Retire In The Philippines With $200,000 Of Savings?

[virginprune]

You can take out private and work place pensions in a lump sum but not the state pension. This is a good thing as then the state pension is something to always fall back on. It is worth getting a pension forecast because then you will know if you have paid enough in to receive the full amount. Which gives you the opportunity to top up if need be.

I have been working since 17, so i know i have paid enough into the state pension  when i retire at the age of 58, and like you say its a good figure to look forward to if i last that long

I have been working and paid NI contributions since I was 15. They only take into account contributions from age 19. 30 years from then is enough for full pension. However, for younger people than myself, 60, 35 years are needed. Our ages are similar so I believe you will be in the same position as I.

[robert k]

It's different for every person, what they consider adequate for retirement to the Philippines. I have strictly limited savings and a small fluctuating income that I know will improve in time. My expenses for household rent water and electricity and visa extensions are about 8,300 piso a month. No aircon, I acclimatized. I have a vehicle which is optional that costs me about 100 piso a day in fuel and maintenance. I can go to the beach or the mountains whenever I want or take a party of 3 out on the town to dinner and the disco and drinks for 1,300 piso. I forgot to say that I have a nice 2 bedroom place 3 kilometers from the main market in Sibulan, Negros Oriental. My GF's mom is kind of scheming on separating me from any possible loose cash but the rest of the family is pretty good on that score. From my research, pretty good insurance can be had for about 40,000 piso a year which added to Philhealth and enough ready cash to get you admitted to any hospital in an emergency should stand you in good stead, about as good as you will find here. More money would always be nice but some people seem to think retirement is a perpetual vacation. I on the other hand am looking far enough into the past and realize that in 1900, retirement was maybe being fed housed and clothed by family who would let you watch the house, sitting on the porch in a rocking chair. If I had been a Roman soldier way back, dream retirement would have been a small farm in which hopefully I would not work myself to death to keep me and my family fed. This relatively new fashion of retirement since major industrialization of the world may just be a fad. I do not feel guilty taking as much advantage of this fad as I can, as I am sure that anyone else would in this situation but I realize it has not always been this way and there is no guarantee  that it will continue. :thumbsup:

 

It would be great to have 200k in the bank. :dance:

[Dave Hounddriver]

 You still could make small draws, and you could of rode it out,

 

That is key.  I was indeed an idiot because I continued to believe I needed $2,000 a month to live on when my fund was giving me clues that $1,000 a month to live on would conserve capital until the market recovered.  Instead I gambled and am forced to live on the lesser amount now.

 

Oh well.  I saw first hand how hard it is to live on less money, which is why I make so many posts in the "Can you live on X dollars a month" threads.  :hystery:

[Johnny]

 

 

 Unfortunately, I was one of the latter.

 

So how good is that figure of 200,00K in the title of this thread?  Here is my story on 2 1/2 times that amount:

 

Retiring with a $500,000 savings account.  Will it work for me?

 

I’m an idiot.  I know I am because most of my friends tell me that.  They wonder how I could retire with $500,000 in the bank and not have money now.  I am going to tell you about that so you can learn how not to be an idiot.

 

On May 1, 2008 I retired with 500K in my account and moved to the Philippines a happy man.  I planned to live on $2,000 a month so I kept the first year’s money in an easily accessible account and kept an additional 10K for moving expenses.  Then I put 10% (50K) in a high risk growth account and the remaining money I invested with my broker.  He is a well-respected broker who had been earning 8 to 10% consistently for the people I knew who gave me a referral.  His firm is highly ranked as a safe investment company.  I invested 416K with his firm.

 

Then came the world crisis of late 2008.  By early 2009 I had lost all my my high risk investments and 30% of my main portfolio.  I still needed to live so I withdrew 24K that year and that left a balance of 266K in my savings account.  Still not bad right?  This broker had been earning 10% per year for my friends so at 10% I could still live on 26K per year.

 

5 years go by.  My savings account never sees a 10% annual return, in fact it is only making about 1% per year.  That’s nothing.  With 5 x 24 = 120K coming out, my saving are now down to 146K.  Now I realize the chance of living off the interest is done for so I split the 146K into 10 and realize I can survive 10 years at $1,000 a month and still have a little left over.  It can be done, right?

 

And then the Canadian dollar falls to 33 pesos.  End of story.  Your mileage may vary.

 

 

EDIT:  To show the other side, I have a friend/neighbor who retired 1 year after me with 500K and a small pension.  He was NOT hit by the world crisis and he managed his own money in the stock market and got lucky.  He is doing extremely well with that amount.  Again, your mileage will vary.

 

Thankyou for sharing this, this should help many people who are trying to make future plans

 

Hello, stressful times!! If you managed to retired with $500000 I would not call you an Idiot!! You as like many others, in good-faith, gave your hard earned dosh to someone you probably didn't really know that well and let them play with it. Big risk for you, little risk for them. After a recent costly divorce I am still fortunate enough to have a sizable amount invested in a low risk account with two banks (offshore) at 3.5% and roll it over every month. I'm not interested in investing here in the Philippines as Philippine banks offer quite low interest rates 1% or less. I am keeping abreast with inflation but above all, I have piece of mind that my funds are still there if I require them. I also draw a pension which covers my rent and day-to-day living costs. I envisage my investments have minimal risk, if the banks were about to go belly-up I have immediate access to my funds. The way I see it is at my age why take risks and stick my neck out too far because simply, I can't start again.

[stevewool]

So many stories and heartache from many and many more will fall, but its down to each of us to say what is enough, be happy with what you have , work with what you have and let the Jones be as happy as you are too,

[Kuya John]

At the end of the day.......Health is Wealth Guy's

[Tukaram (Tim)]

At the end of the day.......Health is Wealth Guy's

 

I have not had that since I got out of the Navy back in 1993. 

 

So I take it one day at a time...  I tend to tell people "I live on $800 (USD) a month - but I would recommend $1,200 - $1,500....   The way my retirement funds work I will never have $200K in savings.  The fund has way less than $100K in it but will pay me $1,300 a month for life. And half that amount for my wife's life, after I am gone.  :tiphat:

[Dave Hounddriver]

The fund has way less than $100K in it but will pay me $1,300 a month for life

 

Interesting.  How does that work?  I used an annuity calculator on line and it says I would only get about 350 a month from a 100K annuity.  Sounds like you have a great plan.

 

On the topic of retiring with 200,000 bank balance, lets look at the Fidelity Investments annuity calculator  https://gie.fidelity.com/estimator/jsp/IncomeDuration.jsp?cola=true Starting at Age 60 with 200K in the bank and at current rates of about 2% guaranteed growth then a person would get as much as $780 for life.  I suppose that is do-able.  It would be much better if there was a government pension on top of that.

Edited March 20, 2015 by Dave Hounddriver

[Tukaram (Tim)]

It is an incredible plan.  It is a Texas statewide plan.  And there is a law that it can never earn less than 7%.  So during the late Bush years/early Obama years - we still earned 7%.  Which was kind of nice.   And to consider I only worked there 4 years... but left the money in the system since the mid 1990's so it kept growing...and my money got vested without me ha ha

[bows00]

At the end of the day.......Health is Wealth Guy's

Well, kind of, I would agree more if you said "You don't have Wealth without Health". I am looking forward to having both during my Philippine retirement. And maintaining a healthy body takes a lot of work...most times it feels like a visit to the dentist right before my workouts.

But I digress... I do believe $200K US would be enough to survive there, but I definitely wouldn't feel comfortable. and it is only because I am single and know how to live a frugal life.

Using the standard 4% withdrawal rate, that would leave you about $800 per month. And yes, that subject has been beaten to death on another thread...