A recent report revealed that Thailand was the top overseas destinations for senior Australians looking to retire abroad, closely followed by other south-east Asian countries Malaysia, Vietnam, Bali and Cambodia. But how does living overseas in retirement really turn out for the Aussies who wave goodbye to their homeland?
The report by International Living Australia found that the cost of living, the friendliness of the locals and a better climate were all cited by expats as the reasons they’d swapped the land Down Under for another country in their retirement years, with the majority of respondents to the magazine’s survey citing a much lower cost of living as the main driving factor behind their move abroad. Many reported struggling to afford the cost of a mortgage in Australia or being unable to see they could retire comfortably given the level of everyday expenses.
As an example of the lower cost of living available outside Australia, one Aussie who had retired to Thailand’s north, said that selling her house in Australia had allowed her to create an income stream sufficient to live in Chiang Mai, where apartments in the city go for as little as $40,000. For higher-end villas with pools and spas, retirees in the beachside location of Hua Hin reported paying $140,000.
The low cost of dining out was another draw Thailand offered, with meals costing around $4 if purchased in local eateries, as was the small fees English-speaking doctors and dentists in Thailand charged for consultations.
Starts at 60 readers weighed in on the debate, with many sharing their own experiences of moving abroad and telling us why they chose to settle down elsewhere after finishing work. Rod Kimber retired to Thailand 14-years ago, saying that the popular holiday destination, which he was familiar with visiting during his working life, offered a “great climate, great food and great people”.
But he disagreed with claims Thailand was a “cheap” place to retire, adding that the cost of living had risen drastically there over the past decade. “It is not such a cheap place any more compared to 10 years ago, especially Bangkok,” he noted. “But up-country it is still possible to have a good life on $1,000 a month.”
Carol Ramsay moved to Spain 12 years ago and has never looked back. “I love it, a good move. I love the life, relaxed and my money goes further,” she said.
We asked our blogging community to vote on whether they believed Australia was a good place to spend their retirement. Of those who responded to the online poll, an overwhelming majority (83 per cent) answered “yes”, although there were a few who hankered for a more exotic location.
David Ireland revealed he would jump at the chance to move to Thailand or Malaysia, were it not for his young grandchildren. “We would not hesitate moving to Malaysia or Thailand if it were not for family,” he explained. “Very good and affordable health care, eating out is very cheap, home help is very accessible and cheap, flights back to Australia are cheap. Even renting is cheap and while purchasing property has a few more hurdles and risks, buying a home or unit is quite inexpensive also.
“I would probably choose one of the popular expat areas in Malaysia at Penang or near the Singapore border, or a low-key resort area in Phuket, Thailand. Depending upon health care and home care needs, we might end up overseas but not while our grandchildren are still sub-20 years old.”
For reader Brian Pickering, though, it’s all about Australia. “I’ve been fortunate enough to have lived and worked in Papua New Guinea, Spain, UK, USA and visited several other countries,” he said. “Currently planning to go full-time on the road. Most Aussies have never really seen their own country (me included) which is what we are keen to do!”
Blogger Barbara Easthope agreed with Brian about Australia being the best place for retirees, but also expressed concerns about the rising cost of living and inadequacy of payments such as Newstart and the Age Pension, admitting that those reliant on the payments may bear a different opinion.
“I voted yes, but I must admit with some reservation,” she explained. “Yes, it’s great for me, but I count myself as fortunate to be financially secure. I do think it is becoming a tough place to live if you aren’t financially secure as rents are getting unaffordable and if you’re out of work and under 67 and on Newstart you’re worse off. It’s high time all governments looked at affordable housing.”
Pauline Swift revealed that after two decades living in Europe, she chose to come home to Australia for her retirement, while Marianne Massarany said she would never consider packing up and moving elsewhere because her children and grandchildren are in Australia.
Meanwhile, Joan Rowe candidly admitted that while life in Australia has been tough, she couldn’t see herself living anywhere else: “Life has been a struggle for me most of the time, but I have always managed to feed and clothe my family on my own and keep a roof over their heads,” she recalled. “I would not be anywhere else.”
For those who do want to spend their retirement outside Australia, there are some income-related technicalities to consider.
The Department of Human Services cautions Australians considering retiring overseas that doing so will impact the way the Age Pension may be paid to them. And International Living Australia says that moving overseas prior to the pension eligibility age in Australia can even change a person’s residency status and thus their eligibility for the pension.
On the upside, however Atlas Wealth Management, a financial advisory firm that specialises in advising expats, notes that the superannuation system doesn’t discriminate between non-residents and residents when it comes to the tax payable on super withdrawals, with the same rules applying to both.
The Australian Expat Investor, a site that offers advice for Aussies living or planning to live overseas, meanwhile, reminds wannabe expats that some countries require new residents to hold substantial amounts of cash in the bank or show evidence of a certain level of income in order to be granted a visa. Visa requirements can also include the necessity of regularly checking in with a local immigration bureau.
Some countries also have restrictions on the purchase of properties by foreigners and strict prohibitions on working while in the country.
As is always the case before making a major financial decision, it’s important that anyone hoping to retire overseas speak to a professional adviser, preferably one with specialist knowledge of overseas retirement issues, to ensure that the move doesn’t have any detrimental financial impact.
For its annual Global Retirement Rankings report, International Living Australia surveyed expats in 15 countries to assess popular retirement destinations, judging the locations on four aspects: ease of obtaining a visa, the cost of living, the availability and cost of healthcare and the climate. Each country was given a score out of 100 in each of the four categories, with the results pooled to provide an average score out of 100. Thailand bagged the number one spot, thanks to its “friendly people, delicious cuisine and affordability”, with an impressive score of 91.1.
The top five spots on the list all went to Southeast Asian nations, with Malaysia taking second place with 88.3 out of 100, followed by Vietnam (85.1), Bali (84.6) and Cambodia (84.1). All five countries scored very highly when it came to cost of living, with Vietnam even boasting a perfect score of 100.
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