Early Retirement or work another 5 years?

[BigKev 0]

Guys,

 

If you haven't gone yet then go now to the Fireseeker.com website that was mentioned eariler in the thread. It answers tons of the questions asked and really lets you play with a variety of scenarios including pensions and retirement funds kicking in later and for that matter also figuring in rising expenses. Great stuff, especially for those of us in our 30's and 40's trying to decide whether to take the plunge and trying to figure how much we need.

 

Cheers ,

 

BigKev

Edited September 21, 2005 by BigKev

[Owen` 2]

FYI the Fireseeker website is known and talked about on various retirement planning websites and well thought of, but don't rely on it too much because some of the calculation algorithms are not published.

 

It's not really rocket science. If you get returns on your money that exceed your spending, you will see your portfolio grow. If you don't, you will see it shrink. Add to that simplicity the reality that no one knows what future inflation or returns will look like so everything beyond that simplicity is guesswork. The guesswork from the study is to use history and presume the future will be like it. Period. That's the whole conceptual banana. 4% is totally safe if history repeats itself for 30 years. 5% is mostly safe if history repeats itself for 30 years. I was pleased to see the Firewalker computation come close to that conclusion.

 

As for "retiring" in one's 30's or maybe even 40's, this will categorize one as "idle rich". Does this really work for . . . 40 years?

 

Maybe the thought configuration is . . . why is this permanent? If someone does not own a residence back "home", then leasing a condo in LOS means what? I suspect nothing. If you want to spend time back in farangland, make the trip. The longer you're there, the more money you'll spend. While you're there, you need not really be away from "home". Maybe your lease expired.

 

I guess that depends on how much stuff one wants to have with one in Thailand and how willing one would be to just walk away from it. Ha, perhaps it is good to realize that money tied up in "stuff" doesn't earn interest.

[UncleSam 0]

FYI the Fireseeker website is known and talked about on various retirement planning websites and well thought of, but don't rely on it too much because some of the calculation algorithms are not published.

 

It's not really rocket science. If you get returns on your money that exceed your spending, you will see your portfolio grow. If you don't, you will see it shrink. Add to that simplicity the reality that no one knows what future inflation or returns will look like so everything beyond that simplicity is guesswork. The guesswork from the study is to use history and presume the future will be like it. Period. That's the whole conceptual banana. 4% is totally safe if history repeats itself for 30 years. 5% is mostly safe if history repeats itself for 30 years. I was pleased to see the Firewalker computation come close to that conclusion.

 

As for "retiring" in one's 30's or maybe even 40's, this will categorize one as "idle rich". Does this really work for . . . 40 years?

 

Maybe the thought configuration is . . . why is this permanent? If someone does not own a residence back "home", then leasing a condo in LOS means what? I suspect nothing. If you want to spend time back in farangland, make the trip. The longer you're there, the more money you'll spend. While you're there, you need not really be away from "home". Maybe your lease expired.

 

I guess that depends on how much stuff one wants to have with one in Thailand and how willing one would be to just walk away from it. Ha, perhaps it is good to realize that money tied up in "stuff" doesn't earn interest.

Owen, I just jointed this forum a few days ago. I must say you made some good points, but I don't agree with you on many things. Talk to a retirement actuary (net a retirement planner) if you know any. They will show you how to calculate future retirement income in conjuction with your mortality rate, future inflation, future investment return, projected social security income, pension, 401(k), etc, etc.

 

Sam

[bob2005 0]

A nice life in Thailand can be had for about the same as the deposit for a Thai retirement visa, 800k baht a year (11k UKP), with no visa trips needed. To generate 11k UKP at 4.2% (guaranteed in 30 year 'gilts', ie UK Government bonds) needs about 260k UKP. There's no tax to pay if you live in Thailand. And you get the capital back at the end of the 30 years.

[wacmedia 277]

A nice life in Thailand can be had for about the same as the deposit for a Thai retirement visa, 800k baht a year (11k UKP), with no visa trips needed

 

Hi

 

Agree, trying to get the money together.

[sommy 0]

44 is still young but i can see your dilemma, i guess id stick it out for another 5 years to get that 1200 a month. Youll live happy in thailand . The issue is you never know when your health will decline. If you have had some problems already then id say retire now and enjoy your life.

[Owen` 2]

A nice life in Thailand can be had for about the same as the deposit for a Thai retirement visa, 800k baht a year (11k UKP), with no visa trips needed. To generate 11k UKP at 4.2% (guaranteed in 30 year 'gilts', ie UK Government bonds) needs about 260k UKP. There's no tax to pay if you live in Thailand. And you get the capital back at the end of the 30 years.

 

Whoa! I think I read somewhere there is a way to get a "retirement visa" that provides one with permanent residence with no need for visa runs every 30 days.

 

What I read said something like . . . you have to have X amount of money on deposit at a Thai bank. That would get you the retirement visa. The only downside seemed to be that if you were discovered "working" it was a serious offense. It seemed to say that the money just had to be there to show you were not destitute. You kept the interest the bank paid, and you could leave and take your money when you felt like it (but don't expect to do that more than once).

 

But what you say above is rather different. It seems to say that you put X money on deposit and the interest earned on it needed to be 11K pounds, which was turned over to the Thai government? That is rather healthy rent someone is paying, in addition to their housing expense.

 

I suspect I am not understanding this.

[wagger 0]

Yes i recall the retirement Visa option is available although my recollection was that it required nearer £14K and this had to be annual income. No need to hold the total balance at all times just use it as living expenses and demonstrate an income stream.

 

A couple of other points of interest is that there is no double taxation agreement between UK and Thailand consequently you don't pay tax on money brought into the country but you are still taxed at source on UK income from Pension and investments over the annual personal allowance.

 

Also someone could comment because i was told recently that Thai banks currently paying 0% (zero) interest on cash deposits at the moment, is this true?

Edited September 23, 2005 by wagger

[bob2005 0]

It seems to say that you put X money on deposit and the interest earned on it needed to be 11K pounds, which was turned over to the Thai government?

 

I should have said 'deposited' ie put in a Thai bank account at the beginning of the one year visa period (you need an 'O' visa from outside Thailand, I got mine in Kuala Lumpur, or Penang gives 'O's fairly easily it's said). All the money can be used for living expenses during the year, down to zero, then you transfer another 800k baht to the Thai bank account. That's the situation for cash. With a pension it's again 800k a year verified by your embassy and you don't need to put anything in a Thai bank account. Or you can combine cash and a pension to make up the 800k, though I've heard some Immigration offices in Thailand can be difficult about a combination.

 

 

you don't pay tax on money brought into the country but you are still taxed at source on UK income from Pension and investments over the annual personal allowance.

 

For bank deposits you can sign a non-resident form (R105) and get the interest paid with no tax deducted and the Revenue (now HM Revenue and Customs) will not chase you for the tax. It's in Question 9 of their Non-Res Faq document.

[Eneukman 1]

A nice life in Thailand can be had for about the same as the deposit for a Thai retirement visa, 800k baht a year (11k UKP), with no visa trips needed. To generate 11k UKP at 4.2% (guaranteed in 30 year 'gilts', ie UK Government bonds) needs about 260k UKP. There's no tax to pay if you live in Thailand. And you get the capital back at the end of the 30 years.

Are you investing in Index Linked stocks? One point to bear in mind if investing in fixed interest stocks (or leaving the money in a high interest bank account) is that the value of your capital will have depreciated in real terms over a 30 year period.

 

I'm going to be investing in the UK equity market and without investing in any risky shares, my after tax yield is looking to be in the region of 4.6%. I will be able to monitor how the shares are doing over the internet and can instruct sales or purchases by simply phoning my broker in the UK.

 

It goes without saying that you DO NOT invest funds you may require at short notice on the stock market. You could lose a lot of money if forced to sell when the market is at a low point, though this isn't a major problem if you're just reinvesting the sale proceeds.

 

Alan

[fd2084 0]

Yes i recall the retirement Visa option is available although my recollection was that it required nearer £14K and this had to be annual income. No need to hold the total balance at all times just use it as living expenses and demonstrate an income stream.

 

A couple of other points of interest is that there is no double taxation agreement between UK and Thailand consequently you don't pay tax on money brought into the country but you are still taxed at source on UK income from Pension and investments over the annual personal allowance.

 

Also someone could comment because i was told recently that Thai banks currently paying 0% (zero) interest on cash deposits at the moment, is this true?

There are actually a couple options to my recollection.

 

One is the "retirement" option which requires a minimum age (I believe 55) and proof of some minimum income.

 

Another is to deposit a much larger amount of money in a Thai bank, and this is available to any age. I believe the amount was around $100,000, but don't take my word for it. A problem with this method is that it seems to lock up some of your money with a much lower return. I didn't bother to look up the details for this, just wanted to point out that it exists for those who might be interested.

 

Also, keep in mind that they can change the rules at anytime. You may retire with what is currently a decent pension. However, the Thai govt may decide to double the minimum above your income and you might be forced to leave. There was some uproar when this happened (or was attempted) in the past; I don't recall the details.

[BigDUSA 71]

Zero interest for farang in LOS. another example of the "screw the foreign devil" policy of the current government. Another example of Thai logic, cut yourself off from extra capital. Pretty women dumb SOB.

[Owen` 2]

Wow. This is good stuff.

 

I don't know how the other Americans are reading this, but for me the UK posts are interesting. I have to deduce from the context what the US equivalent is that is being discussed in terms of taxes and pensions and yields and returns. Posts like this one:

 

Are you investing in Index Linked stocks? One point to bear in mind if investing in fixed interest stocks (or leaving the money in a high interest bank account) is that the value of your capital will have depreciated in real terms over a 30 year period.

 

I'm going to be investing in the UK equity market and without investing in any risky shares, my after tax yield is looking to be in the region of 4.6%. I will be able to monitor how the shares are doing over the internet and can instruct sales or purchases by simply phoning my broker in the UK.

 

. . . make a lot of sense. The terminology could be unfamiliar, but when someone says "my after tax yield is looking to be in the region of 4.6%" one can easily translate that into US equivalents and it gives a very good feel for what sort of vehicles have been chosen.

 

What I think I'm reading above is that for the retirement visa one does tie up money, but one does not generate interest that is turned over to the Thai government. Rather, one is merely demonstrating that one is not destitute and that one has funds to live on and spend in Thailand. Given that demonstration of an ability to bring money into the country, the Thai gov't agrees to give you a permanent visa. And apparently it needs to be an amount that hits the minimum threshold each year, so you can't deposit and spend it down to zero over X years.

 

As for the Thai banks not paying farangs interest, are the Thai banks connected with Thai brokerages? Maybe there is some maneuver for holding an account "with a Thai bank" but in an offshore account that is positioned in British govt bonds or US Treasury bonds or whatever that do in fact pay interest.

[bob2005 0]

Eneukman:  Are you investing in Index Linked stocks?

 

I've got my eye on them but at present inflation of 3% and their return of 1.2% there's no advantage over normal deposits.

 

fd2084: Another is to deposit a much larger amount of money in a Thai bank, and this is available to any age.

 

IIRC you can be an 'Investor' for 3 million baht and maybe use it to buy a condo, but once I got the Retirement visa extention sorted, I didn't keep up with the other options. Thaivisa.com should have the info (but it's a bit muddled to me).

[Eneukman 1]

Regarding the retirement visa, the minimum age is 50 (I qualify by 3 1/2 months ).

 

You need to qualify certain (not too stringent) health requirements plus be able to show proof of having pension income equivalent to 65,000 baht per month. As an alternative to the income requirement, you can show that you have a minimum deposit of 800,000 baht in a Thai bank account. The funds in this account must have been remitted from outwith Thailand. If you are married to a Thai national, the income and bank deposit requirements are halved.

 

The rules state that a mixture of pension income and bank deposit can be used, though this being Thailand, it seems that this is not recommended.

 

You can use the funds in the bank account for day to day living - Immigration will, I beleive, want to see your bank book when you apply for your visa in any case, though it will of course be necessary to top up the balance from overseas when you apply for a renewal in a years time. Also, don't forget that in addition to the retirement visa, you will need a re-entry permit if you intend to leave the country at any time.

 

On top of this, you need to report your address to Immigration every 90 days.

 

Alan

[BigRobo 0]

The sensable head says put in the time at work and get the extra cash etc.

 

But I to have had friends die before there time, and then all the planning goes out of the window.

 

Only you can decide but I would live life for now, and do what you feel will make you happy.

 

[Owen` 2]

You can use the funds in the bank account for day to day living - Immigration will, I beleive, want to see your bank book when you apply for your visa in any case, though it will of course be necessary to top up the balance from overseas when you apply for a renewal in a years time. Also, don't forget that in addition to the retirement visa, you will need a re-entry permit if you intend to leave the country at any time.

 

On top of this, you need to report your address to Immigration every 90 days.

 

Alan

 

Excellent data. Thanks. The ReEntry visa . . . do you have experience with that? Do you have to requalify each departure from LOS, meaning do you have to have a recent bank statement with you to traverse the airport?

[Eneukman 1]

Excellent data. Thanks. The ReEntry visa . . . do you have experience with that? Do you have to requalify each departure from LOS, meaning do you have to have a recent bank statement with you to traverse the airport?

I'm presently in the country on a multiple entry non-Immigrant O visa, but I will be applying towards the end of next month for a retirement visa at a cost of 1,900 baht. Once the visa has been issued, I can then apply for a multiple re-entry permit at a cost of 3,800 baht. This will allow me to leave and re-enter Thailand as often as I want during the validity of my retirement visa so no need to reapply every time I want to leave the country.

 

So no need to reapply every time you want to take a side trip to PI or wherever.

 

Alan

[rkt 0]

Zero interest for farang in LOS. another example of the "screw the foreign devil" policy of the current government. Another example of Thai logic, cut yourself off from extra capital. Pretty women dumb SOB.

Apparently Thai banks do pay interest to farang bank accounts.

 

There was a thread on this a couple of weeks ago.

 

I'll no for certain when I check mine when I'm there in January.

 

[BigDUSA 71]

I have a Thai bank account and as the nice lady told me no interest for farang.

[MM 6,562]

I have a Thai bank account and as the nice lady told me no interest for farang.

I have several Thai bank accounts and they all pay interest, but you have to have money in the account to get it.

[wagger 0]

ok, the obvious question then... what short term interest rates can you get on deposit in Thai? ummm and what is the what is the current inflation rate?

[rkt 0]

ok, the obvious question then... what short term interest rates can you get on deposit in Thai? ummm and what is the what is the current inflation rate?

Read this thread, you'll find some info here.

 

 

Thai Banks.

 

[BigDUSA 71]

I'll be able to answer this question in 15 days.

[short 215]

At 65, you can no longer get Thai health insurance. I think the plan would be to find a 30 yo TG to take back to the states when you turn 65 to take care of you. (your old age health insurance is only good in the USA). Put your money in a trust that she can't get to even if you become senile.