I’m posting this in The Pub because it’s not really a visa question, more of an observation.

I’ve been thinking about the retirement visa and the requirement to keep ฿800,000 in a Thai bank account, assuming you don’t have an overseas monthly pension to show. Simple enough if you don’t need to touch that money and can afford to have it tied up. But then I started thinking about the opportunity cost.

The visa fee itself is extremely reasonable, no complaints there. But if that money were sitting overseas right now rather than being brought into Thailand, you could have it in a stable fixed income investment earning close to 4%. That works out to roughly $1,000 to $1,200 a year in income, depending on exchange rate fluctuations. Since it’s parked in a Thai bank account earning essentially nothing, that lost income has to be factored in as part of the real cost of the visa.

So it’s not 1,900 Baht a year anymore. When you account for the foregone income on your money, it’s more than 15x that. Still manageable, but a meaningfully different number than it first appears.

Curious if anyone else has done similar math.

Many people have the same thoughts on tying up 800k in a Thai account earning next to no interest.

14 minutes ago, Kyoto Kyle said:

I’m posting this in The Pub because it’s not really a visa question, more of an observation.

I’ve been thinking about the retirement visa and the requirement to keep ฿800,000 in a Thai bank account, assuming you don’t have an overseas monthly pension to show. Simple enough if you don’t need to touch that money and can afford to have it tied up. But then I started thinking about the opportunity cost.

The visa fee itself is extremely reasonable, no complaints there. But if that money were sitting overseas right now rather than being brought into Thailand, you could have it in a stable fixed income investment earning close to 4%. That works out to roughly $1,000 to $1,200 a year in income, depending on exchange rate fluctuations. Since it’s parked in a Thai bank account earning essentially nothing, that lost income has to be factored in as part of the real cost of the visa.

So it’s not 1,900 Baht a year anymore. When you account for the foregone income on your money, it’s more than 15x that. Still manageable, but a meaningfully different number than it first appears.

Curious if anyone else has done similar math.

How much tax you pay on that 4%? Most would keep the 800k in stocks and risk a loss so it's a safe way to keep it.

On the flip side, the 800K in the bank is handy to have in an emergency. Using it would probably mean you've broken the terms of your extension but you could always use an Agent to help with the financies the next year.

That's assuming Agents will still be able to help with the financing. 12 months ago it was a doddle then around about May/June last year Pattaya Agents were having to take people with Bangkok Bank acccounts (Which everybody who used an agent to help with their finances had) to Bangkok to do their extensions & now we have Bangkok Bank insisting your 800K is in the bank for at least 4 months making it impossible for Agents to use them (at least in Pattaya).

I don't want to say the sky is "Falling in" on "Agent Assisted Financing" but it's certainly getting cloudier.

To each his own, for the sake of 32K (Before Tax) in interest I'll stick with keeping the cash in the Bank. Others will argue about keeping it in the Market & making 8-10%, good on them, I like to keep at least 6 months spending in Cash so the 800K covers this as well.

13 minutes ago, gargamon said:

How much tax you pay on that 4%? Most would keep the 800k in stocks and risk a loss so it's a safe way to keep it.

If you're not a US citizen, you can put US dollars into bank CDs in the US and all of the interest is tax free, so you would keep the full 4%.

I wouldn't compare it to investing in stocks or any risk assets because if your money was in a Thai bank account, the principal wouldn't be at risk. Same as bank CDs in the US. I look at it that way.

And if you bring the money into Thailand and convert it into baht at a time (like now) when the baht is quite strong, then you've also got a possible currency exchange risk/loss in the future.

1 hour ago, Kyoto Kyle said:

I’m posting this in The Pub because it’s not really a visa question, more of an observation.

I’ve been thinking about the retirement visa and the requirement to keep ฿800,000 in a Thai bank account, assuming you don’t have an overseas monthly pension to show. Simple enough if you don’t need to touch that money and can afford to have it tied up. But then I started thinking about the opportunity cost.

The visa fee itself is extremely reasonable, no complaints there. But if that money were sitting overseas right now rather than being brought into Thailand, you could have it in a stable fixed income investment earning close to 4%. That works out to roughly $1,000 to $1,200 a year in income, depending on exchange rate fluctuations. Since it’s parked in a Thai bank account earning essentially nothing, that lost income has to be factored in as part of the real cost of the visa.

So it’s not 1,900 Baht a year anymore. When you account for the foregone income on your money, it’s more than 15x that. Still manageable, but a meaningfully different number than it first appears.

Curious if anyone else has done similar math.

No, never crossed my mind. 😊

If you got a spare 800k, who cares, as isn't no hassles worth a few baht. How much more would it cost, to not live in TH ?

IF a Yank, RE taxes & healthcare cost alone, is enough to live on in TH, for me.

If you're concerned about such small amounts of money, then you should probably not try to live in TH. Especially if you don't have enough monthly income to meet the minimum requirements for a visa. They are there for a good reason. Slightest oops and you are bankrupt with a 'go fund my stupidity' opened up for you.

Thank you for making the rest of us look bad, as Imm tightens the rules ... again.

Yes loss of earnings on the 800k is the true cost of being allowed to stay in Thailand.

I've could have quadrupled that money like I have with gold.

It is hostage money and for medical imergencies , but I've saved money by

not having to pay ridiculous high health insurance .

3 hours ago, Kyoto Kyle said:

Curious if anyone else has done similar math.

The lower cost of living should offset the interest rates.

Plus presumably your quality of life is better in Thailand, even if you are losing out a bit.

If you are truly concerned about opportunity lost by not having it your home country, send half of it back after three months and then increase your Thia bank balance 2 month before applying for your new visa. Now your opportunity cost is limited to 5 months in reards to 800k and 400k for the 7 months. which cuts your cost by ~20-30%.

To answer your question - "Curious if anyone else has done similar math."

I assume allmost everyone has but most, like myself, don't bother with reducing the cost. Keeping and extra 400k after the 3 month visa regulation lock period is about what I would have regardless of visa regs. I usually use that as part of my spending money until my next visa.

4 hours ago, Ralf001 said:

Many people have the same thoughts on tying up 800k in a Thai account earning next to no interest.

And paying tax for the interest, I just found out

Krunsri pays ~1.5% on my Mee Tai Dai account, so that knocks the 4% down to 2.5% which would yield B20K or ~$634. How much does the Agent charge if one does not have money in the bank or enough income?

But 4% better than I can get at Chase, my US bank. Where are you getting 4% in the US, and what is the term?

The best I can get at Chase is 3.5%, and that's for three months. Anything longer, and it drops to 2% od below. I can do a little better at Fidelity, but the OP said bank.

In the last year, the USD is down ~7% against the THB. So with the 1.5% from Krunsri, that's 8.5%. Where can I get a fixed account in the US that pays 8.5%?

Having the money in a Thai bank satisfies the visa's financial requirement, but it also serves as a hedge against the dollar.

In any event, I understand why would use an agent to circumvent the law if they are broke, but I do not understand people using an agent to circumvent the law just because it saves them a few dollars.

Every retiree here is engaged in economic arbitrage - transferring from a high cost, moderate pension country to a low cost country where a Western pension puts them in a middle class income bracket.

Example: Renting a condo with a pool here takes about 15% of my pension income. In any capital city in Australia, it would be 80-90%.

The 800K may be an issue to some. I regard it as a perk for Thai banks, who lend the money out at 6%. As far as they are concerned, the more of us, the better.

Personally, even if they did away with the 800k rule, I'd still keep at least that much here for emergencies. I top up my account before it drops below THB1M. The money I remit is regular, small profit taking from overseas investments, so the actual loss of investment opportunity is minimal, while the principle not only remains intact, but keeps rising. In addition, the amounts I do remit are far smaller than the taxes I'd be paying if I was a resident of any of the countries I keep my investments in. Investment planning and financial management should be major factors in choosing when / where to retire - predicated on the rules / laws of the retirement location, and whenever this topic is raised, I always wonder at those who earn so much from THB800,000 that they can't afford to leave it in a Thai bank account, but earn so little from the rest of their money that they can't afford to leave THB800,000 in a Thai bank account.

I'm switching from marriage to retirement next year and have no intention of tying up 800,000. That can go into this year's ISA (tax free, 4.7%) or global funds.

I've already started transferring the 65k pm, so I'll have 12 payments made by next time around. We don't spend anything like 65k a month so I'll look at transferring what we don't spend into the wife's account and, if the numbers look okay, ship it back to the UK and reinvest it there.

1 hour ago, Yellowtail said:

Krunsri pays ~1.5% on my Mee Tai Dai account, so that knocks the 4% down to 2.5% which would yield B20K or ~$634. How much does the Agent charge if one does not have money in the bank or enough income?

But 4% better than I can get at Chase, my US bank. Where are you getting 4% in the US, and what is the term?

The best I can get at Chase is 3.5%, and that's for three months. Anything longer, and it drops to 2% od below. I can do a little better at Fidelity, but the OP said bank.

In the last year, the USD is down ~7% against the THB. So with the 1.5% from Krunsri, that's 8.5%. Where can I get a fixed account in the US that pays 8.5%?

Having the money in a Thai bank satisfies the visa's financial requirement, but it also serves as a hedge against the dollar.

In any event, I understand why would use an agent to circumvent the law if they are broke, but I do not understand people using an agent to circumvent the law just because it saves them a few dollars.

I've used agents in the past because it is extremely easy. No bank balance to maintain or balance records you have to supply. Just walk in and give your passport and bankbook and come back in a few days. It is also much cheaper even if you are only getting 3% at your home country bank.

It has been about 5 years since I used an agent because I determined it wasn't worth some unforeseen risk in the future. For example, immigration starts flagging individuals that use agents and implements a policy that penalyzes them. The ethics involved with using an agent wasn't a concern but maybe it should have been. I was supporting local businesses and corrupt immigration employees.

40 minutes ago, MIke B Bad said:

I'm switching from marriage to retirement next year and have no intention of tying up 800,000. That can go into this year's ISA (tax free, 4.7%) or global funds.

I've already started transferring the 65k pm, so I'll have 12 payments made by next time around. We don't spend anything like 65k a month so I'll look at transferring what we don't spend into the wife's account and, if the numbers look okay, ship it back to the UK and reinvest it there.

What immigration office? Ubon told me it has to come from public or private pension which I don't have for another 10 years. They wouldn't even except a retirement account ( IRA for Americans).

Although I have ex-wives and offspring in Thailand, I would rather use my monthly income to benefit others (students in Myanmar), rather than a Thai bank. That's my own personal decision, and it's why I have just got my annual ER retirement visa in Siem Reap for $300, so that I can use Cambodia as a cheap base to travel to/from Myanmar, since I'm unable to reside in Thailand (visa costs) or in Myanmar (no visa if not employed).

Should the financial poop hit the fan for me, as a last resort, I still have my pension income to return and live in the UK (as I recently did - that was a big shock!).

For practical reasons, I'd much prefer to live in Thailand (if unable to live in Myanmar), but Thailand (quite rightly IMHO), doesn't want cheap charlie retirees like me :)

6 hours ago, Kyoto Kyle said:

I’m posting this in The Pub because it’s not really a visa question, more of an observation.

I’ve been thinking about the retirement visa and the requirement to keep ฿800,000 in a Thai bank account, assuming you don’t have an overseas monthly pension to show. Simple enough if you don’t need to touch that money and can afford to have it tied up. But then I started thinking about the opportunity cost.

The visa fee itself is extremely reasonable, no complaints there. But if that money were sitting overseas right now rather than being brought into Thailand, you could have it in a stable fixed income investment earning close to 4%. That works out to roughly $1,000 to $1,200 a year in income, depending on exchange rate fluctuations. Since it’s parked in a Thai bank account earning essentially nothing, that lost income has to be factored in as part of the real cost of the visa.

So it’s not 1,900 Baht a year anymore. When you account for the foregone income on your money, it’s more than 15x that. Still manageable, but a meaningfully different number than it first appears.

Curious if anyone else has done similar math.

The reality isn't the same, try it and report back what you actually did make, not theoretically

the thai banks are making bank, while the poor expat retirees have to do with a <deleted> (rhymes on bank)

1 hour ago, MIke B Bad said:

I'm switching from marriage to retirement next year and have no intention of tying up 800,000. That can go into this year's ISA (tax free, 4.7%) or global funds.

Unless you're UK Tax Resident you cannot (legitimately) add funds to your ISA or open new ones.

If you are UK Tax Resident & don't need to be, then you're missing out on tax free Gains/Income that it doesn't take a huge portfolio to be more than the 37,600 THB you're getting.

3 hours ago, scubascuba3 said:

The reality isn't the same, try it and report back what you actually did make, not theoretically

You’re stabbing in the dark and making false assumptions without a clue what’s actually possible. Just rolled over one of my brokered CDs on Interactive Brokers yesterday. I always go for CDs with around six months left on the duration. Picked up a couple from Morgan Stanley Private Bank yielding 3.9% for the next six months, which works out to tax-free money for me. Both mature in September with an interest payment later this month and a second one in September. Longer durations are available of course, but I’m keeping everything short term for now.

4 hours ago, atpeace said:

I've used agents in the past because it is extremely easy. No bank balance to maintain or balance records you have to supply. Just walk in and give your passport and bankbook and come back in a few days. It is also much cheaper even if you are only getting 3% at your home country bank.

It has been about 5 years since I used an agent because I determined it wasn't worth some unforeseen risk in the future. For example, immigration starts flagging individuals that use agents and implements a policy that penalyzes them. The ethics involved with using an agent wasn't a concern but maybe it should have been. I was supporting local businesses and corrupt immigration employees.

If you consider the sheer scale of the "informal cash flows" associated with that route, it is unlikely that the boat will be rocked!

6 hours ago, Yellowtail said:

Krunsri pays ~1.5% on my Mee Tai Dai account, so that knocks the 4% down to 2.5% which would yield B20K or ~$634. How much does the Agent charge if one does not have money in the bank or enough income?

But 4% better than I can get at Chase, my US bank. Where are you getting 4% in the US, and what is the term?

The best I can get at Chase is 3.5%, and that's for three months. Anything longer, and it drops to 2% od below. I can do a little better at Fidelity, but the OP said bank.

In the last year, the USD is down ~7% against the THB. So with the 1.5% from Krunsri, that's 8.5%. Where can I get a fixed account in the US that pays 8.5%?

Having the money in a Thai bank satisfies the visa's financial requirement, but it also serves as a hedge against the dollar.

In any event, I understand why would use an agent to circumvent the law if they are broke, but I do not understand people using an agent to circumvent the law just because it saves them a few dollars.

Wrong , I have that account too, it has been >1 % for years.

6 hours ago, Lacessit said:

Every retiree here is engaged in economic arbitrage - transferring from a high cost, moderate pension country to a low cost country where a Western pension puts them in a middle class income bracket.

Example: Renting a condo with a pool here takes about 15% of my pension income. In any capital city in Australia, it would be 80-90%.

The 800K may be an issue to some. I regard it as a perk for Thai banks, who lend the money out at 6%. As far as they are concerned, the more of us, the better.

And that's why I keep only 800k for the required 5 months and withdraw 400k for 7 months, so they can't profit

too much from my money. I very much hate banks.

1 hour ago, Kyoto Kyle said:

You’re stabbing in the dark and making false assumptions without a clue what’s actually possible. Just rolled over one of my brokered CDs on Interactive Brokers yesterday. I always go for CDs with around six months left on the duration. Picked up a couple from Morgan Stanley Private Bank yielding 3.9% for the next six months, which works out to tax-free money for me. Both mature in September with an interest payment later this month and a second one in September. Longer durations are available of course, but I’m keeping everything short term for now.

Most of us don't care mucking about with the 800k, leave it there and forget about it, you can do all the investing with the rest

5 hours ago, atpeace said:

What immigration office? Ubon told me it has to come from public or private pension which I don't have for another 10 years. They wouldn't even except a retirement account ( IRA for Americans).

Chaiyaphum...if I stay here.....but I have four pensions, so touch wood, shouldn't be a problem.

4 hours ago, SamSpade said:

Unless you're UK Tax Resident you cannot (legitimately) add funds to your ISA or open new ones.

If you are UK Tax Resident & don't need to be, then you're missing out on tax free Gains/Income that it doesn't take a huge portfolio to be more than the 37,600 THB you're getting.

Aren't you are always a UK tax resident......for UK income.

5 minutes ago, MIke B Bad said:

Aren't you are always a UK tax resident......for UK income.

Not for Investment Income E.g. (Non Property) Capital Gains, yields on Government Bonds (both tax free), Dividends (limited to the withheld tax amount even if you're in a higher rate Tax bracket).

I do pay tax on my property rental income but am in discussions with my UK accountant about getting an NT tax code so I won't need to pay tax on my pension income, this is not looking to good from the Thai side of things at the moment so it might need to wait until next year or even the year after.

Flipside of this is I had to stop paying into my ISAs when I became Non-UK Tax Resident (2008) I figure I came out of the deal better as I actively trade a "Punt Fund" in which I buy FTSE 100 stocks that (IMHO) have been over sold, would estimate I've had capital gains in the 6 figures over the past 18 years, never paid a penny in CGT.

16 minutes ago, scubascuba3 said:

Most of us don't care mucking about with the 800k, leave it there and forget about it, you can do all the investing with the rest

Do what you like, but let’s be clear: you’re changing the subject. I responded directly to your own words (below), reported back exactly what I actually make in practice rather than in theory, and now that the real numbers are on the table you’ve suddenly decided to pivot. If you were comfortable with the answer, you wouldn’t need to.

5 hours ago, scubascuba3 said:

The reality isn't the same, try it and report back what you actually did make, not theoretically

1 minute ago, SamSpade said:

Not for Investment Income E.g. (Non Property) Capital Gains, yields on Government Bonds (both tax free), Dividends (limited to the withheld tax amount even if you're in a higher rate Tax bracket).

I do pay tax on my property rental income but am in discussions with my UK accountant about getting an NT tax code so I won't need to pay tax on my pension income, this is not looking to good from the Thai side of things at the moment so it might need to wait until next year or even the year after.

Flipside of this is I had to stop paying into my ISAs when I became Non-UK Tax Resident (2008) I figure I came out of the deal better as I actively trade a "Punt Fund" in which I buy FTSE 100 stocks that (IMHO) have been over sold, would estimate I've had capital gains in the 6 figures over the past 18 years, never paid a penny in CGT.

I'm not arguing as my knowledge is very sketchy on this topic, more looking to be educated...........but I thought as UK citizen you could only 'avoid' UK tax on foreign earnings by claiming to be non-resident for tax purposes.....and you could 'never' avoid UK tax on UK earnings.