Whether you’re a self-funded retiree or on a Government Pension, you’ll know just how hard it is to increase your income to match the rising costs of living.
So, if lifting your income isn’t an option, then how can you improve or even maintain your current lifestyle?
You need to reduce your costs.
Clearly that’s far easier said than done. That’s one reason why we established Retire to Asia, we wanted to make it possible for people to consider an alternative to save money. And at the same time have more fun in retirement.
Let’s go over a few common questions.
HOW MUCH CAN I SAVE BY RETIRING TO ASIA?
SE Asia generally offers a much lower cost of living. Listed below are some examples on how different the major SE Asian retirement destinations are compared to a few countries.
The percentage figure represents how much cheaper it is on average, country wide, compared to the corresponding country.
| Country | Thailand | Indonesia | Philippines | Malaysia | Cambodia | Vietnam |
|---|---|---|---|---|---|---|
| Australia & USA | -49% | -59% | -52% | -57% | -45% | -54% |
| United Kingdom | -39% | -52% | -44% | -49% | -34% | -46% |
| Germany & Netherlands | -42% | -53% | -46% | -51% | -37% | -48% |
| Norway | -53% | -63% | -56% | -61% | -49% | -53% |
| Japan | -29% | -43% | -34% | -41% | -23% | -36% |
Table 1: Cost of living reduction
While this will depend on your spending, the key here is that this is DISCRETIONARY spending, and money saved is money you can spend extra on having fun and enjoying yourself.
How is SE ASIA so much cheaper?
There are huge savings on rent, but also utilities, food, water, transport, mobile, internet services and entertainment (such as going to the movies, or playing a round of golf).
What about keeping in touch with family and friends? Mobile and Internet is an area where there are big savings. And internet speeds generally are very fast! Call your friends, Skype your family, technology really has made it so easy to stay connected. And when you want to fly back home, flights are plentiful and cost effective (plus you’ll have the spare cash to do it)
What about Healthcare costs IN SE ASIA?
The quality of healthcare in many of our preferred locations is as good if not better than you have come to expect back home, and costs may be substantially cheaper. This is a primary reason why Medical Tourism has become so popular in places like Thailand and Malaysia.
INTERNATIONAL PRIVATE HEALTH INSURANCE
We will always recommend that you take out International Private Health Insurance. This will provide peace of mind should you have an accident or suffer a serious medical episode. This cover will enable you to access truly international quality private hospital care whilst you are living in SE Asia.
So, what is the cost of cover?
This is a little hard to answer as we are all different in our needs, age, and current health conditionS. But we have found the following is a decent ‘general’ guide to what you can expect to pay for private health insurance in US dollars:
- Basic cover – approximately US$1,500 pa or less
- Intermediate – approximately US$1,500 to US$2,750 pa
- Premium – approximately US$2,750 pa plus
If you have private health insurance in your home country, in many instances you will be able to pause this cover for a period to ensure you will not be paying two health insurance premiums at the same time.
In any case, the cost savings from living in SE Asia should well-and-truly cover the cost of international health insurance with plenty left over to enjoy a higher quality of life and/or to limit drawdown of investment assets.
SE Asia even better if you own a home – back home
Most people that we speak to do not plan to live their lives out in SE Asia. At some point in time, they plan to return home. Some only wish to be a grey nomad living in the tropics for a few years, others plan to return home when their health starts to wane.
In both cases it’s usually best to not sell your home in your home country to be able to return to it at a latter date. It can be a costly exercise to sell, then to repurchase at a later date. Plus having your home intact, we find it provides a level of comfort knowing there is an exit SE Asia strategy at any time in future if required.
If you are in the position of owning a home in your home country and are prepared to rent this out while you are in SE Asia, then not only are you able to cut costs, then you most likely will be able to substantially increase your income.
This is due to property rental costs generally being much lower in SE Asia than what you would typically find back home. That is, you can rent your home out for much more than the cost to rent in SE Asia.
The following graph highlights country rental differentials based on major city centres in each country. Like table 1 above, the percentage figure indicates how much cheaper a property is to rent in SE Asia than back home.
| Country | Thailand | Indonesia | Philippines | Malaysia | Cambodia | Vietnam |
|---|---|---|---|---|---|---|
| Australia | -60% | -72% | -74% | -75% | -77% | -69% |
| UK | -53% | -67% | -70% | -70% | -73% | -63% |
| USA | -69% | -78% | -80% | -81% | -82% | -76% |
| Germany | -42% | -60% | -63% | -64% | -67% | -55% |
| Netherlands | -53% | -67% | -69% | -71% | -73% | -63% |
| Norway | -49% | -64% | -67% | -68% | -71% | -60% |
| Japan | -23% | -46% | -51% | -52% | -56% | -40% |
International Retirement Calculator on its way
Retire to Asia has a Retirement Calculator for Australians linked to our web site. Little did we know when we set this up that only 25% of traffic to our web site will come from Australia. Surprisingly, about 50% comes from the United States, about 15% from Europe, and the rest is spread around the world with Japan always showing strongly. So, g’day to you all.
Anyway, as such we are working on an international retirement calculator so that most of our visitors can compare their financial benefits in moving to SE Asia by using the Retire to Asia retirement calculator.
We will let you know when it’s ready. Suffice to say, when it is you will see for yourselves how living in SE Asia could be about the best financial decision you have ever made. That it comes with a relaxed year-round tropical climate is a huge cherry on top.
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