Retiring in Thailand and your Pension

If any of you guys are thinking of retiring in Thailand (or anywhere else for that matter) in the next few weeks or months, your pension could be worth a lot less.

The stock markets have crashed around the world and basically knocked as much as 10% or more of indices.

Now if your pension fund is in an Equities type fund, you will have been affected by this.

However, a good pensions adviser and/or company pension advisers should have advised a person over 50 to put their funds in a "with profits" type/safe fund. However, a lot of people just don't bother and wait and wait and wait until they retire, to find out their pension pot aint what it should be.

If you are retiring within the next few weeks/months, the stock markets (probably) wont recover to the levels and couple of months ago. What I am saying is if you are one of the unlucky ones, keep your eye on and check your funds.

If you are not retiring for a few years, you will probably be able to ride out the storms!

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It could just be a correction. 10 percent decline isn't a big deal at all over the long term view. I disagree that people over 50 should be out of equities. Maybe over 70, but 50 is too early. Your theories are very old fashioned and not mainstream. OK for those with no tolerance for risk at all. But remember, no risk, no reward.

BTW, panic selling is almost always a bad idea. Market way up today. I like the market.

It could just be a correction. 10 percent decline isn't a big deal at all over the long term view. I disagree that people over 50 should be out of equities. Maybe over 70, but 50 is too early. Your theories are very old fashioned and not mainstream. OK for those with no tolerance for risk at all. But remember, no risk, no reward.

BTW, panic selling is almost always a bad idea. Market way up today. I like the market.

Well, if one had a pension fund around 2000 and were 50 years of age then, the fund still wouldn't be worth what it was originally in or around 2000 and they would be 57 now. Its a proven theory time and time again. It is also only a recommendation from a lot of advisers to ensure that one limits their risk. Yes, there are people out there who have a a tolerance to risk. But to put it in perspective, UK equities halved their value during the last spiral downwards. If you came out of "equities" at 70, the risk is extremely high indeed.

[globalwanderer]

the answer is not age related, but when you want to retire... as you approach retirement you should move out of equities to ensure a steady cash income

The stock markets have crashed around the world and basically knocked as much as 10% or more of indices.

That is a ludicrous statement.

10-15% can hardly be called a crash.

This is a much needed levelling out of the stocks thanks to the greedy American mortgage market biting off more than they could chew for a few fast dollars.

Already markets have started to recover from the low of the last 48 hours but just don't expect the Baht to weaken. By the end of this year anyone buying Baht and relying on a good rate of exchange is going to be bitterly dissapointed.

the answer is not age related, but when you want to retire... as you approach retirement you should move out of equities to ensure a steady cash income

That is one answer. Not the only answer. For those retired early that would be financial suicide. They still need a good portion in equities to assure continued growth over time. It seems many are thinking like their grandfathers. Retirement investment theory has changed.

[Bob]

WD, your advice is a bit goofy.
If anybody needs their money within the next two years or so (let alone the next few weeks/months), they would be nuts to have their money in the stock market anyway.
And suggesting that people divest themselves of stocks after a 10% downturn is exactly the wrong advice. For people who investments are to sit for a couple of years or more, it's more likely a buying opportunity.

[/quote]That is a ludicrous statement.

10-15% can hardly be called a crash.[/quote]

Naughty:

This is not my terminology, it is news reports, i.e. BBC, CNN - other words they use is "wobbly" "big falls" "bubble burst".

Whatever the future holds, pensioners cashing in on their pension today will be 10-15% worse off.

WD, your advice is a bit goofy.
If anybody needs their money within the next two years or so (let alone the next few weeks/months), they would be nuts to have their money in the stock market anyway.
And suggesting that people divest themselves of stocks after a 10% downturn is exactly the wrong advice. For people who investments are to sit for a couple of years or more, it's more likely a buying opportunity.

Bob:

It's not MY advice, generally what people do, GENERALLY I SAY, is they put money in a pension scheme based on advice from their adviser/company and just sit on it. Invariably, pensions are put into equity funds, bonds and so forth. Equity funds are classed as risky or volatile is probably the word I should use. Generally once again, when nearing retirement age (I'm not stating an age here, but as a general rule of thumb 10-15 years before you retire), an adviser/company recommends that you put your "pension pot" in a low risk fund. That is the way it should work.

NOW - in reality there are a lot of people out there, who don't know there left foot from their right foot and haven't got a clue how pension schemes work - and we are talking about a high percentage here. I think that speaks for itself.

With respect to myself, only a small part of my pension pot is in equities, and I will ride out the storm.

With respect to a buying opportunity while stock prices are low - well how long is a piece of string - unless one is clued up as when stocks are going to fall or rise, then one wouldn't have a clue. Hence, when buying stocks you in it for the long haul, so it "smooths over" over time.

The key about investing in pensions is take account of the risk factors with these funds. Whilst equity funds which are volatile to say the least, bond type funds are now a safer bet and paying pretty high dividends due to higher interest rates around the world which is where a lot of investors are sticking their money at the moment instead of equities. This is only an opinion of mine and I would never suggest anyone take MY advice. They should seek advice from an independent pensions adviser.

I think you are talking about some kind of British thing I don't understand about. (Pension funds.)

Anyway, the investment principles are the same, stocks versus bonds.
I still contend the modern thinking is that even old people should have a good portion in equities:

You guys who think you should drop all equities at the date of retirement are running on ancient false assumptions. I would fire any advisor who advised that.

http://money.cnn.com/2006/02/16/pf/upde ... ymag_0603/

NEW YORK (MONEY Magazine) - It's an accepted tenet of retirement planning: You need to stay invested in stocks -- keeping, say, 30 percent or more of your investments in equities -- if you want your savings to last the three decades or more you may need it for income once you stop working.

The right balance, according to Ned Notzon, chairman of T. Rowe Price's asset allocation committee, is to start off with 40 to 60 percent of your portfolio in stocks at retirement. Then, as you age, gradually ratchet down your stock holdings until they represent 20 to 30 percent of your assets by the time you're in your eighties.