Cheap and exotic: the overseas retirement option

August 18, 2014

Retirees who face the prospect of a frugal existence in Australia’s high cost cities are taking off to live in Asia where their pension and super go further. Can you imagine doing that – selling up the family home or renting it long-term, and establishing a new life for yourself in Bali, Vietnam, Malaysia, Thailand or Cambodia? Even parts of Europe – Spain, for example – can be a cheaper retirement destination than Australia.

A new book called Sell Up, Pack Up & Take Off tells you how to do it, and tells the stories of Australians who have taken the plunge. They swear they feel younger, healthier and richer for the move. And because of Skype and cheap technology they don’t feel cut off from family and friends. Authors Stephen Wyatt and Colleen Ryan are two terrific journalists, former China correspondents for the Australian Financial Review. But more than that, they both have accountancy credentials, handy for explaining the implications for pensions, superannuation, tax and health insurance of the expatriate life. “The trend to living overseas in retirement is basically economically-driven,” Colleen said. “People can live really well overseas but don’t have the dosh to do it in Australia. Personally, I’m horrified by Sydney prices.”

I first came across the phenomenon about eight years ago when retirement was far from my mind. I was on holidays in India and met a retired couple from England who told me how they made their modest pensions go further. They rented their family home out for six months a year and spent that time in India, sometimes in one place, sometimes travelling. They loved the adventure, the cultural difference, and the warmth. Life was cheap and, in many ways, better. Later came the movie The Best Exotic Marigold Hotel about the pleasures (and traumas) experienced by a group of British pensioners on moving to India, a country that respects the elderly. I thought, ‘What an amazing thing to do.’ But apparently lots of Australian retirees are doing versions of the expat life though generally not in India.

Take Geoffrey 62 and Michael 56 who have built a new life in the tropical paradise of Ubud in Bali. Their story, not untypical, is about two people who enjoyed the good life in Sydney and Melbourne while they had prominent jobs in the arts. “We were on two good salaries, living in a fabulous apartment in Flinders Lane in Melbourne, having a wonderful time,” Michael told the authors. “We were renting and had always been renters, so the prospect of retiring meant our lifestyle would have to change dramatically. I think we calculated that on a pension, the only alternative for us would have been a caravan park in central Victoria or on the central coast of NSW….So really, we had to find a place to live that offered a reasonable life…and Bali looked like a possibility.” On a Veteran Affairs pension they now live a life of relative luxury. For $60,000 they bought a 20-year lease with a ten-year option on a block of land and built a beautiful Javanese-style house in lush grounds with a pool. They have three staff; and groceries, restaurants, electricity and communications are a fraction of Australian prices.

While finance is the big driver, it’s striking how often boredom is a factor in people’s decision to try a more interesting life overseas. Several said that back in Australian they felt they were “waiting to die.” Ian said, “I was living in Wagga, on the Murrumbidgee River. It’s a nice place. But….life becomes very predictable. They knew what I drank at the bar of the Wagga RSL. I knew what everyone else drank. I knew which topics you could talk about and which topics you couldn’t. I just sat there, getting older and older and older and doing nothing.” After several trips to Vietnam where he’d served during the war, he settled in Vung Tau, a magnet town for old Aussie Vietnam veterans. “I live very well on my (war) pension here,” Ian said. “And I even save.”

Amid the stories of the good life – maids, massages, tennis and swimming – I wondered if the retirees found something meaningful to do. Ian was one who’d found new purpose. He’s helping to run tours of Long Tan and Nui Dat with the income going to a Vietnamese children’s charity. Some have started businesses, cafes or a consultancy or teach English. But most it seems simply feel enlivened by the adventure of living in a new country, grappling with a new language, and taking part in the rich expat life available in some of these places.

“We didn’t find unhappy people,” Colleen said. “Almost to a person they said they felt younger. Expat communities are open to friendship. In Sydney you hang around with the same people, the same age group, the same socio-economic group. In the expat communities there’s a range from 20s to 70s, different professions, and everyone is reaching out to one another. It’s particularly good for single women. They have book clubs and wine clubs and travel clubs….it’s much more social.”

There’s a questionable side to aspects of the expat life: older Aussie men partnering up with local women 30 and 40 years younger, the slide to early morning drinking…..And there are pitfalls in paradise for the expats. Quality health care can be particularly problematic. The book is a must-read on these issues. Yet overall it’s an uplifting story. Facing what they considered a frugal, boring life at home, some retirees have opted for adventure. (Sell Up, Pack Up &Take Off is in bookstores on August 27)

Does this retirement life appeal to you? Please leave a comment.

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