomes available only if the home is sold, refinanced or rented profitably.
Keeping the American home could make a future return easier, but it would also leave a substantial portion of the household’s wealth tied to one property. Selling it could create additional liquid capital, although transaction costs, taxes, moving expenses and the cost of buying another home later would need to be considered.
The family should evaluate the plan using $6 million unless the home will definitely be sold and its net proceeds added to the investment portfolio.
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