Are You Worried?

[drummachine]

Thats why paid in Euros...

[davyboy]

Maybe you have got to teach your Thai lady, the facts of life!

Not so easy when you are living with a Thai woman

Well I didn't want to say this, but maybe you should try another country for a lady!

( no insult intended my friend)

There's no insult taken, but I think that many members here will attest to the fact that Thai women are experts at wasting money. My lady, same as many other Thai women have absolutely no idea what is going on in the world and just cannot comprehend that their farang partner may be facing difficulties financially. I have tried to explain the situation, that things could get bad, but she doesn't understand. I'm a farang so money just comes. Simple as that!

At least you agree with me by suggesting that I try another country, but I wouldn't want to be too far away from our little 3 year old.

Ha, when you have a 3 year old, that changes everything. Maybe my wife learned when we lived in the UK.

Whatever, I wish you good luck, especially your 3 year old!!!

[jcon]

Thats why paid in Euros...

Not to worry, you may get your turn soon enough...

[loong]

Thats why paid in Euros...

It's about time that people realised that the $, Euro, pound or whatever are all promissory notes with absolutely nothing to back them up. Don't you think that the so called emerging markets are eventually going to stop supporting western currencies??

America consumes consumes consumes and gives nothing back but freshly printed greenbacks. The western world is leeching on the asian markets. It consumes the asian product and gives what in return? US$ that cannot be spent. If things continue as they are in a few years China will be able to buy out every PLC in America. Of couse this wont happen, becauise if China tried to do that the $ would plummet, so China's foreign reserves would be worth zilch. But the situation cannot continue as it is.

If you think that you are safe because you are paid in Euros, think again.

There are radical changes to come, and I guarantee that most westerners will not like it.

The western economy is F****ed, well and truly.

I think that it was the Nixon administration that abandoned the need of gold reserves to support the currency, closely followed by other economies in the west and that has led to where we are today.

I repeat , western currencies are only printed promissory notes with nothing to back them up. Pound $ Euro are all SUB SUB Prime

[Spee]

I get a little worried when people say "ride out the storm". That's what a lot of people did in New Orleans. Didn't work out too well.

Not to go OT or anything, but let's keep things in perspective. The people who experienced the most hardship from Katrina in New Orleans were the first, second, third and fourth generation of welfare dependents. Most of these people have been born and bred to depend upon government handouts for the majority of their daily needs. They don't grow up learning to be self-sufficient. So when the local and state governments failed them in the face of crisis, and then the state government delayed in calling in the federal government (as required by law), these people had no idea what to do or did not have the resources to fend for themselves.

Getting back to retiring in Thailand from places like the UK and the US, I think there is a lesson to be learned from this perspective. If we are able to be self sufficient and save enough money to retire in our desired lifestyles, then good for us, as we will likely have a nice, leisurely retirement in Thailand without worry of money crises. If we count on government pensions for a significant percentage or majority of our retirement income, then perhaps a retirement in Thailand may one day not be affordable or there may not be enough income to support one's desired lifestyle.

[davyboy]

I get a little worried when people say "ride out the storm". That's what a lot of people did in New Orleans. Didn't work out too well.

Not to go OT or anything, but let's keep things in perspective. The people who experienced the most hardship from Katrina in New Orleans were the first, second, third and fourth generation of welfare dependents. Most of these people have been born and bred to depend upon government handouts for the majority of their daily needs. They don't grow up learning to be self-sufficient. So when the local and state governments failed them in the face of crisis, and then the state government delayed in calling in the federal government (as required by law), these people had no idea what to do or did not have the resources to fend for themselves.

Getting back to retiring in Thailand from places like the UK and the US, I think there is a lesson to be learned from this perspective. If we are able to be self sufficient and save enough money to retire in our desired lifestyles, then good for us, as we will likely have a nice, leisurely retirement in Thailand without worry of money crises. If we count on government pensions for a significant percentage or majority of our retirement income, then perhaps a retirement in Thailand may one day not be affordable or there may not be enough income to support one's desired lifestyle.

What more can one say?? you are 100% right!!!

[wernerfreitag]

According to CIA World factbook

Reserves of foreign exchange and gold:

$57.3 billion (31 December 2007 est.)

Debt - external:

$10.45 trillion (30 June 2007)

Stock of direct foreign investment - at home:

$1.288 trillion (2007 est.)

Stock of direct foreign investment - abroad:

$1.707 trillion (2007 est.) That was 2007, with what has transpired in the last year I immagin the debt is well over 10 Trillion by now. Not sure where your 400 billion came from.

You are referring to the US national debt, not the UK.

Incidently it is worse than I thought apparently as yes the 400 billion figure is out of date.

http://www.statistics.gov.uk/cci/nugget.asp?id=206

http://www.telegraph.co.uk/finance/economi...-the-books.html

so 700 Billion pounds at the end of december and obviously worse now following the drop in share price of RBS and Lloyds.

Government borrowing levels are now getting unmanageable, it will get to the stage that this money has to be paid back. The only way to pay this back is by printing money with no thing to support it. Gold reserves to back up a currency are a thing of the past. Printing too much new money can result in runaway inflation and massive devaluation of the currency.

It's different in the USA as the $ is the major world currency and everybody will suffer if the $ crashes. For this reason countries like China will help support the $. But, China is already looking to establish the Yuan as the currency to trade in Asia. After all they are holding huge amounts of $ as foreign currency reserves that they dare not release or the value will crash. Eventually the $ day will be over, but we wont see that for a while yet.

The Euro is also held as a foreign currency reserve, so will not suffer as much as the pound.

The figures quoted at the top of the page are indeed for the UK not the US. Check CIA fact book if in doubt.

I found the CIA factbook

https://www.cia.gov/library/publications/th...os/uk.html#Econ

I'm sorry but I cannot agree with that figure - The UK national debt cannot be anywhere close to 10 trillion $. 10,000 Billion $.

The Uk has a workforce of about 30 million. That would equate to 333,000 $ or 240,000 pounds per working person.

I have no idea what Debt-external means, maybe it is the total borrowings of all the companies in the UK

I will stick with the Uk government statistics for now - UK national debt 700 billion pounds

I did read somewhere(If I can find a link I will post it) that the US National debt can be expected to rise to over 10 trillion$, that's why I initially thought that your figures were for the USA. If that's right then equates to 66,000 $ per working American. And I thought that I was worried, the Americans should be Sh*****g themselves.

It seems that the Obama administration have finally accepted that the $ is overvalued re the Yuan and are looking at ways to pressure China to allow the Yuan to reach a natural level without manipulation. Of course they don't want to upset the chinese as they hold so much in US government bonds and if they decided to sell all at once, would be very bad for the $. Whatever the US government do, I don't know if it would just affect the$ against the Yuan or against all currencies - any thoughts?

The debt of the U.S. ( financial and non-financial sector of industry and private sector ) is now far above 50 trillions$ . Based on 300 US-Americans , it comes close to 200 000 $ for each and everyone.

This is still just the beginning.

Sorry , but I am frightened.

Werner

[davyboy]

According to CIA World factbook

Reserves of foreign exchange and gold:

$57.3 billion (31 December 2007 est.)

Debt - external:

$10.45 trillion (30 June 2007)

Stock of direct foreign investment - at home:

$1.288 trillion (2007 est.)

Stock of direct foreign investment - abroad:

$1.707 trillion (2007 est.) That was 2007, with what has transpired in the last year I immagin the debt is well over 10 Trillion by now. Not sure where your 400 billion came from.

You are referring to the US national debt, not the UK.

Incidently it is worse than I thought apparently as yes the 400 billion figure is out of date.

http://www.statistics.gov.uk/cci/nugget.asp?id=206

http://www.telegraph.co.uk/finance/economi...-the-books.html

so 700 Billion pounds at the end of december and obviously worse now following the drop in share price of RBS and Lloyds.

Government borrowing levels are now getting unmanageable, it will get to the stage that this money has to be paid back. The only way to pay this back is by printing money with no thing to support it. Gold reserves to back up a currency are a thing of the past. Printing too much new money can result in runaway inflation and massive devaluation of the currency.

It's different in the USA as the $ is the major world currency and everybody will suffer if the $ crashes. For this reason countries like China will help support the $. But, China is already looking to establish the Yuan as the currency to trade in Asia. After all they are holding huge amounts of $ as foreign currency reserves that they dare not release or the value will crash. Eventually the $ day will be over, but we wont see that for a while yet.

The Euro is also held as a foreign currency reserve, so will not suffer as much as the pound.

The figures quoted at the top of the page are indeed for the UK not the US. Check CIA fact book if in doubt.

I found the CIA factbook

https://www.cia.gov/library/publications/th...os/uk.html#Econ

I'm sorry but I cannot agree with that figure - The UK national debt cannot be anywhere close to 10 trillion $. 10,000 Billion $.

The Uk has a workforce of about 30 million. That would equate to 333,000 $ or 240,000 pounds per working person.

I have no idea what Debt-external means, maybe it is the total borrowings of all the companies in the UK

I will stick with the Uk government statistics for now - UK national debt 700 billion pounds

I did read somewhere(If I can find a link I will post it) that the US National debt can be expected to rise to over 10 trillion$, that's why I initially thought that your figures were for the USA. If that's right then equates to 66,000 $ per working American. And I thought that I was worried, the Americans should be Sh*****g themselves.

It seems that the Obama administration have finally accepted that the $ is overvalued re the Yuan and are looking at ways to pressure China to allow the Yuan to reach a natural level without manipulation. Of course they don't want to upset the chinese as they hold so much in US government bonds and if they decided to sell all at once, would be very bad for the $. Whatever the US government do, I don't know if it would just affect the$ against the Yuan or against all currencies - any thoughts?

The debt of the U.S. ( financial and non-financial sector of industry and private sector ) is now far above 50 trillions$ . Based on 300 US-Americans , it comes close to 200 000 $ for each and everyone.

This is still just the beginning.

Sorry , but I am frightened.

Werner

Calm down my friend, it'll sort its self out. You will die worrying. Relax!!!

[flying]

Not to go OT or anything, but let's keep things in perspective. The people who experienced the most hardship from Katrina in New Orleans were the first, second, third and fourth generation of welfare dependents. Most of these people have been born and bred to depend upon government handouts for the majority of their daily needs. They don't grow up learning to be self-sufficient. So when the local and state governments failed them in the face of crisis, and then the state government delayed in calling in the federal government (as required by law), these people had no idea what to do or did not have the resources to fend for themselves.

Oh boy I think so many there would disagree with you BIG TIME.

Yeah many if not the majority were city types so had no farms etc but.......

even if there were it would all be underwater.

You should perhaps look into it a bit more. Read & see the rich white folks (aka: non welfare types? ) Watch as authorities come & disarm them for no reason as they try to boat away from disaster. Watch as folks are left with nothing NOTHING

food is not even the 1st thing on their mind.

See how hard it was to get clean WATER?

Like you said

So when the local and state governments failed them in the face of crisis, and then the state government delayed in calling in the federal government (as required by law

So you have to wonder then what are you saying? This was USA undesirable population control? SO then the poor rich white folk who happened to be living there were just casualties of that?

Your right OT but when I saw it I couldnt let it pass. That is like saying the poor folks hit by the Phuket Tsunami were lazy for not immediately going fishing or something.

What Katrina showed is how inadequate the *system* is in the face of real disaster. Regardless of the income of its victims.

Edited January 25, 2009 by flying

[Spee]

Not to go OT or anything, but let's keep things in perspective. The people who experienced the most hardship from Katrina in New Orleans were the first, second, third and fourth generation of welfare dependents. Most of these people have been born and bred to depend upon government handouts for the majority of their daily needs. They don't grow up learning to be self-sufficient. So when the local and state governments failed them in the face of crisis, and then the state government delayed in calling in the federal government (as required by law), these people had no idea what to do or did not have the resources to fend for themselves.

Oh boy I think so many there would disagree with you BIG TIME.

Everyone is entitled to their own wrong opinion.

Like you said

So when the local and state governments failed them in the face of crisis, and then the state government delayed in calling in the federal government (as required by law

So you have to wonder then what are you saying? This was USA undesirable population control? SO then the poor rich white folk who happened to be living there were just casualties of that?

Your response is a bit bizzare, with the racial overtones, so forgive me if I don't go there.

As for the tsunami victim analogy, I think that it is pretty sick and disgusting. Those poor souls had ZERO time to avoid disaster. People in New Orleans had DAYS to prepare to avoid tragedy. One group of people were truly victims. The other was more or less irresponsible.

As for wondering what I am saying, it's quite simple. People who are counting on government solutions, such as retirement income in the context of this thread, will always end up with the shitty end of the stick. If there is anything as certain as death and taxes, it is that government social programs historically over promise and under deliver.

Expect governments like the UK and US to reduce pension benefits as the magnitude of their unsustainable bankrupt Ponzi schemes become reality. And to come full circle, for people already retired or trying to plan for retirement in LoS, expect the inevitable reductions in benefits and plan accordingly.

If it turns out that I'm the one who is full of shit (as happens on odd rare occasion), then there is extra money and one is none the worse off in terms of retirement in desired lifestyle. And if I'm correct, then one is nonetheless well planned and able to live in their desired lifestyle without dependency.

Edited January 26, 2009 by Spee

[flying]

Your response is bit bizzare, with the racial overtones and everything else, so forgive me if I don't go there.

Actually it was your response that was obviously racial thinly veiled so dont bother with the pot calling the kettle black routine.

You said

The people who experienced the most hardship from Katrina in New Orleans were the first, second, third and fourth generation of welfare dependents.

That is just a load of crap. Everyone there suffered the same.

How you can even compare a natural disaster like Katrina & the governments lack of help there with ponzi schemes, pensions etc. is well beyond me.

I have said before none should rely on SS or pensions etc. But again those things had nothing to do with your Katrina statement quoted above....end of story

Edited January 26, 2009 by flying

[Tod]

Not to go OT or anything, but let's keep things in perspective. The people who experienced the most hardship from Katrina in New Orleans were the first, second, third and fourth generation of welfare dependents. Most of these people have been born and bred to depend upon government handouts for the majority of their daily needs. They don't grow up learning to be self-sufficient. So when the local and state governments failed them in the face of crisis, and then the state government delayed in calling in the federal government (as required by law), these people had no idea what to do or did not have the resources to fend for themselves.

Getting back to retiring in Thailand from places like the UK and the US, I think there is a lesson to be learned from this perspective. If we are able to be self sufficient and save enough money to retire in our desired lifestyles, then good for us, as we will likely have a nice, leisurely retirement in Thailand without worry of money crises. If we count on government pensions for a significant percentage or majority of our retirement income, then perhaps a retirement in Thailand may one day not be affordable or there may not be enough income to support one's desired lifestyle.

Sean Hannity is that you??

Edited January 26, 2009 by Tod

[Spee]

Getting back to retiring in Thailand from places like the UK and the US, I think there is a lesson to be learned from this perspective. If we are able to be self sufficient and save enough money to retire in our desired lifestyles, then good for us, as we will likely have a nice, leisurely retirement in Thailand without worry of money crises. If we count on government pensions for a significant percentage or majority of our retirement income, then perhaps a retirement in Thailand may one day not be affordable or there may not be enough income to support one's desired lifestyle.

Sean Hannity is that you?

Aside from a useless, smartass and obvious liberal wanke_r response, what part of this paragraph do you have a problem with? (as it relates to financial concerns associated with retiring in Thailand)

[aitch52]

Loong to answer your question in the OP, am I worried? Yep, can I do anything about it? Nope, I was fretting about this during the slide but I have put it to the back of my mind, it's going to be up to us to sort it out and live within our means. I live by the adage one door closes and another one shuts, the UK has been spending way beyond it's means for decades now, that is one reason I got out. Things will get back to equilibrium but it's going to take a long time. Good topic mate and there have been many sensible replies as well as the usual nonsensical. My dear wife has her head buried in the sand Bless her, but I have tightened the purse strings and through positive action will try to weather this storm find a job and work my butt off to get through.

Cheers and good luck to all of you during this meltdown

C

[samuibeachcomber]

I seem to remember all the people in that stadium in new orleans during hurricane Katrina looked very poor/welfare dependant types etc(nothing racial here) and throughout the worlds history of natural disasters its always the poor people that suffer the most(bush fires in LA excepted).

With regard to living in thailand as a retiree,yes banking(pardon the pun)on state funded,or privately funded pensions is a gamble as we are seeing now,but we all take our chances of having a good life here,and as usual some are better off than others to do this...................

Now what to do about cash in the bank?how safe?is there a better way to protect hard earned cash.any good advice out there?

[flying]

Now what to do about cash in the bank?how safe?is there a better way to protect hard earned cash.any good advice out there?

I use the same saying they use for money in Thailand when it comes to banks anywhere

Dont put more in there than you willing to walk away from

Sad state when banks are no longer a safe feeling place eh?

[aitch52]

I use the same saying they use for money in Thailand when it comes to banks anywhere

Dont put more in there than you willing to walk away from

Sad state when banks are no longer a safe feeling place eh?

Very true it's a bl_oody tragedy

[henryalleman]

Its seems that there is some doom and gloom about government pensions. But as long that government pension is indexed secured and paid by the government, I don't see much problems in the future.

[Chaimai]

I use the same saying they use for money in Thailand when it comes to banks anywhere

Dont put more in there than you willing to walk away from

Sad state when banks are no longer a safe feeling place eh?

WHAT ??

Is this what the financial crisis has really done to people - turned them into paranoid dimwits ?

(no personal offence Flying, I have always found your posts to be sensible in the past).

Such attitudes have no place in the 'reasonable world' and only fuel the doom and gloom merchants, preventing the much-needed return of confidence to the markets.

I agree that if your bank deposits are not covered by government guarantees then think seriously about whether they are in the right place.

Flying's comment is typified by one moronic act I witnessed in a UK bank last year - a lady was depositing GBP 21,000 being her savings from Halifax bank (HBOS) because she was worried about the 'scare-mongering'comments about the Halifax's solvency. At that point her savings were already guaranteed to GBP 30,000 by the government. What a waste of time for everyione - including me. waiting in the queue.

Lets start a campaign to get some reality back into the world.

[Spee]

Its seems that there is some doom and gloom about government pensions.

Can you provide some input to indicate why people should not be worried?

But as long that government pension is indexed secured and paid by the government, I don't see much problems in the future.

More power to you then my brother, because you have a lot more faith in government and politicians that many do. It reminds me of a great quote from the clever political satirist PJ O'Rourke, who opined "A little luck and a little government are both necessary in life, but only a fool trusts either one of them."

I can't speak for the UK and EU pension programs, but the US pension program (aka Social Security and Medicare) has been in trouble for many years. The income to these programs does not come close to equaling the outgo, much less show a "profit" for the many years of presumed "investment." When individuals and companies have more outgo than income, they go bankrupt and close down. When a government pension program is bankrupt and should be closed down, the politicians raise taxes and cut benefits in an effort to maintain the charade.

I'll take myself as a case in point. Over my working career, my various employers and I have been forced by legalized government theft (let's be honest and call a spade a spade, after all) to contribute something in the neighborhood of $275k USD into the Social Security Program, presumably on my behalf. In the 20-something years that the money has been in the hands of the government, in the private market it would have accrued sufficient growth and interest to roughly double in size.

So in theory, I should have a government pension valued today at approximately $550k. I have 3 choices for collecting: 1) start early collection at a reduced rate at age 62, 2) start normal collection at normal rate around age 65, or 3) start late collection at an increased rate at age 70.

(All this assumes of course that politicians don't raise the minimum retirement age and reduce payout benefits, as they have done in the past and want to do again now.)

If I start normal retirement collection, my Social Security pension payout will be worth a little over $2,000 USD per month or about $25,000 per year. In order for me to just break even on the deal (receive my $550k back), I would have to live to about 88 years of age, which is 7 years beyond my normal life expectancy.

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

So what's the bottom line?

In my case, the true value of my US government pension will be about $1m USD by the time I am ready to hang up my spurs. Yet the best that I could possibly hope for in a normal life span is to recoup a modest fraction of that amount, perhaps 40-50%. And that is doled out only in dribs and drabs of a couple thousand a month, instead of a rate of perhaps double that amount which would help to approach breaking even.

More importantly, and I hate to burst the bubble of people who may feel otherwise, but $2k a month ain't shit in terms of a comfortable retirement lifestyle without worry of money. It doesn't matter if retirement is in Thailand or anywhere else. In the case of a Thailand retirement, 1-2 months of that could be eaten up just in the occasional trip back to the homeland.

Meanwhile, back at the ranch, where does the rest of MY money go? Well, very clearly the politicians use it for purposes that they deem worthwhile, meaning they take money out of my pocket and put it into someone else's pocket. That my friend, is called transfer of wealth by the force of government, and at present, the American politicians are spending it faster than it is coming in. I'd say they are "spending like drunken sailors," but that would be an insult to drunken sailors. There should be little doubt that this will lead to further reductions in benefits as the Ponzi scheme starts to blow up in peoples' faces.

[[ Of course, we haven't even touched upon the issue of health maintenance and cost of health care in retirement. Eveyrone knows that the UK NHS and the socialized medicine programs that politicians want so badly for America, are only beneficial if one is actually in the country, not residing in a Pattaya beachfront flat. ]]

All this goes back to my original point. Government pension programs are unstable and underfunded, and if one is relying upon government pension payouts for a majority or all of a Thailand-based retirement plan, then that plan bears significant reconsideration (IMHO).

I know we are supposed to stay away from political debate outside of Bedlam, and I am a known offender from time to time. However, for those of us who are either retired in Thailand, or planning to retire in Thailand, it is crucial to keep the politics of the situation in the foreground because it directly impacts present and future financial planning needed to make that Thailand retirement secure, enjoyable and leisurely.

[Naam]

Its seems that there is some doom and gloom about government pensions. But as long that government pension is indexed secured and paid by the government, I don't see much problems in the future.

demographics clearly indicate that this will not be the case in future.

[flying]

(no personal offence Flying, I have always found your posts to be sensible in the past).

Such attitudes have no place in the 'reasonable world' a

Lets start a campaign to get some reality back into the world.

No offense taken Chaimai I like your posts too.

This is in reality quite sensible for me. I have researched & looked at what is happening here in the USA. I have come to the conclusion that I do not in fact feel safe with them holding most of my hard earned dollars.

I remove excess monies from excess risk that is all. Is that not my perogative?

Who decides risk for me? Yes I do

If you look into the FDIC & the NCUA here you will quickly find that they are sorely underfunded for any real activity.

So being the reaosnable person I am I removed what I did not want to risk.

Why is that not an option for me since that is my money?

Look at all the low interest they save not paying it to me right?

Trust me I am being more than fair with the banks.

I have left enough in there to cover any debt/mortgage I have which is not much. So I am not leaving them in a lurch either.

In the end I do not know why anyone would consider this to be the actions of a paranoid dimwit?

Do you live here in the USA now & do you see what is going on?

Would you call what the financial sectors here are doing & have done reasonable?

Does that instill great confidence in you? Trust me I will never consider you a unread dimwit for giving them 100% control of your assets. That is one of the few good things left here..........Freedom of choice

I am a lot like you I am 100% for bringing some reality back into this world.

Because what they the financial & political sectors have been doing can only be described as UNREAL

Good Luck To You

Sawadee Pimai

[caulfield2]

Its seems that there is some doom and gloom about government pensions.

Can you provide some input to indicate why people should not be worried?

But as long that government pension is indexed secured and paid by the government, I don't see much problems in the future.

More power to you then my brother, because you have a lot more faith in government and politicians that many do. It reminds me of a great quote from the clever political satirist PJ O'Rourke, who opined "A little luck and a little government are both necessary in life, but only a fool trusts either one of them."

I can't speak for the UK and EU pension programs, but the US pension program (aka Social Security and Medicare) has been in trouble for many years. The income to these programs does not come close to equaling the outgo, much less show a "profit" for the many years of presumed "investment." When individuals and companies have more outgo than income, they go bankrupt and close down. When a government pension program is bankrupt and should be closed down, the politicians raise taxes and cut benefits in an effort to maintain the charade.

I'll take myself as a case in point. Over my working career, my various employers and I have been forced by legalized government theft (let's be honest and call a spade a spade, after all) to contribute something in the neighborhood of $275k USD into the Social Security Program, presumably on my behalf. In the 20-something years that the money has been in the hands of the government, in the private market it would have accrued sufficient growth and interest to roughly double in size.

So in theory, I should have a government pension valued today at approximately $550k. I have 3 choices for collecting: 1) start early collection at a reduced rate at age 62, 2) start normal collection at normal rate around age 65, or 3) start late collection at an increased rate at age 70.

(All this assumes of course that politicians don't raise the minimum retirement age and reduce payout benefits, as they have done in the past and want to do again now.)

If I start normal retirement collection, my Social Security pension payout will be worth a little over $2,000 USD per month or about $25,000 per year. In order for me to just break even on the deal (receive my $550k back), I would have to live to about 88 years of age, which is 7 years beyond my normal life expectancy.

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

So what's the bottom line?

In my case, the true value of my US government pension will be about $1m USD by the time I am ready to hang up my spurs. Yet the best that I could possibly hope for in a normal life span is to recoup a modest fraction of that amount, perhaps 40-50%. And that is doled out only in dribs and drabs of a couple thousand a month, instead of a rate of perhaps double that amount which would help to approach breaking even.

More importantly, and I hate to burst the bubble of people who may feel otherwise, but $2k a month ain't shit in terms of a comfortable retirement lifestyle without worry of money. It doesn't matter if retirement is in Thailand or anywhere else. In the case of a Thailand retirement, 1-2 months of that could be eaten up just in the occasional trip back to the homeland.

Meanwhile, back at the ranch, where does the rest of MY money go? Well, very clearly the politicians use it for purposes that they deem worthwhile, meaning they take money out of my pocket and put it into someone else's pocket. That my friend, is called transfer of wealth by the force of government, and at present, the American politicians are spending it faster than it is coming in. I'd say they are "spending like drunken sailors," but that would be an insult to drunken sailors. There should be little doubt that this will lead to further reductions in benefits as the Ponzi scheme starts to blow up in peoples' faces.

[[ Of course, we haven't even touched upon the issue of health maintenance and cost of health care in retirement. Eveyrone knows that the UK NHS and the socialized medicine programs that politicians want so badly for America, are only beneficial if one is actually in the country, not residing in a Pattaya beachfront flat. ]]

All this goes back to my original point. Government pension programs are unstable and underfunded, and if one is relying upon government pension payouts for a majority or all of a Thailand-based retirement plan, then that plan bears significant reconsideration (IMHO).

I know we are supposed to stay away from political debate outside of Bedlam, and I am a known offender from time to time. However, for those of us who are either retired in Thailand, or planning to retire in Thailand, it is crucial to keep the politics of the situation in the foreground because it directly impacts present and future financial planning needed to make that Thailand retirement secure, enjoyable and leisurely.

Are you one of Ayn Rand's grandchildren?

Seriously.

Betweening blaming the poor people in Katrina, we're now back to privatized retirement/savings accounts.

You realize, of course, that the majority of people in the US (and I'm going to guess 65-80%) have no idea how to manage their monies...I suppose you could blame them for being poor and not having an adequate education, but that wouldn't change the fact that many of them would have been wiped out this past year with ultra-aggressive investing, which is the style/tendency of the majority of individuals and certainly of many investment "advisors" that would be making tons of profits by risking the retirement monies of elderly people.

Yet I suppose you wouldn't want to regulate these "advisors/brokers" either...right? Because free markets are the solution to everything. We'd be better off if every single bank in the US went bankrupt, correct? And every single insurance agency? And every auto maker? Who would be left to manufacture something for the American people without jobs who wouldn't have any money to buy anything with?

Of course, EVERYONE conveniently forgets that Clinton ran budget SURPLUSES the last three years of his administration...and BUSH/GOP has now blown a gaping hole in the budget that might never be fixed in our lifetimes. But it's those darned tax & spend liberals, if they're not freeing rapists or saving spotted owls, they're whining and complaining and allowing our country to be invaded by fundamentalist jihadists.

But I'll compromise with you (probably member of the Top 10-15% of the US population in terms of net worth who's 95% responsible for this mess)...I'll give you two choices.

Option A

You control half your money deducted for SS payments. The other half goes into an interest-bearing account/bond fund at 2.5% or you can allocate it to an indexed fund the government would base on the Vanguard S&P index to mirror the return of the market.

Option B

You control ALL of your money but would sign a promise/waiver that you would never seek any aid/support/assistance from the government if you mismanaged your money or lost all of it.

This private savings account idea is great as long as the market is advancing 8-10% every year, like in the 90's. But, as we've learned from the Great Depression, the 70's, 1987, 97-98, 2000-02 and 2007, things don't always go according to plan. And when plans don't work out, who do people turn to? Not themselves, but the government.

I hope everyone realizes that the marginal tax rates of US citizens are in the bottom quartile of the world, yet to hear Americans, you'd think their tax rates (and I'm a US citizen) were the highest in the industrialized world, the US was giving out 10% of GNP in foreign aid/assistance and the whole system (banking/insurance, etc.) would have been better off completely deregulated.

[Spee]

Your inaccurate meandering rant hardly deserves a response, especially since it does not respond to my main point, which is that a government pension will never give back the equivalent of what people put into it (or what they could have saved by investing the money on their own) and this may be resulting in serious impact to those of us already retired or planning to retire in Thailand.

You realize, of course, that the majority of people in the US (and I'm going to guess 65-80%) have no idea how to manage their monies...

You are very clearly implying that the government does know better how to manage the citizens' money and therefore should? That's Stalin, Mao and Keynes, my friend, not Ayn Rand.

By constitutional mandate, the US government is authorized to be the protector and defender of life, liberty and the pursuit of happiness. It has absolutely ZERO authority to attempt to be the sole dispenser of it. Yet that is exactly what happens in the case of social security retirement pensions.

I hope everyone realizes that the marginal tax rates of US citizens are in the bottom quartile of the world, yet to hear Americans, you'd think their tax rates (and I'm a US citizen) were the highest in the industrialized world,

This is going way OT but I'm sorry to say your statement is more than a bit misleading, and in some cases completely incorrect.

First of all, the US corporate tax rates are by far the highest in the industrialized world. And these costs get passed on to the consumer resulting in higher prices. This is an indisputable fact. US capital gain and other taxes are also among the highest in the industrialized world. All this does is stifle investment and productivity, remove huge amounts of money from the private economy, and transfer vast wealth into largely unproductive political pet projects.

Yet despite this fact, the US has been one of the most productive countries in modern history. Care to guess why? Because personal income taxes are relatively low. In fact, the bottom 50% of wage earners pay little if no tax at all. The top 50% of wage earners pay 97% of federal income taxes. Oh an by the way, when taxes go down, productivity and tax revenue go up (usually by leaps and bounds). These are also indisputable facts.

I would encourage you to take a wake-up call. Go to my personal page and follow some of the links to learn from great free market libertarian economists like Milton Friedman and Walter E. Williams.

[caulfield2]

Your inaccurate meandering rant hardly deserves a response, especially since it does not respond to my main point, which is that a government pension will never give back the equivalent of what people put into it (or what they could have saved by investing the money on their own) and this may be resulting in serious impact to those of us already retired or planning to retire in Thailand.

You realize, of course, that the majority of people in the US (and I'm going to guess 65-80%) have no idea how to manage their monies...

You are very clearly implying that the government does know better how to manage the citizens' money and therefore should? That's Stalin, Mao and Keynes, my friend, not Ayn Rand.

By constitutional mandate, the US government is authorized to be the protector and defender of life, liberty and the pursuit of happiness. It has absolutely ZERO authority to attempt to be the sole dispenser of it. Yet that is exactly what happens in the case of social security retirement pensions.

I hope everyone realizes that the marginal tax rates of US citizens are in the bottom quartile of the world, yet to hear Americans, you'd think their tax rates (and I'm a US citizen) were the highest in the industrialized world,

This is going way OT but I'm sorry to say your statement is more than a bit misleading, and in some cases completely incorrect.

First of all, the US corporate tax rates are by far the highest in the industrialized world. And these costs get passed on to the consumer resulting in higher prices. This is an indisputable fact. US capital gain and other taxes are also among the highest in the industrialized world. All this does is stifle investment and productivity, remove huge amounts of money from the private economy, and transfer vast wealth into largely unproductive political pet projects.

Yet despite this fact, the US has been one of the most productive countries in modern history. Care to guess why? Because personal income taxes are relatively low. In fact, the bottom 50% of wage earners pay little if no tax at all. The top 50% of wage earners pay 97% of federal income taxes. Oh an by the way, when taxes go down, productivity and tax revenue go up (usually by leaps and bounds). These are also indisputable facts.

I would encourage you to take a wake-up call. Go to my personal page and follow some of the links to learn from great free market libertarian economists like Milton Friedman and Walter E. Williams.

The original supply-siders suggested that some tax cuts, under very special circumstances, might actually raise federal revenues. For example, cutting the capital gains tax rate might induce an unlocking effect that would cause more gains to be realized, thus causing more taxes to be paid on such gains even at a lower rate.

But today it is common to hear tax cutters claim, implausibly, that all tax cuts raise revenue. Last year, President Bush said, “You cut taxes and the tax revenues increase.” Senator John McCain told National Review magazine last month that “tax cuts, starting with Kennedy, as we all know, increase revenues.” Last week, Steve Forbes endorsed Rudolph Giuliani for the White House, saying, “He’s seen the results of supply-side economics firsthand — higher revenues from lower taxes.”

You're living in a total dreamland if you think ANY company and its executives are actually paying the tax rates they are supposed to...they are hiring a team of accounts and lawyers to figure out exactly how NOT to pay taxes or taking advantages of earmarks/subsidies and other handouts from the government. For instance, off-shore or Cayman Islands/Swiss accounts. When was the last time an S&P actually reported TRUE/ACCURATE profit and loss numbers? When its accounting wasn't done by the same team that did investment banking and mergers & acquisitions? These people simply DELIGHT in NOT paying taxes...

Is it any surprise that the economy was doing well from 1993-2001 despite an even HIGHER capital gains tax rate than today? At least Clinton and Rubin were smart enough to realize that LOWERING the deficit and using effective fiscal/monetary policy, in tandem, would please Wall Street/Greenspan and the lower interest rates would benefit EVERY American who bought a car, house, started a small business or took out a loan to improve their educational status and opportunities for advancement.

Yes, and the Top 1% pays 21.2%, so this statistic is VERY misleading. But I suppose you are probably a billionaire, right? I think it would be better to look at mean/mean/mode as well...to get a more accurate portrayal.

In reality...

Top 1% (those with over $10 million in assets)=21.2%

2-5%=14.55%

Top 1-5 TOTAL=35.72%

6-50=61%

51-100=3%

The top 1% of earners pay 21.20% of all taxes paid at an average rate of 24%, the top 2 - 5% of earners pay 14.55% of all taxes at an average of 18% (Top 5% pay @36% of all tax) The bottom 50% pay 3% of all tax collected at an average rate of 2.98%.

HOw many of the billionaires are on this thread complaining about high taxes. Most, like Buffett, Gates and Turner, are complaining they don't pay a fair share and would be willing to pay more to improve their country. Another factor is the AMT.

Keep in mind, you're not including sales taxes, state taxes, city taxes, usage taxes, etc., which usually regressively lower the income of poor and middle class people.

So let me get this straight....under Bush policies, we're better off how? Can you please explain it to me like I'm a five year old? Thanks a bunch. You didn't mention how many earmarks and pet projects the Republicans put forth for most of Bush's term either, did you?

And some would argue that the people in Mao's China have a much brighter future than Americans...really, it's Deng Xiaoping's China, but that's splitting hairs, in terms of mixing regulation/government approaches with free market/laissez faire capitalism.

So you agree, yes or no, that all the banks, auto makers and insurance companies should have been allowed to go bankrupt???

And, by the way, what do you think should happen to all those employees from the various companies (like GM or any airline) whose pensions are gone or worth zero? Should they be rounded up and executed if they get to old age and have no ability to take care of themselves because the company they trusted and slaved for 30-50 years goes bankrupt? Survival of the fittest, right? That's the American way, we're Social Darwinists when it comes down to it. We only pretend to care about the poor (see Hurricane Katrina), but, when the ____ hits the fan, you're on your own, pull yourself up by the bootstraps, as they say.

[caulfield2]

http://news.yahoo.com/s/ap/20090128/ap_on_...ailing_backbone

By the way, how would Mr. Freidman suggest we pay for all these problems that have been neglected over the years by our government? I guess that you would argue that nothing should be done...or that every infrastuctural need mentioned should be privatized, right?

[samuibeachcomber]

Now what to do about cash in the bank?how safe?is there a better way to protect hard earned cash.any good advice out there?

I use the same saying they use for money in Thailand when it comes to banks anywhere

Dont put more in there than you willing to walk away from

Sad state when banks are no longer a safe feeling place eh?

ok flying but you did n't answer my question?for example my money is in australia in term deposits with interest rastes being whittled away.Yes the govt. gaurantees all deposits in aussie banks(but how much trust can we place in that )So where else to go with the money if not in the banks.has anyone got some seriously better ideas.

[caulfield2]

Now what to do about cash in the bank?how safe?is there a better way to protect hard earned cash.any good advice out there?

I use the same saying they use for money in Thailand when it comes to banks anywhere

Dont put more in there than you willing to walk away from

Sad state when banks are no longer a safe feeling place eh?

ok flying but you did n't answer my question?for example my money is in australia in term deposits with interest rastes being whittled away.Yes the govt. gaurantees all deposits in aussie banks(but how much trust can we place in that )So where else to go with the money if not in the banks.has anyone got some seriously better ideas.

There aren't very many "safe" ideas these days if you don't trust in government issued bonds/T-Bills.

Maybe buying precious metals like gold/silver/platinum as a hedge, but the problem is that those types of investments are not as liquid or easy to sell. If the world economy were to fall further or even collapse, then having gold would be the most logical place to be.

With the banks paying a pittance in terms of interest rates (in terms of savings accounts and CD's), you're losing everything to inflation and taxes.

Maybe you can look into some higher yield (not JUNK) bond funds that have a wide-swath/breadth of companies...or some kind of hybrid with part government and part corporate bonds.

The fact remains, the best investments over the past 25 years have been stocks and real estate. I don't think the market for Dutch Tulips is coming back anytime soon.

I still have some stamps, coins and baseball cards, but, once again, ILLIQUID investments...more of a hobby, I doubt I will ever even sell them, in actuality.

Rare art? Well, unless you're a millionaire and can foresee the future, I wouldn't advise a foray into that area...usually a fool's/rich man's game, and to discern which paintings or artists will appreciate in the future requires a fortune teller's tarot cards.

Edited January 28, 2009 by caulfield2

[CaptHaddock]

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

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

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

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

Edited January 28, 2009 by CaptHaddock

[caulfield2]

You cannot outlive your benefits. If you have no such lifetime benefit how would you face the prospect that you might well live to be 95 or even higher? Although statistically, you don't have a high probability of reaching that age it is certainly possible and would be very unpleasant if you were also poor.

That's just it...the biggest percentage of Americans is comprised of the Baby Boom generation (Clinton and Bush being two of the first) from 1945-1960. If there wasn't SS, how many Americans would even be dreaming about retiring on their private pensions and investments? How many of these will even survive the next 3-5 years intact and solvent? Maybe 25%?

How many would be destitute? Perhaps just as many, even though that generation believed more in saving than recent ones.

The problem is that there were 20 workers in the 1930's for every retired person, and of course life span/modern medical care/technology which didn't exist. Currently, it's closer to a 4-1 ratio. Soon, it will be 2-1 unless we 1) allow more immigration or 2) increase the retirement age to be in line with longer lifespans/life expectancy.

That still doesn't preclude one from retiring at 59 1/2 if they've saved wisely and efficiently.