How much $$$ to comfortably retire in Thailand???

[Hawkster 2]

A lot of people have discussed retiring to Thailand. How much money would you need to comfortably retire at ages a) 45, 50, and c) 55 with a) $500,000, 750,000 or c) $1,000,000 sitting in the bank? I am sure different people have different needs and expectations.

 

What is your comfort level with getting 3, 5, 7, 9 or greater 10% return a year on your investments? How you would you diversify and invest the money to get that expected return?

 

For those living in LOS now, how much do typically spend over the course of year including housing, health insurance, plane tickets to home, etc? What are your top five expenses for the year? 1) housing; 2) food; 3) insurance; 4) plane tickets; 5) women? 6) alcohol; 7)taxes; 8) other? Please provide a lower and upper range of expenses.

 

I have entertained retiring early. I would like some prudent advice on how soon to retire. I will be 50 in a couple years and want to retire while still relatively young. I know it has been discussed in other threads before but I would like to revisit the issue and get other peoples views on what they think is a conservative financial retirement plan for Thailand. I would prefer not to have work. I look forward reviewing the inciteful opinions from board members, both who may want to retire someday to Thailand and those who already have.

[Soi7 1]

This Question comes up all the time I live on 500.00 US a month there are guys her that live on more than 10 times that amount all depends on the person.

[Nelly 3]

Hi

 

I would love to know this as well.

I am saving up to retire in 3 years at 46 and have been planning on £2000 a month and the money lasting 30 years assuming I can get 4% interest on my lump sum (and 2% a year increase in my monthly budget). After 76 I don't care !!

 

Its hard to plan and Thailand looks very unforgiving for old Farangs with no money.

On the other hand I don't want to stay in UK too long saving more money than I am ever gonna get through in the rest of my life.

But I do want to go out every night and enjoy myself.

 

My living list is similar to yours

 

1) Housing

2) food

3) women

4) beer

 

I have left out insurance as hospital treatment seems cheap and as I am UK can alway fly home if its too bad.

Plane tickets, don't think I would want to fly back to Europe

Taxes Had not thought of that would I have to pay Thai taxes ?

 

Other Thats the one that scares me

 

Any help from the expat community would be most welcome

 

Thanks

 

Neil

[pfotoguy 3]

Not a flame! but try doing a search on the subject. I did and from what I could gather before I actually got here was.

 

It depends on your life style. There's no set answer. But if your planning on living in "vacation" mode. Bring lots and lots of money.

 

I've been running on the heavy side bacause I just moved here and I ran about 80,000 bht a month for 2 months. It can be cut down to 55 60K

[pattysteve 34]

As already said budgets differ.Having said that you cant live forever in holiday mode.

 

Im retiring to LOS later this yr.Im working on around 60-70K Baht a month,i think this is ample for slightly better than middle road living.

 

Hotel....12k/mnth approx on long term agreement.get UBC installed 1.5K/Mnth.this then allows you to have a couple quiet nights per week,lets all the organs recover

 

Summing up whatever you have you can adapt.

[Owen` 2]

Guys,

 

This comes up often, but the question does have flavors.

 

The first flavor is "How much does it take per month to live in Pattaya?" That information is well covered in the Wiki at the upper right of this page. Look in the Expats area. Learn to praise Soi7, Gary and Eneukman, who kindly provide data on how one lives in Thailand in various ways

 

The second flavor is much more complex and it is . . . How much money do I have to have to last 20, 30, 40 etc years if I am spending X amount of money per month with inflation increasing that amount and with investments varying year to year?

 

I babble about that here often and won't again. Search . . . or go to the excellent empirical calculator found at www.fireseeker.com and gain wisdom, truth and eternal awareness. You UK guys will have to translate a lot of US terms on that site, but the concept is entirely portable to the UK.

[torrenova 644]

As ever, it depends upon birds and booze. The more of those you want, the more cash you need.

 

I can't be bothered to work out another breakdown but 100k per month is ok, less if you can make capital purchases outright (house, car etc.) Watch out for inflation.

[Eneukman 1]

I've been here 10 months and have been keeping, from time to time detailed tracks of my expenditure.

 

First, Nelly - £2,000 per month after tax will be more than sufficient to allow you a comfortable life style.

 

I try to keep my "routine" expenditure to an average of 80,000 baht per month and so far I'm slightly inside that. Of this, my rent is by far the largest single item at 20,000 baht per month. You could pay a lot less or you could easily end up paying a lot more.

 

This does NOT include side trips to Vietnam, escaping from Pattaya for the duration of SOngkran, one-off purchases such as an MP3 player or an external hard drive to serve as a back up to my personal data and all the music I've downloaded off the internet etc. These have pushed my total average monthly costs up to nearer 100,000 baht, though that should come down slightly over the next few months as the cost of my visits to Vietnam and Malaysia get spread over a longer period of time.

 

My aim is to bar fine girls on averge once every 3 days though it doesn't always wok out that way. Your costs here will depend on whether you take girls from a beer bar or from go-gos. I'm a drinker and that (including lady drinks) takes up a fair bit of my budget.

 

I just have a sandwich and a yoghurt for lunch (and a can of coke ), which averages out at a tad over 40 baht per day. At night, I eat mainly Thai food though I do go for the Western option once a week. A small bottle of beer accompanies the meal.

 

Nelly says he has omitted health insurance from his budget but I would look into the various options available here. At the start of the year, I had an eye infection, which ended up costing me 5,500 baht. My own health insurance only covers in-patient treatment so I wasn't covered for this. Despite that, I'm still ahead though only just and if I were to need any more out-patient treatment, it would then have been cheaper for me to have paid for the extra cover.

 

One point that doesn't come up often is travel insurance. I took some out with AA Insurance, who have an office in View Talay 2A before I went to Vietnam and it came out at about 6,000 baht for a year. This does not cover me for Europe or the USA though they can be included for about 1,000 baht extra. Whlst the building should be covered by the owners, your personal effects are going to be your responsibilty to cover. When I was taking out travel insurance, I also took out some contents cover. My laptop, digital camera and video camera had to be listed seperately but again this came out at around 6,000 baht per annum.

 

Hope this helps,

 

Alan

[Hawkster 2]

The real issue is quality of life. Right now I have a very good job with very good compensation and can save quite a bit each year. However, I am working 6-7 days a week and long hours to get the job done. I go home, think about work some more, and then go back to work. I plan to work all of this weekend to keep my head above water. As I make good money, I do not want to pull the string too soon and quit. However, quality of life is not that great right now.

 

That being said, I really, really enjoy my trips to Pattaya where I do not think about work and can truly relax. In retirement, I would like to read a lot of the classics of literature and read interesting articles on the internet, Wall Street Journal, USAtoday, sports articles, downloaded books, etc. Also, I would like to golf, go to the gym daily, and generally go sightseeing on a non-extravagant scale. In Pattaya, it is nice to know you do not have to deal with the typical woman's attitude in the U.S. and spend most nights alone. Its nice to be treated well even if its a business arrangement = pay to play.

 

I talked to a realtor a couple of days ago who told me his father had died of Cancer at 51. Accidents happen at any time. Most of my life has been either going to college (many years) or working long hours at a profession. I want to make sure I am young enough to enjoy my retirement - I pity those who work to 65-70 before being able to retire comfortbly.

 

Anyway, I appreciate everyone's insight into what the practical realities of retirement are. Like most things, you do your research and make your best prognosis as to the future, i.e., money supply. Then make a decison and never look back. I believe I can live on a reasonably budget without lots of unnecessary excesses.

 

Can't wait for my next trip to LOS and Pattaya.

 

I hope I can get further insights/views/thoughts on the practicalities of retirement in LOS.

 

It sounds like $3000/month for usual expenses and for trips home and VietNam, Singapore, etc. and buying occasionally electronics is a reasonable benchmark.

[kdc1899 1]

you don't have to live in pattaya to enjoy it.

Live like an hour away for 1/3 the price.

[Owen` 2]

The real issue is quality of life. Right now I have a very good job with very good compensation and can save quite a bit each year. However, I am working 6-7 days a week and long hours to get the job done. I go home, think about work some more, and then go back to work. I plan to work all of this weekend to keep my head above water. As I make good money, I do not want to pull the string too soon and quit. However, quality of life is not that great right now.

 

I feel your pain. Earning six figures is not that big a deal nowadays, but I guess that's the old yardstick. I went past that threshold years ago and it's just kept going up. The bonus each year is substantial and tacked on. Toss in some good years in the market since 2002 and it becomes pretty clear that what used to be a hand to the forehead and a thought "there has to be some other way" has now become "that other way has arrived."

 

Pulling the string too soon is what worries me, too, and that website I quoted above seems to be the only objective measure to tell the tale. www.fireseeker.com. It tells one, simply, if one has enough money to cut the cord. I do, but I notice I'm still here in the states typing this and not in Pattaya? Why? Cushion. Momentum. Cushion. Concern that history isn't predictive. Cushion. And a move of this magnitude will be a lot of work that will likely take 18 mos (to establish Nevada residency for zero state income tax).

 

I talked to a realtor a couple of days ago who told me his father had died of Cancer at 51. Accidents happen at any time. Most of my life has been either going to college (many years) or working long hours at a profession. I want to make sure I am young enough to enjoy my retirement - I pity those who work to 65-70 before being able to retire comfortbly.

 

We should form a club. You are describing me. I know it's time for "me time", but momentum is tough to overcome.

 

I'll tell you another effect in play. The market was up only 5% last year and it's up about 7% YTD. These are not enormous 20% moves and it is trying our patience. I say this because I can talk about momentum or being intimidated by how much work it will be and all sorts of other things, but the truth is if my net worth exploded 30% in the next 2 mos, I'd be gone so fast you'd hear the doppler shift as I went out the door.

 

Oh, and I have very dark visions of what life will be like for contemporaries of mine at age 65. Soc. Security will be there still at that point, but I'm guessing ZERO additional pensions. I'm 50 and I simply can't see government or private pensions continuing to survive that long. They will be frozen in the next couple of years and inflation will cut them in half by then. We will likely not see many elderly folks at resorts in 15 yrs.

 

It sounds like $3000/month for usual expenses and for trips home and VietNam, Singapore, etc. and buying occasionally electronics is a reasonable benchmark.

 

I think, for exactly the same expenditure types you list, that my number will be a few hundred under that. I did some careful research, and I allow myself a Raffles hotel splurge now and then too, but I still come out under that. I plan about 4 SE Asia trips a year for maybe 4 day weekends plus 2 "major" ones, to Europe or the US for a bit over a week each time. I estimate about $7500/yr to cover that much travel. I expect to do even more. A LOT OF PLACES are close to Singapore and the sightseeing/travel passion could be satisfied from Pattaya easily and cheaply for . . . I'd guess 7 yrs or so before one starts looking farther away. Also, and for me this is big, if Skyteam broadens Delta miles useability to Singapore Air and Northwest, I will either travel even more or travel the same amount for maybe $5K/yr.

 

The one thing that I think is most powerful for guys to understand is what they observe of their parents' lives as they age is almost worthless. Today's parents probably have pensions. Those won't be there. You have to take care of yourself. If you do, Pattaya on $3000/month will be very comfortable. Eneukman has an apartment well above minimum, as is Gary's condo. Eneukman is under that number and he's doing the same travel thing we contemplate. Gary's travel is up north, which certainly has its appeal too.

[Gary 4,119]

I'm pretty conservative and was never a bell ringer. When I decided to retire here the baht was 25 to a dollar so that's what I based my retirement on. Anything over that is really a bonus. After I bought a condo in Jomtien I had no problem living on $1,000 US a month. I now live upcountry in my wife's house and spend a lot less than that plus I collect rent from my condo. Life is good. I get over a nine percent return on my 401K fund and the dividend is paid monthly directly to my bank. I have not had to dip into my retirement fund since I have been here. I also get a small pension from Chrysler for my 22 years of working there. They sold the plant in 1988 so I was out of a job. I should send them a thank you note because if I had not been out of a job I probably wouldn't have discovered Thailand.

 

It's really impossible to know what inflation and currency exchange rates are going to do. An income depending on the stock market is VERY risky in my opinion. I have my money in closed end funds and as long as the interest rate doesn't go crazy they are about as safe as I can find and still get a decent return. That piece of string is as long (or short) as you want it to be.

[RWB 0]

Thanks for the info. I know that this subject gets brought up over and over again, but it seems that it is always useful.

 

I am one of those poor souls that will have to work to age 65. My retirement plans went out the window a couple of weeks ago when I discovered that the "1st option" clause in my retirement plan didn't mean "my" 1st option. It seems that I will be able to retire Dec '07, because of over 60 age and service. Ordinarly the 1st option is the number 75, arrived at by age and years of service. Dec. '07 sounds great, but the money will not be there for another 3 years later, if I had been able to use my military time as planed to reach 75 I would have had full retirment in Sept 08. My goal is 2000usd a month minimum and then I move. I am conservative enough to want to know there is really enough to live on. The dollar vs the baht is always a concern, esp with the US economy being a paper economy anymore. I live on just a bit more now and I won't have the car payment, etc when I move to LOS. If I could stop going to LOS I would have one hell of lot more money to retire with(nope, not ever going to happen). I think living outside Pattaya is best idea.

 

Not too worried about the dying part, if I am stateside(Buddha forbid) my kids can park my remains in a VA cemetary. If I pass in LOS, well who cares, I won't thats for sure, as long as I have a smile on my face.

 

Thanks again to all you guys that keep those of us that haven't been able to retire there yet up to date.

[Owen` 2]

It's really impossible to know what inflation and currency exchange rates are going to do. An income depending on the stock market is VERY risky in my opinion. I have my money in closed end funds and as long as the interest rate doesn't go crazy they are about as safe as I can find and still get a decent return. That piece of string is as long (or short) as you want it to be.

 

A bit of clarification here. Gary knows his stuff. When I refer to the market controlling various decisions, it does, but this does not mean that an asset allocation profile of 100% stocks and 0% bonds is in play. One mixes. As long as one has any % greater than 0 in the market, then its movements are going to matter.

 

Another thing worth mentioning. Scams. Not the illegal kind. The legal kind. Every mutual fund manager and every 401K program Does Not Want Anyone To Retire -- EVER!

 

They are paid out of Annual Expense Ratios. If that number is 1% and your account is, say, $200K, they get 2K per year of your money. Hell no they don't want you extracting from that account for living expenses. They want you adding to it, each paycheck, as you work until you die.

 

Keep that in mind when reading "professional advice".

[jtiger 9]

And a move of this magnitude will be a lot of work that will likely take 18 mos (to establish Nevada residency for zero state income tax).

I'm thinking of making the Nevada move myself before retiring to Thailand but I didn't think it would take 18 months to establish residency. Do you know for a fact that it will take this long or are you just thinking of the whole moving out process as taking 18 months?

[Nelly 3]

Thanks for the replys guys

 

I am in a similar boat to Hawkster. I have a good job and standard of living but I really can see the pointlessness of working till I drop trying to keep a western lady happy while she allows me out a couple of nights a week.

 

However the whole point of retiring to Pattaya for me is having the money to go out drinking and Barfining. Years ago I vacationed on a tight budget and it really took part of the fun out of it. Yes it was a challange for a month but I don't want to spend 20 years worrying if I can afford to enjoy myself.

I really want to treat this move as a holiday that lasts the rest of my life not just an early retirement

 

I have just returned from Vietnam and a 6 monthly trip there would be a necessity as would Malaysia and the phillipines.

 

Gary you seem to be really sorted. I hope when I make the move I soon settle down like you have but I would prefer to have enough funds to make that not a requirement

 

Owen' you seem to be ready to go, if I was in your shoes I would working hard now to get it all in place, you can only place so many cushions to protect you from the unknown

 

 

Keep the information coming please

 

Thanks

 

Nelly

[Owen` 2]

I'm thinking of making the Nevada move myself before retiring to Thailand but I didn't think it would take 18 months to establish residency. Do you know for a fact that it will take this long or are you just thinking of the whole moving out process as taking 18 months?

 

No, poor phrasing on my part. There is no statutory time duration that I know of for establishing residency. The 18 month number is just a casual estimate of how long it takes to get a house ready to sell, find storage for household goods I may not take with me, establish some money cushion in case every investment known to man collapses 2 weeks after I quit, get a 2 month visa, get further educated and whatever. No question most of that is getting the house ready to sell. Maybe I overestimate that. Shrug. It won't be a one month thing, but maybe not 18.

 

There is another thread somewhere where residency techniques were discussed. Sa Teef spoke up about a personal experience he'd seen as an accountant and the conclusion was that apparently one of the most powerful things you can do is get a state resident's hunting or fishing license. If you get such a thing, then a state agency has declared you a resident and this is apparently powerful stuff as rebuttal to another state agency's challenge. I think SaTeef's story was of a guy who tried to claim to be a Florida resident but come hunting season in another state, he went there to go hunting and he got a resident's hunting license. That undid his Florida residence claim.

 

But in general, I think the maneuver is rent an apartment or condo in Vegas for a few months and hang out there, change your drivers license and register your car in Nevada, get a library card, register to vote in that district/state, hell, you might even want to get a job (haha for a week). Behave like you mean it and don't talk about what you're doing. Just do it and be quiet. The KEY POINT is you don't have to keep that apartment and be paying rent on it while paying rent in Thailand. For mail, you can get a maildrop service for a few hundred dollars a year to have your mail forwarded. It even provides you with a Nevada address. You just need to establish that Nevada (or one of the other zero income tax states) was the LAST STATE YOU LIVED IN before leaving for overseas. Then start voting absentee in that state. The idea here is to have a solid paper trail if/when California or NY makes inquiries. In fact, the best thing would be to time it all so you send in a "part time resident" tax return to California or NY or wherever showing you moved mid year and are paying 1/2 year state taxes, and make sure the return address is your new address. In 99% of the cases, I suspect they file you as moved and never revisit the matter to question it. Just make sure you never file another document with that state implying you're still there. If you own land there, sell it. Do not retain any appearance of still being there. Don't leave the door open to doubt. This is just a disaster of back taxes plus interest waiting to happen.

 

Caveat Emptor. I Have Yet To Do All This. What I am saying above is from research. There are people who have done it and I've read their stories. Like all internet stuff, you have to filter with your brain. If you see enough people saying such and such works, you then look into it and if you can't find anything to disprove, you use it as a working hypothesis.

[jtiger 9]

Thanks for all the great advice. My goal is over the next two years to reduce my worldly possessions down to two suitcases of clothes and documents and a laptop computer.

When I come to Thailand I'll pretty much start from scratch.

[MrMango 672]

I'm thinking of making the Nevada move myself before retiring to Thailand but I didn't think it would take 18 months to establish residency. Do you know for a fact that it will take this long or are you just thinking of the whole moving out process as taking 18 months?

I lived in Nevada (Reno) before I moved to Thailand. You can be a resident of several states and even country's, but for tax purposes, your domicile is what is important. You can have a Nevada domicile immediately if in fact it is.

[Eneukman 1]

I lived in Nevada (Reno) before I moved to Thailand. You can be a resident of several states and even country's, but for tax purposes, your domicile is what is important. You can have a Nevada domicile immediately if in fact it is.

I can't comment on the position with the US but if you're from the UK, it is possible to be domiciled there (strictly speaking you're domiciled in either, England & Wales, Scotland or Northern Ireland but that only becomes a major issue after you die) but resident elsewhere.

 

For example, for income tax and capital gains tax purposes, I am resident in Thailand but am still domiciled in Scotland. There are actually different types of non-residency for income tax but I don't know enough about the differences to even begin to discuss them here.

 

Domicile from a UK point of view is a very complex subject. You acquire a domicile of origin (generally from your father) when you are born, which you retain until you make a conscious decision to obtain a domicile of choice elsewhere. It also takes some considerable time to acquire a domicile of choice and it is quite possible never to lose your domicile of origin, even after 40 years of having lived elsewhere.

 

Alan

[bob2005 0]

I found a million baht a year, just over the Retirement amount, very comfortable. After the first 2-3 months you won't want 3-5 girls every day, which helps.

 

The UK tax thing is, after one year abroad you are Non-Resident and don't pay Income tax on off-shore earnings, after 3 years you are Not-Ordinarily-Resident and don't pay Capital Gains tax (actually 5 years but after 3 they assume you will stay out 5). If you can get non-Domiciled you don't pay UK Inheritance tax but it is hard to get.

Edited May 8, 2006 by bob2005

[Owen` 2]

Domicile from a UK point of view is a very complex subject. You acquire a domicile of origin (generally from your father) when you are born, which you retain until you make a conscious decision to obtain a domicile of choice elsewhere. It also takes some considerable time to acquire a domicile of choice and it is quite possible never to lose your domicile of origin, even after 40 years of having lived elsewhere.

 

I knew there just had to be a UK equivalent to US state income tax stuff. Okay for the UK guys . . . .

 

Let me see if I get this right. In the US, geographic subdivisions of the "United States" are called "states". Geographic subdivisions within a state are called "counties". I think in the UK a subdivision of England is a county, not a state. Like Hampshire is a county?

 

Well, in the US, each state (like Nevada, or California, or Florida . . . ) gets to add on its own income tax with which to fund state services like state road repair, state universities or other state government services. A handful of US states have zero for their tax. They fund their services other ways. For Nevada, the major city is Las Vegas and the casinos there are taxed heavily. The state does this in return for allowing gambling to be legal there. The result is zero personal state income tax. Florida taxes hotel rooms and DisneyWorld heavily to get the same effect. Its residents have zero state income tax. There are a few other states like this. Texas gets its tax money from oil and cattle and does not tax residents. New Hampshire (a small state) gets its tax money from highway tolls.

 

In contrast, New York or California have rather high state income tax. Note That This Is In Addition To Federal Taxes. Moving one state to another does not affect our Federal taxes. Federal taxes vary with income. An average federal tax rate for a middle class working American is 22% after all loopholes are taken advantage of. New York or California will add about 8% to that. That's what all this residency talk is about . . . erasing that extra 8%.

[Zeus 56]

I too often dream and calculate the "retirement" factors.

 

What keeps me from taking the plunge is my family and friends here in the states. I have too many ties here to just cut and run away from it all to a land halfway around the world. I am sure I could afford to live in Thailand if I chose. But my ideal lifestyle would be to live there for 6-9 months and have 3 months here in the US each year. Maybe even a 50/50 split. To make such a move I would indeed require that I end a good paying career and try to make what I have last for the rest of my life (I am 42). That combined with the complexities of maintaining a residence in the US, as well as finding a semi-permanent one in Pattaya would stretch my budget too far.

 

As far as planning goes, I figure if I get to the point where I have $2 million US net worth I will have enough self sustaining funds to keep me in a comforatable lifestyle on both continents. If that number sounds high - over 50% of that net worth is in retirement vehicles(IRA, 401k) that I can't touch (without tax penalties) until after age 59. I am not there yet, but with hard work and a good economy, I'll get there soon. Until then I will cherish my regular visits to the LOS and enjoy it in small 2-3 weeks chunks.

 

And I'd like to add a thanks to all the BMs who post their budgets, or even better their actual retirement expenses from the LOS.

 

Zeus

[Shilo 371]

As far as planning goes, I figure if I get to the point where I have $2 million US net worth I will have enough self sustaining funds to keep me in a comforatable lifestyle on both continents. If that number sounds high - over 50% of that net worth is in retirement vehicles(IRA, 401k) that I can't touch (without tax penalties) until after age 59.

 

Actually, with the 2 million, you would find it very easy to retire and the penalty wouldn't be an issue. Just roll all of the funds into an ira and set up "substantially equal periodic payments". The down side is that once you start taking the payments you would have to keep taking them till you reached 59.5

 

But the upside is that with 2 mill you would get a monthly check of about $10,645 which is $127,740 a year US and a monthly budget in Pattaya of about 425K baht. I think most of us could get by on that....

 

PS: at the end of the process when you hit 59.5 you would still have about 1.6 mill in your IRA.... this assumes the IRS's current "reasonable" rate of return of 5.82%

[Owen` 2]

$1 million should safely fund 30 years of life for one person if you hold extractions to $45,000 in the first year and no more than 3% inflation increase on that 45K each year thereafter. Historically, this will last 30 yrs. I also presume in that conclusion that you'll get some social security at 67.

 

If you have more than one person dependent on your nestegg, that $1 million and 45K/yr won't survive 30 years. Mostly because the 45K likely won't cover two. If there are 3 or 4 people to fund (perhaps special needs adult children), even $2 million is very shaky.

 

Notice I said 30 yrs above. But you need to survive 40 years to get to age 82. $45K/yr plus inflation compounding that 45k upward each year makes the $1 million shaky even just for you. 40 years is an enormous amount of time to expect there to be no stock market crashes, no inflation spikes, no wars or revolutions somewhere that you own vacation property that gets blown up or nationalized (confiscated) and no health disasters.

 

www.fireseeker.com Spend hours with this calculator. Understand the power of inflation. Only then conclude that you have enough money.