Preparing Financially to retire in Thailand

The actually process of retiring in Thailand is quite straightforward. You just call the lovely Miss P and you'll get your retirement visa very quickly. But how about preparing financially before you arrive? This blog post will help you understand how much you need and what you need to do to get it?

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How long are you going to live?

This might be morbid, but lets stay completely honest here. Men normally do not live long past 80 years old. Most make it to high seventies. So lets say 76 -- which is the average in the United States. Assuming you are retiring at about 65 years old, then you are thinking of living another 15 years.

Yes we said we would be morbid, and to survive we have to be honest. But lets also say with good food, and a relaxed country like Thailand, you can live for another 5 years, so at the top, we would put it at 20 years. 

Monthly costs

So now you know how many years you are going to be living for. And you also have a good idea of where your income is coming from. It could be from a government or private pension, or even from the sale of your house or some kind of assets. Figure out your monthly income and let's look at some average costs for someone between 50-70 years old.

(All prices are in US Dollars)

  • Rent and Utilities: $500 per month
  • Health Insurance (in Thailand): $200 - 400 per month
  • Food: $300 per month
  • Annual visa renewals: $41 per month ($500 per year)
  • Entertainment: $500 per month
  • Incidentals: $300 per month
  • TOTAL: $2,041

These are average costs. It could be less or more depending on your preferences. But you can live fairly comfortably in Thailand on that amount. And in actual fact, the Thai government wants you to be living on about $2,500 per month. We will get to that later.

You can indeed come to Thailand and live on $600 US per month. You can actually do that. But whenever you are ready to renew your visa, you better be able to show that you do have at a minimum $2,500 per month.

Important note, please compute your tax implications. Depending on where your retirement income comes from, Social Security, Pension, Stock market -- you might have to pay taxes in your home country as you withdraw. (hat tip @Scott Thompson / yt).

Qualifying for the retirement visa

You might think that there is a lot of documentation, insurance and "hoops" to jump through. Nope. The main requirement to have your retirement visa, is to open a bank account and deposit ฿800,000 Thai Baht inside of it. That's around $24,000 US Dollars at current exchange rates (October 10, 2021).

Yes, if you have the money, all "hoops" magically dissapear. Because the rest of it is easy to do and not at all expensive.

So do you have $24,000 US Dollars lying around to deposit into that account? You need to do it. And you also need to be able to leave it there so you can renew your visa without any hassles every year.

Thailand has never been shy about imposing hefty financial requirements. When most people complain about retirement in Thailand... THIS is what they are complaining about.

If you're planning to retire in Thailand, we recommending you start saving up now, so that when you're actually ready, you can come to Thailand on a tourist visa, get your bank account opened up and transfer that amount into it for a smooth and easy visa process.

Living off a pension or investments

So you have a pension. Great! How much per month is it? How long will it last? All these are very important questions. 

So let's do it! You are going to be living for about 15-20 more years based on our earlier calculations. Let's be conservative and say 20. You need to have some income of at least $2,500 USD per month for the next 20 years to take you through retirement.

And truthfully, the same would apply for almost any country that you want to retire in. Now it's beginning to sink in. You should have invested more. You should have saved more. You should have spent less. You should have contributed more to your 401K or pension funds at your workplace.

Working remotely while retired

We've met some retirees who have an online business that pays them at least that amount. Or they pickup part time remote based jobs where they can work from home, a coffee shop, a workspace or on the beach in Thailand.

This is a good option, and to be honest, working in your later years online is not too difficult. You can actually consult or freelance for the business you are retiring from. And really, making $2,500 per month in some part time online business should not be too hard.

We've seen some retirees start Youtube channels. Do technical work online. Do trading online. Whatever way, if you're reached the magic age of 65, then you have acquired a lot of knowledge in your field. If you are short on money, now is a good time to start making some. 

Just remember you are not allowed to work inside Thailand on a retirement visa. However you can do online work that brings you income.

The magic is getting that online endeavor started before you come to Thailand. Not when you arrive here and have no money. We cannot state this point enough.

Selling assets back home

Some people are fortunate enough to have built up some assets to sell to fund your retirement, no matter where you want to live.

If you have a house that you might want to pass on to your kids, maybe ask them to take a loan out and pay you a percentage of the house itself. There is a win-win... they get the house for a much lower price, and you get some money to fund your retirement.

You might also want to rent that house and use the rental income to supplement your in Thailand, then sell the home later, or pass it on to your children (hat tip @T Man).

If you own a business and you're about to retire, then long before you come to Thailand you should be planning to sell your share of it. You can do that in two ways -- sell the business outright, or draw up a contract so your partner pays you a certain amount every month.

Adding it all up

So there you have it, you are going to live for another 20 years. and at $2,000 US per month, that means you need to have $480,000 US Dollars piled up to last you for the rest of your life.

Having health insurance can help you keep that amount, thats why we added it directly into your monthly expenses.

Some of you might want to live on a lot more. And some of you might be able to live on less, but these numbers are about what retirees are spending in Thailand now.

You can have a great time in Thailand if you take the next years to secure your funds. The weather is fine here. The food is great and the people are welcome. You can do it!

 

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