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

[Zeus 56]

Shilo - I agree that is why I set my goal so high ( I don't have it yet)

 

Owen - first thanks for all your posts.They are good reading for the retirement minded. I am using the site you mentioned (note the redirected link is now http://www.firecalc.com ). I started my planning at 50K/mo, which seems minimal to live in the US, even if half the year is in Thailand. To net that post tax, the number needs to be about $62K (even if state tax is 0). (a rough number - not a detailed analysis of deductions etc.) Admittedly I have not researched the tax subject when living abroad, so I just used current domestic rates. I think uncle sam will always want his piece if you are a citizen. I would live to see the inputs of any US citizen living in Thailand (full or part time) as to any tax situatations and/or strategies.

 

At a 50/50 equity/fixed income ratio that calclator comes up with $1.8 million for 62K/mo and 40 years. So my number seems right on target (I need a little buffer).

 

This early in life I will not risk my future unless I am 99.99% sure that the funds will not run out. So everything is slanted to the conservative. As I mentioned in my original post, if i didn't want to keep a US base, I could go now. $600K at 5% return would yeild $30K per year (or about 90-95K baht/mo, depending on rates) and I would not have to touch principle. But that won't cut it here in the US. Especially afer taxes.

 

BTW - I have no property to speak of now. so there is no vacation home to be lost (never was). I sold my place when real estate spiked. It put me in the financial position to start consider these retirement options, as well as not keeping me tied down. And I have no dependants now, but would like to be in the position to have one in the future

 

Zeus

[Owen` 2]

Apologies if I comment on your personal specifics. No intrusion of privacy intended. Comments offered are only on matters that others might be thinking about.

 

I started my planning at 50K/mo, which seems minimal to live in the US, even if half the year is in Thailand. To net that post tax, the number needs to be about $62K (even if state tax is 0). (a rough number - not a detailed analysis of deductions etc.) Admittedly I have not researched the tax subject when living abroad, so I just used current domestic rates. I think uncle sam will always want his piece if you are a citizen. I would live to see the inputs of any US citizen living in Thailand (full or part time) as to any tax situatations and/or strategies.

 

The 62K thing to generate 50K . . . you might be too pessimistic.

 

If your netegg is split between tax-free/deferred retirement vehicles like 401K or IRAs, then you ain't touching that first. You won't touch that money for a long time. You burn your taxable money first. As the taxable accounts deplete, what you extract from it stops being "income" and starts being "principal". Principal isn't tax liability. When the taxable accounts get depleted down (remember, your tax free accounts are growing untouched) to a few hundred K, they may already have been largely taxed because yearly dividends had to be declared for taxes and the taxes already paid.

 

This means that taking 50K from an account of a few hundred K -- that 5% of interest rate generates only 15K of income. That 15K number determines the tax rate and it's low. Real low. Std deduction and personal exemption will erase about . . . 8K? Yes, you need 50K, but only 15K was income. The other 35K was principal. That 35K is not taxed. It's "principal" that is a dividend that you already paid taxes on, or it's money you simply saved and was after-tax money that you put in. So . . . towards the end of your taxable accounts, you don't have to yank 62K to get your 50K to live on. You may only need to yank 53K.

 

As for being an expatriate, I think the tax break is only on earned income. However, note this:

 

On Thursday, the Senate passed a proposal to repeal a foreign earned income exclusion, the so-called “Section 911 exclusionâ€. Americans working overseas will lose income tax exclusions for $80,000 of earned income and certain housing costs if this becomes law.

 

 

This early in life I will not risk my future unless I am 99.99% sure that the funds will not run out. So everything is slanted to the conservative. As I mentioned in my original post, if i didn't want to keep a US base, I could go now. $600K at 5% return would yeild $30K per year (or about 90-95K baht/mo, depending on rates) and I would not have to touch principle. But that won't cut it here in the US. Especially afer taxes.

 

BTW - I have no property to speak of now. so there is no vacation home to be lost (never was). I sold my place when real estate spiked. It put me in the financial position to start consider these retirement options, as well as not keeping me tied down. And I have no dependants now, but would like to be in the position to have one in the future

 

Well done on the real estate sale.

 

One comment here about being young and wanting to be 99% sure. A lot of early retirees who are young overspend. This is exactly the right time to do that. The error becomes apparent quickly if a market crash follows. The person sees what is happening and declares . . . I was too bold and screwed up. Well, good. This was the right time to discover it because they are young enough to get a job.

 

I know a lot of guys in high income situations are sure that if they dropped out for 3-4 yrs and made such a discovery of having screwed up, they'd be so far out of date they could not return to their same pay level on re-hiring back into the workforce. But others can. Docs, dentists, probably lawyers too, could get back into the flow and take a paycut, but not an ego crushing one. Don't know your situation, but keep that in mind.

 

Also a lot of ER guys who punch out of the workforce and change their minds don't try to return to a job paying as much. They may only need a modest cash influx which, when added to their ongoing withdrawls from portfolio, suffices entirely.

 

Point being, you potentially have it backwards. When young, you don't need 99% certainty because you have time to fix a problem that arises. Someone 58 might not.

 

Again, good going on that real estate timing.

[Zeus 56]

No problem with the comments..... I wouldn't put anything on the board if I couldn't handle any response.... isn't that what this place is for.

 

Your points on principle are well taken. I guess I really knew that already, but was approaching the issue from the angle of "how to replace some of my income" if I retired early. So I guess my initial goals were really where I felt truly comfortable chucking the job and going it alone. No way could I get an equivalent paying job if I left my current one(even I wasn't gone for years), but I'm sure I could get something. So for me the real question is how long do I hang on to a good thing. That probably also colors the goals I set. When I retire, I want there to be no looking back (I know - never say never)

 

Thanks for your comments.

 

Zeus

Edited May 14, 2006 by Zeus

[LilWilly 0]

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.

Oh, we are REALLY going to have to get togther. I was thinking $1,000 (CDN) per month was too little to even think about.

Edited May 14, 2006 by LilWilly

[RWB 0]

LilWilly, my thoughts exactly. I can do the 1000usd a month in a yr or so, but I won't even begin to think of the move until at least 2000usd a month. I have lived paycheck to paycheck and worried about how to feed my children too many times to end my life wondering if I have enough $$ to eat, much less enough $$ to get some pussy(if you can't fuck, why eat).

 

Soi7, 500usd has to be a drafting error, but please don't tell us 5,000usd.

[LilWilly 0]

No, I don't think it's an error. I remember past posts where he mentioned he folllows a fairly modest lifestyle. I'd be looking for a live-in so going out to look for it wouldn't be a big expense; and I'm not a big drinker. A modest life style would suit me fine.

Edited May 14, 2006 by LilWilly

[mrstein 0]

One Big issue everyone is forgetting.

 

Once you have everything paid for such as owning a Condo or such You living costs can drop quite a bit.

 

Most are adding in the fact of Monthly Rent ??????

 

Buy a nice condo for 40-60 grand Us $ pay it off 100% and Now you just put 10-20 thousand baht a month in your pocket.

 

If you are going to stay Long term anywhere for that matter its much better to buy then to rent as Your costs are cut in half.

 

If you show up in Thailand or even the phillippines and buy an place outright You could live Very nice for about 1500.00 a month US $ For sure.

 

That inculdes a couple of barfines a night ....NOT TO mention most long term stayes get a Full time GF fast and that cuts down on barfines dramatically.

 

I have never MEET Anyone who has lived in Thailand or the philippines long term that is single for Very long at all.

 

I still think many of here are thinking in terms of a Vacationer instead of living there as a local sort of speaking.

 

In your host country DO you go out everynight and chase Whores and get drunk ??????

 

SO much misinfomation or maybe I should say Mis inputt on these types of posts all the time.

 

Once you core expenses are paid or somewhat fixed to a certain degree you can live anyhwere in the world fairly cheap.

 

Biggest problem Discipline on Spending the CASH.

 

I live in LAS Vegas My home is paid for 100% and my bill s every month inculding food are under 1000.00 a month.

 

Thailand is 50-60 % cheaper to live then Vegas.

 

AS far as what ones needs to live forever on is debatable at best.

 

800k in total monies invested Safely could earn you 7% a year in intrest earnings thats about 55k a year give or take US $ One could live on that FOREVER without ever touching the Orignal principle.

 

Step up to 1st trust deeds and such and Your earnings can sky rocket to 10-13% Fairly safe over your lifetime.

 

Inflation Would never Upset your 55k a year if You live on discipline of your cash,Biggest mistake for most OVERSPEDNING.

 

401 and Ira"s are Bullshit for most .........Unless of course You have 30 years on the same job in Todays Global world that is a THING OF THE PAST.

 

Mrstein

[Shilo 371]

I've said it before, and at the risk of sounding like a broken record, I'll keep on saying it again and again.

 

The amount of money needed to live comfortably in Thailand is the same amount that it would take to "get by" back at home.

 

I know that it's not what most guys want to hear but I believe that you have to have an exit stragey before making the big move. It's important to remember that LOS is a third world country (or at least second world, if there is such a thing) and there is no way of knowing that a move to Thailand will work out in the long run. I could waste a little time coming up with examples of things that could go wrong but it simplier to just say that it would be foolish to "burn your bridges".

 

If you have enough to "get by" at home then it'll be enough to live happily in Thailand. But if you set your goal to have enough to "get by" in Thailand then you'll be screwed if your forced to return home.

 

 

.

[Owen` 2]

If you have enough to "get by" at home then it'll be enough to live happily in Thailand. But if you set your goal to have enough to "get by" in Thailand then you'll be screwed if your forced to return home.

 

Pretty good point by the Shilo guy. But maybe it should be even stronger.

 

I know a lot of BMs are heavy drinkers and smokers. That's their call and they enjoy their lives as they wish. They may not face this issue of living a very long time.

 

But if you do face that issue, then something is not at all clear to me. Will BUPA or the Expat's Club healthcare plan continue to cover you past age 65? Most private insurers will not. At age 65 (for the US) Medicare activates, but it will NOT send money out of the US for medical care. You may have to go home to protect your nest egg from a medical / financial disaster.

 

I think we need more details from the over 65 BMs as to what they are doing.

[Rex7777 0]

Some retirement plans have pretty good health benefits that are good worldwide. In any event, medical care is cheap in Thailand, right? And if you're so sick you need really expensive care, then you're probably too sick to have much fun anyway.

 

Rex

[presto3 0]

I'm a cautious type of person - sometimes this is a good thing, sometimes bad.

 

In relation to retiring in Thailand I presume it's wise to also consider the currency exchange rate, market performance, inflation and changing tax laws (at home and in Thailand). I would keep most of my assets in the UK (even if I lived in Thailand: I don't - yet) - Thailand's economy has been growing well over the past few years but it's stilll regarded as an emerging economy and who knows what will happen in 10-20 years: the UK should be a more stable environment for the bulk of my assets. What will the pound/thai baht exchange rate be like in 10-20 years: I have no idea... But again hopefully the UK will be a relatively stable home for my assets. If I buy a condo in Thailand (probably after living in LOS for 1-2 years), then I can forget about paying rent.

 

I have no idea how the financial markets will do in 5, 10 or 20 years... But I'll hedge: I'll keep a property in the UK (to get some rental income: hopefully that investment will be relatively 'safe' too), have some hopefully decent market investments (stocks, investment trusts and trackers), keep a large chunk of cash (it's 'safe' but will be eroded by inflation), have a pension fund etc.

 

I'll also have to consider inflation. If I need say 60-80k baht per month to live (and party somewhat) in Pattaya now then how much will I need in 10-20 years? I'll take an approx calc of inflation as of 3% a year. Ie in 10 years, my cost of living 'may' be 30% more. I don't know if it actually will be 30% more but I have to consider the possibility... Am I being too cautious? Don't know... Hopefully my investments/property income will increase in line with inflation (or more) so hopefully all will work out well.

 

The above helps me to the extent that when I calc how much I need, I'm going to make sure I have a good buffer/safety net. It'll probably take me a few extra years of UK working to create such a buffer/safety net, but that's not too long given that my retirement will (hopefully) be much much longer.

 

Just my 20 bahts worth...

 

Edited May 28, 2006 by presto3