CaptHaddock

In our case, we are headed to about as rural a location with top rated schools as you could generally hope for. Not to say it doesn't have its own issues of course, everywhere does, but in general, it is really a very nice place. It's clean, sparsely populated, has satellite and is just over an hour from Dallas.

There are good schools in Texas??

I checked in to it 4 or 5 years ago when they switched over to the point system (I'm nowhere ready to collect) but I was under the impression that you had to go in for an interview unless you were unable to due to a medical condition. Also at the time from what I read if you did not live in the USA and did not receive medicare you could get a check for a few hundred dollars a month. But as I said this was a few years ago so it may (as it always does) have changed.

Complete junk misinformation. For a US citizen, SS benefits do not depend on where you live and it never did. They don't depend on medicare either except that the govt deducts the medicare premiums from the benefit payment. Of course, if you don't sign up for Medicare you won't pay the premiums.

if US insurance companies can improve profits from health care reform that includes providing benefits to expats we may be in for a pleasant surprise...their PACs (lobbying groups) are right up there with the Israel and gun lobbies...

Zero chance of that. Why would the insurers want to pay out more? And to foreign providers whom they can't monitor effectively?

They do not want us here.........that is what the visa system is telling us. If you can't see it, you are blind.

The trouble with some of you expats in Thailand is that you overestimate your importance. I doubt whether the Thais and the Thai govt think much about you from day to day. Why should they?

Well, you may know there is a new wrinkle in the news, increased chatter about a VAT tax for the US, and elimination of the need to even file normal income tax for people earning under 250K USD (most of us I imagine).

The chance that the US will replace income tax with a VAT is pretty close to zero. What is much more likely is a VAT in addition to income taxes perhaps with some reform of income taxes. Sales taxes, such as VAT, are regressive which is contrary to the interests of much of the Democrat base.

Next month I will be 60 years old. We plan to retire to Thailand in mid 2010. I have got health insurance quotes from ThaiVisa. My question is whether it is worthwhile for me to buy the insurance now, before I hit 60 even though I will not use it for the coming year. It sounds like I can still get insurance after age 60, depending on a physical exam which I would expect to pass because I in very good health. I would probably take a policy with a large deductible since I can self-insure.

If I were to take a policy after 60 and then have a major illness, would the insurer just refuse to renew me?

Are there any expat retirees out there facing these questions? Most of the discussion seems to be among younger guys.

favorable exchange rate

???

What favorable exchange rate? Have you shopped for wine, cars, or cheese in Thailand? Some things are cheaper, some things are more expensive. This has nothing to with right to settle or not, that is a visa matter, this is about racist pricing policies. Comparing to hotel taxes which are color blind is not apt. If you live in a housing village, you LIVE in a housing village. See the diff?

The favorable exchange rate that makes Thailand cheaper to live in than the US, the cost of wine, cars and cheese notwithstanding. (I don't drink wine, eat cheese or drive a car myself, but I will take your word for the prices.) Hotel taxes are a perfect, color-blind way to make out-of-towners pay more tax than locals pay because locals don't stay in local hotels often. But why is that fair merely because it is not based on skin color?

In general, charging farangs more is progressive taxation, which I have always supported, even though I recognize that in this case we are talking about merchant prices rather than taxes. The principle is similar. If I were a Thai merchant I would be trying to figure out how to get more money out of you than my Thai customers, because you have more. Just as the airlines figure ways to charge businesses more for a plane ride than regular people.

The deal with living in Thailand is that you get a cheaper lifestyle, more especially in housing and services than cheese. Among the prices you pay is forever to be a merely tolerated guest in someone else's country without the rights of citizenship you enjoyed in your home country. That deal should have been obvious before you bought the plane ticket. What had you ever read that encouraged you to believe that Thais would regard you as legally or morally entitled to be treated the same as Thais?

I started overseas work for a large multinational company many years ago. Part of their induction program included a presentation on the various emotional stages a person may encounter in their first few years living/working away from home.

I've forgotten most of the details of that presentation but what you're going through sounds about normal for the timescale. It's just a phase that will pass.

How could I find out more about that? I am planning to move to Thailand and would like to know how to manage expectations around adjusting to life there.

Yes, it is racist and I will go even further. Racism exists in every corner of the world. The Thais didn't invent it. The Nazis didn't invent it. The US KKK didn't invent it. But many of the people of the Asian nations are some of the most extreme racists you are ever going to meet. An inconvenient truth? Sorry. Why do so many want to sugar coat REALITY? What is wrong with seeing the world, including the Thai world, for WHAT IT IS? Why the irrational romanticizing of what is happening here?

Well, taking advantage of unenfranchised visitors is probably a pretty universal humain trait. I don't know that it is necessarily racist. Here in New York City, for example, we have a high sales tax, 8.125%. However, if you rent a hotel room, you get to pay a special Hotel Room Occupancy Tax of 5.875% PLUS the sales tax. Why should hotel rooms be taxed so much more than other items? Because the tax is paid by outsiders who have no voice at all in deciding tax rates and whose wrath no local politician fears.

I find that all this talk of the racist nature of dual pricing to be amusing. Do you imagine that it is a fundamental human right to settle in a foreign country and benefit by commandeering goods and services with the favorable exchange rate for which you can take no credit at all?

It seems to me that the most important question you can get right in investing is whether, on a ten year view, expectation for inflation will decline or rise.

Debate is polarized.

But the bear case against USTs is not that obvious to me now.... here is the deflationary view spelled out....

http://www.hoisingtonmgt.com/pdf/HIM2009Q1NP.pdf

And here is the inflationary view by perhaps the world's leading expert on deflation.

http://en.wikipedia.org/wiki/Bernanke_Doctrine

I have always thought that the US will inflation the way out of their debt crisis but people like Krugman seem to be right (at the moment) that deflation is a more destructive and powerful problem than people have anticipated.

Any views? And to the extent you have one, what is the best play TIPS? TBT? Gold? etc.

You are exactly right that deflation/inflation is the crucial issue of the day! I also read Hoisington & Hunt every quarter. They have had some good calls in the past few years. So far, I lean toward the deflationist camp for these reasons:

1. With US capacity utilization down to 67% and U-6 unemployment up to 15%, it is hard to see how an inflationary spiral can get started. High inflation, such as during the 70's (peaked at 18.5%), seems to require a wage/price spiral.

2. The scale of the losses so far vastly outweighs the govt intervention. Between houses and stocks alone, the US has lost $15 trillion or more. Obama's stimulus calls for spending $200 billion in 2009, half of which will be tax cuts that don't have much impact.

3. Japan both printed money (increase money supply by 1/3 during 2001 and 2002) and doubled its national debt in Keynesian spending. Inflation never happened. The money sat in vaults. You only get about 1.3% interest on a 10 year Japanese Treasury.

Also, all the generals fighting the last war expect inflation, which they know and fear. But deflation is unfamiliar. So, it will not be priced correctly. And deflation has arrived in any case: CPI for the trailing 12 months is slightly negative.

IMHO, the upshot from an investment/preservation of capital point of view is that the best buy now is bank/credit union CDs. You can still get 4% going out 5 or 7 years at some CUs. If deflation were to play out as it did in Japan during the 90's, you would be delighted to have a safe 4% when prevailing rates drop below 1%. On the other hand, if the call turns out to be wrong and inflation does return, you can get out of a CD without loss of principal at the cost of a few months interest. That can't be said for Treasury Bonds.

But some serious people, such as Rogoff and Blinder, do see a risk of high inflation. So, the situation bears careful attention.

We had a friend with us who spoke good Thai, he said it was a standard contract so we trusted him and signed it.

The oldest way to phrase the question, "How ignorant are you?" is to say, "It's a standard contract." Whenever someone says that to me I reply with, "Whose standard? Certainly not my standard."

Thanks for the info. on Canada........he also misrepresented visa policies in the USA, my country.

It is infinitely easier for a Thai to live and work in the USA than it is for an American to do the same in Thailand.

Just a few examples:

1) a Thai can start a business without have to put any money in an American bank account and does not have to hire three Americans,

2) a Thai married to a US citizen is virtually certain to be granted a long term "hassle free" visa, and they often are granted citizenship (takes time but it is frequently granted)

3) a Thai married to a US citizen is given a "re-entry permit card" that is good, I think, for three years, allowing him to leave and enter the country without having to worry about losing visa status

4) a change in visa status does not require leaving the United States

5) once granted a visa there is no 90 day reporting

Not really true. A Thai is much more likely to be denied even a tourist visa to enter the US. We were unable to get a tourist or student visa for my sister-in-law. Nationals from poor countries are routinely denied visas to the US.

There is no such "re-entry permit card." I know because it took my wife three years to get a green card. There is something called "Advance Parole" that permits a foreign national to re-enter the US while her application for Adjustment of Status is pending during which time she does not have any visa. That document is good for one year, but the applicant may still be denied entry according to the judgment of the officer at the port of entry. In other words, re-entry is normally permitted, but is not a right.

The US immigration procedures worked fine for us, but the door to America is not wide open and hasn't been for decades.

I already asked you : What visa are you on?

is that what makes the difference? i am on a tourist visa, as no other visa applies to my situation.

How could you possibly be a bona-fide resident on a tourist visa?

Start calling a recession again and then two, three, five or ten years hence say look I told you so when it takes a dip.

A dip, eh?

Also, one could easily get by without air-con in Chiang Mai if you live in a comfortable building, where it would be almost a must have in Bangkok.

What kind of comfortable building in CM would not require aircon? Can you identify some of these buildings? Interested for our eventual move to CM.

Thanks very much for helping me wade through this issue...I didn't realize the impact on SS by foreign earned income. Looks like I'll need to wait until I retire for good before initiating my benefits. I realize my eventual payments will be higher as a result of deferring my decision, but actuarially it will be a gamble to see if I live long enough to get a bigger cumulative payout.

That's the Return on Investment manner of looking at SS benefits. In my opinion, the better way to look at it is as insurance in the form of an annuity. From this point of view you get an immediate benefit by delaying SS to maximize the eventual payout and the benefit does not depend on your surviving for any particular period of time. By delaying and maximizing SS you protect yourself, at least to a greater degree, against the risk of outliving your assets. That would lead to the worst outcome: being old and poor. The result of increasing your protection against running out of assets is that you can spend more of your assets to live right now. Your need to save for late old age is reduced, freeing up money for current consumption.

I have just relisted my house in Pattaya for rent or sale and so far am pleased at the activity. The developer of my village has said that the rental market is picking up this last month and it appears to be so.

He has 3 beautiful villas for sale or rent and I wish I had the money I would grab another one. I actually prefer to rent over selling since my ROI is about 8% (US tax free) and I don't know where I could get that elsewhare.

If I had some extra cash I would put it in Thailand. I think the returns are better and the future is brighter compared to the US.

Of course there is risk, but I think the trends are good.

If you are a US citizen that rent you receive is tax-free only if you are cheating on your taxes. US citizens are taxable on our world-wide income.

The maximum FICA (Social Security) tax deduction from your pay is about $5840 per year. In 15 years, that maximum would be about $87,000. It's true that your employer also pays about this much, but that is not a cost to you. It doesn't come close to your $225k.

I don't know what you've been smoking or where you get your information, but it's all wrong.

For starters, I get a quarterly statement from the government that tells me exactly how much I've contributed and exactly what my forecasted monthly payout is supposed to be. Did you think I just pulled those numbers from thin air? You are also dead wrong about the maximum social security taxes that can be paid every year. Believe me, I know. I have been paying the maximum for a lot of years. And the bureaucrats want to raise the rate yet again.

As for the employer contribution, you must be a mindless drone to think that is not a cost to me (or anyone else). That money could otherwise be offered as a higher salary, or a bonus or other benefit, so it sure as <deleted> does come right out of my pocket. It's no different than the ridiculously high corporate taxes. Corporations don't absorb corporate taxes and their half of the social security theft. They pass those costs on to the consumer and worker, resulting in higher priced goods and lower salaries.

And you better get your head out of the socialist manifesto, get out and smell some fresh air, and then start listening to some real economists. Social security is bankrupt and has been that way for a couple of decades. The money has been looted just as with any other Ponzi scheme, put into the general revenue fund, and spent. You can't rob Peter to pay Paul an hope to get away with it ad infinitum. Promising to pay out more than is taken in is not a viable business model.

Here are the SS and Medicare tax rates from the SSA:

http://www.ssa.gov/OACT/ProgData/taxRates.html

The SS tax rate (FICA or OASDI) is 6.2%. This rate is applied to earned income up to the maximum in 2008 of $102,000 as described here:

http://en.wikipedia.org/wiki/Federal_Insur...butions_Act_tax

The maximum FICA tax paid by taxpayers in 2008 was 6.2% of $102,000 or $6,324. Warren Buffet did not pay a penny more.

Note this does not include Medicare tax which is 1.45% of all earned income. Nor does it include the employer's portion of either. If you are self-employed you paid both portions.

I am afraid your vehemence is a poor substitute for competence.

Oh, and by the way, I have another 15 or so years left in my working life, which means the government will extract about another $225k from my pay that I might otherwise be allowed to invest in the private markets, and might reasonably accrue to a value of about $450k in that time.

Your post offers a wealth of misinformation, but let's just focus on this particular number. The maximum FICA (Social Security) tax deduction from your pay is about $5840 per year. In 15 years, that maximum would be about $87,000. It's true that your employer also pays about this much, but that is not a cost to you. It doesn't come close to your $225k.

SS is better funded than any other government program. A few years ago the SS Administration estimated that the SS Trust Fund (extra payments made beginning in 1983 to cover the baby boomer generation) would run out in about 2042 after which point benefits would be paid only out of current FICA tax collection. Every year that horizon has been receding. Currently, the SSA estimate is 2048. Even that date of exhaustion is based on using the lowest estimates of economic growth. If we use the highest SSA estimate of growth (2.9%, still lower than the post-war average of 3.4%) the Trust Fund never runs out.

So the "break-even" point you calculate is incorrect. However, when you evaluate an annuity such as SS, it is important to understand the benefit you get does not strictly depend on whether you actually collect all your payments or not. SS pays you for your life, no matter how long you live. You cannot outlive your benefits. If you have no such lifetime benefit how would you face the prospect that you might well live to be 95 or even higher? Although statistically, you don't have a high probability of reaching that age it is certainly possible and would be very unpleasant if you were also poor. Well, when a population has no SS-like annuity and has to fund an indeterminate old age entirely from savings (which is what you are proposing) they do what the Chinese do, save up to 48% of their household income. That means no consumer economy. All those households have to save for the longest possible life even though most of them won't live that long. A great waste of resources. The Chinese govt has announced a plan to institute an retirement system by 2011 or 2012 at a cost of USD 125 billion, just for this reason: to enable a consumer economy.

I am also a fairly introspective fella, so I think I'll be somewhat equipped to avoid the people that want to distract me.

When meditation people talk about "introspection" it has nothing to do with the kind of thinking-about-myself that we call "introspection" in everyday speech. The meditation kind of introspection is observing the mind and takes intense effort.

Thanks for the helpful info on the credit cards. I will have to think it through. I could use a relative's address and phone number, but prefer not to. I will be bringing my US phone number with me via a voip service. So, I would like to use that number. Since I have had my cards for decades, it would be nice if that help at all.

The easy way to handle it is to open an account with http://www.usabox.com and use the address that they give you as your "home address" for all your financial accounts.

It's not as simple as that. I just opened a joint bank account. They accepted my driver's license as verification of address, but since my wife doesn't drive, they demanded a copy of a utility bill for her. Using a mail forwarder wouldn't be sufficient for opening a new account.

For those of us who aren't going to move to Thailand for some years yet, the take-home message is to open several bank accounts before leaving, which I am doing now. I intend to give up my New York State driver's license to eliminate that possible basis for NYS to decide that I am liable for state income taxes.

So, what about credit cards? I plan on keeping my Amex and Mastercard and using usa2me.com for a US mailing address. What will happen when the only charges to those cards are in Thailand? Will the card issuers revoke the cards or put a freeze on them? If I were to inform the issuers that I am resident in Thailand, would they revoke them then?

I don't want to get additional cards, but I am wondering if it is prudent to do so against the possibility of having some of them revoked?

What are your experiences with Amex and the other issuers in this regard?

Has anybody ever attended the Thai language classes at the Language Institute at CMU? They seem less intense then AUA. Any experiences?

Thanks

I aongly recomend it. I speak thai allready but currently finishing the first course at CMU and can stro the course has been invaluable in helping me use better tones.ngly recomend it. I spoke thai before I started however the course has been invaluable in improving my terrible tones. I am continuing the second course. A side benifit is that you get may of the advantages of a CMU student, the gym the library and the swimming pool. Just being on campus has given me a view of thailand I never had when I lived here 30 years ago.

Is it an intensive course? How many hours per week? How many students per class? How good are the teachers?

If it weren't for the current credit crisis, I'll bet this scam could have gone on for many more years. Probably unsuspecting investors,withdrawing funds because of their other losses, drained Madoff below the point where he could continue to rob Peter to pay Paul. It's touching that he made an effort to loot the last $200 or $300 million and distribute it to employees and family before giving up. I am pretty sure that he was not alone, that family members and others were actively engaged in criminal activity, and that he is trying to take the rap alone because he is 70 years old.