Saving Enough Money For Retirement In Thailand.

[asiasurfer]

So, you are living and working in Thailand and you plan to retire there as well at the end of your career. Ok, we all know the Thai pension scheme is quite pretty miserable.

What do you do then? How do you financially prepare for your retirement in Thailand as an expat? You pay life insurance; or pay into the health system of your home country; etc…?

Let’s exchange some thoughts and ideas…

[personchester]

So, you are living and working in Thailand and you plan to retire there as well at the end of your career. Ok, we all know the Thai pension scheme is quite pretty miserable.

What do you do then? How do you financially prepare for your retirement in Thailand as an expat? You pay life insurance; or pay into the health system of your home country; etc…?

Let's exchange some thoughts and ideas…

Discussions on this subject are endless, get in touch with several financial advisers, or contact some financial institutions directly, (household names) and they will flood you with propositions of all sorts, depending on your age, your civil status, (marriage /children) employed, or self-employed, your income, country of residence, and country of domicile, income tax position, inheritance tax, proposed retirement age, etc ...

Once you have received all those bundles of propositions/recommendations digest all of them, and then come back with some particular points.

[wamberal]

Buy an annuity, or more than one.

[noise]

How do you financially prepare for your retirement in Thailand as an expat? Let's exchange some thoughts and ideas…

Sounds like a self flagelation approach. If you are working for a salary/benefits that won't get you there, there is not much you can do except inheirit from someone. Personchester was right; talking won't help.

[givenall]

Bottom line you would need minimum of $3000 a month (to days money)and a place that you own to live for retiring comfortably in Thailand.

[way2muchcoffee]

Bottom line you would need minimum of $3000 a month (to days money)and a place that you own to live for retiring comfortably in Thailand.

You must be joking. $3000 per month in today's money? I live very comfortably in a 3-bdr townhouse in central BKK where I pay rent, with both truck and motorcycle payments, on around $2,000 per month. That includes being able to save each month. In retirement a person living in rural Thailand with low rent and no vehicle financing could easily be comfortable on as little as $1000 per month in today's dollars.

Edited August 15, 2009 by way2muchcoffee

[sokal]

Bottom line you would need minimum of $3000 a month (to days money)and a place that you own to live for retiring comfortably in Thailand.

Thats crazy. I have lived off of $2200 a month in a suburb a half hour from Vancouver Canada which has some of the highest property values in North America.

I also spent less then that in Thailand when I was on a holiday for a month. From my own personal calculations I will be able to live in Thailand for $1700 US a month without owning a place.

[smokie36]

Sounds like a self flagelation approach. If you are working for a salary/benefits that won't get you there, there is not much you can do except inheirit from someone. Personchester was right; talking won't help.

Spot on. If you are not earning enough to support your retirement you should go home and make some real money, then return in a few years.

Or spend your latter years in poverty. Simple choice.

[Ferwert]

Bottom line you would need minimum of $3000 a month (to days money)and a place that you own to live for retiring comfortably in Thailand.

Yeah, givenall.....$3,000.00 a month would be nice. But for those earning less, it is also possible.

Most Farang pensioners I know have pensions in the 50,000.00 baht a month range (you do the conversion)

Settle in lower-cost-of-living areas, other than BKK or the resort communities......but not in some god-forsaken village.

My bottom line imperative however, just be dam_n sure you have an independent source of income. Don't even think of coming to Thailand believing you will either top-up an insuffircient income, or will earn income here. You will have a life of frustrations.

And whatever income you have - keep control of it. Don't get sucked into considering 'your' income becoming 'our' income when involved with a local.

Unless you have money to burn, then who cares.

But for those with a limited income, separate yourself financially from the lady's family. Build a financial firewall. How to do this? Provide her with a monthly stipend. (analytically arrived at, and not some figure out-of-the-blue. I can tell you how to do that). From that stipend, she pays all family financial needs, requests and pressures. The more she gives them, the less SHE has. Thereby she makes all decisions when the inevitable pressures come, and you are outside that vicious circle. Besides, even if you decided to be the good guy, they would never consider you as such. Whatever Momma and Papa get, the daughter owes them, and her source is irrelevant to them.

You dont own houses and land. If pressured to buy or build a house or land, do it via a mortgage in her name. She owns the house/land, and the mortgage. If she doesn't qualify for a mortgage - rent! In the case of a house, you pay all mortgage, maintenace and utility costs. After all, you live in it.

This is called "financial back-end loading" If you pay all purchase costs on the "front-end" you run a risk. You can never get it back, no matter what happens...and you know what I mean by that.

The rule....back-end load financials and pay as you go!

JMHO

Edited August 15, 2009 by Ferwert

[thaimate]

my familly are rich,it helps

[R123]

Bottom line you would need minimum of $3000 a month (to days money)and a place that you own to live for retiring comfortably in Thailand.

Yeah, givenall.....$3,000.00 a month would be nice. But for those earning less, it is also possible.

Most Farang pensioners I know have pensions in the 50,000.00 baht a month range (you do the conversion)

Settle in lower-cost-of-living areas, other than BKK or the resort communities......but not in some god-forsaken village.

My bottom line imperative however, just be dam_n sure you have an independent source of income. Don't even think of coming to Thailand believing you will either top-up an insuffircient income, or will earn income here. You will have a life of frustrations.

And whatever income you have - keep control of it. Don't get sucked into considering 'your' income becoming 'our' income when involved with a local.

Unless you have money to burn, then who cares.

But for those with a limited income, separate yourself financially from the lady's family. Build a financial firewall. How to do this? Provide her with a monthly stipend. (analytically arrived at, and not some figure out-of-the-blue. I can tell you how to do that). From that stipend, she pays all family financial needs, requests and pressures. The more she gives them, the less SHE has. Thereby she makes all decisions when the inevitable pressures come, and you are outside that vicious circle. Besides, even if you decided to be the good guy, they would never consider you as such. Whatever Momma and Papa get, the daughter owes them, and her source is irrelevant to them.

You dont own houses and land. If pressured to buy or build a house or land, do it via a mortgage in her name. She owns the house/land, and the mortgage. If she doesn't qualify for a mortgage - rent! In the case of a house, you pay all mortgage, maintenace and utility costs. After all, you live in it.

This is called "financial back-end loading" If you pay all purchase costs on the "front-end" you run a risk. You can never get it back, no matter what happens...and you know what I mean by that.

The rule....back-end load financials and pay as you go!

JMHO

Excellent advice Ferwert, well done.

[way2muchcoffee]

My family is poor. It hinders....

Edited August 15, 2009 by way2muchcoffee

[smokie36]

my familly are rich,it helps

Not my long lost brother are you by any chance...?

[changnaam]

At least you have started addressing the issue, many people seem to brush this under the carpet and think that everything will be OK and they can live off 20,000 baht a month in the countryside and live out their latter years in bliss.

Reality I would say is not quite the same.

What aspirations do you have? - Return to home country 1/2 times per year

- Golf or other passtimes

- Holiday / travel

- Quality medical care

- Something to leave your family when you are gone

Obviously your current income / lifestyle has a huge bearing on what you can achieve but best thing you can do is start saving early. As others have said do your research, don't just get a single point of view and it would be interesting to hear what conclusions you come to.

[samran]

start saving 15% of your pre-tax salary per month into tax free vehicles like long term funds (if in Thailand) or into low fee managed funds back home. The risk profile of your investments should become more conservative as you age (especially if you know nothing about what you are investing in) and end up in bonds in the 10 years before retirement.

[Gary A]

I like to think that I planned well for my retirement. I put as much as possible into my 401K program and the stocks were doing pretty well. When I sold my few assets at retirement, that money went into my bank account. After retirement, I was able to live entirely off my savings account for a couple of years. After being retired for a couple of years, I was able to start a small pension from a company that I had worked for. That income and dividends from my 401K were enough to live fairly comfortably. Then the disaster. The market crashed and I lost most of the dividends I was counting on. Had that been my only means of support, I would be in trouble today. Fortunately I am now collecting Social Security. I tell this story because sometimes good plans don't work out as expected. A guaranteed pension can't be beat.

[Jingthing]

I tell this story because sometimes good plans don't work out as expected.

You can say that again! There are lots of us in that boat.

[Rimmer]

I had to work and save hard for forty five years to enable me to retire comfortably anywhere in the world. The idea to live here came later.

[PattayaParent]

I had to work and save hard for forty five years to enable me to retire comfortably anywhere in the world. The idea to live here came later.

Me too, although only 30 years so far but I don't think there'll be too many English teachers earning enough in Thailand to provide for a good retirement.

[doodee]

Bottom line you would need minimum of $3000 a month (to days money)and a place that you own to live for retiring comfortably in Thailand.

Thats crazy. I have lived off of $2200 a month in a suburb a half hour from Vancouver Canada which has some of the highest property values in North America.

I also spent less then that in Thailand when I was on a holiday for a month. From my own personal calculations I will be able to live in Thailand for $1700 US a month without owning a place.

Now that sounds better than the other silly answer.

[Lopburi99]

I think the retirement visa monthly minimum of 65,000 baht is about right. My SS income is just a bit more, and I can live fairly comfortably here but I wouldn't want to try it on much less. A lot depends if you are happy renting or want to buy a home. Renting a very nice apartment in Jomtien or BKK is not very expensive. But if you want to buy a home, you would need to have the cash available outside your monthly income to do so because saving up to buy the home would take a long time. Unfortunately I need to go the saving route but we have found a cheap almost-new farang built home to rent in rural WNY for only 2,500 baht/month plus air con so it will be possible for us to save to construct our new home in 2-3 years. Not too bad but much longer than I would like of course. But if we lived in the states we'd be living in a crap apartment somewhere so LOS really works for me. Life threw me a major fast-sinking curve ball a few years back and all my assets poofed . I never, ever thought that would happen. As somebody above said, thank God for a fixed pension, in my case U.S. Soc. Security. Now we just need to hope the O administration keeps the $USD from weakening much more.

Edited August 15, 2009 by Lopburi99

[malcolminthemiddle]

How to create a sustainable, regular income that can keep pace with inflation after retirement, that's the principal issue?

Personally I'm relying on three (3) unrelated sources diversified across the three (3) main currencies of EURO, US$ and GBP. I've set targets for these sources and once they are met I plan to retire, come what may.

[Ferwert]

I think the retirement visa monthly minimum of 65,000 baht is about right. My SS income is just a bit more, and I can live fairly comfortably here but I wouldn't want to try it on much less. A lot depends if you are happy renting or want to buy a home. Renting a very nice apartment in Jomtien or BKK is not very expensive. But if you want to buy a home, you would need to have the cash available outside your monthly income to do so because saving up to buy the home would take a long time. Unfortunately I need to go the saving route but we have found a cheap almost-new farang built home to rent in rural WNY for only 2,500 baht/month plus air con so it will be possible for us to save to construct our new home in 2-3 years. Not too bad but much longer than I would like of course. But if we lived in the states we'd be living in a crap apartment somewhere so LOS really works for me. Life threw me a major fast-sinking curve ball a few years back and all my assets poofed . I never, ever thought that would happen. As somebody above said, thank God for a fixed pension, in my case U.S. Soc. Security. Now we just need to hope the O administration keeps the $USD from weakening much more.

"For "us" to save??"................. For "you" to save, right? This comment based on the assumption it is your income that is being 'saved'.

Some suggestions for you to consider, before giving up control of all those carefully accumulated savings into a home you will not own (which in effect would be a transfer of wealth from you to someone else). This statement would not apply if there was a joint-ownership status.

Upgrade to a comfortable rental home, and keep those savings in your control. In Thailand "money is power" and transferring it into acquisitions you do not own, you lose that power. In this culture, money is the only power Farangs have. They often have nothing else.

The only way I would buy/build a house I do not own, would be via a mortgage, where the mortgage is in the name of the owner of the house. No mortgage qualification - rental. I would pay all monthly mortgage payment costs of course. No problem there. It is just my preferred "pay as I go" model.

Retaining those savings in your name (if she cannot mortgage qualify), achieves three very important objectives - #1-You maintain financial power, #2- You encourage an ongoing good and faithful relationship and #3- You leave an inheritance for her - the proverbial carrot.

This is what I mean by back-end loading, as described in my other posting in this thread.

One needs to find a balance of risk-reward that protects the interests of the lady and the Farang. I find too many instances where their is a great financial imbalance in the lady's favor. That is not good.

Perhaps this doesn't apply to you, as maybe you are an ex-pat veteran. But could be food-for-thought for others.

Edited August 15, 2009 by Ferwert

[Lopburi99]

"For "us" to save??"................. For "you" to save, right? This comment based on the assumption it is your income that is being 'saved'.

Some suggestions for you to consider, before giving up control of all those carefully accumulated savings into a home you will not own (which in effect would be a transfer of wealth from you to someone else). This statement would not apply if there was a joint-ownership status.

Upgrade to a comfortable rental home, and keep those savings in your control. In Thailand "money is power" and transferring it into acquisitions you do not own, you lose that power. In this culture, money is the only power Farangs have. They often have nothing else.

The only way I would buy/build a house I do not own, would be via a mortgage, where the mortgage is in the name of the owner of the house. No mortgage qualification - rental. I would pay all monthly mortgage payment costs of course. No problem there. It is just my preferred "pay as I go" model.

Retaining those savings in your name (if she cannot mortgage qualify), achieves three very important objectives - #1-You maintain financial power, #2- You encourage an ongoing good and faithful relationship and #3- You leave an inheritance for her - the proverbial carrot.

This is what I mean by back-end loading, as described in my other posting in this thread.

One needs to find a balance of risk-reward that protects the interests of the lady and the Farang. I find too many instances where their is a great financial imbalance in the lady's favor. That is not good.

Perhaps this doesn't apply to you, as maybe you are an ex-pat veteran. But could be food-for-thought for others.

Thanks for the good advice, and I'll give it a lot of thought. Yes, it applies to me as I am not a vet. I like the idea of designing and building "our" home but this may simply be beyond my means. I'm already paying monthly on the land, a very nice 1/2 rai parcel in what now is an ideal area, but that doesn't mean I have to actually build on it. We intended to enjoy the land in the interim anyway by planting a garden and puttering around in it to give me something to do. The downside of a rental it always feels like it is somebody else's home, which of course it is. So no improvement projects, etc, which make home ownership enjoyable. I've been here for two years now living in somebody else's home or at resorts and to be honest, I'm going nuts from boredom. I've read many retired expats feel the same way.

You mentioned joint ownership of the home. If I decide to continue with my current plans, joint ownership would certainly make sense. I had always thought that my wife owning the land and home would be suitable reward for taking such good care of me but I need to think more about my own interests I guess. The land costs 200Kbt and our modest home would be about 600Kbt. Not a huge amount of money, in fact our car costs more.

However I fully understand your point about the importance of retaining savings in my name. Again, I'll be giving this all much thought. I believe I could switch my mindset toward upgrading to a more comfortable rental house and trying to come up with a different way to break my boredom, but I need to let it all stew in my mind for awhile. Thanks very much for your thoughts.

[tlcwaterfall]

I think the retirement visa monthly minimum of 65,000 baht is about right. My SS income is just a bit more, and I can live fairly comfortably here but I wouldn't want to try it on much less. A lot depends if you are happy renting or want to buy a home. Renting a very nice apartment in Jomtien or BKK is not very expensive. But if you want to buy a home, you would need to have the cash available outside your monthly income to do so because saving up to buy the home would take a long time. Unfortunately I need to go the saving route but we have found a cheap almost-new farang built home to rent in rural WNY for only 2,500 baht/month plus air con so it will be possible for us to save to construct our new home in 2-3 years. Not too bad but much longer than I would like of course. But if we lived in the states we'd be living in a crap apartment somewhere so LOS really works for me. Life threw me a major fast-sinking curve ball a few years back and all my assets poofed . I never, ever thought that would happen. As somebody above said, thank God for a fixed pension, in my case U.S. Soc. Security. Now we just need to hope the O administration keeps the $USD from weakening much more.

"For "us" to save??"................. For "you" to save, right? This comment based on the assumption it is your income that is being 'saved'.

Some suggestions for you to consider, before giving up control of all those carefully accumulated savings into a home you will not own (which in effect would be a transfer of wealth from you to someone else). This statement would not apply if there was a joint-ownership status.

Upgrade to a comfortable rental home, and keep those savings in your control. In Thailand "money is power" and transferring it into acquisitions you do not own, you lose that power. In this culture, money is the only power Farangs have. They often have nothing else.

The only way I would buy/build a house I do not own, would be via a mortgage, where the mortgage is in the name of the owner of the house. No mortgage qualification - rental. I would pay all monthly mortgage payment costs of course. No problem there. It is just my preferred "pay as I go" model.

Retaining those savings in your name (if she cannot mortgage qualify), achieves three very important objectives - #1-You maintain financial power, #2- You encourage an ongoing good and faithful relationship and #3- You leave an inheritance for her - the proverbial carrot.

This is what I mean by back-end loading, as described in my other posting in this thread.

One needs to find a balance of risk-reward that protects the interests of the lady and the Farang. I find too many instances where their is a great financial imbalance in the lady's favor. That is not good.

Perhaps this doesn't apply to you, as maybe you are an ex-pat veteran. But could be food-for-thought for others.

Very very intelligent and thought provoking post. All of us would do well to read it carefully and apply these principles to ensure our continued wealth, health and happiness.

Thankyou.

[shiatsuman]

I think the retirement visa monthly minimum of 65,000 baht is about right. My SS income is just a bit more, and I can live fairly comfortably here but I wouldn't want to try it on much less. A lot depends if you are happy renting or want to buy a home. Renting a very nice apartment in Jomtien or BKK is not very expensive. But if you want to buy a home, you would need to have the cash available outside your monthly income to do so because saving up to buy the home would take a long time. Unfortunately I need to go the saving route but we have found a cheap almost-new farang built home to rent in rural WNY for only 2,500 baht/month plus air con so it will be possible for us to save to construct our new home in 2-3 years. Not too bad but much longer than I would like of course. But if we lived in the states we'd be living in a crap apartment somewhere so LOS really works for me. Life threw me a major fast-sinking curve ball a few years back and all my assets poofed . I never, ever thought that would happen. As somebody above said, thank God for a fixed pension, in my case U.S. Soc. Security. Now we just need to hope the O administration keeps the $USD from weakening much more.

"For "us" to save??"................. For "you" to save, right? This comment based on the assumption it is your income that is being 'saved'.

Some suggestions for you to consider, before giving up control of all those carefully accumulated savings into a home you will not own (which in effect would be a transfer of wealth from you to someone else). This statement would not apply if there was a joint-ownership status.

Upgrade to a comfortable rental home, and keep those savings in your control. In Thailand "money is power" and transferring it into acquisitions you do not own, you lose that power. In this culture, money is the only power Farangs have. They often have nothing else.

The only way I would buy/build a house I do not own, would be via a mortgage, where the mortgage is in the name of the owner of the house. No mortgage qualification - rental. I would pay all monthly mortgage payment costs of course. No problem there. It is just my preferred "pay as I go" model.

Retaining those savings in your name (if she cannot mortgage qualify), achieves three very important objectives - #1-You maintain financial power, #2- You encourage an ongoing good and faithful relationship and #3- You leave an inheritance for her - the proverbial carrot.

This is what I mean by back-end loading, as described in my other posting in this thread.

One needs to find a balance of risk-reward that protects the interests of the lady and the Farang. I find too many instances where their is a great financial imbalance in the lady's favor. That is not good.

Perhaps this doesn't apply to you, as maybe you are an ex-pat veteran. But could be food-for-thought for others.

Very very intelligent and thought provoking post. All of us would do well to read it carefully and apply these principles to ensure our continued wealth, health and happiness.

Thankyou.

some thought provoking advice , that is much apreciated. Apropriate separation of finances, can obviously help relations with thai spouse and family. In my case I am entering into a working partnership with my intended and also to some extent the rest of her family.

My partner and I will be working half the year in Spain doing massage and i/we have the dream of a treatment centre in her village. In the meantime her mother and auntie are busy producing beautiful little purses and bags for sale in Spain. I am being completely open about my finances (which are complicated by property partnerships with my former partner) but I sometimes get the feeling that the requests (usually after the stypend has been paid ....motor byke no gas cooker yes) are rather like trying to get the code on the cash machine ( all be it with a charming "so sorry for asking" ).

Any coments advice ?

[sassienie]

So, you are living and working in Thailand and you plan to retire there as well at the end of your career. Ok, we all know the Thai pension scheme is quite pretty miserable.

What do you do then? How do you financially prepare for your retirement in Thailand as an expat? You pay life insurance; or pay into the health system of your home country; etc…?

Let’s exchange some thoughts and ideas…

Impossible to discuss your situation with the limited information you have given and for others to give their financial details on line is extremely dangerous for obvious reasons.

How old are you? Nationality, are you working, married to a Thai? Children?

Edited August 15, 2009 by sassienie

[zorro1]

Bottom line you would need minimum of $3000 a month (to days money)and a place that you own to live for retiring comfortably in Thailand.

can you explain how you spend $100/day in Thailand , Assuming you live in BkK and not in Isarn. Just list it like 50 beers , 4 pizzas, rent a lady etc

of course dining at the Landmark everyday would fit the bill, spending $10 for coco pops and $20 on imported cheeses including the 50 beers at villa daily would tip you over the 100 probably, so why live here?

Edited August 15, 2009 by zorro1

[sokal]

Bottom line you would need minimum of $3000 a month (to days money)and a place that you own to live for retiring comfortably in Thailand.

can you explain how you spend $100/day in Thailand , Assuming you live in BkK and not in Isarn. Just list it like 50 beers , 4 pizzas, rent a lady etc

of course dining at the Landmark everyday would fit the bill, spending $10 for coco pops and $20 on imported cheeses including the 50 beers at villa daily would tip you over the 100 probably, so why live here?

Some expats that already live in Thailand full time like to set the bar high to make it seem less attainable for other people. It makes them feel good I guess.

[Gary A]

Bottom line you would need minimum of $3000 a month (to days money)and a place that you own to live for retiring comfortably in Thailand.

can you explain how you spend $100/day in Thailand , Assuming you live in BkK and not in Isarn. Just list it like 50 beers , 4 pizzas, rent a lady etc

of course dining at the Landmark everyday would fit the bill, spending $10 for coco pops and $20 on imported cheeses including the 50 beers at villa daily would tip you over the 100 probably, so why live here?

Some expats that already live in Thailand full time like to set the bar high to make it seem less attainable for other people. It makes them feel good I guess.

The height of the bar makes very little difference. When you are broke, you are broke. You can certainly live for today and not worry about tomorrow, but tomorrow DOES come. When you are young and bulletproof, it seems like you will never get old, but, you WILL get old. Thailand is a great place to live IF you have money. You have a lot of options when you are young. You can always find a way to make money. Those options dwindle away as you get older. If you don't make provisions for your old age, you can be sure no one else will.