Yes, I wonder what a lot of people are going to do in retirement here (which may come sooner than they think either in terms of their inability to stand the physical demands of buxiban teaching long term or simply because they will be passed over for younger candidates).
That said, I think anyone expecting retirement in the West to be a bowl of cherries is in for a rude awakening. Firstly, I don’t think Western governments are going to be too happy to fund the retirements of people who have spent considerable periods of time outside the country (and thus, paying little to no tax into the system). They’re going to increasingly tighten such laws to make it harder and harder for expats. Secondly, many Western governments are essentially bankrupt already and there isn’t going to be any sort of (reasonable) pension in those countries. We are beginning to witness the great unravelling of the middle class in the West.
GiT and headhonchoII touched on some good points, some of which have been going around my head. I know I can’t see myself teaching in a cram school when I’m 50 something, so what do I do then? Teach in a university system which is going to experience some major changes in the next decade or so? I’m not relying on ever having any kind of “pension” if I do move back home, but I’d rather be on soil of my own where I have more rights and security, none of which I think Taiwan offers to its foreigners. Anyway, I have my plans, so I will see how it goes. I am stuck here for a few more years yet due to some commitments, so maybe I’ll get another tooth pulled out a year later and completely change my mind about everything.
[quote=“GuyInTaiwan”]Yes, I wonder what a lot of people are going to do in retirement here (which may come sooner than they think either in terms of their inability to stand the physical demands of buxiban teaching long term or simply because they will be passed over for younger candidates).
That said, I think anyone expecting retirement in the West to be a bowl of cherries is in for a rude awakening. Firstly, I don’t think Western governments are going to be too happy to fund the retirements of people who have spent considerable periods of time outside the country (and thus, paying little to no tax into the system). They’re going to increasingly tighten such laws to make it harder and harder for expats. Secondly, many Western governments are essentially bankrupt already and there isn’t going to be any sort of (reasonable) pension in those countries. We are beginning to witness the great unravelling of the middle class in the West.[/quote]
Your benefits are already based on what you pay in (for the US) or some crazy mathematical equation that doesn’t matter. What we’re going to see is a national social security system that does not remotely coming close to supporting you in retirement. Some will say that we’re already there but benefits (at all levels) will decrease further.
And nobody should count on any form of social security or pension for their retirement. It’s your future so take care of yourself. It’s likely that you’ll get a little extra every month but unless you want to live in a shithole eating rice everyday then you better be saving now no matter where you live. And this is independent of where you live.
But financially many would be better off putting in time in their home country instead of overseas teaching ESL. It’s not bad to do for awhile but your earnings are basically capped unless you’re in a great situation (rare). And ESL (with buxiban experience) is going to leave with a really weak resume in your fifties.
Yes, people do do that. Trust me, I’ve met so many of them.
Now, back to creztor - have you ever considered the International School circuit? Basically, the only International School in Taiwan is Taipei American School. I think that a lot of people are not aware that Taipei American School is not just some random school that’s really big… it’s accredited by the Western Association of Schools and Colleges (WASC). It’s a real school. If you teach there, you must have a real teacher’s diploma. If you teach there, you get paid something like $60,000 + per month (starting), and you are treated like a teacher back in North America. You get benefits, vacation, etc.
That said, if you were a certified teacher, and you didn’t land a job at TAS, you’d have to look to International Schools in other locales; such as China, Japan, Philippines, Thailand, etc.
I remember reading Michael Turton’s blog (a must-read: michaelturton.blogspot.com/) about how people come to Taiwan and start teaching English… and one day they wake up and it’s been four years. It happens! It happened to me, damn it. However, I had left and come back, so it was a conscious decision.
Anyway, all I’m saying is don’t let the fact that you can speak English define who you are in Taiwan. Doesn’t matter that you already “wasted” a couple years basically teaching English without acquiring any new skills… start today and acquire the skills you need, in order to be where you want to be in another four years.
That said, don’t shun English, either - use it to your advantage. It’s a tool you have in your toolkit. What else do you have? Take them out and use them. Or, acquire new tools… improve on existing tools.
As someone else said, quality is relative. Taiwanese tech is, in the main, competent. Some of it is very good. One or two companies (SMC and TSMC spring to mind) do world-class stuff, in a very narrow field.
If you’re comparing with China, it’s slightly better here: “slightly” because the Chinese are learning voraciously, while the Taiwanese are resting on their laurels assuming that the world will come here first simply because this is Taiwan and that is China, and “everybody” knows Taiwan does things better. The gap is closing fast.
[quote=“headhonchoII”]You folks are too pessimistic, for a small island Taiwan sure still produces a lot of ‘stuff’ and it’s a good location to deal with China from. As for semiconductor design, even Intel are having trouble with upstarts like ARM, I guess low end design is very competitive too. If you want to source medium to high end components for electronic goods or OEM/ODM Taiwan is still one of the best places in the world to do this. Same with bikes and bike parts, same with mechanical goods. Trading companies have had a hard time although there are still some successful ones out there, many have got into ODM to compete. There are 1000s and 1000s of successful SMEs too but you just don’t hear about them.
Taiwan is not the best for every industry that’s for sure but you can’t win them all I guess.[/quote]
ARM isn’t an upstart - they’ve been around for 30 years, focusing on completely different market segment to Intel. It’s only very recently their markets have (via external forces) started to converge. I bought ARM at $4/share in 2008 and sold it a while later at $6. AAAAARGH … and I thought I hadn’t done badly out of that!
The problem with Taiwan’s tech industry is their business model. They design to a price, and seek out a small number of customers who will buy a reference design and a chipset in vast quantities. Very few buyers in the west are interested in this: it suits only Taiwanese buyers, who don’t have the in-house inventiveness to differentiate themselves and would rather buy something that works, slap some graphics on it, and sell it as a “new” product. In contrast, western IC companies sell to anyone who wants to buy (you don’t have to “request” anything from the sales dept. and expect a yes or a no). They do that by providing top-notch documentation (Taiwanese documentation is of a similar quality to that produced by Japan in 1980) and application notes, so support requirements are minimal. The buyers are innovators who want building blocks to create truly unique products. Taiwanese products are somewhat cheaper, but they’re much less capable than an equivalent (say) American product. Example: I can buy an ARM-based CPU (100MHz clock, USB 1.1, basic graphics controller, SDR SDRAM interface) here in Taiwan for about US$5 in volume. I can buy something much better from TI (400-600MHz clock, DDR2, graphics accelerator, and more bells and whistles than you can shake a stick at) for $8. If you’re building a low-end product to sell to Wal-Mart, where every cent matters, you put the Taiwanese chip in it. Anything else, you go with TI. The difference is more obvious with analog parts. I can buy a switching power controller in Taiwan for $0.20, but it needs $1 of other parts to make it work. I can buy a much better one from the US for $0.50, which needs $0.50 of support. Which would you go for?
The problem, as usual, is that lifelong learning and pride in one’s work are very rare in Taiwan - compared with, say, Germany. “ChaBuDuo”, as housecat likes to say. People come out of university, sit at their desk, and crank out exactly the same stuff for the rest of their lives until they retire or go crazy - whichever happens first.
[quote=“shawn_c”]
Now, back to creztor - have you ever considered the International School circuit?
That said, don’t shun English, either - use it to your advantage. It’s a tool you have in your toolkit. What else do you have? Take them out and use them. Or, acquire new tools… improve on existing tools.[/quote]
Some good points there. Thanks for the international school suggestion, but it is something I am aware of. I did decide to go the extra qualification route a year or so ago and currently finishing that up. When I go back to Australia, I will more than likely become a certified teacher. At the VERY least, if I don’t like Australia I can get some experience and then return to Taiwan to work in a “better” school environment or some other country. However, until I get my next tooth pulled out and have another mid-mid-life crisis, I’ll finish up here and head back to become certified.
I was being highly sarcastic with my comment about thinking Taiwan was famous for quality. I distinctly remember having a lot of cheap, plastic dinosaurs as a kid that couldn’t stand up because the legs were not a uniform length. Stamped on the bottom was “Made in Taiwan”. Thus, my love affair with this island and its people had begun.
Everyday the urge to just take a boat over to Taiwan from my current destination gets stronger and stronger. Is it a wise decision to make? The answer is probably no, but I am getting tired of wanting to live my life the way I want to live it.
In my current situation, I worry about career development and how Taiwan will affect it adversely. Yet the longer I wait to come over the more I realize that I just don’t simply care. I like Taiwan a lot, the point of staying there is because one likes it…
Yeah, I was fairly sure that was Guy’s trademark deadpan humour, but sometimes it’s hard to tell And I know exactly what you mean. “Chabuduo” does have its upsides.
I think you are being overly pessimistic here. If they tighten laws, it will be in European countries where the retirement ages are set too low. There might be some tightening up of the formulas for defined pensions but I question your statement on Western countries not having reasonable systems. With a combination of public, private and employer based schemes, any responsible person in Western countries with half a brain should be ok.
First of all, the pensions systems of some Western countries are not in bad shape (e.g., Canada’s) thanks to prudent planning from centre-right governance (I count Liberal Paul Martin’s policies as Finance Minister in the 90s and the current Conservative government in this description). Secondly, there are usually formulas for old age pension systems that require some level of residency in the home country. For example, in Canada, when you turn 65 you are eligible for Old Age Security ($500-600 per month). However, you have to live in Canada for something like 20 years overall between the ages of 18 and 65 to qualify. Some left wing parties in Canada have tried to extend OAS to new immigrants who have not qualified for those 20 years, but there has been little support and rightly so. You want to qualify for the pension? You need to spent time within that country paying into the system.
There is also another pension plan (i.e. CPP) workers pay in through payroll deductions. In retirement, this works out to $1200 or so per month if you have contributed for the maximum time. There is yet a further plan where you can deduct tax every year by putting money into a registered plan. Most employers also have a plan for their employees as well, which is usually a defined plan when you work in government or a quality private sector employer.
So let’s look at a hypothetical 65 year old in Canada:
He gets $600/per month after 65 just for being Canadian and living in country for 20 years.
He worked in a professional job his whole life and Canadian Pension Plan (CPP) contributions were deducted (a few dollars from every paycheque) during his working years. Bingo. Another $1200 monthly in retirement.
He worked for a company with a defined pension, so he wasn’t able to contribute as much to the tax deductable registered plan (RRSP) but was able to save $3000 a year with 3.5% interest. By age 65, even that small contribution would be worth $170,000 and would account for another $1,000 per month over the course of a standard 20 year retirement period (living to 85).
On top of this, his defined pension plan through his employer would be worth half his salary during his top 5 earning years during the course of his career. He made $80,000/year during his top earning years (middle level professional) so his pension is around 40,000/year. That’s around another $3000 per month.
Total=$5800 per month or around $70,000/year. He owns his own house in a big city (approx $550,000), paid it off, and now has that equity with a retirement income almost as high as his working years.
That’s why when people take expat packages overseas, they should be ensuring that the pay is far above what they would get back home or that the taxation systems are far lower than in their home country (which allows them to save and pay lower or no capital gains). You backpack and drift for too long, you’re going to start to panic in your 50s.
You combine all of these together over many years, and it’s a nice nest egg for living in a developed country, not to say a fortune for moving to a nice Asian country with retirement visa programs (e.g. Indonesia or Malaysia).
No unravelling of the middle class at all for people that know how to plan and that are responsible.
The rules (as at this point in time ) for a state pension in the UK are that you must contribute for 30 years to get £600 a month when you reach 65. Currently, the age is being pushed up to 67, and it will almost certainly rise a lot further. Most demographic analysts reckon it will end up around 72. The current rules (subject to change) state that should you not contribute the full 30 years you will get a pro rata pension based on the number of years you have put in - with 7 being the minimum.
I choose to contribute every year because I consider my contribution to be pretty low, around £700 a year, and I’m working on the assumption that the UK will still be a democracy in 25 years time. Therefore, the grey vote will count for something. It’s a punt I consider to be worth taking.
However, it’s also an investment that I wouldn’t be surprised to lose. Why would young people be willing to pay higher taxes to pay for the retired in the future? Why should they, in fact? Ponzi schemes are all about timing.
Like Australia, Canada appears to have a sound economy at the moment due to luck. Wait and see what happens when the economy goes into a downturn. That’s the point when all this wonderful social welfare we westerners take for granted begins to get scrutinised.
As a rule of thumb, I think it’s best to base a retirement on many small incomes. Assume that some of them will go down, but the majority will still manage to pay for a decent lifestyle. Pensions, IMO, are a high risk investment.
That’s just the point though. Maybe (most/all) Canadians and their government are exceptionally smart in this respect, and maybe (most/all) Canadians have in fact paid off their houses and have very low levels of personal debt by the time they retire. That is not the case in Australia though. Despite (or perhaps because of) a decade of boom years, Australians have more personal debt than ever before and a large part of their net worth is tied up in houses with very large mortgages in a massively over-inflated property bubble. People have been using paper gains on the value of their houses as a kind of ATM to finance trips to Bali or to buy plasma screen TVs. If/when the economy hits a downturn, there could be a lot of people actually underwater on those mortgages with very little to show for the past decade or so.
My father is a retired Baby Boomer and he is all right. However, no one he knows, including people who have/had good jobs, is in a situation even remotely similar to his. I know few people my age who are on the right track either.
The Australian government changed the pension age to 67 not that long ago, and I am sure that will continue to increase. I’m not sure what the pension is, but it’s very hard to get (because it’s means tested, so people like my father can’t get it), and not a lot anyway.
The Australian government runs a compulsory superannuation scheme with contributions from both employers and employees, but it’s not a massive amount (if I remember correctly, it’s 6% and 9%, respectively). They offered a whole lot of tax incentives to get people to put a whole lot of other money into it a few years ago. The trouble with that, and with what’s happening generally in Australia with regards to personal debt is that when the storm comes, the government won’t be able to resist sticking its hand in the cookie jar and really taxing the shit out of that to placate the masses who have done very little to plan for the future. I really don’t believe I’m being pessimistic at all. It’s not like all these guys who have been irresponsible are just going to take that on the chin. They’re going to want some of what the responsible people put away.
Governments are ultimately going to have no choice but to fund adequate pension schemes. If things are as dire as people say, then there’s a very realistic chance that there’ll be a significant percentage of retirees becoming homeless or otherwise dependent on soup kitchens etc. That would be a PR disaster for government. As it stands now, the oldest baby boomers are only 65 or 66. In 10-15 years time when most of the generation has retired and Gen X’ers start to retire, governments may have no choice.
cfimages: Precisely, which is why they’re going to start eating the “rich”.
Let me qualify the word rich. Several years ago, my father and uncle were discussing this. My uncle said that it would be okay because they’d only tax the rich. My uncle worked a blue collar job all of his life, worked lots of overtime and led a pretty frugal lifestyle. He was nowhere near as wealthy as my father, but still had several hundred thousand dollars between his house (which he owned) and his superannuation.
My father then said, “define rich?” and went on explain that it’s all relative. Compared to the average deadbeat Australian, my uncle was/is rich. Thus, everyone else (via the government) will be looking to take a bite out of him and anyone with two cents to rub together who didn’t piss it up against a wall when younger.
So in other words, expand them. Take away more individual choice from people, tax them further and ruin competitiveness, and put such plans into the hands of unaccountable bureaucrats? :loco: I would say just the opposite. Trim them and keep the bare minimum. I’m supportive of having some public option–basically enough for a retiree to afford basic rent and basic food. In Canada, I think the public plan you pay into (CPP) and the one you’re entitled to (OAS) provide around $1800 per month in retirement to people that have lived and worked in the country.
Any more than that, it’s up to the individual’s savings and the plans his workplace provided. I think most Western countries provide some sort of basic program. Given the fiscal situation so many countries are in, expanding such programs would be very stupid.
It’s also a PR disaster for countries when they go bankrupt, when their credit rating is downgraded, and when countries are forced into austerity measures because of bloated government systems . I think there is a general consensus that retirement ages must be raised and that individual responsibility and financial planning are the most important components of a healthy retirement. Or lots of old people, like they do in Taiwan, should work. But given the entitlement culture that permeates so much of Western society, could you actually see the bums and the geezers that constitute the lower stratums in old age wanting to work hard? I sure to hell don’t. They didn’t when they were younger, why would they in their twilight?
Which is way painful decisions need to be made now and why expanding any program as you suggest sees like a pretty stupid idea. If programs are to remain solvent, a general consensus needs to be reached that the state can’t do everything for people and that only a small portion of one’s retirement should come from national programs. Minimize them and streamline them to ensure they’ll be there to provide partial incomes for people in retirement for many years to come.
[quote=“GuyinTaiwan”]
Thus, everyone else (via the government) will be looking to take a bite out of him and anyone with two cents to rub together who didn’t piss it up against a wall when younger. [/quote]
It’s a sad state of affairs when people punish wealth creators. Whether it’s Obama’s push to end tax breaks for people making more than $250,000/year or the Liberal Democrats as part of the UK coalition wanting to raise taxes on the rich, it’s the politics of envy. You raise taxes or redistribute too much, businesses will leave to where there is less red tape/government intervention. If anything, we should be celebrating wealth creators. I think it’s the educational systems in the West and the control of them by the unions that brainwashes so many people into thinking wealth creation is bad.
The saddest thing about western education is that it has infused everyone with a sense that being rebellious and controversial is always the way forward. Liberals ran with this for 2 centuries and now lazy conservatives have taken the banner.
Ooh, I come from a country where most people want to raise the top top rates. Therefore the truth must lie in the exact opposite and only I and a few brave avant garde can see that. Damn reality and decades of evidence to the contrary; I am going with feelings.
Perhaps you should work towards starting your own business rather than worry about employment prospects as you get older. The truth is that it’s hard for anyone over 40 to find work, because companies want to hire young and inexperienced workers so they can pay them less. If you’re old and have little experience people automatically assume you have a problem.
I personally realized that employment should only be seen as an apprenticeship, and that everyone’s aspiration should be eventually starting a business. Companies will only employ someone they feel will generate them a lot more profit than your wage. As soon as you outlive your usefulness to the company, they will dump you like an old sock. Do not think just because you worked at any company for a number of years, that they’ll take care of you. Companies are only accountable to their shareholder, and shareholders only care about profit and nothing else.
And I know exactly what you mean. “Chabuduo” does have its upsides.
) for a state pension in the UK are that you must contribute for 30 years to get £600 a month when you reach 65. Currently, the age is being pushed up to 67, and it will almost certainly rise a lot further. Most demographic analysts reckon it will end up around 72. The current rules (subject to change) state that should you not contribute the full 30 years you will get a pro rata pension based on the number of years you have put in - with 7 being the minimum.
They didn’t when they were younger, why would they in their twilight?