Connect with us


Finance: Making realistic retirement assumptions



Thaiger deals Thaiger deals

PHUKET: The first step when making a retirement plan is to have realistic assumptions about your retirement.

Unfortunately, I have found that many of my clients, regardless of whether or not they are expatriates – still working or already retired – have at least one or more of the following unrealistic retirement assumptions:

I will retire some place cheaper: Retiring to an emerging market may seem affordable right now, but such countries may not remain affordable in the future. After all, inflation is usually much higher in emerging markets than developed countries and then you will have to contend with fluctuating exchange rates which may make your intended destination more expensive. Finally, retiring some place cheaper may depend upon selling the home you live in right now and getting what you paid for it back – something many retirees will be unable to do.

My living expenses will go down in retirement: You can’t automatically assume your living expenses will go down in retirement – especially if you retire abroad and/or intend to have an active retirement (eg recreational travel, trips to see family, an active social life, or regular visits to the golf course). Moreover, you may have to deal with unexpected expenses such as high health care costs, or the need to provide so-called “economic outpatient care” for adult children or grandchildren who are struggling financially.

My taxes will go down: You may think your taxes will go down when you stop working or retire abroad. However, politicians in western countries are increasingly hard pressed to pay for spending with offshore expatriates and retirement plans you thought were tax free or tax deferred being potentially good targets for so-called “tax reforms” that inevitably raise your taxes.

I can rely on my spouse/family/children for support: Don’t assume your family will be in any position to help you financially or provide you with other types of support. For example: You and/or your spouse could suffer a stroke or otherwise become disabled and require expensive round the clock nursing care from a professional care giver for a long period of time.

I can rely on my defined pension plan: If you still receive or will receive a payment from an old-fashion defined pension every month, congratulations for being lucky as most private-sector employers have long since ditched such plans because they are to expensive to maintain. And if your defined pension plan comes from working for a government, its probably underfunded and may not be completely safe given what happened in Greece, and what is starting to happen with the various municipal bankruptcies in the United States.

I can assume a high rate of return on my investments: With interest rates near record lows in many countries, you will need to be very realistic about investment returns. In fact, John Bogle, the founder of Vanguard, the world’s largest mutual fund company, told filmmakers of a documentary called the Retirement Gamble that the American retirement system is headed for a train wreck because too many defined retirement plans assume an unrealistic 8% per year return when a conservative 5% annual return is more realistic.

I can retire when I choose to: You may intend to retire at age 65, but your employer may decide to lay you off at age 62 or worst, go completely out of business. Likewise, you could suffer a debilitating injury or something that prevents you from working (and saving) until the age you intend to retire.

I can work to supplement my retirement income: Retiring overseas to an emerging market like Thailand will probably eliminate any opportunity to supplement your income with paid work. Moreover and even if you have the opportunity to work, you may not be physically or mentally capable of doing so.

I won’t live to a very old age: Don’t assume that just because various family members did not live until a certain age that you won’t live well past that age. In fact, health care advances mean that living past the age of 80, 90 or even 100 will increasingly become common place – meaning your retirement investments and income will need to last just as long.

Don Freeman,BSME is president of Freeman Capital Management, a Registered Investment Advisor with the US Securities Exchange Commission (SEC), based in Phuket. He has over 15 years experience working with expatriates, specializing in portfolio management, US tax preparation, financial planning and UK pension transfers. Don can be reached at 089-970-5795 or email:

— Don Freeman


Get more from The Thaiger

Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Thailand17 mins ago

Chinese gangs in Thailand take another hit as “Tony” falls

Pollution25 mins ago

Environmental police arrest 7 over illegal dumping in Bangkok

Crime33 mins ago

Pattaya Police warn city’s taxi riders to behave after sexual assault case

Sponsored6 hours ago

Go global with Upbit Thailand: Worldwide digital asset market in your hands

Press Room1 hour ago

Thai-Italian Business Summit highlights the importance of a shared vision

Thailand1 hour ago

Percentage of HIV infections rising among young Thais

Tourism1 hour ago

TAT launches luxury travel package to Thailand for rich South Korean tourists

Join the conversation on the Thaiger Talk forums today!
Lifestyle2 hours ago

Check Thai lottery result 1 December 2022

Thailand2 hours ago

Unexploded MK-82 bomb found in Songkhla forest

World3 hours ago

Iranian forces kill young man for celebrating World Cup loss

Crime3 hours ago

Thai police seize 8 businesses in Phuket owned by Chinese gangster Tuhao

Thailand3 hours ago

Planning a small conference? Try Thailand’s super-luxury villas

Bangkok3 hours ago

50 crypto mines raided for stealing Thai electricity

Bangkok4 hours ago

Bangkok ranked No.6 in the top 10 best cities for expats

Thailand5 hours ago

Man armed with a pen gun arrested at seminar visited by PM Prayut

Tourism5 hours ago

Bangkok’s Suvarnabhumi Airport expects 130,000 daily passengers this month

Thailand1 year ago

Morning Top Stories Thailand | Police to end protests, Human Trafficking | September 14

Thailand2 years ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism2 years ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket2 years ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism2 years ago

Phuket Thai food treats you need to try | VIDEO

Thailand2 years ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism2 years ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand2 years ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand2 years ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand2 years ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand2 years ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand2 years ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand2 years ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand2 years ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand2 years ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11