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Retiring in Thailand is an attractive and popular option for people from many countries. The tropical climate, friendly people, low cost of living and high standards of healthcare all come together to make Thailand one of the world’s most popular retirement destinations.
Thailand boasts a substantial expat population with many retirees from the United States, Western Europe, Australia, Japan and South Korea and is considered a very safe place to live.
Obtaining and maintaining a retirement visa in Thailand is quite simple. The requirements are clear: you must be 55 years or older, hold 800,000 baht (US$25,000) in savings in a Thai bank account or show the equivalent of 65,000 baht (US$2,000) monthly income or a combination of the two (Bank Account + Income x 12 = THB 800,000). If you can meet those requirements, your visa is set and an annual visit to Thai immigration is all that is required to maintain your immigration status.
Retiring in Thailand, tropical paradise that it may be, requires some common sense on the financial planning front and there are certain considerations which must be made:
Dipping too far into your savings may not be wise and should not be necessary. Withdrawing too much too early from savings can jeopardise the long term sustainability of a retirement fund. Be conservative with capital withdrawals and allow the savings to work at providing income. In Thailand, there is little need for substantial capital expenditure. Foreigners cannot own land and rents are low, the cost of living is low and will remain so in comparison to western countries. During retirement, it makes sense to focus on needs rather than aspirations; financial planning for those retiring in Thailand should focus on income whilst maintaining the capital held in savings.
Thailand’s private medical services are of a very high standard; the current trend of medical tourism to Thailand confirms the value for money offered by the country’s high-end hospitals. However, medical costs are rising at a faster pace than inflation in every country around the globe. The commercial nature of medical services in Thailand combined with the rising demand from foreigners seeking care suggests that anyone retiring in Thailand should prepare themselves for increases in healthcare.
Good medical insurance in Thailand can be expensive; private health care can cost between $500 and $1000 USD a year for those wanting comprehensive international medical insurance. While there are cheaper local alternatives these will generally not take on new business after people pass 60 years of age. As a result people looking to retire in Thailand should always look at future healthcare costs.
Advances in healthcare technology and an increase in living standards have ensured that retirement is no longer a short period between leaving the workplace and resting in peace. Retirement can now be a significant life-stage which needs to be financed as with an increased life expectancy comes the challenge of financial planning for a comfortable future. Savings alone may not be sufficient, fixed income annuities or similar investment solutions should be considered in order to provide a sufficient income throughout retirement.
Having built up savings, it makes sense to give priority to protecting that wealth. However, working with an investment strategy that is too conservative can significantly reduce spending power during the retirement years. When considering the costs of retirement, it is very important to come up with an investment strategy that looks towards growth whilst still maintaining an acceptable level of risk.
Wherever we choose to retire, inflation is our enemy. The cost of living in Thailand is significantly lower than in the UK, the US, Europe, Japan or Australia but it will continue to rise; this is inevitable. Any financial planning focusing on retiring in Thailand must still take inflation into account as inflation will reduce spending power. Financial planning for a retirement fund must seek a return that will outpace inflation in order to guarantee security and peace of mind during retirement years.
Infinity has the expertise and track record to assist anyone retiring in Thailand with any and all financial planning needs. Get in touch with our independent, professional advisers or one of our admin team to discuss your plans for retiring in Thailand.
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