How much you really need to retire in Thailand

[Gutenberg]

So, back to the topic, How much you really need to retire in Thailand, I would say a functioning penis and enough money for the bar girls.

[Don Mega]

So, back to the topic, How much you really need to retire in Thailand, I would say a functioning penis and enough money for the bar girls.

Yeah cause thats all that is needed to retire.

[JAS21]

Don Mega, on 27 Feb 2016 - 15:32, said:

I currently churn through about 3 million per year but that is with me occupied working 60+ hours per week.

If retired I obviously have more time on my hands so north of 3 million per year would be needed.

I assume that at that level 'you' own and live in your own house

[colinchaffers]

How much does it cost to live in Thailand? has said before, it depends on your life stye, but I'm in the process or retiring here and give you some costs from my perspective, I have bulit a family house outside of BKK, here are some the costs:

1. General monthly house running costs 10KTHB water, electrcity (air con for 12 hours), internet True vision TV, mobile phones

2. Car insurnace 22KTHB a year for (1st class)

3. Petrol 5kTHB per month

3. In BKK a monthly condo can cost from 20KTHB (one bed in On-nut) to 25KTHB 2 bed in On-nut, or the skies the limit further down Sukhumvit

4. Food 250THB a day for good street food 1> 2,000THB for pub food and a beer

Before I retired I was in Bangkok and a take home pay of 180KTHB per month, this gave me more than enough and I could have lived on less BUT I did not party every weekend ..........

[Don Mega]

Don Mega, on 27 Feb 2016 - 15:32, said:

I currently churn through about 3 million per year but that is with me occupied working 60+ hours per week.

If retired I obviously have more time on my hands so north of 3 million per year would be needed.

I assume that at that level 'you' own and live in your own house

Don't assume anything. If it cannot legally be owned in my name it is rented.

BTW my employer pays my rent.

Edited March 8, 2016 by Don Mega

[JAS21]

Don Mega, on 08 Mar 2016 - 15:46, said:Don Mega, on 08 Mar 2016 - 15:46, said:

JAS21, on 05 Mar 2016 - 20:35, said:JAS21, on 05 Mar 2016 - 20:35, said:

Don Mega, on 27 Feb 2016 - 15:32, said:Don Mega, on 27 Feb 2016 - 15:32, said:

Don Mega, on 27 Feb 2016 - 15:32, said:

I currently churn through about 3 million per year but that is with me occupied working 60+ hours per week.

If retired I obviously have more time on my hands so north of 3 million per year would be needed.

I assume that at that level 'you' own and live in your own house

Don't assume anything. If it cannot legally be owned in my name it is rented.

Did you notice that you had a couple of little marks at each end ... ah so the 3M thb includes rental or does your employer foot that bill. I suppose that I will get through quite a lot this years as I've just spent 1.6M thb on an EV. Hell thinking about outgoings could give me nightmares ... best to just chill out ... if only I knew when my last day would be, I could plan better ...perhaps it's best not knowing though

Ah you edited it before I replied ....

Edited March 8, 2016 by JAS21

[Bobotie]

An old school chum of mine, who is a CA and all round finanical whiz kid did some calculations for me and as a cash amount suggested i needed around 2.0 million dollars in my piggy bank

the "whiz kid" knows all about living expenses in Thailand?

The cost of living in Thailand is somewhat irrelevant in the calculation simply because at this juncture there is no intention to retire in Thailand, it was a number which would make for a "comfortable" retirement in a number of countries not specifically Thailand

[Don Mega]

Don Mega, on 08 Mar 2016 - 15:46, said:Don Mega, on 08 Mar 2016 - 15:46, said:

JAS21, on 05 Mar 2016 - 20:35, said:JAS21, on 05 Mar 2016 - 20:35, said:

Don Mega, on 27 Feb 2016 - 15:32, said:Don Mega, on 27 Feb 2016 - 15:32, said:

Don Mega, on 27 Feb 2016 - 15:32, said:

I currently churn through about 3 million per year but that is with me occupied working 60+ hours per week.

If retired I obviously have more time on my hands so north of 3 million per year would be needed.

I assume that at that level 'you' own and live in your own house

Don't assume anything. If it cannot legally be owned in my name it is rented.

BTW my employer pays my rent.

Did you notice that you had a couple of little marks at each end ... ah so the 3M thb includes rental or does your employer foot that bill. I suppose that I will get through quite a lot this years as I've just spent 1.6M thb on an EV. Hell thinking about outgoings could give me nightmares ... best to just chill out ... if only I knew when my last day would be, I could plan better ...perhaps it's best not knowing though

Ah you edited it before I replied ....

Yeah I have both car and house allowances in my "salary".They cover my house rent and car repayments.

Edited March 8, 2016 by Don Mega

[JAS21]

O Don lucky you ... I have to get by on my PowerGen pension and the few GBP that I managed to accumulate over a working life. So you are still working then... You are correct Retirement is expensive ... golf (never let your wife play) it's cost twice as much every time ... the odd few days away ...medical bills ... it goes ON and ON. Children's education all done and dusted ... working but still want a car ... Don it's never ending ... I tell you if I had to pay rent as well

[Don Mega]

My hobbies are cars not golf and they are expensive. Just purchased a brand new 450HP 383 Chev from the USA to put into a play toy (low rider Ranger pickup that I'll slam on airbags and stick big wide tires under it). Can't wait for the import tax bill to arrive.....

I wish I was retired though... working for the man really does not suit me at all but unfortunately my nest egg aint large enough yet (and I aint got any pensions to look forward to) so for now I'll keep waking at 5am and go do what I do best.

[Naam]

An old school chum of mine, who is a CA and all round finanical whiz kid did some calculations for me and as a cash amount suggested i needed around 2.0 million dollars in my piggy bank

the "whiz kid" knows all about living expenses in Thailand?

The cost of living in Thailand is somewhat irrelevant in the calculation simply because at this juncture there is no intention to retire in Thailand, it was a number which would make for a "comfortable" retirement in a number of countries not specifically Thailand

the cost of living is very much relevant no matter which country. major parts of that cost are taxes and the roof over your head. no offence meant but any "whiz kid" who thinks he can do a realistic capital requirement estimate without considering country specific cost variables has my sympathy and that also applies to the individual who accepts advice from "whiz kids".

[Gutenberg]

O Don lucky you ... I have to get by on my PowerGen pension and the few GBP that I managed to accumulate over a working life. So you are still working then... You are correct Retirement is expensive ... golf (never let your wife play) it's cost twice as much every time ... the odd few days away ...medical bills ... it goes ON and ON. Children's education all done and dusted ... working but still want a car ... Don it's never ending ... I tell you if I had to pay rent as well

For each dot a paycheck makes you a big earner.

[JAS21]

And I thought zero's did that ... NO, ... because my memory is so bad (it happens to the aged as you may find out one day) ...I have to have my own unique style, so that I can recognise, at a later date, that I actually wrote 'whatever' AND if you read a few of my posts you will probably realise that, on occasions, I even have my own dictionary .... my own totally unique way of spelling words ................................. enjoy the rest of the day ....

[Henryford]

I think Immigration have got it spot on, 65,000 a month is a broad minimum you need for a reasonable retirement. Just multiply by the number of years you think you have left.

[xylophone]

I think Immigration have got it spot on, 65,000 a month is a broad minimum you need for a reasonable retirement. Just multiply by the number of years you think you have left.

Yes, pretty much have to agree with you on that....as a "broad minimum".

Anywhere between that and 90k should be fine, and as regards inflation, well IMO I can generally counteract that with switching to cheaper meals/ingredients if I had to (not mention cheaper wine) so it means "the cost of living" increase isn't a significant part of my calculations.

[chiang mai]

I think Immigration have got it spot on, 65,000 a month is a broad minimum you need for a reasonable retirement. Just multiply by the number of years you think you have left.

Yes, pretty much have to agree with you on that....as a "broad minimum".

Anywhere between that and 90k should be fine, and as regards inflation, well IMO I can generally counteract that with switching to cheaper meals/ingredients if I had to (not mention cheaper wine) so it means "the cost of living" increase isn't a significant part of my calculations.

I suggest you need to adjust your thinking on that point, inflation is the biggest single issue facing the expat retiree who has been here for several years.

[55Jay]

I think Immigration have got it spot on, 65,000 a month is a broad minimum you need for a reasonable retirement. Just multiply by the number of years you think you have left.

65k * 12mo * 20 years. 15~16 million Baht. Approx $460,000 US at the moment.

Not a bad figure, hopefully offset by a government pension, then adjusted for out year inflation and potential for FOREX fluctuation (if off shore), which had many pensioners grinding their teeth/dentures at night in recent years. Ought to provide a modest lifestyle in a reasonable accommodation, maybe not directly in a metro area, but close enough to enjoy what it has to offer a couple times a week, and a good selection of clinics and hospitals.

Old boy next to my mate in Pattaya is still blinking his eyes at being 90+ years of age, saying he never thought he would get past 85.

Edited March 9, 2016 by 55Jay

[TheAppletons]

I think Immigration have got it spot on, 65,000 a month is a broad minimum you need for a reasonable retirement. Just multiply by the number of years you think you have left.

Yes, pretty much have to agree with you on that....as a "broad minimum".

Anywhere between that and 90k should be fine, and as regards inflation, well IMO I can generally counteract that with switching to cheaper meals/ingredients if I had to (not mention cheaper wine) so it means "the cost of living" increase isn't a significant part of my calculations.

I suggest you need to adjust your thinking on that point, inflation is the biggest single issue facing the expat retiree who has been here for several years.

Typical TVF economics "expert" In another word - rubbish.

[chiang mai]

Only Appletons could tell us he disagrees with another persons view in such a polite and tactful manner and without offering any reasons why or any alternatives, bravo again, Applletons, you arse!

[Bigstef]

Depends of the wife and her family......

[xylophone]

I think Immigration have got it spot on, 65,000 a month is a broad minimum you need for a reasonable retirement. Just multiply by the number of years you think you have left.

Yes, pretty much have to agree with you on that....as a "broad minimum".

Anywhere between that and 90k should be fine, and as regards inflation, well IMO I can generally counteract that with switching to cheaper meals/ingredients if I had to (not mention cheaper wine) so it means "the cost of living" increase isn't a significant part of my calculations.

I suggest you need to adjust your thinking on that point, inflation is the biggest single issue facing the expat retiree who has been here for several years.

I can see why my comment might raise a few eyebrows, however I see it differently because if the highly priced items which I currently buy increase too much through inflation, then I just stop buying them and buy something cheaper.

A few examples: – dinner at one of my local Italian restaurants (entree and main) = 480 baht; making the equivalent at home, 180 baht. Buying a nice Australian wine at Big C = 720 baht; buying a reasonably nice Australian wine at Supercheap, 460 baht. Cooking my own Thai meals at home rather than eating out ( Laab moo, Hot basil chicken) 60 baht.

In addition I can stop buying T-shirts and casual shirts at a whim, which I unfortunately do when I am bored, and use some of the 30 to 40 which I already have, not to mention better use of the existing 11 pairs of shoes/footwear, rather than buying more, which I am still prone to do.........there are always ways to cut back on one's (unnecessary) spending in order to offset the cost of inflation.

[chiang mai]

I think Immigration have got it spot on, 65,000 a month is a broad minimum you need for a reasonable retirement. Just multiply by the number of years you think you have left.

Yes, pretty much have to agree with you on that....as a "broad minimum".

Anywhere between that and 90k should be fine, and as regards inflation, well IMO I can generally counteract that with switching to cheaper meals/ingredients if I had to (not mention cheaper wine) so it means "the cost of living" increase isn't a significant part of my calculations.

I suggest you need to adjust your thinking on that point, inflation is the biggest single issue facing the expat retiree who has been here for several years.

I can see why my comment might raise a few eyebrows, however I see it differently because if the highly priced items which I currently buy increase too much through inflation, then I just stop buying them and buy something cheaper.

A few examples: – dinner at one of my local Italian restaurants (entree and main) = 480 baht; making the equivalent at home, 180 baht. Buying a nice Australian wine at Big C = 720 baht; buying a reasonably nice Australian wine at Supercheap, 460 baht. Cooking my own Thai meals at home rather than eating out ( Laab moo, Hot basil chicken) 60 baht.

In addition I can stop buying T-shirts and casual shirts at a whim, which I unfortunately do when I am bored, and use some of the 30 to 40 which I already have, not to mention better use of the existing 11 pairs of shoes/footwear, rather than buying more, which I am still prone to do.........there are always ways to cut back on one's (unnecessary) spending in order to offset the cost of inflation.

The problem becomes more acute in times of low interest rates when retirees try and live off savings interest without saving anything, over ten fifteen and twenty years the savings pot dwindles quite quickly. Few people realize the true effect of inflation on savings and it's only when we experience it first hand, when we stop working and have been retired for ten years that we begin to fully realize that those illustrations were all too true, a time when it's too late to do much about it.

And UK expats who rely on state pension often are not index linked in any way, most are frozen from day one because they live in Thailand, the inflation rate in Thailand is frequently understated and is of course usually much higher for an expat than a local person by virtue of lifestyle and personal choice. It's all well and good to say that a person can will downsize their tastes over time, that's something that I think most of us do anyway over time.

But there is only so far that can take you, at some point you reach a floor which is pretty much fixed. Ah yes, if only we knew exactly how long we each will live we could refine the financial need precisely, fortunately things don't work that way.

[xylophone]

Yes, pretty much have to agree with you on that....as a "broad minimum".

Anywhere between that and 90k should be fine, and as regards inflation, well IMO I can generally counteract that with switching to cheaper meals/ingredients if I had to (not mention cheaper wine) so it means "the cost of living" increase isn't a significant part of my calculations.

I suggest you need to adjust your thinking on that point, inflation is the biggest single issue facing the expat retiree who has been here for several years.

I can see why my comment might raise a few eyebrows, however I see it differently because if the highly priced items which I currently buy increase too much through inflation, then I just stop buying them and buy something cheaper.

A few examples: – dinner at one of my local Italian restaurants (entree and main) = 480 baht; making the equivalent at home, 180 baht. Buying a nice Australian wine at Big C = 720 baht; buying a reasonably nice Australian wine at Supercheap, 460 baht. Cooking my own Thai meals at home rather than eating out ( Laab moo, Hot basil chicken) 60 baht.

In addition I can stop buying T-shirts and casual shirts at a whim, which I unfortunately do when I am bored, and use some of the 30 to 40 which I already have, not to mention better use of the existing 11 pairs of shoes/footwear, rather than buying more, which I am still prone to do.........there are always ways to cut back on one's (unnecessary) spending in order to offset the cost of inflation.

The problem becomes more acute in times of low interest rates when retirees try and live off savings interest without saving anything, over ten fifteen and twenty years the savings pot dwindles quite quickly. Few people realize the true effect of inflation on savings and it's only when we experience it first hand, when we stop working and have been retired for ten years that we begin to fully realize that those illustrations were all too true, a time when it's too late to do much about it.

And UK expats who rely on state pension often are not index linked in any way, most are frozen from day one because they live in Thailand, the inflation rate in Thailand is frequently understated and is of course usually much higher for an expat than a local person by virtue of lifestyle and personal choice. It's all well and good to say that a person can will downsize their tastes over time, that's something that I think most of us do anyway over time.

But there is only so far that can take you, at some point you reach a floor which is pretty much fixed. Ah yes, if only we knew exactly how long we each will live we could refine the financial need precisely, fortunately things don't work that way.

Yes, all good points and I agree with you in the main, however I have taken inflation as regards to MY situation and I suppose it could apply to a few others if they were in the same boat.

Simply put, I adjust my spending (and can cut down on wastefulness) so that the value of my capital still buys me what I need to live on, and hopefully I will be long gone before the "floor is reached"!!!!!

This of course overcomes the old chestnut with inflation in as much as "it erodes the purchasing power of your capital" because I simply adjust my spending to suit, and anyway I'm probably luckier than most because even as we speak my investments back home are returning me on average 3.6% after tax.

Economies and investments always go in cycles and I'm pretty sure I can keep this return going because some of it is in a long-term bond and some in shares paying a 7% dividend. Anyway using the calculator I have mentioned in a previous post and even adjusting for inflation at 2% per annum, I will be well over 100 before my money gets anywhere near the "danger zone" and by which time I will probably have departed this mortal coil – – if not then I'll deal with it then!

I will stress again that this is the situation I find myself in and it may not apply to all.

[chiang mai]

Yes, pretty much have to agree with you on that....as a "broad minimum".

Anywhere between that and 90k should be fine, and as regards inflation, well IMO I can generally counteract that with switching to cheaper meals/ingredients if I had to (not mention cheaper wine) so it means "the cost of living" increase isn't a significant part of my calculations.

I suggest you need to adjust your thinking on that point, inflation is the biggest single issue facing the expat retiree who has been here for several years.

I can see why my comment might raise a few eyebrows, however I see it differently because if the highly priced items which I currently buy increase too much through inflation, then I just stop buying them and buy something cheaper.

A few examples: – dinner at one of my local Italian restaurants (entree and main) = 480 baht; making the equivalent at home, 180 baht. Buying a nice Australian wine at Big C = 720 baht; buying a reasonably nice Australian wine at Supercheap, 460 baht. Cooking my own Thai meals at home rather than eating out ( Laab moo, Hot basil chicken) 60 baht.

In addition I can stop buying T-shirts and casual shirts at a whim, which I unfortunately do when I am bored, and use some of the 30 to 40 which I already have, not to mention better use of the existing 11 pairs of shoes/footwear, rather than buying more, which I am still prone to do.........there are always ways to cut back on one's (unnecessary) spending in order to offset the cost of inflation.

The problem becomes more acute in times of low interest rates when retirees try and live off savings interest without saving anything, over ten fifteen and twenty years the savings pot dwindles quite quickly. Few people realize the true effect of inflation on savings and it's only when we experience it first hand, when we stop working and have been retired for ten years that we begin to fully realize that those illustrations were all too true, a time when it's too late to do much about it.

And UK expats who rely on state pension often are not index linked in any way, most are frozen from day one because they live in Thailand, the inflation rate in Thailand is frequently understated and is of course usually much higher for an expat than a local person by virtue of lifestyle and personal choice. It's all well and good to say that a person can will downsize their tastes over time, that's something that I think most of us do anyway over time.

But there is only so far that can take you, at some point you reach a floor which is pretty much fixed. Ah yes, if only we knew exactly how long we each will live we could refine the financial need precisely, fortunately things don't work that way.

Yes, all good points and I agree with you in the main, however I have taken inflation as regards to MY situation and I suppose it could apply to a few others if they were in the same boat.

Simply put, I adjust my spending (and can cut down on wastefulness) so that the value of my capital still buys me what I need to live on, and hopefully I will be long gone before the "floor is reached"!!!!!

This of course overcomes the old chestnut with inflation in as much as "it erodes the purchasing power of your capital" because I simply adjust my spending to suit, and anyway I'm probably luckier than most because even as we speak my investments back home are returning me on average 3.6% after tax.

Economies and investments always go in cycles and I'm pretty sure I can keep this return going because some of it is in a long-term bond and some in shares paying a 7% dividend. Anyway using the calculator I have mentioned in a previous post and even adjusting for inflation at 2% per annum, I will be well over 100 before my money gets anywhere near the "danger zone" and by which time I will probably have departed this mortal coil – – if not then I'll deal with it then!

I will stress again that this is the situation I find myself in and it may not apply to all.

Of course there will always be exceptions to a rule and of course, one way to overcome the inflation issue is to have enough money at the start of retirement to where inflation is not a significant issue because the sheer volume of assets allows you to keep spending, within reason, and to largely ignore it. But statistically I suspect people in those categories are very much in the minority and given sufficient retirement years and/or sufficiently high inflation, I suspect even many of those people's pain thresholds can be challenged.

In many respects we are in similar boats but today, after twelve years of retirement, I can look back at the amount of money I had when I first started versus the amount I have today and it makes me wince. It wasn't so much that I got the numbers wrong at the outset it was more a case of my not believing that so many risks could be realized over the same period, as you say, economies run in cycles and one of my failures was to believe that the cycles could be lengthened as long as they have been.

In practical terms the above means little to me personally, I continue to live a pleasant and comfortable life but it moves me closer to the danger zone you describe, sooner than I would have imagined and that came as a surprise. I guess the message I would give to the person considering retirement soon is to tell them not to underestimate their financial needs, don't under estimate the effect of inflation and when considering a worst case scenario, double your estimate.

[xylophone]

I can see why my comment might raise a few eyebrows, however I see it differently because if the highly priced items which I currently buy increase too much through inflation, then I just stop buying them and buy something cheaper.

A few examples: – dinner at one of my local Italian restaurants (entree and main) = 480 baht; making the equivalent at home, 180 baht. Buying a nice Australian wine at Big C = 720 baht; buying a reasonably nice Australian wine at Supercheap, 460 baht. Cooking my own Thai meals at home rather than eating out ( Laab moo, Hot basil chicken) 60 baht.

In addition I can stop buying T-shirts and casual shirts at a whim, which I unfortunately do when I am bored, and use some of the 30 to 40 which I already have, not to mention better use of the existing 11 pairs of shoes/footwear, rather than buying more, which I am still prone to do.........there are always ways to cut back on one's (unnecessary) spending in order to offset the cost of inflation.

The problem becomes more acute in times of low interest rates when retirees try and live off savings interest without saving anything, over ten fifteen and twenty years the savings pot dwindles quite quickly. Few people realize the true effect of inflation on savings and it's only when we experience it first hand, when we stop working and have been retired for ten years that we begin to fully realize that those illustrations were all too true, a time when it's too late to do much about it.

And UK expats who rely on state pension often are not index linked in any way, most are frozen from day one because they live in Thailand, the inflation rate in Thailand is frequently understated and is of course usually much higher for an expat than a local person by virtue of lifestyle and personal choice. It's all well and good to say that a person can will downsize their tastes over time, that's something that I think most of us do anyway over time.

But there is only so far that can take you, at some point you reach a floor which is pretty much fixed. Ah yes, if only we knew exactly how long we each will live we could refine the financial need precisely, fortunately things don't work that way.

Yes, all good points and I agree with you in the main, however I have taken inflation as regards to MY situation and I suppose it could apply to a few others if they were in the same boat.

Simply put, I adjust my spending (and can cut down on wastefulness) so that the value of my capital still buys me what I need to live on, and hopefully I will be long gone before the "floor is reached"!!!!!

This of course overcomes the old chestnut with inflation in as much as "it erodes the purchasing power of your capital" because I simply adjust my spending to suit, and anyway I'm probably luckier than most because even as we speak my investments back home are returning me on average 3.6% after tax.

Economies and investments always go in cycles and I'm pretty sure I can keep this return going because some of it is in a long-term bond and some in shares paying a 7% dividend. Anyway using the calculator I have mentioned in a previous post and even adjusting for inflation at 2% per annum, I will be well over 100 before my money gets anywhere near the "danger zone" and by which time I will probably have departed this mortal coil – – if not then I'll deal with it then!

I will stress again that this is the situation I find myself in and it may not apply to all.

Of course there will always be exceptions to a rule and of course, one way to overcome the inflation issue is to have enough money at the start of retirement to where inflation is not a significant issue because the sheer volume of assets allows you to keep spending, within reason, and to largely ignore it. But statistically I suspect people in those categories are very much in the minority and given sufficient retirement years and/or sufficiently high inflation, I suspect even many of those people's pain thresholds can be challenged.

In many respects we are in similar boats but today, after twelve years of retirement, I can look back at the amount of money I had when I first started versus the amount I have today and it makes me wince. It wasn't so much that I got the numbers wrong at the outset it was more a case of my not believing that so many risks could be realized over the same period, as you say, economies run in cycles and one of my failures was to believe that the cycles could be lengthened as long as they have been.

In practical terms the above means little to me personally, I continue to live a pleasant and comfortable life but it moves me closer to the danger zone you describe, sooner than I would have imagined and that came as a surprise. I guess the message I would give to the person considering retirement soon is to tell them not to underestimate their financial needs, don't under estimate the effect of inflation and when considering a worst case scenario, double your estimate.

A good and honest post "chiang mai"...........and good advice to those seeking to retire here.

In relation to your post, who could have foreseen the GFC, its magnitude, depth and far reaching effects, so I suppose "having plenty in reserve" is something that all retirees should look at.

I am no financial guru (although I was a financial planner and manager of a very large fund in my later previous years) however I've always consoled myself with the fact that if I got things wrong/if things turned to custard then I would simply take my money to a country where it goes further.........and hopefully there are enough of them left should I have to put my plan in place!

[55Jay]

Yes, pretty much have to agree with you on that....as a "broad minimum".

Anywhere between that and 90k should be fine, and as regards inflation, well IMO I can generally counteract that with switching to cheaper meals/ingredients if I had to (not mention cheaper wine) so it means "the cost of living" increase isn't a significant part of my calculations.

I suggest you need to adjust your thinking on that point, inflation is the biggest single issue facing the expat retiree who has been here for several years.

I can see why my comment might raise a few eyebrows, however I see it differently because if the highly priced items which I currently buy increase too much through inflation, then I just stop buying them and buy something cheaper.

A few examples: – dinner at one of my local Italian restaurants (entree and main) = 480 baht; making the equivalent at home, 180 baht. Buying a nice Australian wine at Big C = 720 baht; buying a reasonably nice Australian wine at Supercheap, 460 baht. Cooking my own Thai meals at home rather than eating out ( Laab moo, Hot basil chicken) 60 baht.

In addition I can stop buying T-shirts and casual shirts at a whim, which I unfortunately do when I am bored, and use some of the 30 to 40 which I already have, not to mention better use of the existing 11 pairs of shoes/footwear, rather than buying more, which I am still prone to do.........there are always ways to cut back on one's (unnecessary) spending in order to offset the cost of inflation.

The problem becomes more acute in times of low interest rates when retirees try and live off savings interest without saving anything, over ten fifteen and twenty years the savings pot dwindles quite quickly. Few people realize the true effect of inflation on savings and it's only when we experience it first hand, when we stop working and have been retired for ten years that we begin to fully realize that those illustrations were all too true, a time when it's too late to do much about it.

And UK expats who rely on state pension often are not index linked in any way, most are frozen from day one because they live in Thailand, the inflation rate in Thailand is frequently understated and is of course usually much higher for an expat than a local person by virtue of lifestyle and personal choice. It's all well and good to say that a person can will downsize their tastes over time, that's something that I think most of us do anyway over time.

But there is only so far that can take you, at some point you reach a floor which is pretty much fixed. Ah yes, if only we knew exactly how long we each will live we could refine the financial need precisely, fortunately things don't work that way.

Yes, all good points and I agree with you in the main, however I have taken inflation as regards to MY situation and I suppose it could apply to a few others if they were in the same boat.

Simply put, I adjust my spending (and can cut down on wastefulness) so that the value of my capital still buys me what I need to live on, and hopefully I will be long gone before the "floor is reached"!!!!!

This of course overcomes the old chestnut with inflation in as much as "it erodes the purchasing power of your capital" because I simply adjust my spending to suit, and anyway I'm probably luckier than most because even as we speak my investments back home are returning me on average 3.6% after tax.

Economies and investments always go in cycles and I'm pretty sure I can keep this return going because some of it is in a long-term bond and some in shares paying a 7% dividend. Anyway using the calculator I have mentioned in a previous post and even adjusting for inflation at 2% per annum, I will be well over 100 before my money gets anywhere near the "danger zone" and by which time I will probably have departed this mortal coil – – if not then I'll deal with it then!

I will stress again that this is the situation I find myself in and it may not apply to all.

Sorry if you've mentioned earlier, but how old are you?

Not setting up a criticism trap, just like to compare and contrast my own scenario to others. Yours sounds somewhat similar to mine, just wondering if my strategy will stand the test of time. I'm in my late 40s and left work 3 1/2 years ago.

[xylophone]

I can see why my comment might raise a few eyebrows, however I see it differently because if the highly priced items which I currently buy increase too much through inflation, then I just stop buying them and buy something cheaper.

A few examples: – dinner at one of my local Italian restaurants (entree and main) = 480 baht; making the equivalent at home, 180 baht. Buying a nice Australian wine at Big C = 720 baht; buying a reasonably nice Australian wine at Supercheap, 460 baht. Cooking my own Thai meals at home rather than eating out ( Laab moo, Hot basil chicken) 60 baht.

In addition I can stop buying T-shirts and casual shirts at a whim, which I unfortunately do when I am bored, and use some of the 30 to 40 which I already have, not to mention better use of the existing 11 pairs of shoes/footwear, rather than buying more, which I am still prone to do.........there are always ways to cut back on one's (unnecessary) spending in order to offset the cost of inflation.

The problem becomes more acute in times of low interest rates when retirees try and live off savings interest without saving anything, over ten fifteen and twenty years the savings pot dwindles quite quickly. Few people realize the true effect of inflation on savings and it's only when we experience it first hand, when we stop working and have been retired for ten years that we begin to fully realize that those illustrations were all too true, a time when it's too late to do much about it.

And UK expats who rely on state pension often are not index linked in any way, most are frozen from day one because they live in Thailand, the inflation rate in Thailand is frequently understated and is of course usually much higher for an expat than a local person by virtue of lifestyle and personal choice. It's all well and good to say that a person can will downsize their tastes over time, that's something that I think most of us do anyway over time.

But there is only so far that can take you, at some point you reach a floor which is pretty much fixed. Ah yes, if only we knew exactly how long we each will live we could refine the financial need precisely, fortunately things don't work that way.

Yes, all good points and I agree with you in the main, however I have taken inflation as regards to MY situation and I suppose it could apply to a few others if they were in the same boat.

Simply put, I adjust my spending (and can cut down on wastefulness) so that the value of my capital still buys me what I need to live on, and hopefully I will be long gone before the "floor is reached"!!!!!

This of course overcomes the old chestnut with inflation in as much as "it erodes the purchasing power of your capital" because I simply adjust my spending to suit, and anyway I'm probably luckier than most because even as we speak my investments back home are returning me on average 3.6% after tax.

Economies and investments always go in cycles and I'm pretty sure I can keep this return going because some of it is in a long-term bond and some in shares paying a 7% dividend. Anyway using the calculator I have mentioned in a previous post and even adjusting for inflation at 2% per annum, I will be well over 100 before my money gets anywhere near the "danger zone" and by which time I will probably have departed this mortal coil – – if not then I'll deal with it then!

I will stress again that this is the situation I find myself in and it may not apply to all.

Sorry if you've mentioned earlier, but how old are you?

Not setting up a criticism trap, just like to compare and contrast my own scenario to others. Yours sounds somewhat similar to mine, just wondering if my strategy will stand the test of time. I'm in my late 40s and left work 3 1/2 years ago.

I am 68 and your lump sum and/or return on investments will have to be substantially more than mine if you are in your late 40s...........use the calculator below and others on this site to get an idea. The numbers for tax, inflation and drawdowns are variable so insert a best and worst case scenario and see how you go.

Also check this calculator out on the same site:

How long will my money last with systematic withdrawals?

https://www.calcxml.com/calculators/i-am-retired-how-long-will-my-savings-last

Edited March 9, 2016 by xylophone

[chiang mai]

One thing is clear, this "problem" becomes less of an issue the older your are, I'm 66 and would hate to be in my late forties in this financial economic climate and already in retirement - others mileage will vary however.

[xylophone]

I suppose you are right, in as much as we will have a lot fewer years left in which to suffer poor returns on our investments!

Those setting themselves up for retirement now, with a lump sum upon which to invest/earn interest will have to take into consideration a number of years of low interest environment, but that's not to say that inflation won't increase because many reserve banks these days have an inflation target to meet and they hope that the availability of cheap money will eventually stimulate the economy and inflation, so a bit of a "catch 22" situation for some I would think.

Furthermore, as I think you mentioned earlier, the pension provided by some countries, if you live overseas, is not index-linked which can exacerbate the problem.

As for the folk mentioned above, I recall looking into some research around the "great depression" and it was quoted that had you put a dollar into the sharemarket in 1929 and provided It hadn't been wiped out by companies going bust, or banks collapsing causing the same, you would have regained that dollar amount in 1947 (it might have been a little earlier than that, can't remember the exact details). What I'm trying to say is that we can't foresee exactly what's going to happen and who knows how long this GFC and its spin-offs will last, so those planning for retirement now will need to plan for a low interest rate environment for some time to come.

[uptheos]

Not much at all, just as long as your health is covered you can tick along on whatever you tick along on.