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Retiring in Thailand – How Much Does It Cost?

A recent study carried out by NetCredit estimated that a person needs approximately $390,000 (US) to retire in Thailand.

The study covered most countries of the world, with the goal of estimating the cost of retirement based on the equivalent quality of life you'd enjoy back home.

The research was based on the following lifestyle for 1 person:

  • Renting a 1-bedroom apartment in a city centre, like Bangkok
  • Two vacations a year
  • Moderate drinking
  • No smoking
  • Eating out: 15% expensive restaurants, 75% inexpensive restaurants
  • Eating Western food at home
  • Two round trips on public transport per week
  • Moderate coffee takeout
  • Moderate buying of clothes
  • No taxis/ride shares, but moderate car use
  • Gym membership

The cost was calculated over 14 years: retiring at 64 and with a life expectancy of 78.7 years.

But how does this translate to the real world? And considering the outcome, is it cost effective to retire in Thailand.

Let's dig a little deeper.

How Accurate is This Retirement Study?

Study Flaws:

It's easy to criticize this study for what isn't factored in, and the fairly simplistic financial calculations it uses.

It doesn't take into account a forecast for inflation, or interest earned on savings.

Savings aren't static, even though it might seem that way if the money is just sitting in an account. The cost of living rises (generally), so the value of your money (spending power) decreases over time, unless you are earning an interest rate in line with, or higher than, inflation.

For the sake of argument, let's say that the interest earned is in line with inflation, and that the spending power remains the same over 14 years.

One should also note that few people have this much cash in savings. A more likely scenario is having the equivalent in pension payouts over the 14-year period. Most retirees have modest savings and a half decent pension. Some may have savings and just a state pension.

Either way, the amount required is still the same.

The Cost of Retiring in Thailand

I usually ignore this type of research because seldom is it accurate. But this is surprisingly accurate.

The figure ($390,000 / 11 million Baht) breaks down to just over 70,000 Baht per month. If we do a quick summary of expenses, this is a reasonable assumption:

  • Rent and bills: 15k per month
  • Average daily expenditure: 1,000 Baht per day
  • Food shopping/eating out: 10,000 Baht per month
  • Medical Insurance: 5-10,000 Baht per month
  • Moped rent: 5,000 Baht per month

Total = 70,000 per month.

Living Cost Variables:

One of the main reasons Thailand is such an attractive destination for retirees is because there are different standards of living available. You can live dirt-cheap or super expensive in Thailand.

Therefore, people will no doubt comment that you can live on half the amount I've cited above.

It's true. But I think 70k a good monthly amount to aim for if you are considering retirement in Thailand. And if you don't spend that much, it's more to leave your kids :).

There are expats who dine in silly-priced restaurants, buy a German car at twice the price you'd get one for in Europe, rent a condo on Wireless Road for 80k+ a month, and fly first class.

And then there's expats eating for 100 Baht a day and staying in a 4k a month condo. I'm not judging either way.

Not everyone will require a moped, but some may want a car.

Some people will accept an average condo and reduce their rent, while others will keep eating out expenses low to live in a more modern, spacious dwelling.

Some people have a few beers twice a week, and others drink a few beers every night.

There are many variables, including living rurally, which is much cheaper.

Also consider that some expats live in the family home of their partner, or a home they have built, and therefore don't have to pay rent.

For many, living expenses may be as low as 40-50k per month.

That said, for a single person in Bangkok, Pattaya, Hua Hin, Samui, or Phuket, paying rent, I still think you could live quite well on 50-60k per month.

retire-thailand-cost

Sorry, you'll have to zoom in on the image to see the country names.

Thailand Vs. The Rest of the World

And so it begs the question: is Thailand value for money when it comes to retirement?

The same study estimated that a retiree needs $515,742 in the UK, and $601,489 in the USA (over the 14-year period).

Thailand is only $125,000 less than the UK, but the UK is cold, grey and rainy for 6 months of the year!

Here's some other countries of interest:

  • Canada – $496,118
  • Mexico- $257,078.
  • Costa Rica- $470,432
  • Spain – $453,191
  • Italy – $427, 226
  • Portugal – $429, 647
  • Switzerland – $842,790
  • Germany – $508,656
  • Sweden – $569,809

The most expensive country in the world to retire in is Bermuda: $1,065,697.

The cheapest country to retire in is Pakistan: $182,018.

Thailand Vs the Rest of SE Asia

You're probably thinking that Portugal, Italy and Mexico look like pretty good options, but you like Asia, right?

So let's look at how neighboring countries stack up to Thailand. The following countries all work out cheaper than Thailand for retirees:

  • Philippines – $369,340
  • Indonesia – $290,599
  • Malaysia – $321,614
  • Vietnam – $353,906
  • Cambodia – $389,146
  • China – $382,596

Singapore is very expensive at $946,993, as is Hong Kong at $871,578.

In Summary

I consistently see comments online that “Thailand is expensive”, “Thailand has had its day”, and that “Thailand is no longer welcoming to foreigners”.

I think these comments hold some weight in a debate of historical context, but I don't think that's the whole picture. Global economic shifts have devalued some Western currencies and made Thailand more expensive. But…

Considering the people/culture, weather, variable living standards, and beach get-away options, I think Thailand is still value for money.

There are downsides to Thailand, perhaps the biggest being health and safety. Thailand has very high road traffic accident levels and, depending on where you're living, pollution can also pose a hazard to your health.

Like many second world countries, regular reports of police corruption may worry some, but these problems always seem to exist where it's “cheap”.

I think the aforementioned downsides are more of a concern to those with children, perhaps a family considering relocating in their late 30s, 40s or 50s. These issues can become a threat to the safety of children.

Those with kids also have schooling to consider. Good private schools are expensive here, and that's where the balance is likely to tip in favor of living “back home”

Is the average retiree at 65 years old going to be worried about road traffic accidents or poor electrical wiring standards?

Most will take the view that the benefits outweigh the risks and, with a little extra caution, one can avoid something unfortunate happening. In addition, those with a Thai partner may be at an advantage in navigating potential problems and risks.

And then there's traveling back to home now again. If you still have assets and family back home, that 13-hour trip (for me) gets increasingly tiresome with age, particularly dealing with the jetlag.

However, other countries in SE Asia aren't immune to these problems either.

I personally quite like Vietnam, but I just don't get the same vibe there as I do in Thailand.

Thailand is a very colorful country in terms of travel, people, heritage, music, dance, celebrations, markets, socializing, etc.

Some would argue that for not too much more you could live in Portugal, Spain, Italy or Greece. These places have stunning beaches too. I agree. I love Italy. I'm also a fan of Switzerland, but it's way too expensive and lacks the beaches.

Lots of food for thought.

The original retirement study can be found here.

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How accurate do you think this study is, and is Thailand still your preferred choice for retirement?

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  2. Martin1 says

    You might have heard about FIRE (Financial Independancy / Retire Early).

    They say you can retire when you have savings/posessions of 25 times of the sum of your yearly expenses, and you withdraw not more than 4 % of the original sum per year.
    And you should be invested at the stock exchange (e.g. in mutual funds) to get decent returns p.a.

    If this add not up to you then you might want to reduce your costs, save more, or both. And one should start early in life, not with e.g. 50 y.o.
    Reply

  3. Sean Jose says

    A really good, informative website - thank you. Hmm... interesting stuff as I am considering my position in life too. I doubt if I am entitled to any kind of pension from the UK despite always working since 16 and 5 years in the Army. I have lived and worked in Asia since 1989.The bulk of those years has been in Thailand, followed by Korea, Vietnam (now), Malaysia, Hong Kong & China (Shanghai). Korea is great but so is Thailand and has better options for a British man approaching 58 and married to a Thai for the past decade plus. I do not have any pension and only recently have begun saving (thank you Covid 19)! My thoughts are turning to retirement however, I would still like to work as I am fit and healthy. My wife's place in rural Issarn is where we would settle. Her mum has a little bit of land we could build a house on or share their shack by the railroad tracks. Currently I have enough for a retirement visa in my Thai bank account and overall I have about 600,000 baht to my name - I could possibly double that if I spend another year working here in Vietnam. of course, I would have to keep 400,000 baht in the bank for the visa. In her area, I could take a job in a local school or university (for much, much less than I earn now). I even have thoughts of just doing that (going back to Thailand) until the well runs dry and then saying bye-bye to this Earth. I don't plan to travel outside Thailand once I go back (unless I win the Thai Lottery!). I always think 'wonder how long I could last on x amount?' - irresponsible but honest thoughts.
    Reply

    • TheThailandLife says

      You probably are entitled to some pension if you were in the army and worked in the UK in other jobs. You could top up your contributions now and you're allowed to backpay for 6 years. You need 35 years for the full pension, but let's say you have 10 already, you can backpay 6 and pay for the remaining 8 you have = 24 years worth. It's really inexpensive to do and will make sure you have something to retire with. Read more here: https://www.thethailandlife.com/uk-pension-guide-thailand
      Reply

  4. James says

    Hello, again. I was very happy thinking I found the resources I needed and then I heard something about "taxes" in Thailand?
    I looked at a schedule and does the government really want to tax my funds that I am spending in their country? I mean, my portfolio would include my social security benefits,pension and my savings, and 401k. Would they want to tax that money? That would be a deal breaker.
    Once again thank you so much for allowing folks to see what they can expect in Thailand. Thank you
    Reply

      • JamesE says

        The only thing that *might* be taxable would be income from your investments in Thailand if you ever moved a large sum of money during a time when the exchange rate is more favorable. But that would have to be a *lot* of money. Also, the other tax issue is US taxes. Since US citizens are taxed on global income you're going to have to answer that little "Do you have accounts or financial interests overseas that total more than $10,000?" question with a Yes. Might require some additional paperwork on your US return.
        Reply

  5. Ken F says

    I would love to have 70,000 Baht ($2,333) for retirement in Thailand. But then again if I were going to have that much in retirement funds I would just retire in beautiful San Luis Obispo, California where I’ve spent most of my life. Although I do love Thailand, lets get real, the only reason I am considering retiring there later this year is because I feel I will not have enough money to retire on the California coast. I have probably mentioned this before but 10 years ago when I lived in Phuket with my girlfriend for a year we managed to get by very nicely on 39K Baht ($1300) a month. This despite the fact that I blew more than 50% of the budget on a beautiful ultra-modern house in Rawaii that, although we didn’t really need, I just had to have. The point is we never felt poor or like we were scraping by.

    Still, I would personally not want to have to live on even a dime less than this amount in Thailand. And either way I think you should also have money in savings if you are going to retire in a foreign country. I will have about $80,000 in savings in addition to my retirement income so I will not really have to worry about getting behind on the monthly bills should some unexpected expenses pop up every now and again. And lets face it, trying to live in a foreign country on an extremely tight budget with no savings as a buffer is very risky, and in my opinion is also kind of irresponsible.

    By the way, I was really surprised to see that Indonesia was supposedly so much cheaper than Thailand and the Philippines in this study. I have been to Bali and Jakarta many times and it does not really seem like it would be any cheaper to live in these places than in it would be in Phuket or Bangkok. Furthermore I know that to get a retirement visa in Indonesia you are required to permanently hire some kind of domestic helper, something that is not required in Thailand.
    Reply

    • TheThailandLife says

      It really depends on the accommodation. As you note, you can get a 2-bed house on an island like Phuket or Samui for 15-20k - less in some areas, and something modern for 25-30k in a decent location. You can also pay 8k for a very modern studio apartment, or 35k for a 2 bed. This is why I always recommend to people to put boots on the ground and search out accommodation. The longer you stay somewhere the more you come across great deals on rentals.The research uses the same algorithmic metrics to estimate the amount required for retirement across all the countries, so it's not an exact science and will be inaccurate in places. Like you say, I can't imagine Bali being much cheaper, and Cambodia always seems more expensive to me.
      Reply

  6. Scott Carpenter says

    Touching base again. Ended up landing a gig in Japan starting this month so will have a good chance to visit varied countries during the balance of this year and next including Thailand. Will be seeing how different Thai living areas feel and would be up to buying dinner or a beer if you have a couple of hours available during one of my scouting trips this year. Hope you all are doing well .... 2021 is about as much a mess as 2020 so far in US this year.
    Reply

  7. JamesE says

    "Poor electrical wiring standards" lol... "Poor" implies that a standard exists to make a comparison to standards elsewhere. I believe the entire text of the Thai wiring code is: "Don't let the smoke out." I jest. The place I live in the US loses power significantly more frequently for a significantly longer period of time than any I've experienced in Thailand. But, apropos of the study, the ฿70K may be low for Bangkok, particularly given the maintenance of a living standard. ฿15K for bills and rent *might* get you a newer "one-bedroom" close to public transport but many (most?) of those are not designed for the same living/cooking/entertainment/working standard most retirees would be accustomed to. Some of those that I've seen would stretch the cooking requirements for Ramen and a beer. I realize that to each, one's own but for me being unable to cook or to have a space dedicated to "work" and "relaxation" would be a bitter pill, indeed. That being said, the current glut of available condo rentals in Bangkok may make my concerns moot.
    Reply

    • TheThailandLife says

      That's true. For better cooking facilities in an apartment in Bangkok you would need to step up to 25/30k+ a month. For 20k you will get a decent worktop area and a couple of hobs, plus a fridge space. You can then get a good microwave oven. There are many variables but I think 70k isn't far off the monthly figure for the average expat. As always, some will say it's high and others will say it's low.
      Reply

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