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Financial Thaimes: Chasing your retirement

Following my initial column “Personal Finance: Beyond the banking barrier”, it is time to focus on the things that specifically affect expats in Phuket, and elsewhere in Thailand, and those looking to move to the Land of Smiles. Hence, welcome to the new column “Financial Thaimes”.

economics
By Wiliam Frisby

Sunday 31 December 2017, 10:00AM


Chasing your retirement dream can be easier than you think. Photo: Tanyaluk Sakoot

Chasing your retirement dream can be easier than you think. Photo: Tanyaluk Sakoot

The first cab off the rank is planning for your retirement. If you plan for your retirement early, your retired life may be as long as you working life. A lack of planning may result in your retirement being as short as half your working life.

Retirement is the time in life when we break free from the constraints that employment has held upon us. Retirement is the time to do all the things in life that we were unable to do while we were working and raising up our family. But unfortunately for many, retirement does not provide the lifestyle they desire and more often than not this is down to poor planning.

A lot of people find the whole notion of planning for their retirement an ordeal that they do not want to face and continually delay. This procrastination can have a significant financial impact when the situation is finally addressed, as it inevitably has to be. If you are one of those people who has been hesitating for no good reason then you don’t have to do everything all at once, you just have to do something. Your next decision might be the most important decision of your life.

When we decided to move overseas and take up the expat life, we entered a whole new world and left the old one behind. Our former life had a government that cared for our well-being by forcing us to save for our retirement through social taxes, or offering us tax relief on savings so that we would be able to support ourselves in our later years.

Governments know how important it is to secure your future because they know the cost of footing the bill for the people who do not adequately save for their retirement. Now that we are overseas many services such as health care, social security and state retirement planning cease to exist. It is down to us to look after ourselves as nobody else is doing it for us!

Where do I start?

First of all, set an age when you would like to retire and an income that you would like to retire on. If you have difficulty imagining what income you would like, then ask yourself, would you like to live on more or less than your current salary? Imagine a lifestyle you would like to live. Try and visualise the things in life that are important to you, the holidays you wish to take, the second home you always wanted. And always remember, if you don’t plan for these goals, then no one else will do it for you.

When is right to time to start planning?

It is never the best time to start retirement planning. Throughout life, there are always barriers that tell us now is not the right time. From leaving university, planning the purchase of your first home, getting married, having children, to bringing up your family, when is the right time in these years? Maybe at the end of this period when your children have flown the nest, earning levels are high, and commitments are back to a low?

However, we all know that this is undoubtedly the wrong time as saving is always easiest over the long-term. Don’t let life’s natural barriers put you off. If you haven’t started planning already then now is probably the best time!

Putting the wheels in motion

Retirement plans are built on the foundation of saving money on a regular basis. There is no better way to accumulate and grow wealth than being disciplined and living below one’s means.

The first place that everyone starts saving is in their bank, but this only really helps with short-term goals, and before long you will need to invest your money. To achieve long-term growth, you need to access a vehicle that creates a return and increases your wealth year after year. What we should all be aiming for is very similar to the proverbial grain of rice on a chess board. You cannot double your money every year, but your goal is to use each year’s growth to fuel the following year’s return. The first step will be to find an investment platform or advisor who can help get you started.

Finding an investment platform can be a difficult task to undertake, especially while living overseas. Many consider sending their money back home and investing it there, but domestic pension providers are suited to consumers living in their native country. Many companies will not even open accounts for non-residents. Also, no matter how large the investment company may be unless they are an expatriate focused company, you may find continued international calls, across time zones, speaking with the first person to pick up your call or talking to a faceless website an unnecessary and tiresome undertaking. These problems lead many people to use a professional advisor for their investment and planning needs.

Find a Trusted Advisor

An advisor does a lot more than helping you find a suitable investment platform. It is their job to understand what their clients want to achieve and to help them put in place a plan that will get them there. When done properly this is an ongoing process that requires constant review. Your life changes all the time, and these alterations could affect your planning. You need to know if you are on track to meet your goals and this should be reviewed in detail at least once a year. Professional advisors dedicate their lives to guiding clients through this process.

Advisors possess knowledge and experience about investing beyond most of their clients. Your retirement plan might be the most important investment decision of your life. Is it something you should do yourself? Does your busy life even allow you the time to focus on your financial planning properly? Most people do not represent themselves in court or perform surgery on themselves. They seek professional help from lawyers and doctors, and your retirement is no different.

Having someone who works on a face-to-face basis with you and understands your unique set of needs has value. An advisory relationship should be lifelong, following you no matter where you live in the world and whatever changes in your life. When choosing your advisor, you should be judging whether they have the commitment to go on this journey with you and do they have the global presence to support you.


William Frisby of Hampton Bridge, is a British expat who has been advising clients in the Far East for the past 10 years. To contact him write to wfrisby@hampton-bridge.com and quote The Phuket News.

 

 

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