Early Retirement or work another 5 years?

[pfotoguy 3]

Next year I'll turn 60. If I sell my house I'll cash out with about 350K Don't know how much I'll be able to draw with SS but something is better than nothing. I think I have to take genetics in to my concideration. My father lived longer than any other male in my family he was 80 and died a year ago this weekend. most of the other male lived from 65 to 72. True with modern science I could live a little longer. Or not. I think for me I'd rather take the money and run. enjoy what time I have left.

[Owen` 2]

This is indeed good stuff. Let me offer some items additional to the stuff above.

 

The Trinity Study was American, but the concept of 4-5% withdrawl rate has to apply to other countries too. The study was statistical. Money is split between stocks and bonds and inflation adjusted. The US Standards and Poors 500 index was used as the definition of "stocks", but I would suspect near identical results would have been obtained if the FTSE in the UK had been used.

 

Some more American points:

 

Having additional years in Social Security counts a lot less than you might think. There is an estimator at www.ssa.gov. If you stop working well before your SS trigger age, the monthly pension plummets. And please keep in mind the trigger age is NOT 65 for most folks who would be of an age to be reading this thread. If you're 50 now the age is 66 for pension payments to start, and that works against you two ways -- 1) you wait longer for money and 2) an extra year is in early retirement not paying into SS so the pension payment, when it starts, is less.

 

As of right now, Medicare triggers at age 65 for everyone. It will NOT send money outside the US for medical treatment.

 

Another important issue. Within the US, what is one's state of residency. This matters for state income tax. If you are a resident of, say, Illinois and you retire to Pattaya, that state's elections is what you vote in, absentee. You also will be hit for state income tax from there. I may not have this right, and I'm definitely curious what others plan to do or have done, but I think if you are going to live in Pattaya, you need to spend a year in Nevada, Texas, Florida or one of the several other states with zero state income tax first to establish residency.

 

Applause for the guy above who says there are ways to work via the 'net. There are. One need not turn one's income down to zero. I plan to do some consulting, which will require some travel (paid for by the hiring company). This should double as a visa run, too.

[fd2084 0]

Having additional years in Social Security counts a lot less than you might think.  ...  If you stop working well before your SS trigger age, the monthly pension plummets.

I think these two statements are contradictory, I'm not sure which you meant.

 

I just did a quick calculation and stopping contributions 20 years early made about a 25% difference. Not huge, IMO, but if that's all you have to live on it might be significant. Thanks for giving me an incentive to go figure this out, now I know.

[Owen` 2]

I think these two statements are contradictory, I'm not sure which you meant.

 

I just did a quick calculation and stopping contributions 20 years early made about a 25% difference. Not huge, IMO, but if that's all you have to live on it might be significant. Thanks for giving me an incentive to go figure this out, now I know.

 

Understood. I'm not surprised.

 

Everyone has their own individual situation. In my case I spent a few decades in jobs that did not pay into SS so my total year count was not high to begin with. Add that to early retirement and the monthly pension payout does plummet. Your mileage may, and probably will, vary.

 

I'm trying to think of other things I've considered and researched that may prove important to others and therefore be worth mentioning. Here's one:

 

Mail drops. I mentioned above that state or residency matters for tax purposes of your interest and dividends. If you own some tiny piece of desert land in Nevada in order to claim it as your state, you probably can get into trouble if your mail goes somewhere else. So I'm wondering about maildrops in Nevada or other tax desirable states that forward your mail. How does this work?

[Hub 203]

Thanks you all for your inputs. It appears working another 5 years until 49 then retire makes the most sense. By that time I should be able to save another $60K per year for the total of $300K. Plus the interests and dividends I'll be getting on my investments. I should have close to $400K at 49 to live on and $800K+ in my retirement accounts at 60. Plus another 5 years of credit on my SS account. And I'm still young enough to enjoy my retirement. I guess I knew all this but I needed to hear it from others.

For your info., if I stay until 55, my pension increases to $1500+/month at 55, $3000+/month at 60, and $4800+/month at 65. But I have no intention to work this late, although vast majority of all other Americans do so and/or have no choice.

Meanwhile, I'll stick it out and take my 6 weeks of vacation per year in Thailand.

That sounds like the wisest move by far. I bet the five years will go very fast for you - and it leaves you time to plan where you want to end up in Thailand, property purchases, investment structures, etc.

 

Retire now, generate at at best (assuming 6%) $1,000/month taxable income, which is variable on the market and IMO does not allow for a very good standard of living or emergencies.

 

Or wait five years and get $3,200/month, $1,200 of which is guaranteed and does not even mention the huge amount more in your retirement accounts which you can probably start borrowing on before 59.

 

You just moved from Soi Bukhoaw, food carts, and the once a week ST/LT to a beachfront condo in Jomtien, Brunos, financial security, and gogo dancers whenever you wish. You might even get the opportunity to mingle with the likes of Lord Hilly.

 

With six weeks vacation to boot, I could do that standing on my head.

 

Hub

[Sailfast 503]

That sounds like the wisest move by far. I bet the five years will go very fast for you - and it leaves you time to plan where you want to end up in Thailand, property purchases, investment structures, etc.

 

Retire now, generate at at best (assuming 6%) $1,000/month taxable income, which is variable on the market and IMO does not allow for a very good standard of living or emergencies.

 

Or wait five years and get $3,200/month, $1,200 of which is guaranteed and does not even mention the huge amount more in your retirement accounts which you can probably start borrowing on before 59.

 

You just moved from Soi Bukhoaw, food carts, and the once a week ST/LT to a beachfront condo in Jomtien, Brunos, financial security, and gogo dancers whenever you wish. You might even get the opportunity to mingle with the likes of Lord Hilly.

 

With six weeks vacation to boot, I could do that standing on my head.

 

Hub

Sound advice.

 

Don't forget that you will still be able to afford those nice vacations to LOS :)

 

Now, can someone please tell me how to retire to LOS in the next 4 hours before I have to go to work tonight?

 

Sailfast

[Owen` 2]

An unpleasant thought for those relying on pensions rather than personal portfolio . . . have a look at what is happening to US airlines.

 

Those employees, pilots, flight attendants, mechanics, whatever . . . they thought their pensions were sure things.

 

They aren't. And there is no goal line to cross. Even those already retired are not going to get their full pension checks. Pensions are NOT sure things. Thinking in terms of "if I stay 5 more years then my pension is $XXX" should be phrased "if I stay 5 more years and I'm lucky maybe I'll see pension payments of $XXX for a few years until my company folds and stops paying".

 

Don't think it can't happen to your company. Ten years ago United Air Lines seemed no different than General Electric.

 

About the only thing that comes even close to a sure thing is interest from government bonds from some stable country. Inflation will eat into that, but it's the closest entity to a "sure thing" that exists in the world of finance.

[fd2084 0]

Now, can someone please tell me how to retire to LOS in the next 4 hours before I have to go to work tonight?

I know of a system for winning at online roulette that I've heard works pretty well.

[ballisticus 0]

Yes. Whenever planning something as potentially life-fucking as quitting a career early and moving to sin city, it is prudent to model based on worst-case scenarios. Personally, I think guys moving over there with less than $500K US liquid are crazy. My model is set at earning 4%, an exchange rate of 25, and cost of living doubling in Thailand over the next 10 years. To have BHT 100K/mo. income off the principal, I will need US $1.18 mil earning interest without touching the principal. Why leave the principal off the table? Because I might want/need to return to USA and God knows I will need $1.18 mil then. Hope for the best, but plan for the worst. That should reduce the chances of having a truly miserable last few years as a broke, sick old man full of regrets.

[fd2084 0]

That should reduce the chances of having a truly miserable last few years as a broke, sick old man full of regrets.

And increase the chances of being a bitter, beaten down man full of regrets before you even get to retirement.

[BigDUSA 71]

Those employees, pilots, flight attendants, mechanics, whatever . . . they thought their pensions were sure things.

My two pensions are backed by the full faith and credit of the US Government. I draw a civil service and disabled veteran pension.

 

Bottom line, civil servants take care of civil servants.

[York 0]

Best pensions are definately from the government(city,county, state, military or federal). If they run out of money, they just raise taxes from the people. Various studies showed that government pensions and benefits are far better than private sector. If you look at the most well-off pentioners in Pattaya are government retirees. Also this applied to people on disability. In fact, all 8 expats that I know is receiving disability are former government workers.

This goes to show everyone, work for the government and enjoy your retirement or disability.

Edited September 17, 2005 by York

[soi6 0]

I'll always remember this post from the Stickman site of a fella who retired to early:

 

http://www.stickmanbangkok.com/Reader/reader1713.htm

 

I had a great job in the USA working as an investment banker on the fast track to the big bucks and I was only 32 at the time. I'm 54 now and literally broke and back in the USA living with my aging mother. I'm working at a gas station and mini-mart making US$8.50 an hour and I'm glad to have the job. I have no retirement to fall back on and what little I contributed to social security will not be enough for me to survive until my last breath. I'll be working at a dead end job the rest of my life. Let me tell you my story.

 

A friend and I made our first trip to Thailand in 1981. Thailand was much different then. Everything including bar girls were dirt cheap and their attitudes were very pleasant, focused on servicing their customer to the max. Two weeks were spent there. We made all the runs on the bars in Patpong and Pattaya. We had a blast. We were hooked. So much in fact that we returned in less than four months and carried on where we left off. While my friend kept his head on, I lost mine to Thailand as a junky gets lost on heroine or cocaine.

 

After my second trip I decided that I wanted a life in Thailand. I had about $200,000 in cash and investments at the time and I figured that would be enough to retire on for the rest of my life. I could live in Thailand and bliss forever. And, I made the leap of faith and moved there after selling all my possessions.

 

I took an apartment on Silom Road and settled in for the long haul. My daily routine for the first year was to party all night, bring home a hot bar girl and sleep until noon the next day. After nursing a hang over for a few hours I'd be back on the street to do it all over again.

 

After the first year my body began to tell me to slow down. Besides, I was becoming a bit tired of it all, but I wasn’t going to let go of my dreams of staying in Thailand.

 

I was making farang friends doing the same thing I was doing. We would meet for breakfast daily, shoot the breeze, maybe play a little golf, then hit the bars on a more sober basis. I was still bar fining regularly. About three times a week. My investments were spinning off good money and I settled into a somewhat comfortable and quiet routine of doing nothing or contributing nothing to the world. I was essentially a well financed bum doing nothing all the time. I must say that I was the envy of many male tourists I would meet in a pub or bar while nursing a beer. They all wanted what I had.

 

In 1987 the markets took a dive and my investments dropped. I was still okay. All I had to do was tighten the belt a bit. But, this resulted in my spending more than I was making and I was dipping dangerously into my principal to maintain even my now cut back lifestyle. I was confident the markets would rebound and they did for that matter. But, by then my principal was down to under $100,000.

 

Through an Aussie friend, I took over running his sidewalk bar down in Pattaya. He even let me stay in a small apartment he owned but didn't live in for a modest rent. I was back! I was up to my ears in pussy, had a few baht coming in and something to do with my time. I was glad to just have something to do. Now over forty years old, I figured I had it made. I couldn't afford to go out to dinner in nice restaurants often or even take vacations. But, that didn't matter. I was on vacation. A vacation of the lifetime.

 

When I was 48, my father passed away. I flew home to be with my mother during this time. I spent six months there. I made sure she was settled and then sped back to Thailand despite her pleas for me to stay. The addiction to Thailand surpassed my family obligations or conscience.

 

By the time I got back my Aussie friend had sold his bar and I was out of work. He let me stay on in his apartment while he returned to Australia. He said he was finished with the fantasy and wanted to get something going for himself back home before he was too old. He was 40 at the time. He said he could always come for vacation. I never said it to his face, but I was thinking what a fool. Give up all of this? Not me.

 

I went back to my daily routine of doing nothing. I got bored a lot but just being amidst the action was enough to keep me there. Then the bomb dropped. The US markets crashed again and this time I was virtually wiped out. My principal was reduced to $45,000. I was no longer making enough interest off my investments to buy toothpaste. The party was over.

 

I returned to the States and moved in with my mother. I figured I could buff up my resume and easily get a job with an investment firm. Hell, I was a rising star in my thirties. I had value! Not to be. While I was off living a fantasy life my former peers were rising up the ladder. The younger generations were moving up as well. I was a dinosaur. I sent out over 2000 resumes and got three interviews and no job offers. This went on for over a year. I was over 50 with a great void in my career. I tried to BS that I was over in Thailand all those years researching investments, etc. Dah. I was fooling no one. I finally had to bite the bullet and take the job I have now. No retirement program, no medical plan, etc. I'm going no where and although I may go back to Thailand for a two week vacation (I only get two weeks a year) I doubt I will. My boss, a 25 year old punk, says I can only take one week at a time.

 

Do I regret my life? YES. Had I stayed with banking I'd be retired now with enough money to live in Thailand like a king for the rest of my life. Now I'll die in Farangland as a broke schmock. No one wants to listen to my stories. No one understands or cares. Even my former colleagues look down on me as a loser. Maybe I am, but then again, I rolled the dice and they came up snake eyes. Did I lose? Maybe, but it was a grand ride while it lasted.

[Owen` 2]

Several comments as the posts just keep on coming:

 

1) Government pensions are not sure things. Their magnitude can be cut. They won't go to zero, but they can be cut. In fact, this is pretty easy to do -- even politically. You just change the annual inflation adjustment so that it starts falling behind. The checks get bigger, but not by enough to keep up with life. I completely agree that there is no question at all govt pensions are safer than most and a recipient should probably not lose any sleep at night worrying, but I GUARANTEE you if part of the fix of Social Security turns out to be a benefit reduction then Civil Service pensions will be cut by the same amount. Veterans and disability, I'd guess those folks have an extra layer of protection, but 100% safe? No. Nothing is, other than your own money in your hand spent before inflation eats it.

 

2) The poster who calculated 1.18 million . . . well, that sounds to me personally a tad too demanding, but I like that philosophy of safety and being careful a lot. If you want to take the conservative 4% number, then 40K/yr requires 1 million dollars. Period. That's math. That's not judgement. I am of the opinion $40K/yr buys a very nice life in Pattaya, but I don't live there and I've seen conflicting comments. I don't know.

 

3) The investment banker from Stickman's website who thought 200K would last a lifetime . . . well, that was before the Trinity study. If he'd had access to it he'd have known better. This I banker very much comes back to yet another post somewhat earlier in the thread that talks of finding an income source through the internet while in Pattaya. This seems very much possible to me. Telecommuting has become a common thing in the American workplace. Even if you had to commute to the states for a quarterly meeting, it would still be worth it in terms of avoiding a gap in the resume, retaining an income flow and . . . having something to do.

 

I'm intrigued at the posts in this thread. It seems like most of the guys considering this are definitely white collar types. With the possible exception of those guys relying on pensions. I guess one should not be surprised. Hundreds of K or a million in net assets are not likely for Joe Car Mechanic.

[Soi7 1]

Did I lose? Maybe, but it was a grand ride while it lasted

 

Great story but based on the last line I would be willing to bet he would do it all over again.

[Sailfast 503]

I know of a system for winning at online roulette that I've heard works pretty well.

Well I took your advice. I turned in my badge and stepped out of the pit to the other side of the table and won 10 billion dollars in four hours.

 

Monsters!....under the bed...vampires...Lesbian vampires

 

Pamala Anderson and Lucy Lu licking tequila of each others nipples and begging me to join them...

 

I have a 10 inch cock! AND a working roulette system!

 

If I was having any more fun I'd think I was dreaming

 

Sailfast

[wacmedia 277]

I think for me I'd rather take the money and run. enjoy what time I have left.

 

The guy who had to go home, who's to say if he stayed in Investment Banking he'd have done any better? Wasn't a good investor on his own behalf, and would probably been divorced by some gold digger in America, so maybe he had it better than otherwise as he had years of living it up. It's frightening when you add up how many people are no longer with us from our childhood. Some people think they are going to live forever.

[ballisticus 0]

And increase the chances of being a bitter, beaten down man full of regrets before you even get to retirement.

Yes. Life is a series of choices. It is possible to ratchet down in the last 10 years of working as to avoid burnout, not just decide to jump from the plane and bail one day. Thats what I have done. My job was 110% all day, everyday and it was slowly killing me. I was able to make some lateral moves, and now have half the stress and the same income. It can be done if you plan for it.

 

And anyone on this board who is now married to a farang woman, and planning a life in Pattaya had better plan for something else. Because she just aint going to go with the plan (nor would you want her to).

[ballisticus 0]

I am of the opinion $40K/yr buys a very nice life in Pattaya, but I don't live there and I've seen conflicting comments.  I don't know.

 

I'm intrigued at the posts in this thread.  It seems like most of the guys considering this are definitely white collar types.  With the possible exception of those guys relying on pensions.  I guess one should not be surprised.  Hundreds of K or a million in net assets are not likely for Joe Car Mechanic.

I am certain that $40K/yr. does buy a great life in Pattaya today. Its 10 years from now that concerns me. Just look at the changes in BKK over the last 10 years, and the country in general. 10 years is an eternity in an emerging economy. Even if costs stay flat, $40K/yr. will still be needed because you will want to travel. Personally, I cant imagine my entire reason for living is trolling the streets for the next shag, or playing golf every day for the rest of my days. That may be fine for some, but I need a little more variety.

 

As far as the white collar bit, I think it is apparent that those in the know realize what the state of affairs will be in the USA and Europe in 20 years and it isnt a pretty sight. The gravy days are coming to an end so you better have options.

[Owen` 2]

I am certain that $40K/yr. does buy a great life in Pattaya today. Its 10 years from now that concerns me. Just look at the changes in BKK over the last 10 years, and the country in general. 10 years is an eternity in an emerging economy. Even if costs stay flat, $40K/yr. will still be needed because you will want to travel. Personally, I cant imagine my entire reason for living is trolling the streets for the next shag, or playing golf every day for the rest of my days. That may be fine for some, but I need a little more variety.

 

As far as the white collar bit, I think it is apparent that those in the know realize what the state of affairs will be in the USA and Europe in 20 years and it isnt a pretty sight. The gravy days are coming to an end so you better have options.

 

Good data.

 

Important point. $40K is the extraction for the first year. It gets a 3ish% upward bump each year in the Trinity study presumptions. So it's $41,200 in year 2, etc. That approach gets you a 99% probability of not running your $1 million to zero in 30 years. That 99% number has market crashes built in, cyclical interest rates built in, everything that happens good and bad over 30 yrs.

 

I won't presume to talk for other guys, but I . . . and I suspect others who self make themselves 1 million dollars in net assets . . . don't think I will be happy trolling around daily for women and golf. No question several days a month spent thus will be excellent, but daily for 30 years? Nah. I try to pay attention to the things I read from guys who are already spending their time in Pattaya and they seem to say that it does taper off. It becomes several days a month and not every day a month.

 

I, too, think travel will be an imperative. The good news about this, as I discovered in Pattaya this past spring, is the arrival in SE Asia of Southwest Airlines clones. You can get one-way tix to Singapore for well under $50. Ditto other destinations of the region. I suspect it would take years to explore that particular corner of the world and it looks like that can happen cheaply. Each trip constitutes a visa run, too.

[wacmedia 277]

About the only thing that comes even close to a sure thing is interest from government bonds from some stable country. Inflation will eat into that, but it's the closest entity to a "sure thing" that exists in the world of finance.

 

Hi

 

That statement is quite right, but I met a young guy in Phuket who was one of a few of his group to survive the tsunami. He said he was going home, quitting his job and opening a small guest house in Thailand. His experience was life changing for him. He had barely enough to do it, but for most people if they wait till everything is a cast iron certainty they will never make the move. Life is risky, no matter how well you plan.

[Zeus 56]

Yea I have the same dillema. I'm 42, single, just love the LOS, and could retire there (I have the money) but a few things keep me from going.

 

- Family is in the US (parents, and sisters), and while I am independant, living on the other side of the world from them is a huge step.

 

- I have a good job I like and make decent $$. The job also provides medical coverage, which I would need to independantly acquire in the LOS. While it is not the sole reason for staying ( if I was fired - I'd head to the LOS), but it does help tip the scales.

 

- Stuff. It is amazing how much stuff one can end up with over the years. To really make a switch to the LOS most of it would have to be sold or given away. It would not be practical to move it. You really are starting over.

 

That said, I try to lay the ground work, I sold my condo last year making a tidy profit. However I still have too many ties here in the USA. One day I may retire here in the USA and spend winters in the LOS, but I think I would always have a USA base. I think the best interim plan is to utilize all my vacation for trips to the LOS. But I am envious of all the members who have taken the plunge to commit to a life in the LOS.

 

53 days......

 

Zeus

[BigDUSA 71]

There are decent jobs in the US trucking industry that pay from $40 to 60 K per year That don't require a degree and youth. So many jobs one could spend 3 to 6 months in Los and go back to the same company. Where their's a will there is a way.

 

Guys who had investments the last 20 years and rode out the lows made a fortune in the 90ies. I sold out January 2000.

[Owen` 2]

Stuff. It is amazing how much stuff one can end up with over the years. To really make a switch to the LOS most of it would have to be sold or given away. It would not be practical to move it. You really are starting over.

 

Generic storage facilities anywhere in the US would be less than $100/month. The exact price will depend on the amount of "stuff".

 

Multiple residences . . . well, I've looked into it. One ties up money in real estate equity that won't earn interest or dividends, and given the bubble might itself be at substantial risk. A more subtle obstacle is insurance. Most insurers won't insure a vacant property for more than a few months (while it is being sold). Being gone 6 months runs a big risk of the insurer pointing at that clause in your policy and refusing to pay if the place burns down.

 

One thing I've seen done, common among congressional staff in DC, is take out a long term lease, or even buy, a tiny condo costing maybe $25K in Texas or Florida or Washington or Wyoming or one of the other 0 income tax states. This establishes residency and provides you with a "base" of sorts if you want to store things there (uninsured). These properties exist solely for people on the move who just need a home address but intend to be there only rarely. Certainly not enough for your 6 month purposes, but it's a maneuver worth being aware of.

[galt67 2]

A couple of points:

 

Their is NO 'correct' DOLLAR amount for everyone--The amount YOU need to retire on is VERY specific to YOU.

 

I know guys that have lived in Pattaya for years on pensions of around $1,000USD. Another guy in Chiang Mai living on less than that.

 

Would most us want to live like they do...? Probably not but I suspect many do.

 

Remember, EVERYTHING in life is about choices and perceptions. For most people, our lives are neither heaven nor hell. And moving to Pattaya will NOT radically change that.

 

Bottom line: If you're reasonably happy now, you'll probably be happy in Pattaya. And if you're depressed now, Pattaya will have little effect in the long run.

 

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