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Preparing for retirement

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PHUKET: Many expats don’t know where to begin when planning for retirement. The key is getting a head start. While it’s best to start planning as soon as possible, it’s never too late to take control of your finances and your own destiny.

This is the first of a three-part series outlining the three critical steps that must be taken in order to retire comfortably. The first step is to begin preparations for retirement. This is important because for the first time in their lives, retirees will no longer be building their nest egg, but rather they will be spending it.

In preparation, retirees must be honest with themselves and their financial adviser. It must be remembered that income levels won’t be as substantial as before. Certain expenses will have to be cut back.

For many expats, these cuts will include not going to the beer bars every night, but maybe once or twice a week instead. There have been a number of examples of expats who retired to Thailand with a lump sum and didn’t follow this advice – within three years, they were broke and forced to go home.

While expats don’t want to curtail their lifestyle, the fact of the matter is most do not have enough money saved up for retirement. That’s why it’s important to establish a budget. For instance, 59% of men and 70% of women will live to age 80! After that, 20% of men and 31% of women will live to age 90. That means retiring at 65, some will need their money to last another 25 years.

Furthermore, as age increases, so do health care costs. Only about 20% of retirees age 65 and older are covered by employer-sponsored health insurance. Even though medical costs are lower in Thailand, it’s important to get coverage.

Another important thing to consider when retiring abroad is currency conversion. Many clients have most of their money in dollars, euros or pounds. The money kept here in Thailand is spending money.

How many months of spending money should one keep in Thailand? The most important factor to look at is the baht conversion rate. When the rate approached 33 baht to one US dollar, that was an ideal time to transfer several months’ worth of money to Thai bank accounts.

It’s also helpful to minimize the number of transactions not only because of the conversion rate, but Bangkok Bank, for instance, charges approximately 600 baht for each wire transfer from the US. Over time, this can add up to thousands of lost baht. Being smart with small fees can save considerable money over time.

The last and most important thing to consider in preparing for retirement is where to keep saved money. All the things discussed in this article are what is called the “nickels and dimes”. It’s where retirement assets are kept that is critical to long-term success.

No one wants their hard-earned fortune taken by an unscrupulous broker or a firm that goes belly up.
That’s why it’s safer to use brokerages such as TD Ameritrade (which has US$500 billion in assets), Interactive Brokers, Saxo Capital Bank, Investors Europe and other discount brokers.

Once an account is established, exchange-traded funds (ETFs) from Vanguard (which has over US$2.4 trillion in assets) or US stocks can then be used to diversify growth investment portfolios. Investors don’t have to worry about either one of these brokerage firms going out of business or running off with their money since it is held in segregated accounts separate from their business structure.

A future article will discuss why having a broker with segregated client trading accounts is important.

Don Freeman is president of Freeman Capital Management, a Registered Investment Advisor with the US Securities Exchange Commission (SEC), based in Thailand. He has over 15 years experience and provides personal financial planning and wealth management to expatriates. Specializing in UK and US pension transfers. Call 089-970-5795 or email: freemancapital@gmail.com.

— Don Freeman

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

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Turbulence ahead for Thailand’s aviation industry | VIDEO

The Thaiger

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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.

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Domestic air passenger numbers double those of January

Maya Taylor

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Domestic air passenger numbers double those of January | The Thaiger
PHOTO: Vietjet

Passenger numbers on domestic flights within Thailand have doubled within a month, rising from 4,000 in January to over 10,000 this month. Having nearly recovered to pre-pandemic levels, domestic travel plummeted once more when Covid-19 resurfaced late last year.

Apirat Chaiwongnoi from the Department of Airports says 15 of Thailand’s 29 airports are now operating domestic flights, with more expected to follow. He believes the aviation sector will continue to recover further in the coming 6 months, bolstered by the national vaccine rollout.

Around 120 domestic flights a day are now operating, which is twice the number that were operating at the lowest point in the crisis. Prior to the resurgence of the virus in December, domestic passenger numbers had recovered to 30,000 – 40,000 a day, around 80% of pre-pandemic numbers.

The DoA says airports must continue to adhere to the Covid-19 hygiene measures put in place by the Health Ministry and the Civil Aviation Authority of Thailand.

SOURCE: Bangkok Post

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Coronavirus (Covid-19)

Samut Sakhon’s shrimp market to remain closed until February 15

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Samut Sakhon’s shrimp market to remain closed until February 15 | The Thaiger
PHOTO: Kom Chad Luek

Samut Sakhon’s Central Shrimp Market, the epicentre of Thailand’s recent wave of Covid-19, will remain closed until February 15. The market can reopen once the overall hygiene situation at the market and surrounding area has improved, according to the province’s disease control committee.

Local officials say the shrimp market needs to remain closed until the market structure and nearby residential facilities are inspected. People who violate the order face up to a year in prison and a fine up to 100,000 baht.

More than 12,000 people in the province have tested positive for Covid-19. The increasing number of infections is a result from the active case finding to contain the spread of the virus.

SOURCE: Thai PBS World | Thairath Online

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