FINANCE & INVESTING
By Don Freeman
Managing Your Retirement Is Step #2
The last issue I discussed planning for retirement.
Once you’ve planned your retirement, the next step is actually managing
your retirement. While it’s not a full-time job, there are certain
things you need to manage to keep your retirement running smoothly.
First, you want to address the age old question of rent versus buy. Many
of my clients and fellow expats contemplate what to do in terms of
housing. First, it comes down to if they still own a home back in the US
or Europe. Some expats have decided to rent out their homes and use the
rental income as part of their retirement income. Others are unable to
part with their home because of sentimental value or they still use it
when they go back to their home country. However, if there is a mortgage
on the property, my advice will always be to sell. There’s no room for a
mortgage or debt in managing your retirement. Debt is a sure way to
manage your retirement into the ground.
Here in Phuket, my recommendation is to rent. For one, renting gives you
the ability to determine if a unit or building is right for you. You
would not believe all the horror stories I’ve heard over the years of
bars opening near a condo and the noise making for many unpleasant
nights. Second, I have yet to find a management company that manages a
property as well as those back in the states. I’ve seen many buildings
deteriorate over the years. The construction quality here is just not as
good as what I’m used to in America.
Renting provides the option of walking away from just a security deposit
and one month’s rent if it’s a one year contract. If you look to rent a
property in the low season, deals are plentiful and you can get your
choice of units and buildings. Or if you want a house, renting is the
way to go because foreigners cannot own land. I know many unscrupulous
agents will tell you Thai company is the way to go. Tell that to some
expats where the lawyer kept the 51% when he was supposed to be just the
nominee. As retirees, we cannot afford to put ourselves in any bad
situation. If you do buy make sure you consult with a reputable law firm
that has experience working with foreigners and contracts and make sure
if the investment goes wrong it won’t derail your retirement plan.
Always have a backup plan.
Lastly, it’s pretty obvious there is no shortage of available units here
in Thailand. Whether we’re in Bangkok, Phuket, Pattaya or Chiang Mai,
there is no shortage of condos. Matter of fact, it looks like they’ve
overbuilt. Everywhere I look, there’s a condo building going up or ads
for buildings yet to be built. All I can say is buyer beware!
The second thing you want to address in managing your retirement is your
life insurance. Now I do not sell life insurance and I am not a fan of
insurance products. Life insurance is actually something you probably
don’t need once you retire. Actually the only reason to keep your
current life insurance policy is if you have large debts. Most retirees
are better off cashing in their life insurance policy and investing it
Third, you want to have your affairs in order. Make sure all accounts
have designated beneficiaries. This goes along with your will and
ensures who gets what. Make sure all your important documents are easy
for your family to locate. This should include your will; trust
documents; insurance policies; a detailed listing of your assets,
including account numbers and dollar amounts; and a durable power of
And finally, the fourth and final part of managing your retirement is
managing your portfolio. The two critical pieces to managing your
portfolio are yearly portfolio adjustment and actually building your
portfolio. Even though you’re retired, with the right Exchange-traded
funds (ETFs) and stocks, you can actually grow your retirement portfolio
if you properly planned your retirement. Many retirees have been
misguided and misinformed that stocks are too risky for retirees and
that bonds are the best investment for retirees because they produce
income. The reality is that a balance, diversified portfolio is what’s
Managing your portfolio also involves managing your withdrawals and then
rebalancing your portfolio after the withdrawals are made. A common
question that I get from my clients is where should they take the money
from? That’s why each retirement portfolio is unique and why a custom
plan is what’s needed. Feel free to give me a call, email or Skype and
we can discuss that custom plan for you.
Don Freeman is president of Freeman Capital Management, an independent
US Registered Investment Advisor. He has over 15 years experience and
provides personal financial planning and wealth management to
expatriates. Specializing in UK and US pension transfers. Call
089-970-5795 or email: [email protected]
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