With the cost of even a basic life in many countries creeping upwards and upwards, a growing number of pensioners and retirees are considering moving overseas as a way to get more ‘bang for their buck’ and enjoy a greater lifestyle. From the rising costs of food and accommodation to the hefty taxes applied to even the smallest of purchases, a life of international low-cost living is a welcome alternative to the high-cost, low-reward lifestyle many retirees experience living at home.
Thankfully, the low cost of living in many Asian countries makes living on a pension or fixed income a relatively comfortable prospect. Unlike in most Western countries, where a small pension guarantees a very basic lifestyle, many Asian countries have a very low cost of living that allows those on a pension to live a lifestyle that simple isn’t possible in their home countries.
A pension also provides retirees with a useful source of income that can be used to qualify for long-term visas and residency in many Asian countries. Read on to learn more about how living on a pension or retirement benefit can make a new life in an Asian country possible for you.
Life is significantly less expensive in many Asian countries, but it isn’t free. Even if your pension provides several thousand dollars per month in income, it’s still very important to budget effectively and assess your situation before you commit to a new life in another country.
Many expatriates and retirees move to an Asian country – often Thailand, Vietnam, or Malaysia – because of the low cost of living, only to find that their limited income doesn’t go quite as far as they thought it would. Because of this, they end up with a great deal of debt and struggle to get by with the type of lifestyle they expected.
Countries such as Malaysia and Thailand offer a simple way of life for approximately $1,200 USD per month. This allows a single retiree to rent a small apartment in one of the central city districts in Bangkok or Kuala Lumpur, or a slightly larger one- or two-bedroom unit in less dense coastal areas such as Phuket, Hua Hin, or Krabi in Thailand, or Penang and Johor Bahru in Malaysia.
Along with the basic accommodation, this budget would provide enough spare cash to eat out frequently, to enjoy a leisurely lifestyle, and to possibly hire a maid for one day per week of house cleaning. It will not provide enough purchasing power to live a luxurious lifestyle, and assuming that it will tends to lead to disappointment.
To enjoy a high standard of living in developing countries such as Thailand, Vietnam, and Malaysia, a budget of $4,000USD per month is recommended. This will provide enough money to rent a luxurious apartment in the center of a major city, or a large home in a coastal or rural area. It will also allow one to afford frequent services from a maid or at-home assistant, as well as enjoy a frequent dining-out schedule.
Beyond this, those with a high income or high pension will have no problems with expenses. It’s worth noting that expenses grow disproportionately as you approach the higher end of the spectrum in developing countries. A very luxurious lifestyle, for example, can easily cost ten to twenty times as much as a fairly modest one.
Having a pension, whether from a government or from a private fund, allows one to qualify for a variety of retirement and non-resident visas. In Thailand, for example, someone residing in the country on a fixed pension of more than 65,000THB each month (approximately $2,000 USD) is granted a retirement non-immigrant O-class visa provided they meet the other visa criteria and have no criminal background.
The situation is relatively similar in Malaysia. Those with a fixed income above the government requirement can use it to enjoy a retirement visa with relatively few complications. In countries such as Singapore and Hong Kong, a pension is not a requirement for residency status, although those that plan to live in the territory long-term need to invest a certain amount of assets within that jurisdiction.
Thailand’s visa program for retirees is flexible for those on a lower-than-normal pension. If one fails to meet the 65,000THB per month requirement, it can easily be bypassed by maintaining a bank balance of 800,000THB (approximately $26,000 USD). This indicated to the government that you are able to support yourself for the long term, and allows them to grant a retirement visa without complications.
In some countries, particularly those with well-protected domestic economies, those without a source of local income may have difficulties buying property or a vehicle. Many countries do not offer financing options or loans to those that cannot confirm their income is taxed within the country they reside in. This is worth noting for any pension-holders that plan on making large financed purchases in their new country.
If you plan to retire to an Asian country while living on a pension, it’s essential that you plan for your expenses ahead of time. A great way to get an idea of your true expenses is to visit the country you plan on retiring to for an extended period of time before attempting to acquire residency. This allows you to see the real cost of living in your desired retirement destination, rather than receiving a second-hand opinion online.
Even with a relatively limited source of income from your pension, life in an Asian country with a developing economy such as Thailand, Malaysia, or Vietnam can be a highly enjoyable experience. From the low cost of living to the greater amount of purchasing power that your income gives you, retiring abroad while receiving a pension is a smart financial decision that can drastically improve your lifestyle.