Retirement for someone with no dependents

Bostonerimus1

MaxB93 said:

For a different perspective, my thoughts on early retirement abroad.

I stopped working when I was 38. I had a small company in the UK and anticipated the coming demise of our business sector, so made the decision to close while we were still in funds rather than take the more usual route of trading until we faced liquidation and close with a lot of unpaid debts. The company owned a property.

That year I visited Southeast Asia for the first time, spending two months travelling from Bangkok down to Had Yai. I got the taste for it and spent the next few winters exploring other countries in the region. I was most comfortable in Indochina and decided on Cambodia as a base. I had no wife or children to consider but there were a number of personal and practical issues to be dealt with before I sold my last assets in the UK and moved to Phnom Penh in 2006.

Business failure like other significant life events (divorce, bereavement, acute health issues) often has the effect of making us take stock of our lives. I had thought myself happy to be working and spending and saving for the future, but gradually came to see that time rather than money was the resource I should be valuing. They say that youth is wasted on the young, but too often retirement is wasted on the old.

I've had twenty years so far of happy 'retirement' (Covid did temporarily stop travel) getting up in the morning and doing whatever I want to do before heading to bed at night. I suppose I have become more frugal, spending less on frivolities. I still can't walk past a guitar, book or wine shop. For those interested in films, music, literature and adult education the internet has been a Godsend and close to free resource for expatriates. On the rare occasions when I visit the UK I find it entirely alien. I could never re-acclimatise myself to either the weather or the prices. £14 for a bowl of pho that would cost £2 in Saigon.

I have been very fortunate to have had the opportunity to stop work at an earlier than usual age, but I increasingly see grey haired gentlemen and women from the UK, Europe, US, Australia etc. who are obviously not in Asia for a short holiday. Many have sold or are renting out their houses back home, some no doubt have juicy pensions. They may be singles or in couples, in their 50s, 60s and older. I suppose some are of the demographic who would have retired to Spain in the 1970s for the sun and the lower cost of living. Perhaps I was just an early adopter.

I also see a lot of youngsters in their 20s working part time in bars on the islands for room and board. They certainly aren't saving for retirement, or paying NICs to fund my coming State Pension. Increasingly they see it as a Ponzi Scheme. Who knows what things will be like in 40 years ? It's getting hard to look ahead 40 days.

Serious considerations include the availability of retirement visas, currency fluctuations, inflation, crime levels, political and economic stability and not least healthcare options. I do miss the NHS, but from what I hear, many do now. Health Insurance isn't economically viable past 70. Private healthcare in e.g. Bangkok is competent and affordable with no waiting lists. Pharmaceuticals, Dentists and Opticians are all available on demand at a fraction of the UK cost. I see retirement homes for foreigners are now opening in Thailand. For single men a housekeeper will often morph into a de facto wife and ultimately carer. I know some successes and many horror stories.

With the advances we have seen in medical science the loss of our mental faculties in old age is now as much of a concern as the loss of our physical fitness. In the last stage of our lives the most important question is how long do we want to live ?

It's later than we think.

For balance I recommend the Maugham short story The Lotus Eater.

https://facultyweb.wcjc.edu/users/jonl/documents/LotusEater.pdf

Even if they believe UK SP to be a bad long term bet they should still be paying Class 2 NI if they qualify because it's so inexpensive. 

hotncold47

I could be wrong but I'm sure I read recently of someone who moved to Thailand in 2016 relying on the SP has found it untenable as his SP does not increase since he left the UK meaning he is now relocating to the Philippines which for some reason has an agreement with the UK and SP increases.

Stanleychops

Keith_Clunk said:

MaxB93 said:

For a different perspective, my thoughts on early retirement abroad.

[...]

Brilliant, well done, MaxB.

My story is not dissimilar to yours, albeit a decade later. Being single with zero dependants in my mid-30's in 1998/1999 I took a one year sabbatical after selling my house and through Trailfinders booked a one year round-the-world ticket. This extended to 18 months after briefly returning to the UK to sort out (free-up) some more finance to return to SE Asia, where I visited every SE Asian country, with the exception of Brunei. I fell in love with that part of the world.

Fast-forward to 2012. Still single with zero dependants and my mortgage endowments finally paid to me (falling short) and at 49yo, I retired and moved between Cambodia and Thailand for the initial 18 months due to visa limitations. I rented my London property through an agent and with some help from my ISA to supplement income until the mortgage was paid off a few years later. Once over 50 a retirement visa for Thailand was obtained and I've been here ever since. I am now 62. Very content and the internet speeds here in Thailand are great at 1.2GB fibre optic.

My London house is now up for sale and the proceeds will fall into a GIA. Around half will go into UK low coupon gilts, forming a gilt ladder of around 5 or 6 years, premium bonds will be maxed out and a chunk into MMF's and the remainder into global investments and dividend paying IT's. I have been studying the taxation of unsheltered investments quite rigorously for several years now and taking the average gain of my house value I can achieve very similar in a GIA. I have no debt.

In around 2018 I consolidated all my separate pensions into a single SIPP invested globally, along with the remaining S&S ISA invested into dividend generating stocks and my UK state pension is (according to the gov.uk website) now at 35 years following a few top-ups before the deadline.

I held health insurance for the first 10 years but never used it. Since 60 years old I self-insure.

That initial sabbatical travelling the world in my mid-30's was the best thing I ever did. It opened my eyes to the rest of the world and I made my choice. I would retire to either New Zealand or Thailand. Thailand it was. No regrets whatsoever. Life is as simple or as complicated as you want it to be here.

Over the past 13 years many things have changed regarding finances and will likely continue to change over the coming years. I always made my plans based upon the way things were at the time allowing for some contingency. Second-guessing can cause poor decision making.

Cost of living increases and inflation occur here in Thailand too, but seemingly nowhere near the way I've read it has in the UK.

Thank you to both of you (and everyone else that has taken the time to comment) for this insight, this is kind of how I was imagining my future.  Will obviously get advice on what to do with my house - sell/buy to let or the biggest ER possible, where to put funds and the all important provision for private healthcare.  

After this I am of course assuming the best case scenario that I am relatively upwardly mobile and faculties somewhat in tact, which will then allow me to move around as you describe.  I would like to live in various countries (visas allowing) as long as I am able to do so.  Is this possible, or am I missing something obvious?

Bostonerimus1

Stanleychops said:

Keith_Clunk said:

MaxB93 said:

For a different perspective, my thoughts on early retirement abroad.

[...]

Brilliant, well done, MaxB.

My story is not dissimilar to yours, albeit a decade later. Being single with zero dependants in my mid-30's in 1998/1999 I took a one year sabbatical after selling my house and through Trailfinders booked a one year round-the-world ticket. This extended to 18 months after briefly returning to the UK to sort out (free-up) some more finance to return to SE Asia, where I visited every SE Asian country, with the exception of Brunei. I fell in love with that part of the world.

Fast-forward to 2012. Still single with zero dependants and my mortgage endowments finally paid to me (falling short) and at 49yo, I retired and moved between Cambodia and Thailand for the initial 18 months due to visa limitations. I rented my London property through an agent and with some help from my ISA to supplement income until the mortgage was paid off a few years later. Once over 50 a retirement visa for Thailand was obtained and I've been here ever since. I am now 62. Very content and the internet speeds here in Thailand are great at 1.2GB fibre optic.

My London house is now up for sale and the proceeds will fall into a GIA. Around half will go into UK low coupon gilts, forming a gilt ladder of around 5 or 6 years, premium bonds will be maxed out and a chunk into MMF's and the remainder into global investments and dividend paying IT's. I have been studying the taxation of unsheltered investments quite rigorously for several years now and taking the average gain of my house value I can achieve very similar in a GIA. I have no debt.

In around 2018 I consolidated all my separate pensions into a single SIPP invested globally, along with the remaining S&S ISA invested into dividend generating stocks and my UK state pension is (according to the gov.uk website) now at 35 years following a few top-ups before the deadline.

I held health insurance for the first 10 years but never used it. Since 60 years old I self-insure.

That initial sabbatical travelling the world in my mid-30's was the best thing I ever did. It opened my eyes to the rest of the world and I made my choice. I would retire to either New Zealand or Thailand. Thailand it was. No regrets whatsoever. Life is as simple or as complicated as you want it to be here.

Over the past 13 years many things have changed regarding finances and will likely continue to change over the coming years. I always made my plans based upon the way things were at the time allowing for some contingency. Second-guessing can cause poor decision making.

Cost of living increases and inflation occur here in Thailand too, but seemingly nowhere near the way I've read it has in the UK.

Thank you to both of you (and everyone else that has taken the time to comment) for this insight, this is kind of how I was imagining my future.  Will obviously get advice on what to do with my house - sell/buy to let or the biggest ER possible, where to put funds and the all important provision for private healthcare.  

After this I am of course assuming the best case scenario that I am relatively upwardly mobile and faculties somewhat in tact, which will then allow me to move around as you describe.  I would like to live in various countries (visas allowing) as long as I am able to do so.  Is this possible, or am I missing something obvious?

If you intend to live outside the UK in retirement and your money is in UK based accounts and you are getting UK SP, just make sure you understand the tax and account access implications and if your SP amount will be frozen. They aren't necessarily a big issue, but that can only be guaranteed if you make the appropriate arrangements before upping sticks.

Retiring overseas works out well for some people, but for others the reality will fall far short of the dream. Big issues are often restrictions on buying a home, frozen UK SP, healthcare and missing family. If you become old and infirm and want to return to the UK it can be stressful both physically and financially.

Bostonerimus1

hotncold47 said:

I could be wrong but I'm sure I read recently of someone who moved to Thailand in 2016 relying on the SP has found it untenable as his SP does not increase since he left the UK meaning he is now relocating to the Philippines which for some reason has an agreement with the UK and SP increases.

That's correct, in most countries people receiving UK state pension do no get inflation increases. The only countries  close to SE Asian where they do are S. Korea, Philippines and Japan.

MaxB93

 Bostonerimus1 wrote Even if they believe UK SP to be a bad long term bet they should still be paying Class 2 NI if they qualify because it's so inexpensive. 

As I understand it in order to pay Class 2 NI you have to claim to be employed (?). The Gen Z 'youngsters' I was referring to who may have been here for several years are very much under the radar. They will not have work visas or permits, are possibly on serial tourist visas via periodic border runs. They will have no employment or tax history here.

In any case that age group isn't usually known for long term planning, and they are aware of the demographic time bomb we are seeing. People just aren't having enough babies who will grow up and work and pay NI to fund the older generation's SRPs. It applies here in Asia too. One company in South Korea is trying to incentivise employees by paying them $75,000 for every baby they have.

But there are older working expats in their 30s and 40s running small businesses with the relevant paperwork and certainly paying Class 2 would be worth their while.

MaxB93

Bostonerimus1 said:

hotncold47 said:

I could be wrong but I'm sure I read recently of someone who moved to Thailand in 2016 relying on the SP has found it untenable as his SP does not increase since he left the UK meaning he is now relocating to the Philippines which for some reason has an agreement with the UK and SP increases.

That's correct, in most countries people receiving UK state pension do no get inflation increases. The only countries  close to SE Asian where they do are S. Korea, Philippines and Japan.

In Cambodia and Thailand for example the SRP amount is frozen. There is a continuing debate on Thai expat forums between those who maintain a false address in the UK in order to get the increases and those who say that they will be caught and prosecuted.

There is a campaign to have these and other countries 'unfrozen' but I won't hold my breath.

barnstar2077

Surely the solution to state pension being frozen when you live abroad is to find one of these gangs (that I keep hearing about on the news) that smuggle people into the country, and have them smuggle me out!

barnstar2077

Bostonerimus1 said:

The fees at Audely and the "suits" running it are somethings that put me right off. This advert for Audley is a bit "Hyacinth Bucket" and I just wouldn't want to end my days around the old people shown in the ad. Also they show lots of hotel like images and gloss over what care they provide and how much it costs if you fall and break a hip. So I'd be very careful. I'd prefer to be a long term resident in a genteel hotel in Harrogate or Scarborough where there's a turn over of interesting guests and a murder happens every other week.

https://www.youtube.com/watch?v=xQQM8-UMRI4&ab_channel=AudleyVillages

This place looks amazing, if I had the money I would move in today!

Keith_Clunk

poseidon1 said:

Keith_Clunk said:
[...]

My London house is now up for sale and the proceeds will fall into a GIA. Around half will go into UK low coupon gilts, forming a gilt ladder of around 5 or 6 years, premium bonds will be maxed out and a chunk into MMF's and the remainder into global investments and dividend paying IT's. I have been studying the taxation of unsheltered investments quite rigorously for several years now and taking the average gain of my house value I can achieve very similar in a GIA. I have no debt.
[...]

Interestingly although UK inheritance is probably of no real significance in your long term planning, getting rid of the London House and partially reinvesting in UK gilts will provide a very helpful IHT saving in this regard.

I assume you are a UK born and therefore UK dom. The London house kept you firmly rooted in the UK for IHT purposes, and likely would have made your world wide estate liable to UK IHT on your death.

Selling the house assists in severing that ' umbilical cord' whilst investing in UK gilts provides you with an asset the value of which is legally excluded from IHT for all persons resident outside the UK (the FORTRA securities rule) .

Out of curiosity what have you done ( or are doing ) by way of Wills and estate planning generally?

I have been fortunate with property, owning only 3 freehold houses during my lifetime which have all gained in value. Proceeds from the 2nd paid for my 1998/99 18-month sabbatical but the bulk sat in a one-year high street fixed bond of 8.5% at the time. I always remember that percentage. The 3rd house was bought in 2001 assisted in the deposit by those endowments I'd kept going. I lived in it until 2012 once the endowments and a 10-year life policy came to fruition, and that's when I left the UK. That house is now for sale.

Prior to leaving the UK I applied for a NRL1 form from HMRC (non-resident landlord) which allowed no tax to be taken from the rental income by the agent and paid to HMRC. I would subsequently declare my rental income to HMRC via SATR each year online. Through the government gateway I also topped-up my NI to complete the 35 years, which was 30 at the time I stopped working. I did contract out of SERPS in the past so I half expect not to get a full SP despite it showing 35 of NI. They say a full SP is equivalent to circa £275k in a personal pension, or thereabouts.

Just prior to the sabbatical I made a will at the insistence of my father and it still remains unchanged to this day. I thank my father for that advice. However, I wish to change the will on my next visit back to the UK once the house is sold to see my mother (father now deceased, RIP). My mother now lives in a comfortable care home not far from the family home they'd purchased back in 1965 in which I grew up in, plus her  grandsons and their families both live nearby and visit often. I have visited her care home on numerous occasions and it is really nice compared to many I have seen. She is content in there and at 94 years of age remains sharp and clear of mind.

Incoming changes to my will are to give far more to several registered smaller animal charities and less so to relatives whose circumstances/partners have changed. Although I would have liked to give to various animal charities anyway I feel more inspired to do so now following the changes in IHT rules. I don't want any of what's left behind to be paid in tax.

Selling my home after renting for 13 years was as much to do with having enough of being an overseas landlord as it was feeling I had been very lucky in terms of decent tenants and that I'd run that gauntlet long enough, plus my age. Also, a house being such an un-liquid asset began to grind so following the 2024 Autumn budget it felt like a lucky escape regarding CGT on property, which remained unchanged with the bonus of the 28% drop to 24% (by the Tories) remaining in place, so the time had come to sell. Investment assets can be bought and sold in seconds, the house will take months.

I have one brother 18 months older than me, he has 5 children across two marriages. I had a vasectomy back in 2002, no children. Different strokes, as they say.

Here in Thailand I am never bored. I just don't get bored. It is not about filling days with things to do, I just enjoy doing nothing very much indeed. The days pass quickly, too quickly ..