Owen`

Guys, Currency fluctuation is presumably cyclical. If you want to undermine its effects, you could entrust some portion of the 50% bond asset allocation niche to CD or Money Market equivalents at Thai banks. But in general, currency fluctuation being cyclical makes it negligible over 30 years. If it's not, it's not. That is just one more unknown. It does not undercut the structured nature of the analysis. Most of the calculators using the historical numbers give you a choice of using historical inflation, or specify your own. You can nudge the inflation number to reflect your projection of the upcoming 30 years of currency fluctuation. And in the category of "Really Weird", here's some help predicting your date of death: http://www.telegraph.co.uk/news/main.jhtml...1/nmoles111.xml

The early retirement forums have become too conservative. Do not embrace them too firmly. There are no shortcuts on this. You have to understand what is going on. The 4% number ONLY applies if there is no pension at all in the future (social security or state pension). If there is to be such a thing, the number can elevate. This is not quibbling. 4% of 500K is 20K/yr in year 1. 4.5% of 500K adds $2500/yr to what you can safely spend. If the lump sum is higher, the fractional % is even more powerful. There is also a study addendum by Guyton that shows an asset behavior profile that can add a full additional 1%. The folks on the early retirement sites lose their objectivity on that. Somehow, 4% seems correct to them and 5% does not, for whatever reason. At 5ish%, life can be pretty damn good for 30 years.

I have babbled about this extensively in the archives. First, and foremost, you must not put all your money in CDs or Money Markets yielding 4%. If you do that, you will run out of money. You cannot understand this unless you first embed deep in your gut an acceptance of one critical concept: My Costs Today Must Not Be The Only Basis Of Calculations. Inflation Decides Everything. The magic number is 4-5%, depending on whether or not you will get another pension input at age 65(6) (social security in the US, the UK calls it state pension, I think). If you will, you can move that magic number up between 4.5 and 5%. That number means this: A profile of both stock and interest rate histories from the year 1880 to present shows that if you divide your investments roughly 50% stocks and 50% "bonds" (CDs) then you can take 4.5ish% from that nest egg in year one, increase the amount withdrawn each year by inflation, and not run out of money over a period of 30 years (95% confidence -- meaning 95% of all 30 yr segments since 1880 did not run out of money using that procedure -- and 5% did). If you take more, you will run out in maybe 50% of 30 year segments. If you have 100% CDs and no stocks, you will run out in 50% of segments. If you have 100% stocks and no CDs, you run out in 40% of 30-year segments. Stocks protect you from inflation. You have to endure the risk they represent to buy that protection. All this depends on history repeating itself. It is a WORST CASE analysis. You are extracting an amount that would leave you with money on day of death in 95% of historical cases. If you live longer than 30 years, 4.5% will be too high. If inflation proves higher over the next 30 years than the historical norm then 4.5% will prove too high. If you die in 20 years, or if inflation is low over the next 30 years, you are going to die rich. You cannot know what will happen, but this procedure is a very structured and well reasoned approach that is frankly the ONLY method available to nest egg retirees that has a rationale behind it not designed to make money for some annuity salesman. So you see your question about drawing down to die at zero (everyone's goal) is addressed by this procedure. It's all a matter of probabilities and not certainties. You cannot compute it precisely because you don't know what inflation will be in the future and therefore don't know your costs. And you don't know your date of death.

100K baht is $2900/month or $35,000 per year. Your statement "70,000 baht a month, which is about what I get (not including money from stock investments and the like)" means your investments need to fund 30,000 baht per month. If "what I get" is inflation adjusted pension, then what you need is enough investments to fund about $900 USD/month. That is $10,600 per year. If your investments are divided approx. evenly between stock market mutual funds and bonds/Certificates of Deposit/Money Market accounts then you need about $260,000 total to cover yourself for the next 30 years. If you drink heavily and smoke, you won't last 30 years so you could get by with less, maybe as little as $240,000. Of you have far less than 250K, you're in trouble and have to cut spending or find a part time job. And do it now, before the recession hits.

Correct. Most overseas plans will not cover in the US because of prices. The reason I said people wind up back in the US is Medicare, which covers 80% past 65. Your description of BUPA is encouraging, unless they exclude pre-ex conditions (and I'm sure they do). There are some plans that will allow pre-ex conditions provided there has been no treatment for anything relevant to that condition within the past X years, sometimes 3 sometimes 5. As for coverage all the way to death, great. For guys already in that plan, that is great provided it does not change, but of course anything can change. I am surprised to hear that they do that. Thanks for that data.

In three years, maybe options will appear. The demand for insurance past 65 is going to grow so maybe some company will find a way to spread risk over all age groups and lower premiums for older folks. To an extent, this is a hope, but not a probability. Demand WILL be there. Maybe a company will find a way to meet it and stay in business.

Always interesting to see what the Brits are doing for taxes and health care. You seem to be converging to the same rotten deal the US imposes. There has been talk of some US expats in Mexico trying to get US Medicare (equiv to your NHS past age 65) to be willing to send money for medical reimbursement outside the US. You may want to start nudging your MPs to support a similar thing. I assume you still vote in the . . . region (riding?) . . . you left when you went to Thailand? If you can find 5 or 10 other guys from that same place then a joint letter might get attention.

Guys, a general point. The odds are high, not 100% because there ARE exceptions, but very high that you WILL be going back to your home country about age 65. Insurance companies cannot stay in business if they try to cover you past that age when you are guaranteed to start running up medical costs. Across the whole population they would be paying out more than they are bringing in and that just doesn't work. So when you do these investigations, it will ease your peace of mind if you at least partially realize that you will probably go back to the home country at age 65. This does NOT make the whole "move to Thailand" concept stupid. If you make the big move in your early or mid 50's, that gives you over 10 years to spend little to live great, save the difference and let it accumulate compound interest, and be able to fund a similar great lifestyle back in the home country from 65 to death. So, try to relax. The health care insurance problem you are trying to solve really only exists until 65. A solution becomes obvious after that. Health insurance is not going to get cheaper. Period and full stop. Loopholes are going to close. Companies covering past 65 will stop. More and more companies will try to evade claims -- which are guaranteed past 65. The one hope the US and UK BMs may have is the NHS and Medicare past 65 may decide to be willing to send money for medical reimbursement outside the country. I would not bet on this. The medical lobbyists have no reason to stand quietly while such a law is passed. A last point. In the US, early retirees usually try to get a "High Deductible" plan. This is the "no bells and whistles" plan mentioned above. It will not cover anything until you spend $2500 during the year, but it will thereafter protect you from catastrophe. Premiums are low for this sort of plan and it has merit because the reason you have insurance is to protect you from disaster that threatens your life savings. Not from casual doctor visits because a laceration got infected or you needed a blood pressure prescription. You CANNOT come out ahead on insurance. They design it to make a profit, and that is at it must be. So . . . a high deductible plan protects your nestegg from a $250,000 USD hospital stay and it does so for $1500 premium per year. Until age 65 when it stops.

Some babble time: Three points. 1) "Retirement" is the wrong word. Odds are high, not 100% because there are exceptions, but the odds are high you WILL be "going home" to your home country at age 65. 2) The source of your money changes many things in what is available for you. 3) Lifestyle is defined by money. Spend it how you will, but it IS defined by money, because without it you have no choices. Item 1 means private health care policies, most of them, will not cover beyond age 65. There are a few, but they will become fewer in upcoming years or will spike premiums as your age increases because they simply can't afford to cover the guaranteed health care issues that arrive beyond 65 in return for small premiums. If you are not already within such a plan before you are 65, then trying to enter it on your 65th birthday will likely be silly -- because by then you will have accumulated so many pre-ex conditions that your policy will indemnify almost nothing. So if you are American, home you go for Medicare. If you are a Brit, NHS. Item 2 has to do with pension income vs nestegg as source of funds. Pensions are going away and are going to be cut. They are also taxed very much differently than nestegg funding generation. BigD above quotes 48K of pension per year. For US taxes, assuming he came from a zero income tax state, that will turn out to be about 41,000ish USD of spendable money per year after taxes, inflation adjusted (a very powerful plus). That is about 115K baht per month to fund 2 people, him and his wife. Given item 1, trying to duck taxes would not be wise. And as long as the inflation adjustment holds up and currency fluctuation does not get too extreme, this can work forever. Cuts ARE likely though, and they will probably occur gently, but relentlessly, by reducing the inflation adjustment. If nestegg is the source of funding, the tax rate can be configured much lower. $41,000 per year could be generated from as little as 45K USD pre-tax income, with a further boost to the nestegg derived from the presumption that much of it is in tax protected retirement vehicles, that one does not tap until age 60+. The good news about this is that with such a low draw on a nestegg it can grow in the 10+ years from 50something to age 65 when one goes home. It may be much larger at age 65 and can fund a great lifestyle even back in the home country. And Item 3 is about how the money is spent. Housing and drinking/women are the bulk of it in Thailand and all else is lifestyle dependent. You can travel internationally or you can stay home -- a choice that occurs based on desires, but it is also a choice that does not even exist if you don't have money. You can buy a car and drive yourself or you can hire a trusted driver -- and make no mistake, this will matter from age 60-65 when your reflexes erode -- but again, it is a choice non existant without money. Do you go home to see your kids and grandkids in the home country once a year, or not at all. A choice, again, available or not depending on money.

There is an aspect of perspective here that I will suggest to folks. Permanence is very likely not. Most people, for health care reasons, WILL be going home at age 65 because private insurance usually shuts off then. In the US, Medicare triggers at age 65, but it will not send money outside the US for health care reimbursements. The reality is private health care insurance usually shuts down at 65 and if you find a policy that does not and you aren't in it pre-65, well, by age 65 you will have accumulated so many pre-existing conditions that the policy you found won't cover much anyway. So in general, when you "retire" to Thailand it is likely not, for most, permanent. It is a 10+ year vacation until age 65.

Here's what you need to find out for sure: What is the current rate of premium increase? Not just your portion. The total premium paid for by county PLUS you. If you pay it all, okay. If the county pays any of it, don't bet on them continuing to do so. Will your deductible and maximum out of pocket per year change for "out of service area"? Are they changing year to year as rates go up? No one needs to know anything about previous conditions if you can prevent it. When you move, see if you can get your doc to give you your records. Not a copy of them. Your records in their entirety. This is almost certain to fail, but almost is worth asking. Then when you have the, toss the previous conditions as long and mention them verbally to any future docs. Lastly, the 50% coverage is something that only applies to bills they accept. If they declare that they won't accept a claim based on "some third world quack", you could be in trouble. Find out what they need to see for a claim to be funded.

I am not creating an argument here, but without the detail you don't know what people have decided "doesn't count" so you aren't going to get meaningful data. I have seen many threads where people quote what they spend per month and then only deeper in the thread is there mention of "I own my own condo so I pay nothing for housing". Owning your own place should be calculated as lost interest on the cash that would have been in the bank were it not tied up in the condo, homeowners association fees, appliance depreciation . . . everything having to do with owning -- but that isn't what happens. torrenova's famous rule of thumb that drinking/women plus housing are the bulk of monthly costs says much. Above, he just tacked 30K onto that for food and transport. Anyway, it's a good thread because it is thought provoking.

The overall thrust of the concept is socializing. If you don't socialize much now, there is no compelling reason to think that will change when you relocate. It is my belief that a lot of social interaction has moved online for people in general. Beyond that, social circles evolve around activities. Not neighborhoods. If you play a sport, you know the people who play a sport. If you belong to a book club, you know those people. As you mentioned earlier, neighborhoods becomes social mostly because the kids play with neighboring kids. It's a different world than it used to be. The internet has changed many things.

Two points: 1) Everyone is different. People drink differently (or not at all), they like to travel different amounts (or not at all), they have different medical demands, different women demands, different everything demands. A top level number will NOT help you unless you know the details of that number and what lifestyle it defines. Check the archives. Eneukman has good detail there. torrenova has good top level insight. 2) Inflation. Inflation. Inflation. Currency fluctuation can be thought about, but it can sometimes go in different directions. Inflation generally does not. This, or next, year's number MUST NOT be projected ahead 10's of years. That is the path to disaster.

The different name idea is a good one. You'd probably need to do this in a different country than the US, but that is certainly possible. In the US, the pricing is so high for a doctor's visit that a credit card comes into play, and your name is on it. It's a good idea though and maybe folks can figure out a way to dodge the database.

Good luck on this guys. This is an absolutely huge issue in the US and it takes more than knowing the current rules. You have to keep an eye on what is being proposed and what is likely. There are some retirees in the US for whom healthcare is 30% of their total cost of living (prior to age 65). Don't get caught by this stuff. Know your rules and what rule changes are pending.

That is a solid cost analysis. My only question would be about liability. Did the insurance number quoted indemnify you from some enterprising Thai who arranges to get hit by you in order to sue?

Eneukman is correct. The ramification of this is . . . they will quietly collect your premiums and say nothing at all about the matter until you file a claim. Then they will refuse to pay. All your years on a group plan, as government worker or corporation worker, are in a database. All your treatments and medical visits are in records and that data is available to an insurance company faced with a big claim. You have no chance of ducking this. If a claim is big enough, the insurance companies have a process in place to easily and cheaply check up on you. It is not to their benefit to trigger that process until you file a claim. And that's how it works.

Get that in writing before you presume it is true. Talk is cheap and "emergencies" can be re-interpreted at will. For example, they might pay to stop the bleeding, but not for the effort of setting broken bones. They will certainly not cover you "in network". This stuff is a subject EVERYONE hates to study. Whenever you get an answer that looks easy and seems like good news, dig deeper. There is no good news in this field, even for government employees. There are always caveats.

Health insurance is not tax deductible right now for most who are in the category of this thread. Besides which, guys should understand what deductible means. It just means your taxable income for a given year is reduced by the amount in question. If your income is low (like most retirees), the the tax rate is also low and the amount of money "saved" is tiny. Tax deductibility is always best viewed as a percentage subsidy of a cost. If an expenditure (cost) is deductible, then the tax rate you pay (a percentage) is the amount of price reduction of that expenditure.

I am in South America typing this. It is part of my overall investigations of where to be as the years accumulate. Blood pressure as a pre-ex condition is one of the worst to have because the insurance company excluding it can exclude heart attack, stroke, kidney failure -- pretty much anything serious you are likely to endure. In the context of anything being available for a price, it would be useful to discuss these things NOT with a broker but with the companies directly. They are trying to limit their liabilities, of course, but the one thing Thailand has going for it is low cost. A policy covering you in Thailand should not burden that company with all that much of a liability. You should be able to negotiate something for an elevated premium. More ominously, guys, in general insurance companies know a lot more about this stuff than we do. If they won't cover something, it means it is very likely to be in your future. Start with the weight loss regimens, and frequent exercise, and don't start forgetting to take your pills. Do everything you can to be above average.

A lot of these questions are not Pattaya questions. They are retirement questions. They have been asked and answered for hundreds of years. What do I do if I'm not working? If you're in Pattaya, you have some different answers you can give to those questions. Everyone is going to be different so everyone will choose to do different things with his time, Provided He Can Afford It. I good way to think of this might be . . . if you had $50 million and could live anywhere, what would you do? A lot of guys on this board would still choose Thailand and/or Pattaya. And take that further . . . if you had $50 million what would you do with your time living anywhere? THAT is the real question. Once you have computed a subsistence budget you start thinking about luxuries. A bigger condo? There is a top end limit to that. Do you really want to walk for 5 minutes to get from one end to the other? You will have maid service so that issue arises, too. Maybe you can afford to pay maid service whatever it costs to clean, but it will simply take them longer to clean it and there you are with strangers bustling around your home. You will upgrade your housing, but not to the stratosphere, because it would make no sense. So what do you spend it on? Not housing, clearly. The housing upgrade won't be enormous. More expensive women every night? Maybe. Or maybe you get tired of that. This question of how to spend time is why I put so much travel in the budget above. Once you are past subsistence, you have to fill your time. Even if you're not bored, you WILL go home now and then to see family or whatever. You WILL take trips just to get out of town. That has to be in the budget.

Pay attention to Eneukman's numbers. He has many excellent budget analyses in the archives. As has been said many times, the bulk of expected Pattaya spending ON RETIREMENT (NOT vacation), is housing and bars/bargirls. If a condo is rented at 25ishK/month, and you spend 2000 on women about 3X per week, that is 24,000 baht rent 2000 baht X 3/week X 4weeks/month = 24,000/mo on drinking/women That is 48,000 per month for the bulk items. Food, utilities, incidentals, medical insurance add to other numbers guys have posted over the last several months. Here is a compilation of monthly RETIREMENT (NOT vacation) expenditures from various posts: Maid Service 1000 Medical Insurance 5500 Utilities 7000 includes power, water, condo fee (trash pickup), internet and vonage LongTermStorage 3000 this is for storing your stuff back in the home country, if you have none, good Overall Travel 25000 this is 4 singapore-level trips per year + 2 major trips per year Gifts 3850 gifts for family back in home country, Christmas or whatever General Transport 1800 General getting around, bahtbus, taxi to airport, whatever Incidentals 10,000 Food, Periodic computer upgrades, digicam upgrades, TVs, books, toys --------- 57150 horrible formatting, sorry The sum is 105,000 baht per month for what is a quite good lifestyle with a great deal of travel and toys and generosity to your family back home. If you want to throttle back on some items, fine. Travel 1/2 as much and save 12,000 baht. Buy half the computers and digicams and save 3500. Ship all your household goods and keep nothing at all back home and save 3000. With some slight reduction on that defined lifestyle above (mostly less travel) you should live very very well in Thailand with 3 women a week for the rest of your life for 100,000 baht per month in 2007 baht. They will inflate. 100,000 baht is about $2800 USD per month. It will be easy for BMs to toss numbers out of that total on presumption of they are too extravagant. Just be sure you do it right. You WILL take trips back home and you WILL have to upgrade your computer now and then. But if you can come up with about $34,000 USD/yr in retirement, you can live very very well in a place where it never snows, has beautiful women, a seashore, modern conveniences and a community of like minded men. Yes, the government can toss you out. If you rent, you don't care.

1) Singapore vehicle ownership is low because the government wants no smog. There is an enormous annual fee of . . . I think it was $30,000 USD per year to register a vehicle. The vehicle itself has a 2-3X cost tarriff on it to be shipped in. They do not want cars on the road there. You get from home to work via mass transit, which is among the best in the world. And yes, it is a 1st world country. One of the cleanest, richest, safest places you'll ever see. 2) Thais don't make much money. They can survive on their low pay inside the country, but they don't travel much, because they can't. They also don't have many lifestyle aspects farangs consider normal. 3) The guys on pensions, or about to be on pensions, NOW are likely to make it to the finish line comfortably. The guys expecting a pension in 5 or 10 or 15 years are not. Watch carefully for how this is done. The classic method is "we will continue to have a pension plan for our workers, but we are "freezing" it. We will make no more contributions to it and benefits earned within it are frozen as of today (meaning no more years of service in the calculation and no inflation adjustments from now on)." That is the method of devastation. If you have 15 yrs of service or whatever, and you need to work 10 more years to collect a pension -- what you're going to get is 15 yrs of calculated years of service, not 25. And that 15 years of service, which might translate to oh, pick a number, maybe $350 per month, is in 2007 dollars (or pounds or whatever). That $350 will suffer 10 years of inflation with no adjustment. 10 years at 3% inflation per year is [ (1.03 ) ^ 10 = 1.34 350/1.34 = $260 equivalent spending power) ]. And that is just in year 10 on the day of retirement. Ten years later that 260 is eroded another 1.34. 4) Please, guys, you MUST save money. And it must grow where you save it. And then after you have accumulated wealth, that you somehow managed to protect from theft from an ex wife or a lawyer, then you must divide it between bank savings and a broad stock market index. A 50/50 mix will last you at least 30 years if you spend only 4.5% of it in year 1, and adjust spending upwards by the rate of inflation each year.