Reader Submission: The pension is losing purchasing power, will this endanger our stay in Thailand?
A few elderly pensioners of various nationalities live in my neighborhood who are visibly not well off, but are nevertheless able to manage. Some of them have no health insurance, others cannot afford trips. They stay at home for a while, with the occasional moped ride to neighboring Big C or Tesco.
Now I had noticed that the NL'ers among them often have to make do with only AOW and Pension and some savings. Other EU nationals seemed to have more room for maneuver. It was therefore equally striking to me what I read in NL media yesterday: “Pensioners do not have to count on an increase in the next 5 to 10 years. Because the funding ratios of pension funds have fallen sharply, there are no extras available. Funds are in the red. Where a healthy fund has a coverage of at least 105 percent, the largest funds in the Netherlands fall far behind. The ABP is now at 96 percent, Metaalfonds PMT at 95 percent and PNO Media, PME and Zorg en Welzijn are even at only 94 percent.” www.rtlz.nl/finance/personal-finance/pensioenen-kan-jaar-niet-ophoog
The article continues with the slogan: “The pension loses purchasing power. Indexing is therefore a long way off, and shortening is getting closer and closer. According to Peter Borgdorff, director of Health and Welfare, pensions cannot be increased for at least 5 years, but it may also take 12 or 15 years before inflation can be made good again. Retired people will therefore also lose a lot of purchasing power in the coming years.”
Which means that: the ratio between the level of the benefit (which has been the same for years and will remain at the same level in the coming years) and the cost of living is starting to show a strong imbalance. If the amount of the benefit is also reduced, this means a significant decrease in monthly income.
Now there will certainly be a large number of lucky people living on roses in TH. Last week I even read that someone reported that 3000 euros per month is not enough. Every month he had to make extra money from his savings account. But I think that many people have to make do with AOW and pension. The AOW abroad is already disproportionately subject to abrasion, due to the fact that supplements and tax credits can no longer be applied. If the Pension is now also affected by reductions, all these measures could hit a large number of pensioners considerably.
Besides those who can live in Thailand as before God in France, there are also optimists who believe that the cost of living in Thailand is low. Apparently they buy their weekly groceries at local markets and eat at street stalls 3 times a day. And others, not completely free of envy, believe that as long as AOW and Pension do not reach the same heights as the Thai minimum of 9 thousand baht per month, pensioners in Thailand have no right to speak.
What I am curious about is whether and to what extent all these discount measures make pensioners already living in Thailand concerned about their near or distant future. Can they still meet the income requirements of Immigration, do they still experience the same level of living and enjoyment, is there a financial safety net in case of serious or long-term illness, do people sometimes think about returning, is it still possible? And what about those who have plans to emigrate to Thailand?
On Thailand blog you can read several times that plans to emigrate to Thailand are often postponed or canceled for financial reasons. In short: is our stay in Thailand in danger?
Submitted by Soi
If you can't make ends meet in Thailand, then certainly not in the Netherlands, I'm afraid. Is also an appropriate proverb for namely putting the consumption to the trade.
I agree with you, but it seems a lot more difficult if you live on Sukhumvit (Bangkok) than in Khon Kaen.
Dear Dirk, always respond with: putting the consumption to the business is a clincher. We know that by now, and that's how it happens. My question is not about that either. My question is precisely about the possible effects of the declining business. Any idea?
Ls,
You will certainly need to have a certain minimum income to be able to afford the basic necessities of life. It also makes a difference where you live, of course. Chiang Rai or Pattaya. It seems to me that you will have to have at least 1200 € per basket.
Gr Rob
As long as you can meet the income requirement for your retirement visa, there will be "few" problems to continue your stay in Thailand.
Often we live "too" well and it is best to cut back "something" in the daily needs.
It may be wise for many who have a meager pension (I also have) to save in a separate account in addition to the state pension to have a supplement at least 3 months before the renewed application if the income is becoming too low.
With an income of a total of 2000 euros per month, in extreme circumstances, a reduction in pension, a drop in euros, saving an amount of 3000 baht per month for a year will be the solution.
You only have to do this once and possibly add something if more trouble arrives.
“Pension will not reach the same heights as the Thai minimum of 9 thousand baht per month, ???Just read. My single “mother-in-law” gets 700 baht a month deposited into an account or are they kidding me?
I can confirm that of the 700 bath per month. This is a government benefit. It is for all older thai (over 65). This means that these people must continue to work or be supported by their relatives. The writer was talking about the earnings of an ordinary Thai (younger than 65) who works and therefore has a minimum wage of 300 baht per day. Nothing is earned on a day off, so with 30 days of work that is 9000 bath. That 300 bath per day is a standard that does not apply in rural areas.
Hello Casbe
that amount of THB 700,00 is correct. That is the state pension up to and including 79 years (don't know when it starts). From the age of 80 people receive THB 800,00 per month. One must apply for that extra THB 100,00. in the official residence. My mother-in-law is 82 years old, but has not been able to apply for it because she is too ill to travel to southern Thailand, so she still receives THB 700,00 per month, while my father-in-law receives THB 800,00.
Gr. Hank
The first reaction: putting your money where your mouth is is a good saying and it must and can be done. We will certainly succeed because back to the Netherlands (we live in the north of Thailand for 8 years) Never and never.
I do remember that we, as now retired, have paid quite a few premiums during our career. My husband and I have each worked for 42 years, so 84 years together.
Then I get a bit sick when I see and hear what is about to happen to us (what we thought was well-invested money). Government in the Netherlands, what are you doing ???????? Fie!!
Your pension is paid from a private piggy bank or insurance policy, into which you have invested approximately 20-25% (take a look at the money you have invested for 2 x 42 years, you will cry, especially if risk insurance was also linked to it in the event of premature retirement). passing away ! ). The rest must come from profits/returns on investments. Those returns used to be 10-15%, with an inflation of 7-10%, and now 1-2% with an inflation of 1-2% (if it will be repaid at all and not the pennies in a bankrupt company – ABN- Fortis, for example, or country - Greece. After all, returns had to be achieved, so higher risks. Have we all stood by with sleepy heads !) .
The expected value of tens of thousands of guilders per month will therefore never come true, but everyone could have known that if they had gone through the conditions.
No government can do anything about these returns because it is independent of their powers, at most they ensure that the pension pots are not now emptied at the expense of those currently saving. Hence the so-called calculation interest rate.
Your (state) AOW was once set up by Drees cs and then it was already assumed that the retirement age would increase in accordance with the expectation pattern of a reasonable old age. However, no government has ever dared to do anything about it until recently.
By definition, you did not pay a penny for your own state pension, but it was paid for by the workers at the time. If that changes democratically to, for example: only to be spent in NL, so that the “expenditures once again benefit the NL economy” you will only be on “black seed” in TH.
@Harry, that of the state pension only to be spent in the Netherlands has been applied by Denmark for years. If you live outside the EU, you will lose the full Danish State pension to which you are entitled (other than in the Netherlands) by having paid contributions. For me that was approx. Euro 200 - after paying premiums for 10 years there on the Danish Merchant Navy. I do receive the company pension every month. Do I want to have the Danish State pension do I have to settle in an EU country again, So I am very worried about the AOW from the Netherlands, it may well be that they just stopped exporting benefits, following the Danish example, outside the EU, and what then? Back? Living among all Syrians? I don't speak their language.
My question is not about the effects of the recently introduced new method of low actuarial interest, but about what that method causes. Has also surprised the sector itself and also policymakers. http://www.telegraaf.nl/dft/geld/pensioen/24556168/___Koopkracht_ouderen_extra_onder_druk___.html
As far as the AOW is concerned: Drees et al had solidarity as their starting point. Solidarity has been raised by current pensioners when they paid for those who were enjoying their old age at the time they were employed. My state pension was not “paid for by the workers back then.” This is a complete misrepresentation. I was one of those workers back then, like all pensioners today. We then paid the people's state pension. If you want to talk about solidarity, ask us!
Moderator: Please stay on topic: pension.
Moderator: Please stay on topic: pension.
Pension not reach the same heights as the Thai minimum of 9 thousand baht per month.??? So read correctly. My single mother-in-law only gets 700 baht deposited into an account, is that possible or are they fooling me?
You take part of a sentence out of the total context of the question and run off with it. I am not talking about the TH pensions in TH. And nowhere do I say that TH pensions are linked to TH minimum wages. I challenge you to comment on the context of the entire question.
For long-term stays you must of course meet the visa requirements and the income limit is still 65.000 baht per month or 800.000 baht pj etc etc. With the current exchange rate, therefore 1623 euros (for unmarried persons). The gross/net story has never really become clear to me, but the immigration office in Pattaya still assumes the gross story, which is used in my case. What you can actually bring up is the Dutch net amount and that is different for everyone, of course.
For me, a reasonable life means comparing it with my life in the Netherlands. So a nice bungalow of about four to five million bath, with internet connection and good air conditioners, a car and motorbike for shorter distances, good insurance and a decent sandwich and bite of hot food. Take a trip every now and then. Well then you need about 2000 euros net to make ends meet. If people cannot afford this, it is better to stay in the Netherlands, because then it will only be stressful here. The only alternative is to live in the countryside, then you can apparently do with less. I have no experience with that. You will still have to take into account a drop in pension income, because apparently this is about to happen with this less, less, less cabinet. So it is better to have a buffer of about 25% on top of the aforementioned amounts, then I think you are future-proof, although you can never be sure because the madmen pull the card in the Netherlands.
many forget to add 8% holiday allowance to make the annual income appropriate
therefore I give up the annual income and rightly so
I did not leave the Netherlands for good until I had built up a financial safety net.
Whether it is enough remains to be seen.
Thailand is a developing country and sometime in the future, prices in all countries will reach a similar level, because with free world trade, products will go to those countries that pay the most.
The developing countries will therefore also have to pay that price for those products.
The price increases in Thailand will therefore (almost?) be higher every year than those in the Netherlands, as a result of which the purchasing power of Dutch pensions in Thailand will become increasingly lower.
Moving to Thailand with only state pension does not seem like a good idea to me.
I have some friends in Phuket who have to live on their state pension. Here they have a reasonably comfortable home for Baht 7000 / month and the weak baht has just given them an advantage of 10 % . They make ends meet , they live frugally but happily . One just came back from the Netherlands and found that he could never live in the Netherlands like here and was very happy to be back here ……. in the future it will always be easier to live here than in the Netherlands (including no heating costs etc.)
Dear Eric,
I think it's great that there are people who can live on little money. In my case with my bungalow, staying at the dark site of Pattaya, in a moo job, life is a bit more expensive.
There are no heating costs, but my electricity bill is usually between 4500 and 5000 bath per month. When I get acquaintances or family over, the electricity consumption is 2000 baht more per month. Water costs about 1200 to 2000 bath (my girlfriend loves plants and they need water again) and the rent is between 17.000 and 20.000 bath per month for my type of bungalow. Incidentally, no luxury bungalow with swimming pool, etc. I only use the air conditioning in a bedroom at night and sometimes for an hour during the day if it gets too much for me. However, a lot of fans are used during the day and I have a large pond and 2 aquariums and three refrigerators, so they consume quite a bit.
As long as people can meet the minimum requirements of the Thai government, or AOW + small pension, I think life will always be better in Thailand than in the Netherlands.
I rent a decent apartment for less than €150 per month + €50 electricity + water.
In NL, something similar would cost more than € 600 + € 150 glw. So more than € 550, - more.
Food in Thailand is about as expensive as in the Netherlands, and going out doesn't make much difference either, unless you drink whiskey in the Netherlands, which is a lot more expensive.
I also buy clothes much cheaper in Thailand than in the Netherlands.
Many complain about expensive health insurance when they go abroad. I'm much cheaper than in the Netherlands.
In the Netherlands, about 7% ZVW (was zfw) premium is deducted from the gross salary and you pay about €130 in premium yourself from your net salary. In addition, the deductible of € 375, - I think already.
I pay less than € 50 now and can increase to a maximum of € 150 when I become 80 years old. Completely without excess, and with worldwide coverage except USA. A matter of searching the internet, and certainly not using a Dutch insurer.
In short: Life in Thailand is considerably cheaper than in the Netherlands, so that even with a small pension you are better off here than in the Netherlands. However, don't expect to spend every day in the gogo bar. That is not possible in the Netherlands with a small pension.
Moderator: please don't chat.
Moderator: Please do not chat.
First to clear up a misunderstanding. The employer paid 66.6% of the pension premium and the employee 33.3% of the pension premium.
The money of all pension funds is well invested, let there be no misunderstanding about that. The boards of pension funds include representatives of employee and employer organizations with an independent chairman.
What is happening now, and that has been since 2008, is that the return on investments is not great. You can notice that, because borrowing money from banks at the Nederlandse Bank BV is almost 0%.
There is also a disadvantage that the calculation method for the funding ratio has changed. This met with a lot of resistance from the pension funds. Because people were just starting to get a little "meat on the bones" again through the old calculation method.
The day before yesterday I read in the AD that only 30% of the elderly know how their pension works. This did not surprise anyone, because when I was on the Works Council responsible for pensions and AOW, I was surprised that many employees had no idea how their pension was built up. They did get an overview every year, but that was good to light the fire. Hardly anyone asked for an annual report from the pension fund.
So writers in forums, blogs, etc. write without being aware of how pension funds work and the obligations of pension funds. Because that's what it's all about. The obligations of pension funds to their members. The calculation methods are out of date. It needs to be kicked off.
Until investment returns go up, there will be little room for increases. Because a lot is invested in “safe” investment funds, including government bonds, those funds only give little return. Pension funds are not allowed to invest much in 'adventurous' funds, because that is at odds with the obligations they have towards the members.
So this situation will last for several years. Those who are to blame for this are, in principle, the banks that took irresponsible risks in 2008. And we, pension holders and pension funds are now stuck with the baked pears.
The fact that pension funds are deeply in the “red” is mainly due to the ever-changing requirements and calculation methods of this government. Particularly because of this, funds are supposedly in the red despite the fact that the total assets continue to grow. Today or tomorrow the government will want to take another step into the coffers. They recently already did this indirectly at ABP.
Returning to the Netherlands may seem like an option for those who live in Thailand, but I think it will get them into even more trouble.
Renting a house here is at least 500 Euro per month. Electric and gas around 150 and just add the water, municipal taxes etc and you are already at 1000 euros just for living. Then the insurance policies, health insurance premiums, personal contribution etc etc also come into play. Then you have to eat. Pensioners residing in the Netherlands are also finding it increasingly difficult. I cannot underline the statement that all this endangers a stay in Thailand. It endangers all Dutch pensioners anywhere in the world – wealthy people aside.
We have one of the best laws for pension funds and because they are prepared for the future, they unfortunately yield less at the moment. I'm not worried about that. Well about the AOW because the people who are now 1 + have paid less than the generation that will have to cough up the premium in +/- 75 years and I wonder if they can still afford that. It remains to look in a sphere what exactly we will receive in the future and I think take your measures now but don't forget to LIVE in the present…..
Not only the calculation methods have changed, say increased, but also the coverage of 130%, which in the near future, proposed by the Minister/Secretary of State, must always be present and cannot and may not be affected. So this will actually be dead money and that is exactly what people want. The next step is, we have to do something with the government with that dead money and that could be done, for example, by all pension funds that put 130% in a separate fund and where the previous EU president van Rompuy dreamed that it would be taken over by the EU.” used” as, for example, a guarantee fund for the “nice things” that the EU commission has in mind. Take it from me that every guarantee fund set up by and for the EU is wasted money,
money we will never see again. What the EU is good at is filling bottomless pits.
The annoying part of the whole phased looting of the pension funds has already started and our government is happily participating in it. I assume 50% less pension in the near future and then I would be better off staying in Thailand than going back to the Netherlands.
There will undoubtedly be pensioners in Thailand who are, probably rightly so, worried about the future development of their financial situation.
But there are also those in the Netherlands, and probably even more among those who are still working.
You never know tomorrow, let alone next year, and worrying alone is completely pointless.
You can do an experiment.
Let's assume that purchasing power decreases by 12% over the next 2 years compared to the current level.
It's an assumption, but you have to do something. You can simulate those twelve years in one year by putting 100 more in a piggy bank for every 2 Baht you spend in January. In February that will be 4 per 100 and so on, so in December if you spend 100 Baht you also have to put 24 in your jar. We will then be virtually in 2028.
It is a bit of a hassle, of course, but it does give you some insight into whether your concerns are justified, and it also leaves you with a nice piggy bank, and you can find out where you could save.
If you are also afraid that the Euro will fall, you may have to charge 3 or 4% per month.
Happy New Year in advance!
it all depends on where you live and what your spending habits are like.
I know someone (German) who has been living in Thailand for 10 years and comes out with 550 Euro.
If I'm in the province I can go out with a 1000 Euro per month (woman) and me.
When we go to our apartment in Srigun (Don Muang) we just lost 1500.
Must say that the house in the province and the apartment in Srigun are owned.
So calculate a rental value of say 300 to 500 Euro extra.
An acquaintance of mine in the Netherlands (single) has a 980 Euro per month in social assistance. Rents a flat for 650 (including heating), 80 euros per month for gas and electricity and 120 for medical expenses. Save 160 euros per month for food, drink and clothing.
Forget telephone, internet and cable.
My wife and I are going to Thailand in 3 years and will stay there until the end. Here in the Netherlands, we have to pay more than 700 euros in rent. In 3 years that will be around 800 euros. So we no longer have those costs. We have a house in khon kaen people have to get by from 6 to 7000 bht, so even less if I pay for rent here, so it will work right? We will not be able to lie on the beach in Phuket every day, but we will be able to go to other places where it is a lot cheaper and there are plenty of them. The only expensive thing is actually the insurance, but we will get over that, so we go that way and see where the ship strands.
greetings from an upcoming pensionado in thaland
The people in the picture are there every day where Pattaya Klang turns into Pattaya Beach Road. Eat in food centers like Big C (Carrefour) for 50THB 2x a day, buy their drink at 7/11, sometimes have a girl for 200THB and sleep for 150THB a day. If they have an interpretation for long-term residence, these people will be able to stay for 10.000THB per month without health insurance with a Dutch pension of 700E = 28.000THB per month. With the purchase of slippers 50THB, shorts 129THB and a T-shirt 80THB, they have new clothes every month. These people live a bit different from the average Dutch person who emigrates to Thailand, who is looking for comfort and is more expensive. Countless Thai families where the man earns no more than 6 to 7.000 THB and also sends his children to school.
MY big question is not whether I can live in TH of my NL AOW and self-accrued pension and assets, but whether this is sufficient if I start getting REAL medical care.
How do I pay for permanent old-age care if I REALLY need help, because in NL you go at the expense of the AWBZ the nursing home is.
Moreover, that is after… 15-25 years of retirement and interest on assets.
In all the above comparisons I see people who want to live in touristy Phuket or Pattaya, or somewhere in between. And as a cutback, live upcountry.
A few things are clear to me:
1) AOW will be cut back democratically, if only because of the expected better health and therefore perceived self-reliance, in addition to an increase in the average old age reached.
2) the privately accrued pensions will never again achieve the returns of the past. Government bonds – in which the pension funds invest a lot in view of the certainty – are already yielding hardly anything. This is not going to improve, because the governments are about to collapse from the height, so they will do everything to keep interest rates low. In addition, interest rate agreements are already being concluded for 10 years, so 2025-2035 for 2,02% interest.
3) I will live longer, with more demand for care, which will be able to do more due to advancing technology, but at a higher price
4) In currently still cheap countries such as TH, the cost level will move more towards “the West”, so you will need more financial resources.
In TH, just like in NL, you need to have decent health insurance. It is crazy to think whether Aow and Pension: “is sufficient if I am going to receive REAL medical care.”
That is not the case in NL either, which is why health insurance (zkv) has been made compulsory in NL. The fact that this obligation does not exist in TH is not an argument for not taking zkv in TH. Your train of thought with which you start your response makes no sense. During your preparations, go to: http://www.verzekereninthailand.nl/
Do pensions and our expectations go together?
The difference seems to be quite high for a large number?
Always stays separate until we seem to need more money abroad than in the Netherlands.
Just a wet finger work for a near future as far as I'm concerned.
I was once calculating if I would like to live in Chiang Mai center for example.
2 bedrooms in Condo about € 340 per month all in. For when someone comes to have a cup of coffee haha 1 extra room. (also here it can probably be cheaper, but I'm a layman)
OOM insurance 600 euros per year deluxe (very cheap must have forgotten something?)
Then save € 300 per month because you sometimes want to go home.
For me the most important “Roof over my head and medical expenses”
With a pension of 2000/2100 net per month!!
Another 1300 to 1400 to digest. Still, I feel like I don't have much!
Because during vacation I lost n 5000 for 3 weeks.
In the Netherlands I have less to digest per month a 700 net (paid everything)
Is that going well? Fine I can do what I want in reasonable sizes.
So where does this difference of thinking lie?
I think I'll forget until I'm settled here and not in Thailand, for example.
Would I live there and master the language, social life built on it, then I should be able to live well off my pension. (As it stands now haha in 7 years??)
What I want to indicate “One can live well somewhere in all kinds of ways, provided one is satisfied and remains realistic.
Vacation and living somewhere is like comparing apples with oranges.
Thailand versus the Netherlands it is more expensive here, why do you need more money there?
What I understood from other readers is until they finally have a good time there in Thailand.
Nice to read and encourages me to live there in due course if possible.
Furthermore, I am already raising my children Thias haha kuhn Helping Dad when he lives in Thailand.
The last is something that concerns me the most "How do you deal with family / friends but especially children living so far away" One of the children lives in Sweden and yet I could do a cup of coffee "but Thailand just a little too far
gr chief
If you want to enjoy your pension in the Netherlands, it is easier for your children to come to visit, but if you live in Thailand and they come to you, you have more intensive contact with your children. Especially when you make sure there is enough room to stay. My experience is that I prefer to see my children once a year and have them with me for a few weeks than, for example, have them come by once a week. Since you think you will spend less money per month, you can also show them a bit of Thailand.
The problem with the pension funds lies in the money buffer in the funds.
There is plenty of money in the funds for all insured.
What goes wrong is that the money in the pension funds is never paid out.
The money in those funds is in fact the property of the insured in that fund only, and they should be able to use that money together.
Then they can all live like God in Thailand.
However, the government and the pension funds do not allow the money to be used up, but call it a reserve for the next batch of pensioners.
And that money will always be reserved for the next group of pensioners.
That entire amount that has been accrued with contributions and returns is therefore never returned to the pensioners.
Same story with health insurance.
The premium payers have paid billions in premiums and gifted them to the insurers for the buffers of the insurers.
And they never get it back.
Pension, we all calculate what costs for ourselves, in order to give a reasonable follow-up to an often working life. but you can charge whatever you want
the laws change every year, just look at healthcare costs outside Europe from the basic package.
My calculation was three months Thailand and three months the Netherlands etc.
The annual travel insurance will go up considerably.
Calculating what extra health insurance costs in Thailand might be an option.
It is certain that pensions will not keep up with price increases in the coming years
It is certain that there will be a reduction in the amount of the benefit.
I certainly can't live like a Thai in the Isaan.
What I can do is adopt the Thai habit and let my children in the Netherlands support me.
Going to live with my children for three months in the Netherlands
rent out my own house
in Thailand I have a relationship with someone who already has a reasonable house, apart from the purchase of a good bed and air conditioning, those costs were fortunately not too bad.
Okay, let's do some more math for now, but going to work tomorrow.
Two months of work and one month to Thailand all year round
also an option.
The ECB (Draghi) keeps interest rates low so that the southern European countries can sell their products better. The ECB is partly to blame for the current (low) interest rate level, as a result of which the pension funds …………