20 year saving for retirement.

[JeffersLos]

I'm 40 and plan to help my retirement by saving a set amount each month for 20 years. (25,000 baht p/m)

 

I'd rather not have it all tied up in something I cannot use, in case of an emergency or whatever.

 

I don't work here, so I don't have a WP etc, but have a number of bank accounts.

 

What are my options?

 

Are there any bank options or pension companies here that I can use that would be better than simply building it up in a normal low interest Thai bank account?

 

Splitting it 15,000 into something that I cannot touch without penalties, and 10,000 into a normal account in case I need to withdraw it could be an option.

 

Any information appreciated.

 

TIA.

 

 

[fletchsmile]

If you don't work here and have no income here, you won't be able to contribute to any Thai retirement schemes.

 

You can, however, make investments that you decide you are going to use for your retirement, just like anyone else (with a few restrictions along the line for being a foreigner), eg buy shares, buy property, buy gold, buy mutual funds, buy bonds, etc etc

 

Aside from Thailand focused products, like Thai equities, Thai focused mutual funds, Thai property funds, Thai bonds etc, you'll find that there are likely better and cheaper products outside Thailand.

 

On amounts like 25k a month though, exchange rate fees and transfer fees would significantly eat into just transferring the money each month overseas.

 

So what you could do do is, save your money up and do larger transfers say every 6 to 12 months.

 

Or another approach is

 

Buy investment products here that you know might not be quite as good as elsewhere, but are convenient, less hassle, avoid FX and transfer costs, might be more tax favourable for you, and mean that you are at least invested throughout. 

 

Remember being out of the market and in cash for 12 months could be losing you average annual returns of say 7% or more. These could outweigh an extra 0.X% to 1% per annum in charges by using Thai products, while also avoiding transfer fees, admin costs and tax, plus convenience and making life simpler etc  

 

 

Edited May 20, 2019 by fletchsmile

[Happy Grumpy]

1 hour ago, fletchsmile said:

Buy investment products here

Sorry to butt in.

 

Investment products such as?

 

 

Thanks. 

[NCC1701A]

3 hours ago, JeffersLos said:

I'm 40 and plan to help my retirement

what country are you from?

[Lacessit]

Save, then transfer out every 6 - 12 months to avoid repeating fees. Or buy shares on the SET here. Focus on companies paying dividends and with solid balance sheets. Bear in mind shares fluctuate in price, so there is sometimes short-term paper losses.

The main advantage of shares is they can be liquidated for cash instantly.

You could consider gold; however, it is not an investment. It is a currency hedge, and earns no income apart from capital appreciation.

[BritManToo]

3 hours ago, JeffersLos said:

Are there any bank options or pension companies here that I can use that would be better than simply building it up in a normal low interest Thai bank account?

Cambodia, 1 year fixed term deposit in USD or Thai Baht bank account paying 6-8%.

[manchega]

Maybe not as bad as US, Britain, Japan and increasingly China but not sure Thai pension schemes are the way to go anyhow.  Less people paying into schemes means the money will run out, still not sure about Thaialnd but I know increasingly7 more people who put off having babies till older or altogether because its so expensive.

[fletchsmile]

1 hour ago, Happy Grumpy said:

Sorry to butt in.

 

Investment products such as?

 

 

Thanks. 

such as the ones mentioned in my previous post????

 

plenty of threads on here and other Thai forums. Depends what someone is looking for but these days there's a reasonable choice in Thailand

 

As an example, my longest investment held in Thailand is Aberdeen Growth mutual fund I bought late 1990's post AFC. So around 20 years. Those days price was around 9 baht. These days price is around THB 120. I've taken out more than originally invested over the years, and since I've held it has outperformed the SET TRI index. I haven't put any new money with Aberdeen (except RMFs for tax benefits), for quite a few years though as I don't think Aberdeen or the fund itself are as good as they used to, and performance relative to benchmark has dropped, though I remain well ahead. It helped fund my early retirement. The principle of investing monthly in such funds to help me retire early in Thailand has been useful.

 

These days, I would prefer something like UOB Good Corporate Governance to Aberdeen if looking for Thai equities. UOB GCG I've held for well over 10 years and has consistently been in top 10 performing funds in the time I've held, outperforming the benchmark index.

 

TMB Property Income Plus fund has been a nice diversifying investment giving exposure to Thai and Singapore property REITs, for best part of 5 years now

 

etc etc

Edited May 20, 2019 by fletchsmile

[ThomasThBKK]

59 minutes ago, Happy Grumpy said:

Sorry to butt in.

 

Investment products such as?

 

 

Thanks. 

 

You should look into Index funds, but not here in asia. 

Something like Fidelity or Vanguard in the US: https://mymoneywizard.com/vanguard-vs-fidelity/

 

Buffets a big fan of index funds and manages to not beat them quite often which says a lot i guess: https://www.cnbc.com/2019/02/25/buffett-remains-bullish-on-index-fund-investing.html

 

 

[Lacessit]

2 hours ago, BritManToo said:

Cambodia, 1 year fixed term deposit in USD or Thai Baht bank account paying 6-8%.

Any form of government guarantee on bank deposits?

[BritManToo]

37 minutes ago, Lacessit said:

Any form of government guarantee on bank deposits?

Probably as good as Thailand.

[fletchsmile]

2 hours ago, BritManToo said:

Probably as good as Thailand.

Bit facetious ???? 

 

Cambodia's sovereign (government) credit rating is a few notches below Thailand. Thailand  is investment grade whereas Cambodia is below. A reflection of the credit strength of the people possibly bailing you out (or not)

 

Not exactly sure where Cambodia is up to these days with a deposit guarantee scheme either. 2 or 3 years back they didn't have one. Whereas Thailand does.

 

So one reason for that "nice" headline 6% to 8% return, is that the risk on a Cambodian deposit is higher than a Thai deposit, particularly from a credit perspective. Not to mention that as the banks are weaker in terms of financial standing in Cambodia, so they have to pay a higher USD rate than other banks to attract money in the first place ????

 

... and those are just (some of) the credit risks ????

Edited May 20, 2019 by fletchsmile

[Oxx]

If this is your only income, I rather doubt you're saving enough for a comfortable retirement.

 

Assuming that you save 25,000/month for 20 years, that you don't make any withdrawals, and that money grows at inflation + 4%/year, then at the end of 20 years you would have just under 9,000,000 baht.  Assuming a withdrawal rate of 4%/year (a rate which is often considered a safe one), then you would, post retirement have a monthly income of less than 30,000 baht.

[Hanuman2547]

I would keep your money in a something like Vanguard that was mentioned earlier.  Oh, and definitely not in Thailand!

[davidst01]

Wait for the next big stock mkt crash in the States. Then buy tech shares on nasdaq when they are all on sale. Sit on it and double/ triple your money eventually

[ncc1701d]

Highly recommend:

 

https://www.amazon.com/Global-Expatriates-Guide-Investing-Millionaire/dp/1119020980/ref=redir_mobile_desktop?_encoding=UTF8&ref_=dbs_a_w_dp_1119020980

 

https://andrewhallam.com/2016/04/ten-top-financial-advisors-for-expatriate-investors/

 

 

[quandow]

You can always buy a bar.

<that's a JOKE BTW>

[dlclark97]

Have been with Fidelity for over 25 years.  One hitch in just beginning with them is that you must open your account(s) in person at a Fidelity Investment Center.  Initially while in the USA I used their professional management service where they managed my assets.  However, once I moved to Thailand they, by US law could not continue to manage my assets and I had to begin managing them myself.  Not too difficult but you do have to use due diligence (research, research, and more research) when buying or selling assets.  At Fidelity transaction fees are low and the same goes for Vanguard and others.  I have stayed away from totally internet based companies but not saying they would not be good.  I have a Fidelity savings account and also a traditional IRA (keeping that was a mistake on my part as intended a person would be in a lower tax bracket once retired, not so in my case).  Would definitely consider a Roth if I had to do it over again.  I did max out all contributions to the IRA including to my company 401K that on retirement was rolled over to the IRA.  Due to some successful stock, fund, and ETF purchases along with a few not so successful I have been able to make the required annual RMD's along with some larger withdrawals when building a house or buying a new vehicle for over 20 years and the balance today remains almost as high as when I started taking distributions.  Index ETF's are a great way to start.  I hold DIA (DOW stocks), SPY (S&P 500 stocks) and QQQ (Nasdaq) etf's in both my savings and retirement accounts.  This way you get a lot of exposure to many great companies.  When some lose, others will gain.  Overall you should come out a winner over the years.  To begin, use dollar cost averaging, a set amount every month to add to your portfolio.  Buy more when there are significant market downturns.  I was very lucky in the beginning with DELL as an individual stock.  It was back when DELL split their stock price as many as three times in one year.  I started with 200 shares and over the early years I ended up with 19.600 shares from my original purchase.  Finding a company that does that today would be possible but like finding a needle in a haystack.  GOOD LUCK!      

[dlclark97]

Forgot to mention, once with Fidelity you can manage everything over the internet.

[Oxx]

4 minutes ago, dlclark97 said:

I was very lucky in the beginning with DELL as an individual stock.  It was back when DELL split their stock price as many as three times in one year.  I started with 200 shares and over the early years I ended up with 19.600 shares from my original purchase.

 

Uh, stock splits don't affect the value of your investment.  It just means, for example, rather than holding 10 shares, each worth $10 (total value $100), you end up with 100 shares, each worth $1.

 

[emptypockets]

If the OP is 40 and is living in  Thailand and not working isn't he effectively retired already? 

I'm presuming he is married on an extension is stay based on marriage.

Why does he need to save for retirement? Retirement usually mean stopping work, which he says he isn't doing now. 

He could of course be FIFO. 

A touch confusing. 

 

[suzannegoh]

2 hours ago, Oxx said:

 

Uh, stock splits don't affect the value of your investment.  It just means, for example, rather than holding 10 shares, each worth $10 (total value $100), you end up with 100 shares, each worth $1.

 

Yes, though stocks are more likely to split when their prices are rising.

[Oxx]

10 minutes ago, suzannegoh said:

Yes, though stocks are more likely to split when their prices are rising.

 

Not really.  They're more likely to split when the cost of a single share becomes a barrier to purchase.  Splitting simply increases liquidity (albeit at a cost for implementation), which may in turn slightly increase the share price for shareholders.

[monkeycu]

Send the money to me

My 2 ex and 1 current wife will look after it for you 

[suzannegoh]

21 minutes ago, Oxx said:

 

Not really.  They're more likely to split when the cost of a single share becomes a barrier to purchase.  Splitting simply increases liquidity (albeit at a cost for implementation), which may in turn slightly increase the share price for shareholders.

Yes, really.  As you say, stocks generally split when the price become a barrier to purchase.  But the reason that the price becomes a barrier to be purchased would either because it became too expensive or too cheap.  In the former case a split would be a common remedy and in the latter case a reverse split might be considered. 

In this particular case, that other poster was talking about having held Dell while it split multiple time.  You can see in the table below the price that Dell was at each time that it split.  Each time it went up a lot, split, went up more, and then split again.

[sawadee1947]

20 hours ago, Happy Grumpy said:

Sorry to butt in.

 

Investment products such as?

 

 

Thanks. 

ETS

[Billy The Kid]

5 hours ago, Oxx said:

If this is your only income, I rather doubt you're saving enough for a comfortable retirement.

 

Assuming that you save 25,000/month for 20 years, that you don't make any withdrawals, and that money grows at inflation + 4%/year, then at the end of 20 years you would have just under 9,000,000 baht.  Assuming a withdrawal rate of 4%/year (a rate which is often considered a safe one), then you would, post retirement have a monthly income of less than 30,000 baht.

Plus the state Pension Of average 37,000 a month ( today’s rate ) , projected rate in 20 yrs time ( 45,000 a month ) and the total of 30,000 ( 25,000 monthy  savings for 20 yrs)  = 75,000 bt a month . Great for TODAYs cost of living but in 20 years time , will the cost of living eclipse/surpass that . 

[PerkinsCuthbert]

34 minutes ago, Billy The Kid said:

Plus the state Pension Of average 37,000 a month ( today’s rate ) , projected rate in 20 yrs time ( 45,000 a month ) and the total of 30,000 ( 25,000 monthy  savings for 20 yrs)  = 75,000 bt a month . Great for TODAYs cost of living but in 20 years time , will the cost of living eclipse/surpass that . 

Especially if he acquires an alcoholic gambler with the family from hell for a wife along the way.

[NoshowJones]

18 hours ago, Lacessit said:

Any form of government guarantee on bank deposits?

Do not take the Thai governments word on anything.

[Oxx]

37 minutes ago, Billy The Kid said:

Plus the state Pension Of average 37,000 a month ( today’s rate ) , projected rate in 20 yrs time ( 45,000 a month ) and the total of 30,000 ( 25,000 monthy  savings for 20 yrs)  = 75,000 bt a month . Great for TODAYs cost of living but in 20 years time , will the cost of living eclipse/surpass that . 

 

He's 40.  Won't have accumulated much of a pension in his home country in all probability.