How much to retire on?

[Guest]

Let's assume you have the option to retire early, with investment income that would on average increase with inflation.  Or you can work slightly longer to increase the income.

 

(Note:  When the poll says pension, I mean investment income.  Therefore you don't have some politician telling you at what age you may retire).

 

 

[TMax]

I've answered 1.5 as that equates roughly to what my retirement income from my superannuation converts to given the current exchange rate, that would be for living in Thailand. Plus I would still have a property here in Australia to fall back on as well as renting it out whilst over seas.

[vinapu]

we have quite a few threads recently about age and retirement ,  they seem to be popular  and I find them interesting as well but I can't stop thinking that it would be nice if somebody would chip in with some recent trip report to LOS 

[Up2u]

Every situation is different. If I retired at 50 and had to bridge the gap until I quality for Medicare (age 65)and perhaps a cheaper health policy, my annual health premium costs would be an estimated 15,000,000 baht. At age 65, the general rule is to budget 80% of your pre-retirement income when you do retire. That is why many of choose to retire, to save a few baht. I know it is not easy to talk about health issues as we age but we must plan for the inevitable.

[Travellerdave]

50 is an impossibly young age to retire. Given life expectancy in advanced countries of 80 years then one would spend as long in retirement as workng. Here in the UK we can only draw pension funds from the age of 55.

I am in semi retirement spending periods working but having plenty of time for holidays in Thailand mainly, but occasionally in European gay resorts.

For healthcare i rely mainly on the British NHS plus a top-up insurance policy. Whilst travelling i have a annual travel policy, which so far i have not made a claim on, so do not really know how if its a good one.

To live full time in Thailand i think i would need an assured income of at least 100,000 per month and even that would be insufficient to support spending at the level i maintain on holiday.

[Guest]

50 is an impossibly young age to retire. Given life expectancy in advanced countries of 80 years then one would spend as long in retirement as workng. Here in the UK we can only draw pension funds from the age of 55.

I am in semi retirement spending periods working but having plenty of time for holidays in Thailand mainly, but occasionally in European gay resorts.

 

Retiring at 50 is perfectly feasible for anyone in a reasonable graduate job, running a small business or some other lucrative trade, such as a plumber.  They also need to be good with money.   Living frugally and investing it well.

 

For stock market investments, many experts say you can withdraw 4% of the portfolio each year & expect to be able to increase that with inflation each year and maintain your income for life.  Not guaranteed, but very likely to be OK.

So to get our 1.5 million baht (=£30,000 per annum), you need to have assets of £750k.   Including housing, this is attainable for professionals with a reasonable salary, a ruthless focus on living costs and some investment ability.

 

Anyone nearing 50 may have graduated in the 1980s with no debt and had the opportunity to buy a house (or two) at a fraction of current prices. In fact, taking a £50 k mortgage in the mid 1990s, whilst earning almost half that per year would allow the mortgage to be paid down very swiftly. 

If that person is gay & single, he has no other mouths to feed and could even rent the spare room out.

Or instead of paying down the mortgage, he could have put his annual PEP & ISA allowance into the stock market.

 

Once he reaches the retirement age, all but one room in the house could be let out to students, whilst he goes off abroad for at least 6 months of the year.  Or he could sell the house and put it in stocks paying a nice little dividend.

 

Of course, for a Doctor, Dentist of Solicitor, salaries are considerably higher, so they should have even greater opportunities.

Not to mention those who may have inherited something by the time they hit 50.

 

Of course anyone on an average income has very little chance of retiring at 50.  Those with only a modestly above average income can do it, if they have been making the right decisions over the last 35 years or so & perhaps make a little compromise here or there.

[Up2u]

When I voted I did not consider this poll a general retirement question but geared towards a retirement in Thailand since the options were in baht. Everyone's situation is different and one size doesn't fit all. Again, if I considered retirement at 50 and lost my employer sponsored /subsidized health coverage and was forced to go out in the marketplace my annual health premium costs would be 10,000 USD(320,000 thb) which I would have to increase 6-10% for the next 15 years. A sizable chunk of change. (please disregard that 15M typo in post #4). From an American perspective, this scenario makes no sense, and depending where you come from you will have a different answer. I understand the Brits get no general increase in their government pension when living outside the UK. Getting sick in Thailand and trying to return and use the NHS also has its problems so I am told. Remember LMTU's story. Using the 1.5M baht (45,000 USD) figure means I have to pay 25% of that to Uncle Sam, I don't know the tax rates for other countries.

[Alexx]

Interesting thread for me, because retiring at age 50 is exactly my plan as of now. I've been planning that since quite a while and I don't see any reason why it won't be feasible. After all, I don't have kids that I need to put through college, or an ex-wife to pay alimony to. These are the major "obstacles" for our straight brethren who also would love to retire early but cannot, I think.

 

As for the pension, I could make do with a rather modest amount (let's say 100,000 baht per month in today's money), if certain other important conditions are met as planned: (1) I will keep properties (real estate) in the West both for extra rental income and to have the option to return anytime I want or need to, (2) I will have secured comprehensive health insurance of some kind that isn't totally unaffordable at high age (actually I think the plan I'm enrolled in will have me covered, but it's worth to keep looking), (3) I will have some extra cash in the bank for unforeseen or large expenses along the way. I'd assume that I will spend more than now, because I'll have more time on my hands, but I'm not an excessive spender and that won't change.

[Guest]

I'm obviously in the minority here by considering all income sources to be more or less equal, whether it be a pension, dividends or rental income from property.   The latter two income sources may fluctuate, but with appropriate diversification, that income stands a chance of keeping up with inflation over a 20 year retirement period. 

 

As for your pension, that's bullet proof, right?   Well no. 

I believe UK law requires company pension schemes to increase pensions in line with inflation, except when inflation is above 5%, when they only need to offer 5% (was talk of cutting that limit to 2.5%, however I cannot confirm if that happened).

Had you retired a few decades ago and received 5% inflationary increases in the 10 years to the end of 1980, your pension would have fallen in value by 62% in those 10 years.  Company pensions can have their value severely eroded during periods of

high inflation.

 

The other disadvantage with pensions is the government tells you when you can take it.   My state pension will not be paid until I'm 67 and company pensions often have a minimum age limit.    In contrast, I can start taking dividends out of my ISA at the time of my choice.

 

I suppose healthcare merits it's own thread.  However, firstly I suspect Thai healthcare costs a lot less than that in the US (for example), so are there reliable Thai insurance policies which cover treatment in Thai hospitals?  

Then how does the health insurance market work after you pay in for 10 years, then develop cancer or some other expensive condition.  Do premiums skyrocket at the next policy renewal date?

I suppose UK citizens could return home every 6 months or so to preserve entitlement to healthcare.

[billyhouston]

At the age of fifty I had to choose between carrying on working and having more money or stopping work and having more fun. The decision didn't take long and I've never regretted it. If you have sufficient income for your needs, you don't need any more but the amount varies from person to person and can be difficult to ascertain! The great iniquities for UK citizens living in Thailand are the failure to index the NI pension (it's indexed in the States but not in Canada and some other Commonwealth countries... there's no logic to it) and the attempt to prevent their use of the NHS.

[vinapu]

Other than health care factor major fear of many contemplating retirement is that that will not be able to maintain their lifestyle hence figures 75-80 %  of pre-retirement income as requirement for comfortable retirement. 

 

I think those figures are grossly inflated for most people in Western  countries since  we consume and spent much more than we need. Trimming spending habits will do miracles to our waist lines and helps to get some air into our closets.

 

Person concerned should first ask himself  questions like "do I need to buy new car every 3-4 years? ", 'will I die if I don't buy newest smartphone if old one still works" , 'how many pieces of whatever do I really need ?" and so on.

 

I 'm not retired but several years ago on losing job I was forced to go through the same exercise as new one did not pay even nearly to what old one did. Adjusting to halved purchasing power  was easier than I thought and at times I 'm thinking on meeting my old boss and thanking him for getting rid of me then.

[Guest abang1961]

Yes I do agree with live with your means...but do I have to compromise my standard of living?

Will the farang retiree end up as an ATM for the Thai boys?

There are just too many fleecing stories about farangs left penniless.... and their Thai partners, evaporated into thin air.

[Bob]

Will the farang retiree end up as an ATM for the Thai boys?

There are just too many fleecing stories about farangs left penniless.... and their Thai partners, evaporated into thin air.

 

As the old axiom goes, a fool and his money are soon parted. But I don't believe for a moment that those "fleeced falang" (however many there are is unknown to me) only got stupid with their money once they hit the shores of Thailand.

[vinapu]

Bob, while I agree with you,   unfortunately there are many love stories when otherwise  sensible people lost their heads and wits and subsequently fortunes on falling in love. And this happens everywhere  so is not contained to Thailand and retired people.

[vinapu]

Yes I do agree with live with your means...but do I have to compromise my standard of living?

Will the farang retiree end up as an ATM for the Thai boys?

There are just too many fleecing stories about farangs left penniless.... and their Thai partners, evaporated into thin air.

trimming  standard of living  not necessarily means compromising it. If one has 10 shirts instead of 20 standard of living is not compromised other than doing laundry more often, minor nuissance.

 

As for ATM there are many  far from retirement and still  performing that task for boys, not always unwillingly. After all even Christian admitted to lavish some 100 baht notes on boys just for fun in one of BT bars not that long ago. Spending money can be fun as much as counting it.  

[Bob]

unfortunately there are many love stories when otherwise  sensible people lost their heads and wits and subsequently fortunes on falling in love. And this happens everywhere  so is not contained to Thailand and retired people.

Yes, the phenomenon certainly isn't limited to Thailand.  Up here in Chiangmai, I'm only aware of one guy who might fall into the "love" trap you mentioned (on the other hand, I also know he wasn't wise at all with his money back in North America).  As the female comedienne once said:  There isn't enough blood in the world to fill both heads and have them both work properly..... 

[Guest]

trimming  standard of living  not necessarily means compromising it. If one has 10 shirts instead of 20 standard of living is not compromised other than doing laundry more often, minor nuissance.

 

As for ATM there are many  far from retirement and still  performing that task for boys, not always unwillingly. After all even Christian admitted to lavish some 100 baht notes on boys just for fun in one of BT bars not that long ago. Spending money can be fun as much as counting it.  

 

We may have some common ground here.

 

Strictly speaking, I would say trimming the COST of living doesn't necessarily mean compromising the standard of living.

There are loads of ways to cut living costs without any detriment on quality of life. 

e.g.

1 Operate an old but reliable car

2 Service it yourself

3 Walk or cycle on short journeys

4 Monitor all your expenditure for a month, then cut out or substitute all the things which have a high cost to benefit or cost to satisfaction ratio. The aim would be to make maximum saving, whilst still being very happy with your lifestyle.   

[vinapu]

I'm obviously in the minority here by considering all income sources to be more or less equal, whether it be a pension, dividends or rental income from property.  

Dollar is dollar but equality of income source in most cases is distorted by taxation rules of source country so 1000 $ of net rental income not necessarily equals 1000$ of dividend income after taxes , if any, are calculated.

[vinapu]

We may have some common ground here.

 

Strictly speaking, I would say trimming the COST of living doesn't necessarily mean compromising the standard of living.

There are loads of ways to cut living costs without any detriment on quality of life. 

 

we do have plenty

 

if i recall correctly you like to stay at Om Yim and so do I,

neither of us has quality of vacation in Bangkok reduced much in comparizon to staying in say , Dusit Thani, 3000 baht saving per night.

I'm not saying spending money on Dusit is waste but if one is forced to look for savings lots of them can be found easily without much harm