Retirement, The Complex Issue
I read with interest the comments on retirement in Thailand. I think the issue is VERY complex, whether you are thinking of retiring in Thailand, or anywhere else for that matter. I have a couple of thoughts. First, when I was stationed in Thailand I
received a per diem equivalent to just less than 1200THB/day, which was enough to live on – with a very comfortable life-style – that did include some sanuk – including some drinking, some massages, and if the truth be told the occasions short-time-fun.
If you retired you would need to add accommodation on top of that but a total of about 55 to 60K THB/month should
– Show quoted text – be enough.
I think of retirement often. If I sold all my assets except 1 house in Australia – then rented the Australian house and put the rest on deposit at 6% net, I estimate that I could retire to Thailand tomorrow with an income of 100,000THB per month. Given that is ample by all the measures, why am I still going through the stress of working everyday then – given the alternative of lazing around in Pattaya for example, looking at lovely girls and having the fun of my life?
Well, that is because we then move from the simple part of the retirement equation – which is above – to the real complex part. And the complex part is what follows – largely not covered in your article, which focuses on the simple part….
If you are relatively young (as in my case – early 40's) the point at which you choose to retire, you need to be DAM BLOODY SURE, that you can survive for the REST OF YOUR LIFE – unless you plan for a temporary retirement – in which case you would probably return to the workforce earning a great deal less than you do today. So consider:
1. Do you have children? Are they grown up and 100% self-sufficient? If no, then you may have 'calls' on your funds – and it may not be that responsible to retire just yet.
2. Do you have parents? What support are they potentially going to need from you in their advanced years? Same comment as #1.
3. What about future medical costs? Dental costs? These can be heavy and are not really included in the 60THB/month above.
4. What if exchanges rates change for the worse?
5. At 40, I could live to be 80 (hopefully). 100THB/month may be great now, but what will 40 years of inflation do to that figure?
6. If you have parents/children, or anyone else that is important to you, chances are you will need to travel occasionally. That increases the 60THB/month too. Will you have somewhere to stay when you travel to see them if you have sold your Farangland property or rented it out? The calculations for what it costs to have sanuk in Thailand month after month assume that you can just buy a one-way ticket to Thailand and never return. Unfortunately life is rarely as simple as this.
7. Is retirement worth the 'cost' at this age? The cost is not just the 60THB/month – it is the loss of earnings and the loss of the increase in value of your high-growth assets that would be moved to cash on retirement. The REAL COST of retirement at this age is VERY HIGH. Is sitting on the beach at Pattaya, looking at girls, REALLY worth that opportunity cost? Work out the OPPORTUNITY COST of retirement in your 40's – THIS is the BIG number. The 60THB you need to live on is actually the small change.
8. Is retirement REALLY going to be THAT good? Sure at 7am on a Monday morning when the alarm goes off you would answer YES – but being objective – after 12 months, boredom could become an issue. Will I REALLY feel that good sitting on the beach at Pattaya every day (for example) having great fun, when I could be in the office 'putting away' another AUD$80K or thereabouts per year in savings? Comes back to the points on is it really responsible to retire at 40?
So in SUMMARY, I think the actual amount that you need to retire per your paper calculations are one thing – but whether it is a plunge that you could really take is QUITE ANOTHER! Personally, I believe the amount you actually need to live on if retired in Thailand (60THB/month per above), needs to have a LARGE factor added to it to compensate for items #1 to #6, and THEN you STILL need to be comfortable that it is worth the costs per items #7 and #8. How much is the 'large factor' is the HARD bit to calculate – but I reckon it needs to be twice the retirement cost. Hence I think you need 180,000THB per month income to comfortably retire. 60THB per month to live on, and 120THB/month to compensate for the risks of #1 to #6 – but honestly this figure is something of a guess.
It is for the reasons above, therefore, that I continue to work – I am still 80,000THB/month short of what I think is needed to retire on if your month-to-month expenses are 60,000THB/month, plus I can't yet accept the opportunity costs at items #7 and #8.
The above said, my outlook on life has changed such that if the job with the good money were to end for whatever reason – I would take that as an opportunity to have a year or two off. In the meantime the responsible thing and the thing that makes the most sense is to 'put away' earnings while the opportunity is there.
With health on my side, I will still get a good few years of retirement, even if I work for 10 more years, and retire around 50.
This was actually sent to me as email from a long-term reader but I encouraged him to allow me to run it as a submission as I thought he made many good / relevant points.