What Are The Effects Of A Strong Baht On Foreign Retirees.

[henryalleman]

I would like to know how retirees deal with the downfall of their currency's (Euro, Aussie dollar). and does it have an effect on their lifestyle.

I'm planning to move up to Thailand in April 2009, but with the present rate of EURO, I wonder if its not better to put it on hold, till the rates are becoming better, or is this wishful thinking, or do I have to accept a new reality of a strong Baht and a weak Euro for the years to come.

I realy like to have some honest opinion of retirees who receive an offshore pension.

[Jingthing]

Currencies fluctuate! Always have and always will. To live the expat life, depending on your income source, you just have to add that to your equation of uncertainties. You should consider bad case scenarios and consider what actions you may have to take if they occur. Coming from the US where we have had 8 years of the Bush weak dollar policy, there is a lot of talk now about pursuing a stronger and more stable dollar policy to the extent that can be controlled. One can hope.

There are some things you can do to shelter some currency risk. For example I have assets in Thailand and assets in the US (and also in many other currencies). So when currencies move I am hedged, I can't really cry or celebrate.

Edited November 12, 2008 by Jingthing

[pkrv]

Currencies fluctuate! Always have and always will. To live the expat life, depending on your income source, you just have to add that to your equation of uncertainties. You should consider bad case scenarios and consider what actions you may have to take if they occur. Coming from the US where we have had 8 years of the Bush weak dollar policy, there is a lot of talk now about pursuing a stronger and more stable dollar policy to the extent that can be controlled. One can hope.

There are some things you can do to shelter some currency risk. For example I have assets in Thailand and assets in the US (and also in many other currencies). So when currencies move I am hedged, I can't really cry or celebrate.

Snap - PKRV

[PCA]

I would like to know how retirees deal with the downfall of their currency's (Euro, Aussie dollar). and does it have an effect on their lifestyle.

I'm planning to move up to Thailand in April 2009, but with the present rate of EURO, I wonder if its not better to put it on hold, till the rates are becoming better, or is this wishful thinking, or do I have to accept a new reality of a strong Baht and a weak Euro for the years to come.

I realy like to have some honest opinion of retirees who receive an offshore pension.

What JT says is right though I think that you are not capable to resemble his hedging model. Seriously if the rate is making you hesitant to do the move I am not sure there is much more than a dream behind it. Of course a strong baht has severe impact on retirees' lifestyles who have offshore pensions and Exchange rates for the long run are simply unpredictable. Still life can be cheap here as well as it can cost a bundle depending what you wanna do with your time. If you can survive with your pension in western Europe I am sure you could live "better/cheaper" with a touch of more luxury here. Calculate until which rate extreme you can maintain a living and if similar to the current (10% up/down) makes you nervous then simply stay where you are until you have more dough. Holidays are also nice considering you can do many when retired.

Edited November 12, 2008 by PCA

[Naam]

Currencies fluctuate! Always have and always will. To live the expat life, depending on your income source, you just have to add that to your equation of uncertainties. You should consider bad case scenarios and consider what actions you may have to take if they occur. Coming from the US where we have had 8 years of the Bush weak dollar policy, there is a lot of talk now about pursuing a stronger and more stable dollar policy to the extent that can be controlled. One can hope.

There are some things you can do to shelter some currency risk. For example I have assets in Thailand and assets in the US (and also in many other currencies). So when currencies move I am hedged, I can't really cry or celebrate.

JT, "many other currencies" = hedged? which currency -besides JP¥- appreciated vs. Thai Baht to provide a hedge for those who have the bulk of their expenses in Thailand pray tell?

[Naam]

I would like to know how retirees deal with the downfall of their currency's (Euro, Aussie dollar). and does it have an effect on their lifestyle.

I'm planning to move up to Thailand in April 2009, but with the present rate of EURO, I wonder if its not better to put it on hold, till the rates are becoming better, or is this wishful thinking, or do I have to accept a new reality of a strong Baht and a weak Euro for the years to come.

I realy like to have some honest opinion of retirees who receive an offshore pension.

THB will sooner or later cave in. but only up to a certain extent. but the question you should ask yourself is "do i really leave cheaper in Europe?" i rest my case.

[henryalleman]

I would like to know how retirees deal with the downfall of their currency's (Euro, Aussie dollar). and does it have an effect on their lifestyle.

I'm planning to move up to Thailand in April 2009, but with the present rate of EURO, I wonder if its not better to put it on hold, till the rates are becoming better, or is this wishful thinking, or do I have to accept a new reality of a strong Baht and a weak Euro for the years to come.

I realy like to have some honest opinion of retirees who receive an offshore pension.

What JT says is right though I think that you are not capable to resemble his hedging model. Seriously if the rate is making you hesitant to do the move I am not sure there is much more than a dream behind it. Of course a strong baht has severe impact on retirees' lifestyles who have offshore pensions and Exchange rates for the long run are simply unpredictable. Still life can be cheap here as well as it can cost a bundle depending what you wanna do with your time. If you can survive with your pension in western Europe I am sure you could live "better/cheaper" with a touch of more luxury here. Calculate until which rate extreme you can maintain a living and if similar to the current (10% up/down) makes you nervous then simply stay where you are until you have more dough. Holidays are also nice considering you can do many when retired.

PCA its not a dream at all. But a strong Baht will have an effect on my purchases. I like to buy a car and this will cost me almost 20% more the 6 months ago, the same go's for all the other stuff I have to buy. At the end this will raise up the bill between 10 000 and 15 000 EUROS extra. Maybe for some people 600 000 baht extra buying power is peanuts, but my name is not Thaksin.

I'm not so much worried about daily spending, but I know much better way's to spend that amount of money due to a bad rate. Its also lower the margin for extras like traveling around Asia and Australia using LOS as my home base, as I was planning to do with my general before we become too old to do it.

Anyhow I than you and JT for the advise

[Gary A]

I would advise anyone planning on retirement in Thailand to base their needs on the current exchange rates and not to plan on their home currency appreciating. On top of that, you should plan for a healthy surplus of as much as 25 percent. There could be few things worse than finding that you don't have enough money for a decent life style in a foreign country.

[BEENTHEREDONETHAT]

I would advise anyone planning on retirement in Thailand to base their needs on the current exchange rates and not to plan on their home currency appreciating. On top of that, you should plan for a healthy surplus of as much as 25 percent. There could be few things worse than finding that you don't have enough money for a decent life style in a foreign country.

Wise word Gary.......

[farangpattaya]

I would advise anyone planning on retirement in Thailand to base their needs on the current exchange rates and not to plan on their home currency appreciating. On top of that, you should plan for a healthy surplus of as much as 25 percent. There could be few things worse than finding that you don't have enough money for a decent life style in a foreign country.

Wise word Gary.......

Very wise words, but what if the currency rates will get worse?

Just to give an example:

I know a guy who lives on a state pension + private pension of EUR 1,500/month.

With a currency of THB 52 to Euro 1 that makes: THB 78,000

With a currency rate of THB 45 to Euro 1 that makes: THB 67,500.

Just a bit more and he isn't able to keep up the Thai Governments request for a monthly income of THB 65,000.

As far as I can recall, most American retirees suffered from a decline in income up to 25% over the last 2 years and the Euro retirees up to 13%. Imagine, that they would cut your income while living at 'home' like that.

[lannarebirth]

I would advise anyone planning on retirement in Thailand to base their needs on the current exchange rates and not to plan on their home currency appreciating. On top of that, you should plan for a healthy surplus of as much as 25 percent. There could be few things worse than finding that you don't have enough money for a decent life style in a foreign country.

Wise word Gary.......

Very wise words, but what if the currency rates will get worse?

Just to give an example:

I know a guy who lives on a state pension + private pension of EUR 1,500/month.

With a currency of THB 52 to Euro 1 that makes: THB 78,000

With a currency rate of THB 45 to Euro 1 that makes: THB 67,500.

Just a bit more and he isn't able to keep up the Thai Governments request for a monthly income of THB 65,000.

As far as I can recall, most American retirees suffered from a decline in income up to 25% over the last 2 years and the Euro retirees up to 13%. Imagine, that they would cut your income while living at 'home' like that.

Americans suffered and continue to suffer a drop far worse than 25%. US interest rates fell 60% and exchange rates 25%. So, if you were making 5% interest at 40baht/$, hows 3% interest at 30 baht/$ feel? it's the interest rate that's the killer, not the exchange rate. Europeans should base their forecasts on something similar or worse occuring IMO.

If I were European, this is the assumption I would make. Euro and GBP fall to parity with $USD. $USD rises to no more that 38 baht/$ and could go as low as 25 baht/$, Interest rates of 2%.

Edited November 13, 2008 by lannarebirth

[PCA]

I would advise anyone planning on retirement in Thailand to base their needs on the current exchange rates and not to plan on their home currency appreciating. On top of that, you should plan for a healthy surplus of as much as 25 percent. There could be few things worse than finding that you don't have enough money for a decent life style in a foreign country.

Wise word Gary.......

Very wise words, but what if the currency rates will get worse?

Just to give an example:

I know a guy who lives on a state pension + private pension of EUR 1,500/month.

With a currency of THB 52 to Euro 1 that makes: THB 78,000

With a currency rate of THB 45 to Euro 1 that makes: THB 67,500.

Just a bit more and he isn't able to keep up the Thai Governments request for a monthly income of THB 65,000.

As far as I can recall, most American retirees suffered from a decline in income up to 25% over the last 2 years and the Euro retirees up to 13%. Imagine, that they would cut your income while living at 'home' like that.

Americans suffered and continue to suffer a drop far worse than 25%. US interest rates fell 60% and exchange rates 25%. So, if you were making 5% interest at 40baht/$, hows 3% interest at 30 baht/$ feel? it's the interest rate that's the killer, not the exchange rate. Europeans should base their forecasts on something similar or worse occuring IMO.

If I were European, this is the assumption I would make. Euro and GBP fall to parity with $USD. $USD rises to no more that 38 baht/$ and could go as low as 25 baht/$, Interest rates of 2%.

sorry to say but thats wrong. Its the exchange rate and not the interest rate what counts. You can have an interest rate of 30% on an exchange rate of 30 baht and it will not beat a rate of 40 baht without any interest payment. Beyond that the OP has his money coming from a foreign country based in Euro. What is of value to compare is the rate of inflation. Interest rate is not an issue at all unless you want to recognize that it never covers real inflation no matter in which country you live or in which currency your money is parked. If you dont invest eventually you lose purchasing power consistently.

[lannarebirth]

I would advise anyone planning on retirement in Thailand to base their needs on the current exchange rates and not to plan on their home currency appreciating. On top of that, you should plan for a healthy surplus of as much as 25 percent. There could be few things worse than finding that you don't have enough money for a decent life style in a foreign country.

Wise word Gary.......

Very wise words, but what if the currency rates will get worse?

Just to give an example:

I know a guy who lives on a state pension + private pension of EUR 1,500/month.

With a currency of THB 52 to Euro 1 that makes: THB 78,000

With a currency rate of THB 45 to Euro 1 that makes: THB 67,500.

Just a bit more and he isn't able to keep up the Thai Governments request for a monthly income of THB 65,000.

As far as I can recall, most American retirees suffered from a decline in income up to 25% over the last 2 years and the Euro retirees up to 13%. Imagine, that they would cut your income while living at 'home' like that.

Americans suffered and continue to suffer a drop far worse than 25%. US interest rates fell 60% and exchange rates 25%. So, if you were making 5% interest at 40baht/$, hows 3% interest at 30 baht/$ feel? it's the interest rate that's the killer, not the exchange rate. Europeans should base their forecasts on something similar or worse occuring IMO.

If I were European, this is the assumption I would make. Euro and GBP fall to parity with $USD. $USD rises to no more that 38 baht/$ and could go as low as 25 baht/$, Interest rates of 2%.

sorry to say but thats wrong. Its the exchange rate and not the interest rate what counts. You can have an interest rate of 30% on an exchange rate of 30 baht and it will not beat a rate of 40 baht without any interest payment. Beyond that the OP has his money coming from a foreign country based in Euro. What is of value to compare is the rate of inflation. Interest rate is not an issue at all unless you want to recognize that it never covers real inflation no matter in which country you live or in which currency your money is parked. If you dont invest eventually you lose purchasing power consistently.

$1,000,000 @ 5% and 40B/$ = 2,000,000 Baht

$1,000,000 @ 5% and 30B/$ = 1,500,000 Baht

$1,000,000 @ 2% and 40B/$ = 800,000 Baht

$1,000,000 @ 2% and 30B/$ = 600,000 Baht

[Gary A]

It's possible that the exchange rate could get worse. That's what the extra 25 percent cushion is for. I was ready to retire five years earlier than I did. My 401K was in good shape so I wasn't really worried about my reduced pensions. I did have this irritating nagging thought that the stock market could turn bad. I am quite conservative so I worked another five years to increase my savings and build up my pensions. I originally based my living costs on 25 baht to a dollar so I have enjoyed a nice bonus since I have been retired. My 401K plan has been decimated so working the extra five years saved me.

[PCA]

I would advise anyone planning on retirement in Thailand to base their needs on the current exchange rates and not to plan on their home currency appreciating. On top of that, you should plan for a healthy surplus of as much as 25 percent. There could be few things worse than finding that you don't have enough money for a decent life style in a foreign country.

Wise word Gary.......

Very wise words, but what if the currency rates will get worse?

Just to give an example:

I know a guy who lives on a state pension + private pension of EUR 1,500/month.

With a currency of THB 52 to Euro 1 that makes: THB 78,000

With a currency rate of THB 45 to Euro 1 that makes: THB 67,500.

Just a bit more and he isn't able to keep up the Thai Governments request for a monthly income of THB 65,000.

As far as I can recall, most American retirees suffered from a decline in income up to 25% over the last 2 years and the Euro retirees up to 13%. Imagine, that they would cut your income while living at 'home' like that.

Americans suffered and continue to suffer a drop far worse than 25%. US interest rates fell 60% and exchange rates 25%. So, if you were making 5% interest at 40baht/$, hows 3% interest at 30 baht/$ feel? it's the interest rate that's the killer, not the exchange rate. Europeans should base their forecasts on something similar or worse occuring IMO.

If I were European, this is the assumption I would make. Euro and GBP fall to parity with $USD. $USD rises to no more that 38 baht/$ and could go as low as 25 baht/$, Interest rates of 2%.

sorry to say but thats wrong. Its the exchange rate and not the interest rate what counts. You can have an interest rate of 30% on an exchange rate of 30 baht and it will not beat a rate of 40 baht without any interest payment. Beyond that the OP has his money coming from a foreign country based in Euro. What is of value to compare is the rate of inflation. Interest rate is not an issue at all unless you want to recognize that it never covers real inflation no matter in which country you live or in which currency your money is parked. If you dont invest eventually you lose purchasing power consistently.

$1,000,000 @ 5% and 40B/$ = 2,000,000 Baht

$1,000,000 @ 5% and 30B/$ = 1,500,000 Baht

$1,000,000 @ 2% and 40B/$ = 800,000 Baht

$1,000,000 @ 2% and 30B/$ = 600,000 Baht

yes I see your point and it produces more money in case you have a mill $ parked and consider to live from the interest rate alone. Being specific and taking the OPs case so far I understand it, he when doing the move will use his pension payment in thailand maintaining a living by regular withdrawing or transferring money. If this is not the case the whole thread would not have been started. Unless you can afford to live from interest only you mainly depend on the exchange rate in the country where you live/spend. And regardless you lose PP independent of the percentage in interest rate.

[lannarebirth]

I would advise anyone planning on retirement in Thailand to base their needs on the current exchange rates and not to plan on their home currency appreciating. On top of that, you should plan for a healthy surplus of as much as 25 percent. There could be few things worse than finding that you don't have enough money for a decent life style in a foreign country.

Wise word Gary.......

Very wise words, but what if the currency rates will get worse?

Just to give an example:

I know a guy who lives on a state pension + private pension of EUR 1,500/month.

With a currency of THB 52 to Euro 1 that makes: THB 78,000

With a currency rate of THB 45 to Euro 1 that makes: THB 67,500.

Just a bit more and he isn't able to keep up the Thai Governments request for a monthly income of THB 65,000.

As far as I can recall, most American retirees suffered from a decline in income up to 25% over the last 2 years and the Euro retirees up to 13%. Imagine, that they would cut your income while living at 'home' like that.

Americans suffered and continue to suffer a drop far worse than 25%. US interest rates fell 60% and exchange rates 25%. So, if you were making 5% interest at 40baht/$, hows 3% interest at 30 baht/$ feel? it's the interest rate that's the killer, not the exchange rate. Europeans should base their forecasts on something similar or worse occuring IMO.

If I were European, this is the assumption I would make. Euro and GBP fall to parity with $USD. $USD rises to no more that 38 baht/$ and could go as low as 25 baht/$, Interest rates of 2%.

sorry to say but thats wrong. Its the exchange rate and not the interest rate what counts. You can have an interest rate of 30% on an exchange rate of 30 baht and it will not beat a rate of 40 baht without any interest payment. Beyond that the OP has his money coming from a foreign country based in Euro. What is of value to compare is the rate of inflation. Interest rate is not an issue at all unless you want to recognize that it never covers real inflation no matter in which country you live or in which currency your money is parked. If you dont invest eventually you lose purchasing power consistently.

$1,000,000 @ 5% and 40B/$ = 2,000,000 Baht

$1,000,000 @ 5% and 30B/$ = 1,500,000 Baht

$1,000,000 @ 2% and 40B/$ = 800,000 Baht

$1,000,000 @ 2% and 30B/$ = 600,000 Baht

yes I see your point and it produces more money in case you have a mill $ parked and consider to live from the interest rate alone. Being specific and taking the OPs case so far I understand it, he when doing the move will use his pension payment in thailand maintaining a living by regular withdrawing or transferring money. If this is not the case the whole thread would not have been started. Unless you can afford to live from interest only you mainly depend on the exchange rate in the country where you live/spend. And regardless you lose PP independent of the percentage in interest rate.

OK, I went back and read the OP and he does refer to a pension, so yu're right the exchange rate is what matters most. My advice in that case is, don't come if you don't have sufficient other assets to help you through extended periods of unfavorable exchange rates. The Baht is no where near its historic highs and the Euro is no where near its historic lows. I'm a "worst case scenario" kind of guy and if you can't take the worst exchange rate we've seen thusfar, My suggestion is don't come.

Additionally, it is not unreasonable to assume that sometime in the next 5-20 years asian currencies will make new highs against all western currencies. If it were me, I'd mitigate that somehow by buying a house or condo or finding a way to derive some income in baht. Good Luck.

[henryalleman]

I would advise anyone planning on retirement in Thailand to base their needs on the current exchange rates and not to plan on their home currency appreciating. On top of that, you should plan for a healthy surplus of as much as 25 percent. There could be few things worse than finding that you don't have enough money for a decent life style in a foreign country.

Wise word Gary.......

Very wise words, but what if the currency rates will get worse?

Just to give an example:

I know a guy who lives on a state pension + private pension of EUR 1,500/month.

With a currency of THB 52 to Euro 1 that makes: THB 78,000

With a currency rate of THB 45 to Euro 1 that makes: THB 67,500.

Just a bit more and he isn't able to keep up the Thai Governments request for a monthly income of THB 65,000.

As far as I can recall, most American retirees suffered from a decline in income up to 25% over the last 2 years and the Euro retirees up to 13%. Imagine, that they would cut your income while living at 'home' like that.

Americans suffered and continue to suffer a drop far worse than 25%. US interest rates fell 60% and exchange rates 25%. So, if you were making 5% interest at 40baht/$, hows 3% interest at 30 baht/$ feel? it's the interest rate that's the killer, not the exchange rate. Europeans should base their forecasts on something similar or worse occuring IMO.

If I were European, this is the assumption I would make. Euro and GBP fall to parity with $USD. $USD rises to no more that 38 baht/$ and could go as low as 25 baht/$, Interest rates of 2%.

sorry to say but thats wrong. Its the exchange rate and not the interest rate what counts. You can have an interest rate of 30% on an exchange rate of 30 baht and it will not beat a rate of 40 baht without any interest payment. Beyond that the OP has his money coming from a foreign country based in Euro. What is of value to compare is the rate of inflation. Interest rate is not an issue at all unless you want to recognize that it never covers real inflation no matter in which country you live or in which currency your money is parked. If you dont invest eventually you lose purchasing power consistently.

$1,000,000 @ 5% and 40B/$ = 2,000,000 Baht

$1,000,000 @ 5% and 30B/$ = 1,500,000 Baht

$1,000,000 @ 2% and 40B/$ = 800,000 Baht

$1,000,000 @ 2% and 30B/$ = 600,000 Baht

yes I see your point and it produces more money in case you have a mill $ parked and consider to live from the interest rate alone. Being specific and taking the OPs case so far I understand it, he when doing the move will use his pension payment in thailand maintaining a living by regular withdrawing or transferring money. If this is not the case the whole thread would not have been started. Unless you can afford to live from interest only you mainly depend on the exchange rate in the country where you live/spend. And regardless you lose PP independent of the percentage in interest rate.

PCA,

You hit the nail right on top. I receive a state pension and luckily its an inflation free pension meaning when the cost of living go up 2% so is my pension. So I'm only interested in the exchange rate, because this will have an immediate effect on my daily life style, because the interest on my capital will only be used for some extras and unexpected spending.

So this left the question of my OP

What Are The Effects Of A Strong Baht On Foreign Retirees in daily life spending unanswered.

I was hoping to have some information on that, if it is not to personal.

[PCA]

I would advise anyone planning on retirement in Thailand to base their needs on the current exchange rates and not to plan on their home currency appreciating. On top of that, you should plan for a healthy surplus of as much as 25 percent. There could be few things worse than finding that you don't have enough money for a decent life style in a foreign country.

Wise word Gary.......

Very wise words, but what if the currency rates will get worse?

Just to give an example:

I know a guy who lives on a state pension + private pension of EUR 1,500/month.

With a currency of THB 52 to Euro 1 that makes: THB 78,000

With a currency rate of THB 45 to Euro 1 that makes: THB 67,500.

Just a bit more and he isn't able to keep up the Thai Governments request for a monthly income of THB 65,000.

As far as I can recall, most American retirees suffered from a decline in income up to 25% over the last 2 years and the Euro retirees up to 13%. Imagine, that they would cut your income while living at 'home' like that.

Americans suffered and continue to suffer a drop far worse than 25%. US interest rates fell 60% and exchange rates 25%. So, if you were making 5% interest at 40baht/$, hows 3% interest at 30 baht/$ feel? it's the interest rate that's the killer, not the exchange rate. Europeans should base their forecasts on something similar or worse occuring IMO.

If I were European, this is the assumption I would make. Euro and GBP fall to parity with $USD. $USD rises to no more that 38 baht/$ and could go as low as 25 baht/$, Interest rates of 2%.

sorry to say but thats wrong. Its the exchange rate and not the interest rate what counts. You can have an interest rate of 30% on an exchange rate of 30 baht and it will not beat a rate of 40 baht without any interest payment. Beyond that the OP has his money coming from a foreign country based in Euro. What is of value to compare is the rate of inflation. Interest rate is not an issue at all unless you want to recognize that it never covers real inflation no matter in which country you live or in which currency your money is parked. If you dont invest eventually you lose purchasing power consistently.

$1,000,000 @ 5% and 40B/$ = 2,000,000 Baht

$1,000,000 @ 5% and 30B/$ = 1,500,000 Baht

$1,000,000 @ 2% and 40B/$ = 800,000 Baht

$1,000,000 @ 2% and 30B/$ = 600,000 Baht

yes I see your point and it produces more money in case you have a mill $ parked and consider to live from the interest rate alone. Being specific and taking the OPs case so far I understand it, he when doing the move will use his pension payment in thailand maintaining a living by regular withdrawing or transferring money. If this is not the case the whole thread would not have been started. Unless you can afford to live from interest only you mainly depend on the exchange rate in the country where you live/spend. And regardless you lose PP independent of the percentage in interest rate.

PCA,

You hit the nail right on top. I receive a state pension and luckily its an inflation free pension meaning when the cost of living go up 2% so is my pension. So I'm only interested in the exchange rate, because this will have an immediate effect on my daily life style, because the interest on my capital will only be used for some extras and unexpected spending.

So this left the question of my OP

What Are The Effects Of A Strong Baht On Foreign Retirees in daily life spending unanswered.

I was hoping to have some information on that, if it is not to personal.

I dont think this is too personal though as well can't I speak for others. First of all I am not at retirement age and second I dont depend on the thai baht or for how much ever it might exchange in the future. What is clear to happen in case of a further baht strength is that less retirees will settle down and some who dont have decent budget available will have no other choice than moving elsewhere, not necessarily home. Those who will need to leave won't cry long as seriously here is nothing much getting better by time. I live here since 1996 and see nothing improving. Whatever you buy it is not worth the money. Beaches, food, (chicks in case) and that is basically it. Let me point out that I am just highlighting my personal view.

Taking the economic situation into account which will not improve very fast I guess Thailand will suffer a lot and life quality for expats will follow along. Less exports for thai products, less tourism, higher criminal rate, more corruption and ripp offs.

In 2 or 3 years in case the thais learn some lessons the time might probably be better with more attractive real estate prices, political stability and more vivid humanity. But will the thais ever learn? I doubt it. Without money you cannot enjoy anything here thats for sure. Talking about Phuket here and did never live at another place in Thailand, so in case there are better places I put the cards down for somebody else with a brighter outlook or different experiences.

[GuestHouse]

Currencies fluctuate! Always have and always will. To live the expat life, depending on your income source, you just have to add that to your equation of uncertainties. You should consider bad case scenarios and consider what actions you may have to take if they occur. Coming from the US where we have had 8 years of the Bush weak dollar policy, there is a lot of talk now about pursuing a stronger and more stable dollar policy to the extent that can be controlled. One can hope.

There are some things you can do to shelter some currency risk. For example I have assets in Thailand and assets in the US (and also in many other currencies). So when currencies move I am hedged, I can't really cry or celebrate.

JT, "many other currencies" = hedged? which currency -besides JP¥- appreciated vs. Thai Baht to provide a hedge for those who have the bulk of their expenses in Thailand pray tell?

You can fool some of the people some of the time, but you can't fool Naam very often.

Well spotted Naam

[Gary A]

Will the stock market come back? If it does, I think it will take a number of years if ever. I took a huge hit in the US market and now have about as many assets in Thailand as I have in the US. My financial life revolves around Thailand and the USA. At this point it really doesn't make much difference what happens with any other currency. The extra money I had every month from dividends is gone. I'm quite thankful that I waited the extra five years to retire and didn't depend on income from my investments.

[Pib]

I would like to know how retirees deal with the downfall of their currency's (Euro, Aussie dollar). and does it have an effect on their lifestyle.

I'm planning to move up to Thailand in April 2009, but with the present rate of EURO, I wonder if its not better to put it on hold, till the rates are becoming better, or is this wishful thinking, or do I have to accept a new reality of a strong Baht and a weak Euro for the years to come.

I realy like to have some honest opinion of retirees who receive an offshore pension.

If your retirement to Thailand hinges on your pension currency being strong and the baht being weak, then you are going to have years of good times and years of bad times as currencies vary over the years--that is, they go through business cycles just like stock markets/economies. For retirement planning/living purposes you should plan on your pension currency "always" being on the weak side in comparison to the baht; that way, you will do fine when your pension currency is weak (you consider it normal) and be a very happy guy when your pension currency is strong.

[henryalleman]

I would like to know how retirees deal with the downfall of their currency's (Euro, Aussie dollar). and does it have an effect on their lifestyle.

I'm planning to move up to Thailand in April 2009, but with the present rate of EURO, I wonder if its not better to put it on hold, till the rates are becoming better, or is this wishful thinking, or do I have to accept a new reality of a strong Baht and a weak Euro for the years to come.

I realy like to have some honest opinion of retirees who receive an offshore pension.

If your retirement to Thailand hinges on your pension currency being strong and the baht being weak, then you are going to have years of good times and years of bad times as currencies vary over the years--that is, they go through business cycles just like stock markets/economies. For retirement planning/living purposes you should plan on your pension currency "always" being on the weak side in comparison to the baht; that way, you will do fine when your pension currency is weak (you consider it normal) and be a very happy guy when your pension currency is strong.

Thanks for this excellent and sensible advise. I will keep it in mind, and adjust my expectations.

[pkrv]

Currencies fluctuate! Always have and always will. To live the expat life, depending on your income source, you just have to add that to your equation of uncertainties. You should consider bad case scenarios and consider what actions you may have to take if they occur. Coming from the US where we have had 8 years of the Bush weak dollar policy, there is a lot of talk now about pursuing a stronger and more stable dollar policy to the extent that can be controlled. One can hope.

There are some things you can do to shelter some currency risk. For example I have assets in Thailand and assets in the US (and also in many other currencies). So when currencies move I am hedged, I can't really cry or celebrate.

JT, "many other currencies" = hedged? which currency -besides JP¥- appreciated vs. Thai Baht to provide a hedge for those who have the bulk of their expenses in Thailand pray tell?

naam - I think you are being too literal here. If you bought property here at say in my case (GBP) 75 and were forced to sell at 40/50 thats not bad. I think this is what he is talking about. It is hedging but not as we know it, but we can do this on our own.

Have I got this interpretaion correct Jingthing? because I agree with this.

[OriginalPoster]

Currencies fluctuate! Always have and always will. To live the expat life, depending on your income source, you just have to add that to your equation of uncertainties. You should consider bad case scenarios and consider what actions you may have to take if they occur. Coming from the US where we have had 8 years of the Bush weak dollar policy, there is a lot of talk now about pursuing a stronger and more stable dollar policy to the extent that can be controlled. One can hope.

There are some things you can do to shelter some currency risk. For example I have assets in Thailand and assets in the US (and also in many other currencies). So when currencies move I am hedged, I can't really cry or celebrate.

JT, "many other currencies" = hedged? which currency -besides JP¥- appreciated vs. Thai Baht to provide a hedge for those who have the bulk of their expenses in Thailand pray tell?

naam - I think you are being too literal here. If you bought property here at say in my case (GBP) 75 and were forced to sell at 40/50 thats not bad. I think this is what he is talking about. It is hedging but not as we know it, but we can do this on our own.

Have I got this interpretaion correct Jingthing? because I agree with this.

Yes, that would be a more plausible claim.

[Naam]

Currencies fluctuate! Always have and always will. To live the expat life, depending on your income source, you just have to add that to your equation of uncertainties. You should consider bad case scenarios and consider what actions you may have to take if they occur. Coming from the US where we have had 8 years of the Bush weak dollar policy, there is a lot of talk now about pursuing a stronger and more stable dollar policy to the extent that can be controlled. One can hope.

There are some things you can do to shelter some currency risk. For example I have assets in Thailand and assets in the US (and also in many other currencies). So when currencies move I am hedged, I can't really cry or celebrate.

JT, "many other currencies" = hedged? which currency -besides JP¥- appreciated vs. Thai Baht to provide a hedge for those who have the bulk of their expenses in Thailand pray tell?

naam - I think you are being too literal here. If you bought property here at say in my case (GBP) 75 and were forced to sell at 40/50 thats not bad. I think this is what he is talking about. It is hedging but not as we know it, but we can do this on our own.

Have I got this interpretaion correct Jingthing? because I agree with this.

that's not hedging but a coincidence albeit based on facts. i agree that people bought property with the expectation that it might appreciate pricewise. but i can't think of anybody having bought property expecting an appreciation via exchange rate.

prophets are of course excluded

[pkrv]

Currencies fluctuate! Always have and always will. To live the expat life, depending on your income source, you just have to add that to your equation of uncertainties. You should consider bad case scenarios and consider what actions you may have to take if they occur. Coming from the US where we have had 8 years of the Bush weak dollar policy, there is a lot of talk now about pursuing a stronger and more stable dollar policy to the extent that can be controlled. One can hope.

There are some things you can do to shelter some currency risk. For example I have assets in Thailand and assets in the US (and also in many other currencies). So when currencies move I am hedged, I can't really cry or celebrate.

JT, "many other currencies" = hedged? which currency -besides JP¥- appreciated vs. Thai Baht to provide a hedge for those who have the bulk of their expenses in Thailand pray tell?

naam - I think you are being too literal here. If you bought property here at say in my case (GBP) 75 and were forced to sell at 40/50 thats not bad. I think this is what he is talking about. It is hedging but not as we know it, but we can do this on our own.

Have I got this interpretaion correct Jingthing? because I agree with this.

that's not hedging but a coincidence albeit based on facts. i agree that people bought property with the expectation that it might appreciate pricewise. but i can't think of anybody having bought property expecting an appreciation via exchange rate.

prophets are of course excluded

Thats odd - I do view this as hedging, but on a personal level - I obviously bought in Thailand, and for one critical reason. I did not whish to become vunerable to exactly the situation that now exists (I am UK based). At the time I looked at the exchange rate in 2005 and that was a major contributor to my decision to buy at that time. I have openly said I could juggle things if push came to shove. Either rent out in Thailand to fund living in the UK or vice versa. It just seemed logical to me to have a fallback position/not have all my eggs in one basket/hedge my options.

I have not yet had to test my thoughts in practice but seem to have landed on my feet. I have on paper a 65% increase in value on my condominium and an exchange rate gain from 75 (ish payments ranged from 75 to around 69 I think) let's keep it simple to 50. So another 50% profit. Interesting isn't it.

No I did not predict this NO WAY can I do that - but the logic works (well/well in my case anyway).

If I were Thai I would soon start to think about doing this the otherway around (You would have less hurdles to jump though guys )

Edit - Oh the property in The UK is of course in freefall so I too "can't really cry or celebrate". which is what i picked up on from this poster.

Edited November 15, 2008 by pkrv

[Nomad97]

To answer the OP's question - when the exchange rate is down tighten your belts! Put off major expenditure unless absolutely necessary. The new car that you wanted this year will have to wait until next year. The latest flat screen LCD TV can wait another year. Defer your annual holiday. Blimey, it is really common sense. If the Thais in rural Thailand can live off next to nothing each month, certainly less than 5,000 Baht per month, then I am sure we expats can get by with only 75,000 Baht instead of 150,000 Baht per month.

[pab]

So this left the question of my OP

What Are The Effects Of A Strong Baht On Foreign Retirees in daily life spending unanswered.

I was hoping to have some information on that, if it is not to personal.

Being a retiree from Australia, although we live debt free and quite comfortably, we have decided to keep our old car and defer purchase of a new one, be more aware of our budget expenditure whereas previously, no purchase of luxury and/or non essential items was too much trouble and most of all I made sure that my wife (Thai national) fully understood and appeciated our financial situation - including my super fund unit price values and the impact of exchange rate variations on our disposable income. In fact we have a standing agreement now that when (or if) my super fund units again reach a given level that we will immediately purchase a new Honda Accord (her dream car). I actually have found it very reassuring to be able share all this with my wife and know that she now truly appreciated our financial situation. Previously, she was aware of our superannuation pension monthly income but that was all. Maybe some would not agree with me to share all like this but we have been married for quite some time now and have a very trusting relationship

No big problems but best to be prepared - good luck mate

[Alwaysright]

I have a full COLA with my retirement from the states and hope to see big inflation back there.

[henryalleman]

So this left the question of my OP

What Are The Effects Of A Strong Baht On Foreign Retirees in daily life spending unanswered.

I was hoping to have some information on that, if it is not to personal.

Being a retiree from Australia, although we live debt free and quite comfortably, we have decided to keep our old car and defer purchase of a new one, be more aware of our budget expenditure whereas previously, no purchase of luxury and/or non essential items was too much trouble and most of all I made sure that my wife (Thai national) fully understood and appeciated our financial situation - including my super fund unit price values and the impact of exchange rate variations on our disposable income. In fact we have a standing agreement now that when (or if) my super fund units again reach a given level that we will immediately purchase a new Honda Accord (her dream car). I actually have found it very reassuring to be able share all this with my wife and know that she now truly appreciated our financial situation. Previously, she was aware of our superannuation pension monthly income but that was all. Maybe some would not agree with me to share all like this but we have been married for quite some time now and have a very trusting relationship

No big problems but best to be prepared good luck mate

Thanks a lot, for your sensible advise. I also have a Thai wife(33 years married already), and luckily she understands the impact of the strong Baht on our financial situation.