Connect with us

Business

Finance: Making realistic retirement assumptions

Legacy Phuket Gazette

Published 

 on 

Finance: Making realistic retirement assumptions | The Thaiger

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: freemancapital@gmail.com.

— Don Freeman

Keep in contact with The Thaiger by following our Facebook page.

Never miss out on future posts by following The Thaiger.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

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

Business

Governments & old media versus social media – who will win? | VIDEO

The Thaiger

Published

on

Governments & old media versus social media – who will win? | VIDEO | The Thaiger

We look at the recent changes made by the Australian and Indian governments to except control over the world’s biggest social media platforms. India has issued strict new rules for Facebook, Twitter and other social media platforms just weeks after the Indian government attempted to pressure Twitter to take down social media accounts it deemed, well, anti social. There is now an open battle between the rise of social media platforms and the governments and ‘old’ media that have been able to maintain a certain level of control over the ‘message’ for the last century. Who will win?

The rules require any social media company to create three roles within India… a “compliance officer” who ensures they follow local laws; a “grievance officer” who addresses complaints from Indian social media users; and a “contact person” who can actually be contacted by lawyers and other aggrieved Indian parties… 24/7.

The democratisation of the news model, with social media as its catalyst, will continue to baffle traditional media and governments who used to enjoy a level of control over what stories get told. The battles of Google and Facebook, with the governments of India and Australia will be followed in plenty of other countries as well.

At the root of all discussions will be the difference between what governments THINK social media is all about and the reality about how quickly the media landscape has changed. You’ll get to read about it first, on a social media platform… probably on the screen you’re watching this news story right now.

Keep in contact with The Thaiger by following our Facebook page.

Never miss out on future posts by following The Thaiger.

Continue Reading

Business

The social media giants in battle with ‘old’ media and world governments | VIDEO

The Thaiger

Published

on

The social media giants in battle with ‘old’ media and world governments | VIDEO | The Thaiger

“The rules signal greater willingness by countries around the world to rein in big tech firms such as Google, Facebook and Twitter that the governments fear have become too powerful with little accountability.”

India has issued strict new rules for Facebook, Twitter and other social media platforms just weeks after the Indian government attempted to pressure Twitter to take down social media accounts it deemed, well, anti social.

The rules require any social media company to create three roles within India… a “compliance officer” who ensures they follow local laws; a “grievance officer” who addresses complaints from Indian social media users; and a “contact person” who can actually be contacted by lawyers and other aggrieved Indian parties… 24/7.

The companies are also being made to publish a compliance report each month with details about how many complaints they’ve received and the action they took.

They’ll also be required to remove ‘some’ types of content including “full or partial nudity,” any “sexual act” or “impersonations including morphed images”

The democratisation of the news model, with social media as its catalyst, will continue to baffle traditional media and governments who used to enjoy a level of control over what stories get told.

The battles of Google and Facebook, with the governments of India and Australia will be followed in plenty of other countries as well.

At the root of all discussions will be the difference between what governments THINK social media is all about and the reality about how quickly the media landscape has changed. You’ll get to read about it first, on a social media platform… probably on the screen you’re watching this news story right now.

Keep in contact with The Thaiger by following our Facebook page.

Never miss out on future posts by following The Thaiger.

Continue Reading

Business

Turbulence ahead for Thailand’s aviation industry | VIDEO

The Thaiger

Published

on

Turbulence ahead for Thailand’s aviation industry | VIDEO | The Thaiger

When the airlines, in particular, were asking the government to put their hands in their pockets for some relief funding in August last year, it was genuinely thought that international tourists would be coming back for the high season in December and January. At the very least local tourists and expats would head back to the skies over the traditional holiday break. And surely the Chinese would be back for Chinese New Year?

As we know now, none of that happened. A resurge in cases started just south of Bangkok on December 20 last year, just before Christmas, kicking off another round of restrictions, pretty much killing off any possibility of a high season ‘bump’ for the tourist industry. Airlines slashed flights from their schedule, and hotels, which had dusted off their reception desks for the surge of tourists, shut their doors again.

Domestically, the hotel business saw 6 million room nights in the government’s latest stimulus campaign fully redeemed. But the air ticket quota of 2 million seats still has over 1.3 million seats unused. Local tourists mostly skipped flights and opted for destinations within driving distance of their homes.

As for international tourism… well that still seems months or years away, even now.

Keep in contact with The Thaiger by following our Facebook page.

Never miss out on future posts by following The Thaiger.

Continue Reading
Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO | The Thaiger
Tourism12 hours ago

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

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2 | The Thaiger
Phuket1 day ago

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

Phuket Thai food treats you need to try | VIDEO | The Thaiger
Tourism1 week ago

Phuket Thai food treats you need to try | VIDEO

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23 | The Thaiger
Thailand1 week ago

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

In search of Cat & Dog Cafés in Phuket Town | VIDEO | The Thaiger
Tourism1 week ago

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

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21 | The Thaiger
Thailand1 month ago

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

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19 | The Thaiger
Thailand1 month ago

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

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18 | The Thaiger
Thailand1 month ago

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

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15 | The Thaiger
Thailand2 months ago

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

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14 | The Thaiger
Thailand2 months ago

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

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13 | The Thaiger
Thailand2 months ago

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

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12 | The Thaiger
Thailand2 months ago

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

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11 | The Thaiger
Thailand2 months ago

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

Thailand News Today | Southern floods, Face mask fines, Thai Air Asia woes | January 8 | The Thaiger
Thailand2 months ago

Thailand News Today | Southern floods, Face mask fines, Thai Air Asia woes | January 8

Thailand News Today | 305 infections, No happy ending for massages, Phuket quarantine mooted | Jan 7 | The Thaiger
Thailand2 months ago

Thailand News Today | 305 infections, No happy ending for massages, Phuket quarantine mooted | Jan 7

Follow The Thaiger by email:

Trending

Copyright © 2020 The Thaiger