Retire At 45

[ade]

I am 45 and considering my options regarding retirement. I hope to to retire in Pattaya or Chiang mai. I have total assets of $700,000 of that about 85% equities 12% bonds 3% cash. These pay an annual income of about $30,000.

Any self funded retirees happy to tell me if this a comfortable position from which to retire?

Bearing in mind I will have to pay for visa runs probably to Malaysia every 3 months.

Currently I have the option of working which obviously means I will have more assets if I retire at a later date.

[Jingthing]

It's enough but it would be better if you are going ot be due for some kind of pension later.

[chiang mai]

I am 45 and considering my options regarding retirement. I hope to to retire in Pattaya or Chiang mai. I have total assets of $700,000 of that about 85% equities 12% bonds 3% cash. These pay an annual income of about $30,000.

Any self funded retirees happy to tell me if this a comfortable position from which to retire?

Bearing in mind I will have to pay for visa runs probably to Malaysia every 3 months.

Currently I have the option of working which obviously means I will have more assets if I retire at a later date.

It depends on your life style but as a general rule I would say it is not enough. But there are others on this board who will no doubt give you chapter and verse on the risks, lessons about inflation and the associated maths - I would advise you take those comments seriously because whilst $700k sounds like a lot to you, it is not.

But the finances aside, my recommendations if you are planning very early retirement is to figure out what you are going to do for the next say 35 years and how much is that going to cost you. The first year or so of your retirement will be OK but once you are rested and you start to get bored, what then? The "then" usually involves some kind of business and that means spending money to begin. $30k a year seems like a lot now but let me assure you it will not seem so in say five years time and in ten years time it will not be much at all.

Edited January 18, 2008 by chiang mai

[Jingthing]

Why doesn't he work until he is 80 and then that will be enough. For the funeral.

[lannarebirth]

I'd say it's marginal at best. the problem with retiring without a big enough nestegg is, you have to change how you invest. You can't any longer be looking to "growth", which is too volatile and risky for retirement. You have to invest safely and "not to lose", which can drastically limit expected returns. It's doable, but you may get married still at your age, may have children, etc.

[ade]

I'd say it's marginal at best. the problem with retiring without a big enough nestegg is, you have to change how you invest. You can't any longer be looking to "growth", which is too volatile and risky for retirement. You have to invest safely and "not to lose", which can drastically limit expected returns. It's doable, but you may get married still at your age, may have children, etc.

Thanks for the reply for your infomation I do not intend to get married or change my life style. You will notice my investments pay an income of $30,000 this is not capital withdrawal. I am also due a pension at 60 and 65 but consider this to be too far away for imediate consideration. How big a nest egg or income will you recommend? my back of envelope figures suggest I will have 60,000 to 70,000 baht per month.

Inflation and exchange rates are an ever present risk of which I am aware.

[lannarebirth]

I'd say it's marginal at best. the problem with retiring without a big enough nestegg is, you have to change how you invest. You can't any longer be looking to "growth", which is too volatile and risky for retirement. You have to invest safely and "not to lose", which can drastically limit expected returns. It's doable, but you may get married still at your age, may have children, etc.

Thanks for the reply for your infomation I do not intend to get married or change my life style. You will notice my investments pay an income of $30,000 this is not capital withdrawal. I am also due a pension at 60 and 65 but consider this to be too far away for imediate consideration. How big a nest egg or income will you recommend? my back of envelope figures suggest I will have 60,000 to 70,000 baht per month.

Inflation and exchange rates are an ever present risk of which I am aware.

Oh, you'll be getting pensions, well that helps alot. I imagine you're alright if you can live within your income and your investments continue to deliver for you. Congratulations on your upcoming marriage.

[Jingthing]

If you have a pension coming, congratulations! No worries mate. Just pay attention not to get ripped off here and you should be doing great.

I also think you should continue to be in more aggressive investments for many years to come. The guy who said you need to put it all into no risk fixed income vehicles is simply wrong.

Edited January 18, 2008 by Jingthing

[AyG]

Your biggest worry should be exchange rate risk. Exchange rates between currencies regularly fluctuate 30% per year. Without such risk the amount you have is (as others have said) borderline, but with further depreciation of the dollar, you'd be in serious difficulties. If you can double it, then you should probably be secure.

You also need to consider unexpected large expenses - the most likely of these being medical expenses. Your budget should include a top-notch medical insurance plan, and to afford that you may well need a higher level of income.

[yorkman]

I'd say it's marginal at best. the problem with retiring without a big enough nestegg is, you have to change how you invest. You can't any longer be looking to "growth", which is too volatile and risky for retirement. You have to invest safely and "not to lose", which can drastically limit expected returns. It's doable, but you may get married still at your age, may have children, etc.

Thanks for the reply for your infomation I do not intend to get married or change my life style. You will notice my investments pay an income of $30,000 this is not capital withdrawal. I am also due a pension at 60 and 65 but consider this to be too far away for imediate consideration. How big a nest egg or income will you recommend? my back of envelope figures suggest I will have 60,000 to 70,000 baht per month.

Inflation and exchange rates are an ever present risk of which I am aware.

Yes but take into account your $30,000 is not capital increase either. So taking into account inflation, possible swings in exchange rates $700,000 is not really a large amount.

By all means go for it if you can. You are young enough to enjoy it, but try and leave some options open to return to say semi-retirement if it all starts to go wrong. Not knowing your profession it is hard to know whether this is good advice or not.

[AyG]

Just to add a personal note, I retired at 45 after working for a couple of years in Thailand. Now, three years later, I find my brain under-challenged. I've just signed up for a Masters Degree by distance learning. This is very expensive (by Thai standards). You too might find that living a relatively comfortable but cheap life isn't enough for you for the next 50 years or so, and that to retain your sanity you have some unexpected expenses.

[GuestHouse]

I'd take a year off and consider your options.

Its a personal thing I know, but 45 years is far too early for retirement in my book.

Move on and do something else, yes, retire no.

[thaibkk]

It's enough but it would be better if you are going ot be due for some kind of pension later.

30.000 dollar income each year not enough ?

is this forum full of multi miljonairs ?

i'm a bit shocked...

i know thailand is mostly a paradise for older (50+) geesers with 65.000 baht of pension ... most people in my homecountry (west-europe) do not even make that on their monthly salary ... and pensions are not over 55% of their last revenue before retirement

i find it also strange that most -50 people are left out the deal ... like thailand wants old persons to come and make children here to thai women so they can stay and ... maybe die early ?

myself , i got a thai wife and 2 children ... sadly enough, i am not even 40 years old ...

I would just like to enjoy my life a bit, as i am on a carreer break in my home country where a works many years...

after years of living in my home country, my wife has the opportunity to work in Thailand ... but of course the company will not pay here a farang income ... more like a good thai standards income but not meeting 40 K a month

Running for a stamp in my passport every 3 months seems so useless to me, but necessity ...

would rather prefer a foreigner tax of 1000-2000 baht per month, but who am i ?

[chiang mai]

And I'm surprised at the support for the idea!

Firstly, 45 is way too young and the earlier post is entirely correct, take a year off and think about the idea - the risk of not being stretched mentally will certainly become a problem.

But as for the amount itself: when you factor in investment risk, inflation, currency fluctuations and a new marriage, there are a number of fronts that can derail even the best laid plans. All of the foregoing points have been features of my early retirement at age 52, six years ago and my available funds is higher than the OP's. Would I do things the same way again if given a second chance, absolutely not, if for no other reason alone than the mental stimulation side of things.

[Rsee]

<br />I am 45 and considering my options regarding retirement. I hope to to retire in Pattaya or Chiang mai. I have total assets of $700,000 of that about 85% equities 12% bonds 3% cash. These pay an annual income of about $30,000.<br />Any self funded retirees happy to tell me if this a comfortable position from which to retire? <br />Bearing in mind I will have to pay for visa runs probably to Malaysia every 3 months.<br />Currently I have the option of working which obviously means I will have more assets if I retire at a later date.<br />

<br /><br /><br />

I would suggest that $30k/year is probably significantly more than you would need as long as you don’t blow your load on a flashy high-rent pad, fancy wheels, and womanizing/partying 7days/week.

If you can find a reasonably nice place to live for less than $500/month(which i have heard is very possible outside downtown bkk), in a location that may not require a car to survive, and can limit the debauchery to weekends.... you may even be able to actually accrue and re-invest USD5k-10k of your cash flow each year, which would offset inflation/currency depreciation risk and actually compound to increase your nest egg over time.

Some(including myself) would also argue that the recent depreciation of the USD may be close to running full course. Currencies move in cycles, and it is probable that the USD is allot closer to the bottom of its value than the top of its value...so folks with USD cash flow may be in for a nice surprise in late 2008 as the cycle reverses course.

Please correct me if Im wrong, but I heard its hard to do the 3month visa run thing continuously now that the rules have changed?

Good luck with your retirement!

[PCA]

I am 45 and considering my options regarding retirement. I hope to to retire in Pattaya or Chiang mai. I have total assets of $700,000 of that about 85% equities 12% bonds 3% cash. These pay an annual income of about $30,000.

Any self funded retirees happy to tell me if this a comfortable position from which to retire?

Bearing in mind I will have to pay for visa runs probably to Malaysia every 3 months.

Currently I have the option of working which obviously means I will have more assets if I retire at a later date.

I woud say 700k is enough to retire in your age as long your investment income is derived from dividends the equities are paying and not a calculation on stockprices from historic developments. Otherwise(and not even herewith) you cannot predict cashing in 30k per year. Nevertheless a nice nestegg and definitely enough for a few/plenty sunny years and if things turn out bad still there would be enough time moving to plan B which you presumably have worked out, no?

[yorkman]

a new marriage

I read up carefully, which is what I tend to do before I post anything, excuse my strange habits

I do not think Ade mentioned getting married as his plan, in fact he said it was not.

Nevertheless, $700,000 is small capital to retire at 45 for reasons previously mentioned.

Anything might change Ade (you might even decide a marriage is for you) , given life expectancies you have 30 years ahead of you. If you can, go for it, but have a backup plan

[Jingthing]

Firstly, 45 is way too young and the earlier post is entirely correct, take a year off and think about the idea - the risk of not being stretched mentally will certainly become a problem.

Speak for yourself. I recently lost a childhood friend, Dead at 50 from a heart attack, He was a accomplished hiker, mountain climber, and diver.

I think it is too young if you have work that stimulates you rather than deadens you. If the latter, and you have the money, and I am sorry 700K plus a future pension is more than enough, and you think you can love leisure and create your own stimulation, then GO FOR IT.

This propaganda from fear mongerers that people need to be dollar millionaires to ever retire at all is a total myth and a big lie. The vast majority retire with oh so much less, and most adjust quite well.

If the OP didn't have a pension coming later, I would agree there is alot of risk, but with a pension coming later if/when he reaches that age, anyone with their head screwed on straight could manage quite swimmingly in Thailand.

There is another myth of retirement in Thailand or any tropical place that retiring here means you have to live like you are on a big vacation everyday to be happy. That is simply not true for most people. You move to a place, you mostly live a normal life. No need to go a fancy restaurant every night, etc. to be happy.

Edited January 18, 2008 by Jingthing

[niebla]

I agree. If you cannot live on 30K US something is wrong. I agree about planning for inflation, and balancing your investments in stocks and bonds. If you would like further information, please IM me.

Firstly, 45 is way too young and the earlier post is entirely correct, take a year off and think about the idea - the risk of not being stretched mentally will certainly become a problem.

Speak for yourself. I recently lost a childhood friend, Dead at 50 from a heart attack, He was a accomplished hiker, mountain climber, and diver.

I think it is too young if you have work that stimulates you rather than deadens you. If the latter, and you have the money, and I am sorry 700K plus a future pension is more than enough, and you think you can love leisure and create your own stimulation, then GO FOR IT.

This propaganda from fear mongerers that people need to be dollar millionaires to ever retire at all is a total myth and a big lie. The vast majority retire with oh so much less, and most adjust quite well.

If the OP didn't have a pension coming later, I would agree there is alot of risk, but with a pension coming later if/when he reaches that age, anyone with their head screwed on straight could manage quite swimmingly in Thailand.

There is another myth of retirement in Thailand or any tropical place that retiring here means you have to live like you are on a big vacation everyday to be happy. That is simply not true for most people. You move to a place, you mostly live a normal life. No need to go a fancy restaurant every night, etc. to be happy.

[shochu]

I'm surprised when people talk of pensions - because most of my friends and I pretty much assume they will no longer exist in the not too distant future - by the time we are supposed to benefit.

And up to their demise, they will be so debased and worthless through massive inflation in order maintain them that they will be much like what the Russian pensioners were getting.

Our forefathers did not factor in that people would live longer, the fluctuations in birth rates, and the fact that many governments used the money in the system while they were still listed as exisitng.

May be a good idea to keep working and building the nest egg if you want to play it safe, or consequently do the opposite and enjoy your life - in the end your choice.

[billaaa777]

You have way more money to retire and live here in style. Do you want to be like the vast majority of the retirees that come here when there 65 and way to old to enjoy the place? After something very important stops working. Don’t you want the girls calling out to you “sexy man” each and every day? I do!

I am 50 and came here for a 1 year vacation 4 years ago. I told myself while I was here I would look around and see if there was some safe way I could make money without to much work. I had a lot less money than you do and now make a lot more per year than your investments will pay. The same thing will happen to you once you get here; you will become aware of many low risk high return investment opportunities.

If I was you I would quit my job tomorrow, sell my house, car and furniture and catch the next plane here. That is what I did after I found out about the investment opportunities and I have never regretted it for one minute and I am so glad I did. I only wish I knew about Thailand 10 years earlier and I would have been here.

I wish you the best of luck what ever you do.

[simcity]

Ade, I find your investment to passive to retired at 45!

In my case after a car accident, I decide to call it quite; I sold my business, keep the commercial property and my house in Australia, and decide to retire!

I know it will be there, if I wish to come back.

I was 39, ten years later investments have done extremely well, commercial and residential, I was not counting on that much!

As a hobby, I did play with the stock market ( Australia online ) for the last 10 years, that give me some extra return !

If you restructure your capital, add few more years of work, perhaps you will feel more comfortable later one.

If you already think about a visa run every three months as a cost, I think you find yourself on a budget!

For the pension, I do not rely on one ! Mainly with all the fuss about super fund, perhaps it will be very hard to get in 20 years if you have other asset!

I like to have enough, not to plan, but I am serious with finance.. if I need it is here

[chiang mai]

a new marriage

I read up carefully, which is what I tend to do before I post anything, excuse my strange habits

I do not think Ade mentioned getting married as his plan, in fact he said it was not.

Agreed the OP stated he was not going to marry, ergo he will but doesn't know it yet.

[Naam]

I am 45 and considering my options regarding retirement. I hope to to retire in Pattaya or Chiang mai. I have total assets of $700,000 of that about 85% equities 12% bonds 3% cash. These pay an annual income of about $30,000.

Any self funded retirees happy to tell me if this a comfortable position from which to retire?

Bearing in mind I will have to pay for visa runs probably to Malaysia every 3 months.

Currently I have the option of working which obviously means I will have more assets if I retire at a later date.

none of us is qualified to answer that question! it all depends on what lifestyle you expect to lead. the same goes for your question whether to retire or keep on working. if you retire and find out that you are (contrary to your expectations) living like a pauper when you are 50, well that's bad luck. you will say "i made a wrong decision". if you keep on working till 50, your capital has grown to 1 million dollars and you are diagnosed with terminal cancer you will say "&lt;deleted&gt;! how could i make such a stupid decision!"

[BEENTHEREDONETHAT]

I think it depends on the life style you plan to live and what it takes to make you happy. Personally I would wait until I had a bit more and be insured that the money will continue to grow and keep up with or better yet exceed inflation. If you have no money worries retirement is much more enjoyable. But like I say it depends on the lifestyle you want for the next 40 or 50 years. Good luck in your decision!

[chiang mai]

Firstly, 45 is way too young and the earlier post is entirely correct, take a year off and think about the idea - the risk of not being stretched mentally will certainly become a problem.

Speak for yourself. I recently lost a childhood friend, Dead at 50 from a heart attack, He was a accomplished hiker, mountain climber, and diver.

I think it is too young if you have work that stimulates you rather than deadens you. If the latter, and you have the money, and I am sorry 700K plus a future pension is more than enough, and you think you can love leisure and create your own stimulation, then GO FOR IT.

This propaganda from fear mongerers that people need to be dollar millionaires to ever retire at all is a total myth and a big lie. The vast majority retire with oh so much less, and most adjust quite well.

If the OP didn't have a pension coming later, I would agree there is alot of risk, but with a pension coming later if/when he reaches that age, anyone with their head screwed on straight could manage quite swimmingly in Thailand.

There is another myth of retirement in Thailand or any tropical place that retiring here means you have to live like you are on a big vacation everyday to be happy. That is simply not true for most people. You move to a place, you mostly live a normal life. No need to go a fancy restaurant every night, etc. to be happy.

Sorry about your friend Jingthing but it can happen to anyone at anytime and without logical reason. But if you take the average and look at the Actuarial numbers it suggests we will all live, on average to age 84 years or something similar. So the OP and anyone else in his/her position has to plan on that basis and that leaves him with almost half of his life remaining.

I agree entirely with what you said about continuing to work as long as it is stimulating but what about where it is not. I also agree with your statements on lifestyle. But what is it the advert says, "bald broke and crying is fine for when you are borne but not when you are old". Bottom line for me on this is that if the OP fully understands the risks then sure, give it a try. But also have a plan B handy at all times and make sure it is a realistic and workable plan.

[LivinLOS]

No way I would even consider it at that amount.. Especially not as I see turmoil in financial markets over then next 3 - 5 years that could very much rock any security out of that boat.

Its borderline now.. How will it look after some equity losses, a dollar at -30% where it is now on the baht.. And 10% inflation for the next half a decade..

The result of running home with your nestegg gone and your tail between your legs is a horror I would wish on anyone (why so many end up staying until they become condo skydivers I guess)..

[jackr]

And I'm surprised at the support for the idea!

Firstly, 45 is way too young and the earlier post is entirely correct, take a year off and think about the idea - the risk of not being stretched mentally will certainly become a problem.

But as for the amount itself: when you factor in investment risk, inflation, currency fluctuations and a new marriage, there are a number of fronts that can derail even the best laid plans. All of the foregoing points have been features of my early retirement at age 52, six years ago and my available funds is higher than the OP's. Would I do things the same way again if given a second chance, absolutely not, if for no other reason alone than the mental stimulation side of things.

Rubbish. I semi-retired at 30 and have zero plans to ever work my trade again. I'm busier than I've ever been - up very early, bed late - and have far more time to tax my brain than when I had to fixate on making someone else rich. I agree that you could end up getting bogged down if you sit around all day and piss away the evenings, but unless you have the perfect job back home, a big income, and are content with how things are going, then get your a$$ over here and really enjoy your time... this is no rehearsal.

[Irene]

Financially, it may be comfortable for you to retire in that range. However, you need to be more certain of your equity investment of 85%. Any losses on this hefty portion could put you in a poor house, e.g. in Enron stocks.

Aside from your question, you should ask yourself whether you would be really happy and contented in retirement. Or, do you mean your retirement is not really a retirement but more like finding a new horizon. Will you be bore to death in Pataya or Chiangmai to let life go by. I have seen another thread for Pataya with the question of being bore with meaningless life.

Anyhow, I admire your question and enjoy reading all the thoughts.

[PhilHarries]

Personally I think $30k per year is doable from 45 to 60/65 when your pensions kick in provided:-

1. Your health holds out. Have you factored in health insurance and would it cover any eventuality?

2. Your sanity holds out. Ever thought of having nothing to do day after day, week after week? Don't forget hobbies cost money.

3. You don't meet miss phwaaarlookatthebodyonthat! With the attendant wedding bells, house, transport, bin lids (kids) etc.

4. The dollar, long term, holds up. This should not be an issue but nothing in life is certain.

5. The visa regs let you get through to 50 when you can get a retirement visa and they don't change the requirements for that substantially.

6. You don't live in Thailand for 5 or so years and decide it aint for you and have nothing to go back to. Your $700k will provide a cushion in that event but getting a job at 50+ aint easy, trust me on that.

7. You can adapt from your curent lifestyle to one where you won't exactly be penniless but you won't be living anything like the high life. $30k per year comes in at around 2500 Baht per day, okay if you don't drink, don't smoke and don't go for wild wild women (or boys).

Equally personally I think it is a bit too tight to call, there is not enough of a safety margin. The visa runs will eat a fair hole in your disposable cash but provided you budget carefully you should be okay. But then you might be one of life's risk takers in which case what are you doing asking us? As the advert says "just do it".