I’ve written before about my own plans to retire in Thailand and why it’s ideal for me and my family. In a nutshell the reasons are:
- My wife is Thai
- Low cost of living
- Great weather year round (mostly)
- Great cheap food
- Easy access to some of the best beach/snorkeling/diving areas in the world
- It’s an adventure
Those are the basic reason and there are many more I could list, but I don’t want to talk about me…let’s talk about the current cost of living and retiring in Thailand.
In the list above 5 of the 6 reasons I mention are as true today as they ever were. Of course that could change over time, but things change everywhere and we have no way to see into the future. The 6th reason, low cost of living, is perhaps the spoiler for those considering Thailand as a place to retire. While it has been quite cheap for us Westerners in Thailand over the past 2-3 decades that “truism” seems to be reversing itself and Thailand today is more expensive than it has ever been.
Lately there has been a severe weakening of Western currencies combined with a strengthening of the Thai baht that has seen the purchasing power of most expats in Thailand drop by 10-15% per year over the past 2-3 years. Notable exceptions are Australians and Canadians whose currencies are remaining stronger than their American and European counterparts. Lucky Aussies and Canucks!
Added to the strength of the currency is a definite upward trend in inflation in Thailand. Things are becoming more expensive, in part because of the strength of the baht and the effect that has on the price of imports and also because of the upward trend that we are seeing around the globe in the prices of many essential commodities.
If you are considering a move to Thailand you need to ask yourself if you can survive a further drop in the value of your Dollars or Pounds or Euros as it is quite possible we have yet to see the end of the erosion in the value of these currencies. We are also likely to see increasing inflation in Thailand as commodity prices continue to rise and as Thailand’s middle class population continues to expand. There is still a great gap between the rich and poor in Thailand, but that gap IS being filled by an increasingly larger number of middle class Thais. This is not unusual in a growing economy and considering the strengthening of the entire ASEAN region (propelled by growth in China) I would expect this trend to continue.
I would be surprised if you haven’t run across articles online that claim you can live in Thailand on $500 a month, but I caution you that while this may have been true in the past, I don’t think you would be wise to think that it is true now. At current exchange rates that is a mere 15,000 baht and with the most recent data I can find this is even lower than the median income for Thais. Do you really think you are going to be happy living on less than 50% of the Thai population in Thailand?
If I was a single guy I can’t imagine retiring to Thailand without an income of at least $1500 a month and that doesn’t take into account likely inflation and erosion of your purchasing power due to currency fluctuations. Sure the baht may weaken, but it may get stronger too (much more likely for the foreseeable future) and I think having some wiggle room to account for another 15-20% rise in the baht would be wise. If I’m wrong and the baht tanks then you can consider yourself a lucky and much wealthier guy or gal.
I hate to think that some of you may be basing your decisions on old information about the cost of living in Bangkok and Thailand in general because it could be disastrous to your standard of living. What does everyone think? Am I way off base of has it really become much more expensive to live and retire in Thailand over the past several years?