Retirement Plan

[KNJ]

Where did the 34K come from?

Annuities- US$ 2000-3000 per month

Company pension after tax $4-6 k per month

Rental property income $2-7 K per month

Stock investment returns (conservatively) @$1k per month

Retirement funds = 9,000 to 17,000 US$ per month

3000

6000

7000

1000

17000

34000 came from the top end of your own predictions

Ah, my mistake for not being clear- the final line in my list- 'retirement funds' is the TOTAL of all the various fund sources..so the final total pension will be 9k to 17 k...

My mistake in that case 4 million USD is sufficient

[KNJ]

It's a cliche that most investors neglect the inflation rate when investing in annuities, bonds, or fonds-based investments. The inflation rate can bring down your nice agent - promised interest rate by 2-4% a year. A 5% promise then turns out to earn you actually just half of this or even less.

There are various types of annuity, fixed inflation linked, those with guarantee periods, dual cover and VERY many companies with similar products. The latest estimates are that if people shopped around rather than accepting the first quote ( usually from the company that has been managing a pension fund ) that they would be 20% better off, a big difference.

I would not recomend putting all themoney to an annuity, but having a guaranteed portion is worthy of consideration.

As I keep saying Research research research, take your time a then research again

[KNJ]

Latest report by Economist.

Careful of those investments in property, they are due a correction at some stage

Edited July 5, 2012 by KNJ

[silsburyhill]

You have 1,685 posts, and you're asking this now? You big 'international executive' you

Edited July 5, 2012 by silsburyhill

[GreenSnapper]

Latest report by Economist.

Careful of those investments in property, they are due a correction at some stage

Very interesting!

But I believe the Spanish market has corrected already up to 50%.

Thailand not on the list, I see it coming too.

[crazygreg44]

Latest report by Economist.

Careful of those investments in property, they are due a correction at some stage

Very interesting!

But I believe the Spanish market has corrected already up to 50%.

Thailand not on the list, I see it coming too.

as soon as it comes, that's a perfect time to buy !

[crazygreg44]

To the OP . . Jurgen, markets have one main characteristic : They all are CYCLIC ! There is a time when buying gold is promising, there is a time when you should sell some of your earlier accumulated real estate, there are times when one's stocks are low , and when they reach their cyclic maximum, you must sell and shift into an investment that is in low cycle with upward tendency.

Investing properly is a challenge in deciding into which cycle you are linking in. If you see a real estate bubble, don't invest into it. If you trust the cycle will still be swingin upward for a while, then invest. Allow one downward cycle, hold, and then watch your assets rise from the ashes again.

A good Timing is the mother of all investments.

I agree the Thai rental and condo market is running on empty. That's why I firstly suggested to Jurgen to invest into real estate in Europe - or even Florida. As this market is in low swing right now with a good outlook to the future ( fingers crossed ! ) buying in these shores I would make part of my diversifying. Real estate in Patters on the contrary has never been so unsure. Finding tenants now very difficult. Future uncertain.

For Thailand, I predict political unrest and upheavals IF the price race for essential food continues. Upcountry the poor already eat ants from the trees - they work chopping bananas, but can't afford buying them, because they get exported to Farang countries. My concern is that people's xenophoby might reach unexpected levels. This is a very explosive mix. ( I keep fingers crossed for better). So diversifying into a few different countries ( and currencies) as proposed by another forum member, might not be such a bad idea.

I agree that managing a lot of properties is difficult when you get older. Should restrict yourself to not the cheapest but also not the most expensive properties. Too cheap, you never rent out, too expensive, no one out there because they can afford to buy.

Some of us , with 50M, would want to start living like there is no tomorrow and life is a big party ! And spent it all, no need joining the Pattaya Flying Club ever. Toi Toi Toi ! 50M is big dough, yeah.

Edited July 6, 2012 by crazygreg44

[DogNo1]

You must be careful about annuities. Although there are many varieties, many of them guarantee a fixed income for a certain period. So for example, putting $400,000 into an immediate annuity guaranteed for twenty years with my bank would yield $2,124.64 per month for 240 months. The total amount that I would get back would be $509,913.60 for a net gain of 109,913.60, a 1.37% return on my money per year. Just investing in a AAA bond fund would return more than that. Just drawing down your principal, without any interest at all would provide you with $1,666.67 per month. Actually, although the calculations are complicated, you could probably withdraw $2,200 per month from a fund earning just 3% and have money left at the end of twenty years. Also, hybrid annuities have problems. www.annuitynewsjournal.com says the following:

"While in principle, this [hybrid annuities] sounds like an ideal product from the customer’s perspective, there are significant limitations. First, the customer’s participation in the index is significantly limited; those who expect to achieve returns near that of the market are likely to be disappointed. Secondly, the income element is not of the full cash value of the account, but rather on a limited portion of the capital invested. When customers realize that the returns they receive will be less than expected, they often abandon this approach. Hybrid annuities can be a extremely useful tool, but one must first understand their limitations."

As I posted earlier, income securites are my solution and I have been making around 7% on them for the past five years although some holdings have lost value so my real return is probably more in the neighborhood of 5%.

I considered real estate and was strongly urged by familty members to invest in California real estate back in the early ninetys. Thank goodness I didn't do that. Besides, unless you enjoy managing your properties, keeping them in good repair and filled with tenants can be a chore!

What is worrisome to me right now is the contention of some newspaper columnists that if President Obama is re-elected, dividend tax rates will go to 45% and capital gains will be taxed at 28.3%. As US citizens will know, we must pay those taxes no matter where we live. If tax rates do go up that much, I must rethink my investing strategies.

It is hard work to invest your money and get a good return on it but annuities have always seemed to be a rip off to me. You are actually paying some insurance company to parcel out your money, along with a very small amount of interest, to you on a monthly basis. Even laddered CDs will give you a better return.

[IsaanUSA]

What is worrisome to me right now is the contention of some newspaper columnists that if President Obama is re-elected, dividend tax rates will go to 45% and capital gains will be taxed at 28.3%. As US citizens will know, we must pay those taxes no matter where we live. If tax rates do go up that much, I must rethink my investing strategies.

Mis-information. At least state the whole policy and not only how it relates to you.

[DogNo1]

I am only interested in the policy as it relates to me and the newspaper columnist was engaging in speculation. I don't remember where I read it or if my remembrance of the possible tax rate on capital gains is exactly the right number but I do remember the 45% rate on dividends,. It's only speculation at the moment but worrisome speculation nonetheless.

[IsaanUSA]

I am only interested in the policy as it relates to me and the newspaper columnist was engaging in speculation. I don't remember where I read it or if my remembrance of the possible tax rate on capital gains is exactly the right number but I do remember the 45% rate on dividends,. It's only speculation at the moment but worrisome speculation nonetheless.

Taxed as ordinary income. So if you're the 1% guy making over $200k a year (taxable) then yes, it would be 45% or whatever that top rate would change to. I make nowhere near that amount of money, so I would get taxed at 15% or whatever the brackets end up at.

EDIT: Sorry Thai-Visa-nites. US tax law post.

Edited July 13, 2012 by IsaanUSA

[DogNo1]

I think that there's no danger of me making more than $200K in retirement so I should be OK unless the banks, brokerages and financial advisors manage to steal ALL of my savings. What a mess the world financial systems are in! I look for BIG tax increases coming down the road. Even here in Japan the government is planning a 100% boost in the consumption tax from 5% to 10%. They will probably tax our incomes more heavily too. Unlike the citizens of the UK and some other countries, I have to pay US income tax too on the portion of my income that comes from my US investments and annuities although my foreign-earned income exclusion means that I don't have to pay US tax on my income earned in Japan.

[JurgenG]

I just read that in the New york Times http://www.nytimes.c...=me&ref=general

To maintain living standards into old age we need roughly

20 times our annual income in financial wealth. If you earn $100,000 at retirement, you need about $2 million beyond what you will receive from Social Security

.

Do you believe it applies for retirement in Thailand ?

Edited July 24, 2012 by JurgenG

[GreenSnapper]

I just read that in the New york Times http://www.nytimes.c...=me&ref=general

To maintain living standards into old age we need roughly

20 times our annual income in financial wealth. If you earn $100,000 at retirement, you need about $2 million beyond what you will receive from Social Security

.

Do you believe it applies for retirement in Thailand ?

Makes sense. Unless you have a good pension or other means of regular income.

[DogNo1]

This advice seems to be assuming a 5% return on the $2M over the rate of inflation. That's hard to do safely! I expect to earn 6% before inflation on my nest egg so I won't have the same income as I do now but then I've always lived on about 60% of what I make and can probably do so in the future barring any catastrophic occurrences such as having a stroke or getting Alzheimers in which case my money would be eaten up quickly. Of course, accepting a lower standard of living would mean that I would need less in savings. An indignity, but one which many of us will face!

[JurgenG]

My dream

[jacktrip]

Is it too little or too much?

It's got to be cheaper then where you are. If you will be retiring anyhow why do the math, it will be cheaper in isaan!

If you find that you still don't have enough, then you will need to move to an even cheaper country. Working is probably not an option at your level unless/until you run completely out of money, then it is.

Edited August 1, 2012 by jacktrip