One of the biggest questions we had before retiring in Thailand was how much would it cost us?  And the second questions was, would my Social Security pension be enough to live on here?  Everyone is different.  I know someone who is perfectly content to live on ฿10,000 a month. Then there are others where $10,000 a month wouldn’t be enough.  For some people Social Security is more than sufficient and others will have to supplement their pensions with investments and savings.

So instead of trying to answer those questions for you I thought I would break down our living expenses and let you know what we, and friends we know, pay for stuff.  That might help give you an idea of what you will need to live here.  Be aware that prices in Bangkok can be lots more than what we are quoting here and they can also fluctuate (that usually means “go up”) wildly.  The prices given are what we generally experience in Chiang Mai, the country’s second city.

All the prices we give are in Thai baht.  You can see the daily exchange rate on the first page of  http://www.bangkokbank.com.

Accommodation

The big question is “To Buy or Not to Buy”.  Foreigners can own a condo, and they can own a house, but they cannot own the land that the house is on.  Some people need to own things and they look for loopholes in the Thai legal system where they can “own” property here.  Others are content to rent.  My advice, at least when you first get here, is to rent.  (Go to http://www.retire2thailand.com/retire2-real-estate.php for a longer discussion of Thai real estate.)

You can rent or buy just about any level of accommodation imaginable, from a guest house room, to a dormitory, to a one room condo, or a luxurious high rise, to a nice house in the suburbs, to a mansion in the heart of town.  It will all depend on your needs and finances.  You get what you pay for of course so the prices here are estimates and given in a range.  The larger cities will be more expensive, the small towns cheaper.

Guest house –   Cost depends on if you are in a tourist center and how close to the action you are.   Some places may have monthly rates which would be cheaper than daily rates.

  • Cost to rent:     ฿200 – ฿600 per day

Dormitory –      You can find these near colleges and universities.  Will definitely have no-frills but will have all the good and bad of living in a dormitory.

  • Cost to rent:     ฿1,000 – ฿2,000 per month

Small condo –   Usually rented by the month, are quite a bit higher scale than the dorm rooms, but still very basic.  One room condos are usually about 36-45sq ft.  Cooking is usually not permitted but they may have a refrigerator.

  • Cost to rent:     ฿2,000 – ฿3,500  per month
  • Cost to buy:  ฿1,000,000 – ฿2,000,000
  • Service fee (for owners) : ฿500 per month

Apartments –    Thailand has many nice condo apartments for sale and rent.  These will have air conditioning, security systems and guards, swimming pools, exercise rooms, etc., and be close to shopping and restaurants.  The upscale Bangkok apartments can be rather pricey but will be quite comfortable.  Of course there are luxury apartments for lots more.

  • Cost to rent:     ฿7,000 – ฿15,000  per month
  • Cost to buy:      ฿2,500,000 – ฿10,000,000
  • Service fee (for owners): ฿1000 per month

Houses –          There are many three bedroom, 2 bathroom house in compounds both for rent and sale. These will usually have a living room , kitchen ,and small dining area, and have a small yard and garden.  There are also many upscale housing compounds where houses can rent for many times higher.  Many compounds, especially the higher scale, will have swimming pools, exercise rooms, 24 hour guards, and CCTV.

  • Cost to rent:     ฿10,000 – ฿30,000  per month
  • Cost to buy:      ฿3,500,000 – ฿10,000,000
  • Service fee (for owners): ฿1000 per month

Untilities

Whether you own or rent you will still need to pay for utilities.  These include garbage pickup, water, telephone, and electricity.  Each household will use these utilities differently so I’ll just say what we pay.  There are 2 of us and we live in a 4 bedroom house in a small compound.  These are monthly rates.

  • Garbage pickup – ฿20
  • Water – ฿1,200
  • Electricity Cool season – ฿1,500
  • Electricity Hot season (using Air con) – ฿2,000

Next post we’ll cover food, transportation, entertainment, etc

A lot of newly retired people wonder how they will spend their time once they don’t have a 9 to 5 job to go to.  In Thailand there are lots of alternatives.  Many retirees spend the majority of their days with a beer glass stuck to the end of their arms.  I elected to be a little more busy.  You can fill your days with as much as you want.  On my last birthday I jotted down how I spent my day and I thought I might share so you might get an idea of what your days can be like. Your retired life, wherever you are, will be what you make it.

**********

Rainy season 2009

I thought we would have a bit more free time to just hang out once we retired.  But our daily lives are a bit more hectic, somewhat exotic at times, and sometimes we just do simple stuff that we would be doing back in the States.  Whatever we do, there just never seems to be enough hours in the day.

The other day was my birthday so I thought I would jot down just how I spent the day so you would get an idea.

I usually awake at about 5:30 to the beautiful song of a magpie robin just outside my window.  He is there at the same time every morning.  He wakes all the other birds so a whole chorus is singing by the time I stir.

The first thing I do is log on to NPR.com and stream Morning Edition.  It is evening in America so the show is about 12 hours old by now but it is morning here so it seems appropriate.  That is how I use to wake up back in Seattle.

I also take this opportunity to check finance.yahoo.com to see how my investments have done (not good as usual) since the stock market in New York has just closed.  It tells me that I am not rich but I still have enough to remain retired for a while.  So I once again put off the idea that I will have to go back to work.

By 6:30 I have heard enough of the news of the world.  I often go for a bicycle ride at this time, out in the university research fields nearby our house.  They are right at the base of the mountains and it’s a great place to go bird watching in the morning.  Later in the day it will be too hot.

But today I use this time to spend an hour or so working in our garden.  It rained last night so today I need to go out to do some work in the Oxygen Farm.  That is what I call the piece of land we bought just next to our house.  People ask me what I produce on my land.  I tell them I produce oxygen.  We have planted about 70 trees, flowering, fruiting, and jungle trees, and all together about 125 different species of plants and flowers.  Today I need to dig a trench as an outlet for some of the standing water there since it is the rainy season and it rains almost every day now.

The Oxygen Garden

After the digging I am covered in mud but I need to go and catch my five ducks (We are getting 2 eggs a day now, which is more than enough for our needs.).  We use to have more but two of them have gone missing in the last month.  It could be a mongoose but because of the one month time gap between the two disappearances I am thinking it is probably a large python.  They take that long to digest something as big as a duck.

About the size of the guy we are looking for.

Then I took the first of many showers during the day.  It is the best way to cool down.   I then had a small breakfast of croissants and some wild honey that some of the local villagers give us.  They get it from the forest here.  They always leave part of the hive so that the bees can rebuild and so that they will have more honey next year.  I wish everyone were so conservation minded.

After breakfast I checked my email and looked to see if Social Security has deposited my payment for this month.  It has been nice living off the government teat.  And my monthly check is just about enough to live on without using any of my savings.  That should continue as long as the Social Security system stays solvent.  I’ve got my fingers crossed.

This is the time when I usually do some writing.  Right now I write a retirement column for Chiang Mai City Life magazine (chiangmainews.com), write a language column on the web (womenlearnthai.com), work on my website (retire2thailand.com), or my blog (retire2thailand.wordpress.com), or work on my English textbook series Professional English for Thailand (silkwormbooks.com).  I wonder when I ever had time to go to work before I retired.

Then, while I am editing my retirement column “A Reitring Attitude”, I heard my wife Pikun, who has been doing some weed whacking down in the garden, call out “Snake”.  I hoped it is that python we are looking for and ran down to help.

We caught a small black and yellow banded snake. I immediately thought it could be a banded krait, a very poisonous snake.  Most Thais would kill the snake right there but I won’t allow the killing of any animal on our property so we jar it up and will call the zoo later.  We volunteer at the reptile department at the Chiang Mai Zoo and work with the reptile curator because we have started a sanctuary for endangered mountain tortoises.  So far we have 50 with 10 more babies born in our garden over the last couple of years.  Some day we will return them to the wild; somewhere far from the people who would catch and eat them.  Until then we enjoy watching them roam the garden in the evenings, go through their mating rituals, and laying their eggs.  I call the wide fenced off area of our garden “Jurassic Park”.

A Bale of Tortoises

Jurassic Park, where the tortoises live. Doi Suthep in the background where the tortoises come from.

We then got ready to go to lunch at a nice hotel buffet to celebrate my birthday.  Birthdays are no big deal for me but at least it is an excuse to go out.  On the way there we stopped by the local roadside restaurant near our village to give the owner one of our mangoes.  We are proud of our mango since it is what we consider to be huge, weighing in at 1.1 kilos.  The restaurant owner reciprocated by giving us one of his mangoes.  It’s huger and weighs more than 2 kilos.  We’ll just have to work harder next year at growing bigger mangoes.

Lunch was fun, topped off with crepe suzettes with ice cream.  I almost always eat only Thai food but every once in a while crepe suzettes are fun.  Lunch was an all you can eat buffet with great Thai and western food, sushi, soups, salads.  A normal lunch of  noodles or a rice dish would cost about $1.00 each.  Today we splurge by spending a whopping $3.50 each.

After we return home from lunch a friend brings by a birthday cake.  Pikun let slip earlier to our neighbors that it was my birthday.  The cake is made with some Thai spices that might turn off the western palate but I like it and it was a nice gesture.  Thais are forever bringing each other food and fruit and sweets.  It is a nice feeling.

Then I took one of my power naps and woke 30 minutes later feeling great.  That is when I started to prepare this blog entry for posting.

Later I sat on the upstairs porch reading the Thai version of Readers Digest.  I try to spend at least one hour a day studying Thai.  They say that keeping your mind active is one way to stave off senility.  Well, Thai is so difficult and gives my mind such a work out that I’ll be 120 before my brain starts to slow down.  After, I spent a little time watching the farm making oxygen and listening to blues on the stereo.  I then read one chapter of Homer’s Iliad, one of the books I am reading.  I am at the part where Patroclos gets himself killed pretending to be Achilles by wearing his armor, and Achilles goes nuts and starts killing everyone.  This story takes place about 3,500 years ago and Man hasn’t changed a bit in all that time.  Let’s see, in keeping with my habit of always reading a few books at a time, I am also reading Isabel Allende’s Of Love and Shadows, James Glieck’s biography of Isaac Newton, and something by Tom Clancy – they are all pretty much the same.

I had some time so I motorcycled over to the nearby driving range and hit some balls.  Four trays of 40 balls each costs about $3.00.  Golf is a terrible game, and is more or less a waste of time, but it is addicting and I can’t wait to play again.  Only a golfer or a Zen master can understand a contradiction like that.  Most golfers know why life is as long as it is. It takes that long to learn this bloody game.  I try to play at least once a week.  A round of 18 holes with caddie costs about $12.00

After having a small dinner, Pikun went night hiking with the people at the zoo who are doing a survey of the frogs and reptiles on the mountain.  She found out that our snake wasn’t a banded krait after all.  It is a look-alike Laotian wolf snake. See for yourself.

Banded Krait

Laotian Wolf Snake

The jungle is cooler at night but very humid this time of year.  My ankle is giving me trouble so I elected to stay home.  So I sat down and watched Fellini’s La Dolce Vita.  A few of us old Chiang Mai hands have gotten together and stated a film club with films that we can’t just download from the Internet.  We have more than 500 films in our collection now, from Japanese samurai flics to Fellini, to Peckinpaw, to Harold and Maud (my selection).  I can’t see why the Vatican would ban La Dolce Vita since it seems very tame by today’s standards.  Maybe they thought the whole world would become decadent like the characters in the story.  Hey, they were right.  And Anita Ekberg looks stunning.  I have been to the Trevi Fountain in Rome where she jumps in but never, never saw anyone who looked like her.  I later watched some of the quarter finals of the French Open on TV.

Later, Pikun, the Jungle Woman, came home.  They found some Asiatic Giant Frogs in the forest, something similar to this guy.

Asiatic Giant Frog

These things are huge and weigh more than 3 kilos and stretched out must be about 2 feet long.  It could feed a whole family.  But luckily the people who found them were doing research for the zoo so the frogs are safe from the stew pot for now.

Before going to bed I logged on to look at my investments one more time since the markets are open again.  I’m still not rich but still retired.  I go to bed listening to the tree frogs, bull frogs, and night birds out in the garden and wondering where that python could be.  I fall asleep with the BBC’s World Report streaming from the Internet and some rain drops just beginning to fall.

Visitors to my website retire2thailand.com often drop me an email requesting more information.  My usual response is for them to pick up the very informative book below.  I have reprinted my review.

Retiring in Thailand (Live in Paradise for Pennies on the Dollar)

Phillip Bryce – an Englishman living in Thailand

Sunisa Wongdee Terlecky – a Thai living in California and Bangkok

Paiboon Publishing, 2006, 263 pages

I approached this book with jaded curiosity and the arrogance of one currently retired here thinking I already knew all the answers.  I looked to find all the things that the authors got wrong or left out.  I was quite disappointed.  Retiring in Thailand is an excellent guide and source book for anyone considering making Thailand their home.

What questions are foremost in the minds of prospective retirees?  Any good guide would tell me all I would want to know about obtaining visas, and the kinds of housing available, and the food, and the weather?  Medical and dental care is a big question.  How good will communications be?  And maybe most important of all, how much will retiring to Thailand cost and do I have enough to retire yet?  With this list in mind I went to the book ready to do some research.

Visa worries when living abroad can at best be a headache and at worst a nightmare.  For 30 pages or so the authors help ease the pain by giving us all we ever wanted to know and more about whatever visa you might be interested in (tourist, retirement, spousal support visas and work permits, etc.) as well as details on how to make visa runs to the borders.

Finding a comfortable and affordable place to live out our days is a difficult thing to do in a new and confusing country.  The book does a good job explaining the complicated issues surrounding foreigners owning property in Thailand and covers the different options and costs one has in choosing a place to live.  A very nice feature is a complete chapter on the different retirement locations in Thailand.  There are good descriptions of what life is like in Bangkok, Chiang Mai, Pattaya, Hua Hin, Phuket, the northeast, and the gulf islands.  The testimonials of foreigners living in each location bring the descriptions to life.

Medical and dental care is well covered from chiropractors to cosmetic surgeons.  A list of insurance companies and another of hospitals that cater to foreigners are  included as well as two charts giving medical and dental costs in Thailand compared to the US and UK.   The section on making out wills and Dying in Thailand kept everything in prospective.

I found the charts on expected retirement incomes at various ages very helpful in the chapter “Planning Your Retirement”.  They would be a big help in determining whether we have enough to retire yet.  The section on, “How Much Money Do I Need to Retire in Thailand?” is maybe the place I would go to first.  The authors give us a very useful list of the cost of common items in Thailand from hair cuts to nose jobs.

Questions on communications are answered by giving us the low down on cell phones, and dial up, DSL and satellite internet.  But they unfortunately leave out cable TV access.  Don’t they think retirees want to watch football (American or otherwise)?  But lots of helpful websites and telephone numbers are included.

Retiring in Thailand packs a lot of information into its 263 pages but here is a wish list for the authors to include in the 2nd edition:  Besides just the few references to how the weather in Thailand can become “insufferably hot”  I would like to have seen a section on what to expect in the different seasons here and comparing the differences in the weather in the different parts of the country.  The section on health care could include something on prevention and care of typical health concerns found in Thailand including the ubiquitous gastro-intestinal problems, infections, fungus, insect bites, STDs, and HIV.  I was hoping for a discussion on Thai food and the availability of western foods in country.  Although a small glossary is included it could easily be expanded.

It took a lot of hit or miss and a lot of time for me to learn even part of the information that Retiring in Thailand gives us all in one place.  It would be a great start to anyone’s retirement planning.

We have been asked frequently how we were able to retire as early as we did, at age 55.  Especially now that so many people have lost a considerable portion of their retirement savings in the current economic downturn, one asks the question of how in the world we can retire at all, let alone retire early.  The only way most of us can do this is to increase our bottom line so that we will have enough to live on when retirement time comes.  The thing to keep in mind is that there are two ways to increase your bottom line.  One is to make more money, something that the present economic situation is making more and more difficult.  The other, the one we so often forget, and the one that we still have some control over, is to spend less.

I never had a super high paying job.  Pikun, my wife, mostly had part time teaching jobs so she could take care of our two boys. So we were basically a one income family.  And unfortunately, no one died and left us with a chunk of change.  But we were able to save enough to retire early by being very careful with our spending.  And “time” was the secret ingredient.

For example, if you save $10 when your wife cuts your hair, that’s nice.  If you do it every month for 30 years, that’s a lot of money.  If you take your lunch to work you might save $5.  If you take your lunch to work every day, 200 days a year, for 30 years, then you are getting closer to retiring early.

Below is a list of 10 things we did that saved us more than half a million dollars. I have given very conservative costs and savings amount as you will see.  Still, the total savings number at the bottom surprised even me.

If you keep your eye on your goal and don’t spend what you save, you’ll be able to leave that 9 to 5 world sooner than you think.  And if you modify your lifestyle just slightly you’ll be able to do it without ever feeling that you are forgoing all the good stuff in life.

1.  College costs

My children went to good state colleges close to home.  The difference between a state college and a private college was about $15,000 per year at the time.  Depending on which private college you look at, the difference could be much more today.  Both boys graduated with no college loan debts.

For 2 children at $15,000 apiece for 4 years

Savings: $120,000

2.  Living at home during college

Because the children went to local colleges they were able to live at home.  We agreed that if they wanted to move out and live in off-campus housing that they would have to find jobs and pay for their own expenses, which they both willingly did by the time they were juniors.  It had the added benefit of helping them to learn independence earlier than they would have.

For 2 children at $10,000 apiece for 4 years

Savings: $80,000

3.  Car costs

In our life together we have never bought a car that was less than 4 years old.  We chose carefully when buying a used car so we had minimal extra car repairs over all the years.  We always had two cars.  We used to say “Our new car is 13 years old – so is our old car.”

Over our 30 years we bought 3 cars each for a total of 6 cars.  The difference (between a new and a used car) was about $15,000 each.

Savings: $90,000

4.  Auto insurance

Because we owned older cars all we needed was minimal liability insurance instead of full coverage.  You want to steal my car?  Go right ahead.  No one ever did.  They were too busy stealing our neighbor’s new car.  The difference in insurance costs were at least $100 per month for each car. We had 12 payments a year for each car for 30 years.

Savings: $72,000

5.  Pay the house off early

It is amazing how much you can save by paying a little extra each month on a 30 year mortgage.  My mortgage was $750 per month.  We paid the mortgage off 15 years early and saved $135,000 in payments.  To see how much we saved we need to subtract the $80,000 extra in payments that we made.

Savings: $55,000

6. Vacations

Over the years we went on many nice vacations, Mexico, Costa Rica, Hawaii, Italy.  But most years we would take car camping trips around the country.  It is difficult to be closer as a family than for all of us to sleep together in a small tent.  And we also saved lots of money.  The difference between going on a big vacation and car camping or just staying at home was about $1,750 each.  And we did this for about 20 years.

Savings: $35,000

7.  Lunches

A simple way to save a bunch of money over the long run is if you have really tasty leftovers that you can take to work for lunch.  We occasionally ate out with our coworkers but we usually made use of that most important piece of office equipment, the microwave.  The average savings at lunch time was about $5, and my food was much better than what I could have gotten outside.  There are about 200 work days a year and I took my lunch to work for 30 years

Savings: $30,000

8.  Haircuts

My wife worked really hard at learning to cut our hair and she became quite skilled.  I learned how to trim her hair.  A haircut costs $10, though you can pay lots more if you want.  Pikun and I cut our own hair for 30 years (for a savings of $8,640) and cut the boys hair for 20 of those years (for a savings of $5,760).

Savings: $14,400

9. Alcohol

When my first son was born I decided to give up alcohol.  That was a personal decision but it also saved me quite a bit of money over the years.  On a normal week (non holiday, non football, non boys night out week) I would buy at least 3 six packs of beer.  At $3 a six pack (cost of cheap beer) for 52 weeks for 30 years the savings added up.

Savings: $14,040

10.  Miscellaneous Savings

Video rentals (instead of going to the theater)

Six movies a year viewed on video instead of going to the theater, at $15 (cost of ticket, parking, popcorn, etc) for 4 people for 20 years.

Savings: $7,200

Transportation to work

For ten years I biked to work or took the bus even when I could have driven my car.  Parking was about $2 (I figure that the bus fare and gas costs cancel themselves out).  I did this for 200 working days a year for 10 years

Savings: $4,000

Eating Out

I have been to many good and fancy restaurants in my life.  But my favorite restaurant is Taco Bell, an American fast food, pseudo Mexican joint.  My wife and I love it and it is really cheap.  Let’s say that the differences between Taco Bell and a more expensive restaurant is $20.  Let’s say we substituted going to a “real” restaurant with Taco Bell only 5 times a year for each of the 30 years (in reality it was lots more often than that).

Savings: $3,000

Total savings over 30 years: $524,640

Non-quantifiable things we did

Here are some things we all can do but we can’t put a savings amount to.  Doing them saved us probably more than all of the above.

Don’t make any big mistakes.  Don’t make big investments in things you aren’t sure about.  Diversify your portfolio. Cut your investment risks as you get older.  We lost almost nothing in the last economic downturn since we had been out of the stock market for over a year.

Keep healthy with exercise, eat fresh foods, watch your weight, check your blood pressure often.  If you aren’t sick you aren’t going to be paying doctor bills.

Any extra money you get (pay raises, gifts, tax returns, government stimulus checks, etc.), save it instead of spending it.

We refinanced the house twice.  Each time we took the extra money the bank gave us and used it to remodel or upgrade the house (instead of paying for a new car or a fancy vacation, see above).  It really paid off later when we went to sell the house.

We always spent less than we had and never once in 30 years did we pay a credit card interest payment because we always paid off the card in full.

I always wanted, and dreamed of having, a nice big luxurious RV, with captains chairs, satellite TV, fake lawn that we could roll out when we stopped for the night, telescoping living rooms.  I never bought one.  But I occasionally still leaf through some of the brochures.  If I had ever given in and bought the RV of my dreams I would still be working at my office desk dreaming of retirement.

Most important of all, even though marriage and raising a family can be super stress producing, don’t even think of getting divorced if you want to have any hope of retiring early.  With lots of effort, and maybe a little professional advice, you can probably work out most of your problems, because if you do get divorced, all of the savings tips above will be a waste of time.  You’ll probably never have enough to retire, and retiring early will most likely be out of the question.

My hope is you will be able to retire when you want to.  Be frugal and keep your eye on the prize and you’ll be able to make that dream come true.

You’ll have to excuse me now.  Pikun is calling for me to get a haircut.  And then we have a date for Taco Bell.

Note:  If everyone took up my lifestyle then the country would be in perpetual recession.  But Taco Bell, Netflix, marriage counselors, and used car lots would be doing a booming business.

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