Retiring Overseas

Boracay, Philippines

Have you ever thought of retiring overseas? This thought may have crossed your mind for a number of different reasons. Perhaps you are looking for adventure? It would certainly be very adventurous to take up residence in another country you might be mostly unfamiliar with. That could be pretty exciting. The reason this idea has crossed my frugal mind is because I think I could retire earlier in life by living somewhere my dollar goes even further.

I have come to the conclusion that if I was ever to retire overseas the Philippines would be my first choice. English is widely spoken, crime seems to be fairly comparable to the U.S., it has many beautiful beaches since the country is made up of thousands of islands, the people appear to be welcoming and friendly and (best of all) it’s extremely affordable. I’ve seen various examples of the cost of living in the Philippines, and in general I think it’s safe to say it’s about half the cost of living in the United States when you compare apples to apples.

There are drawbacks of course. You’d have to navigate visa issues and managing finances from another country could become troublesome. Currency fluctuations could add risk, especially for a larger portfolio. Currency exchange rates could also make small, but additional, dents in your monthly income. One of the larger problems for me, personally, would be the prohibitive cost of flying back home to see family and friends. Even one annual trip back home could add $150/month in costs, when you average it out over the year. If I were to retire here in the U.S., there are many cheap transportation options like a bus or train. Flying to and from states is also much cheaper than international flights.

I’ve seen various examples of people living in the Philippines for ~$1,000/month. This isn’t exactly impressive for me, as I’m pretty close to living on that now…and I haven’t left the country. I think these examples, when dissecting the expenses, are actually closer to a middle-class lifestyle. My lifestyle is not nearly as extravagant, as my expenses trend pretty close to the U.S. poverty line. I could probably get by on $500-600 in the Philippines and live a slightly better lifestyle than I currently enjoy.

I wanted to write about this to see what you, the readers, think about retiring overseas. It’s something that is still in the far back of my mind, but I see some great benefits to something like this. I don’t necessarily dislike living as frugally as I do, however I wouldn’t mind living a better lifestyle. If that lifestyle could be attained through no additional costs then I might be open minded to moving somewhere like the Philippines.

Are you considering retiring overseas? Why or why not?

Thanks for reading.

Comments

  1. Anonymous says

    I’ve been to the Philippines. It’s a beautiful country with wonderful people who like Americans, where English is spoken widely, and where indeed the dollar goes far. But there are still big cultural differences that might or might not be problematic for you. The widespread poverty, for one thing, is a psychological challenge.

    This is something to approach experimentally. You should take several trips to the Philippines. Stay for a few weeks, then a few months, in different areas to get to know the country and see if it works for you.

    But a few trips to the Philippines will add to your present costs and possibly slow your progress to retirement at 40, especially if the Philippines turn out not to be Nirvana and you’re destined for stateside retirement after all.

    This post seems to suggest a little more of the frugality weariness that was part of the previous post — “I wouldn’t mind living a better lifestyle.”

    I have a suggestion for dealing with the danger of frugality burnout. Consider your dividends part of your current income and earmark a small percentage of them, maybe just 5% of them, for lifestyle improvements right now, not 12 years from now. Then as your dividends grow, your lifestyle can gradually improve right now, not 12 years from now.

    It’s one thing to live frugally because one enjoys the lifestyle. It’s another to live frugally because it will make life better twelve years in the future. Very few of us have the psychological make up to live a life full of extreme self-denial for a reward that is twelve years away.

    Setting the bar too high for present performance is a recipe for failing to get to the long term goal.

  2. says

    philiphines is not so far from Singapore where i stay. Singapore is probably the best destination for you if u wrote this post 5 years ago. sadly it has gotten much more expensive.

    u will definitely find living in south east asia interesting. do keep your evaluation thought in this blog though. I am evaluating them myself.

  3. says

    Mantra,

    This is a very interesting post! First of all, I can tell you that I am married to a Filipina and there is no better wife in my opinion. Secondly, the Philippines is an excellent choice for retirement.

    Having been in the Philippines dozens of times, I can tell you it’s a wonderful country. As someone commented earlier, your first trip into the Philippines can be a bit of a culture shock. There is poverty at every turn. That’s just part of being in a third world country. I can also tell you there is a thriving middle class and also many wealthy people.

    For example, my wife’s parents (my in-laws) live on about $200 dollars a month. They live on the southern island of Mindanao. There cable TV runs about $16 a month, electricity about $12 dollars a month and internet access about $18 a month. Their water is free.

    You can do easy stuff to off-set expenses like having free range chickens or running a sari-sari store. A sari-sari store is just a small store that you run from your home. Surprisingly, your neighbors will purchase small items from you instead of traveling into town to shop. Things like beer and soda, chips and candy, laundry soap and shampoo. Stuff like laundry soap, shampoo, conditioner, coffee etc. comes packaged in single servings and Filipinos will buy it from you readily. When we visit my wife’s family, were all the time going next door to the neighbors house to buy from their store.

    If your not married to a Filipina, then you can’t own land or a house. You can however own a condo. There are many foreigners in Cebu. My wife and I love it there. Plenty of things to do. Your also very close for travel to Hong Kong, Thailand, South Korea, Bali, Palau, Australia, China, Fiji, Guam etc. My wife and I live in Guam.

    When we travel to the Philippines, we budget $2-$5 dollars for lunch when eating out and $4-$10 dollars for dinner. That’s for two people. Hotels in Manila can vary but we usually get a hotel in the $40-$60 dollar range. When we stay in my wife’s home town, we get a nice hotel room for about $20 a night. Another example is 1 kilo of mangos for about a dollar. That’s 5 pieces of fruit per kilo. Delicious…

    Income Pirate

  4. Mark Miller says

    I’m definitely interested in retiring abroad. Thinking more along the lines of central or south America. Many of those countries have nice beaches, great climate, low cost of living,and much closer to home then southeast Asia. I’m thinking of taking a seminar to learn how to teach English as a second language. It’s not that expensive to take the seminar. I think that would be a great way to supplement retirement income as well as provide something to do to occupy all that time while in retirement. I think I can only sit on the beach for so long before I’d start getting bored. I don’t think this scenario would work for me in southeast Asia. From what I understand there is considerable discrimination against older instructors in that area. One plus for the Philippines, or anywhere in that area would be the fact it is so much more exotic than anything I would be used to living in the states. One thing I dislike about the idea of retiring abroad is the fact that you have no medicare coverage. You’d think the US would jump at the chance to provide healthcare for their retirees at the bargain prices I’ve heard about in foreign countries.

  5. says

    Anonymous,

    Thanks so much for the information. I really appreciate all the insight you gave.

    I can understand your point on the widespread poverty. I’ve done quite a bit of research on the Philippines and I’ve done everything but actually visit and I’ve gotten a pretty decent feel for how poor it is there. I can only say that I hope more westerners retire there and hopefully bring their income with them. Instead of trying to exploit a poor economy it will eventually boost the surroundings and give the locals a better quality of life.

    I do intend to make a trip or two to the Philippines. I’m interested in Cebu and some of the beach-side smaller communities like Boracay. Once I get closer to retirement in 5-7 years I do plan on making a 1-2 month trip and seeing first hand how it really is there. Of course, this is all a few years out still and the Philippines could certainly be a more expensive place to live in that far out in the future. It’s a developing country now, with progress being made all the time. It’s third world now, but it won’t be that way forever…which is something I hope for (for the local people).

    As far as frugality burnout, I see what you’re saying. I guess that my writings have defined some feelings I really didn’t know I had. I don’t feel deprived in any way, but certainly wouldn’t pass up a better lifestyle. I suppose there are two types of people: people that have frugality in their bones, and people (like me) who do it to improve their opportunities, whatever they may be.

    Thanks for the commentary. I really appreciate it!

  6. says

    Drizzt,

    Thanks for stopping by.

    Just the same as Singapore, the Philippines could be much more expensive 5-10 years from now, and is likely to be so. It’s a developing country and it won’t be a third-world country forever. That’s something that bodes negatively for me as it will be more expensive, but I’d certainly be very happy to see it happen as I think the Philippine people are a very proud and wonderful civilization and deserve a better quality of life.

    We’ll see how it goes. I do intend to keep my ideas and research public on this blog, and retiring abroad is one of my many ideas. Let me know how your research goes as well.

    Take care!

  7. says

    Pirate,

    So you are married to a Filipina? That’s pretty terrific. I’m happy for you. They seem like really wonderful and proud people. You live in Guam? I didn’t know that. That seems like a pretty exotic and unique place to live. I imagine it’s a lot like Hawaii, no?

    I agree with your assertions on cost of living. It seems that, in general, it’s about half the cost of living here. You could probably live on a quarter of the money in some places, if you’re OK living in the provinces. If you want a semi-Western lifestyle, then I would say half is fair.

    I’ve heard the southern island of Mindanao can be a pretty treacherous place for foreigners, especially Americans, due to kidnappings and other crime. It seems anywhere else is very safe.

    Thanks for all the fantastic information. I actually used craigslist to look for rentals and found many 1-2 bedroom apartments in the $250 range around Cebu, which is extremely cheap. And that was using craigslist, which I’m sure if far from the most efficient way to find cheap places to live in the Philippines. It seems that food, as you assert, is also extremely cheap in that country.

    I agree with you on cheap flights. It might be expensive to fly back home to the U.S., but cheap flights to other exotic locales like Hong Kong and Fiji would be a really great benefit! I didn’t even think of that.

    Thanks for stopping by. I’ll have to write you some time for more information on the Philippines.

    Take care.

  8. says

    Mark Miller,

    I had thought about Central and South America a few times when the idea of retiring abroad first entered my mind. It would be much easier, logistically. The problems I found is that most of the desirable areas have already been claimed by a large number of expats, and are therefore fairly expensive. The languages could be a barrier as well. Some countries are also not as friendly with the visas. The Philippines, for instance has a retirement visa program where for as little as $20,000 you can buy a permanent visa. That is, of course, a lot of capital…but it saves a lot of money on constantly have to leave a country to get a renewed visa.

    Let me know what some of your ideas are and where you think you might go! Maybe I’ll join ya!

    Take care.

  9. says

    MoneyCone,

    Thanks! I’ve researched it tremendously, but kept my post short on purpose. I don’t want to write a long, drawn-out article on living somewhere I’ve never been. I think it’s a very cheap and comfortable place to live due to the lack of barriers, but only visiting and living there could truly give you room to speak on the subject. I look forward to traveling there one day and seeing first-hand if it’s something I could do.

    Keep in touch.

  10. says

    Mantra,

    I agree with your cost of living assessment. You can live for approximately half the cost. If you get into the provinces, then you can save even more. Cebu has a huge ex-pat community and the Filipinos are super gracious to foreigners. Here are some additional cost comparisons that you might find interesting.

    A six pack of San Miguel Light $2 dollars compared to Miller or Bud Light $6 dollars (66% savings).

    Movie in the province $1.25 compared to $8.50 in the states (82% savings).

    One hour massage in the Philippines $7 dollars compared to states $45-$60 (84%-88% savings).

    Whole rotisserie chicken in the province $3 dollars compared to states $6 dollars (50% savings).

    Gasoline is approximately the same price as the states (0% savings). However, everyone zips around on scooters so you can save big time if you use a scooter (80 miles to the gallon).

    Transportation and housing extremely cheap. Also, how about a live in maid? You provide living quarters and meals plus $120 a month salary and that takes care of all your cooking, cleaning and household duties.

    I have land in Mindanao but will probably retire to Cebu or Bohol. My land in Mindanao is a rubber tree farm. You might consider Bohol as they are building a huge cruise ship terminal for travel and it’s very close to Cebu. Bohol and Cebu have international airports. Feel free to get back with me if you have any questions

    BTW, yes Guam is a lot like Hawaii. Beautiful white sand beaches and plenty of sunshine…

    Income Pirate

  11. says

    Why Philippines exactly?

    Some people recommend south America – Argentina or Mexico for retirement. Others recommend places like Thailand. Personally, I think that Eastern Europe is a great place to retire now.

    The thing that you should not forget about is political risk. Some countries that are “cheap” are not democracies. That might mean that it might not be safe for you to be there – you could have an uprising similar ot ones in Egypt or Tunisia or Lybia. Also as a foreigner you are viewed as a rich person, even if you are not really rich. That might make you a target of kidnappings etc in an unstable country.

    Next, you should also try to be somewhere, where you will “fit in”. If there is a US expat community where you are going, chances are that you will fit in. However, if you go to a foreign country, and you do not plan on at least trying to learn the language and be open minded about other cultures, then you will be pretty miserable. When you are retiring abroad, you are also losing on social capital – all the friends and everyone in your network, who you have built relationships with over the past 20-30 years would be “lost for you”. Sure you can Skype, but if you cannot keep in touch, you are going to drift apart, so you will have to start from scratch. Are you willing to do that when you are 40, and you are “set in your ways”?

    Why I like Eastern Europe – most of the countries there offer low prices, they have low risk ( as most have recently joined or are going to join the EU in a few years) and have the cultural amenities and vibrant communities which offer a lot to an open minded person who is willing to explore the world and live life. There are plenty of low cost airlines, which could transport you to major hubs like London or Amsterdam at prices that are comparable if not lower than transportation between Chicago and Kansas City or Saint Louis.

    The main issue is that as many countries in the world develop, their standard of living increases, and as a result you will experience higher costs of living. You could easily switch to another country of course, which would have both good and bad experiences.

  12. Oculista says

    Have you thought about South Vietnam? Saigon has a thriving middle class. It’s a very cheap country (a coke served in a restaurant costs about 0,50€/0,70$) and they like american people. They are not smiling everytime like thai or cambodian people but it seems like there is less poverty or at least less differences amongst people. You can go to the same places as native people without feeling a stranger.

    Thailand is also a good option (Bangkok or some island like Koh Samui). Thai governement even provide expats with courses about how to handle with property, healthcare, etc. And Thai women are very, very beautiful (at least in Bangkok)

    South East Asia has one of the smaller rates of murders and violence in the world, similar tu western europe and lesser than south america and also united states or canada.

    I have been there (Thailand, Cambodia and Vietnam) for 3 weeks this summer and they were my best holidays ever.

    Keep in mind that the flights are expensive (900€/1300$ from Spain) but once there the cost of living is cheaper than in western countries.
    For example our 4 stars hotel in Koh Samui was 90€/130$ for a double room for 5 nights (a month would have been cost 540€/780$) and breakfast was included. There you could eat a dish of Pai-Thai (rice noodles with meat or seafood) and a beer for 2€/3$ on a local restaurant.

    I think I could retire by now in South East Asia but finally come back to continue compounding my portfolio.

    Great post!

  13. says

    Pirate,

    Thanks for all the information on the food comparisons. I would say that the difference in food is one of the larger savings available, along with rent and transportation. If you eat the right foods and eat comparably to here in the U.S. the savings could be dramatic. However, if you’re comparing eating sandwiches here to eating out at restaurants in the Philippines it’s not apples to apples.

    Guam sounds really nice. I have done minimal research on Guam, but that seems like a great place to live. It’s exotic, but it’s still a U.S. territory.

  14. says

    DGI,

    Which Eastern European country did you have in mind specifically? In my research, I’ve found that the eastern part of Europe is rapidly becoming quite expensive. I compared Prague in the Czech Republic to Cebu, Philippines just now and it turns out that Prague appears slightly more expensive where I live now (Sarasota, FL) and much more expensive than Cebu.

    http://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=Czech+Republic&city1=Prague&country2=Philippines&city2=Cebu&displayCurrency=USD

    I remember seeing a show on HGTV “House Hunters” where they profiled a man buying his first house in Belarus, and I believe he was spending around $100k USD and he was getting a shack in return. I was actually quite shocked. This is just one instance, but I certainly wasn’t impressed with the real estate market there.

    I do agree with you on the loss of relationships aspect. That would be the major downside of retiring overseas. I have some experience with that as I am the only member of my family living here in Florida. I moved here because I simply couldn’t stand another harsh northern winter and FL has no state income tax, which is a bonus. This move has strained some relationships with family and friends, but I really don’t let it get me down too much.

    I also agree with you on the fact that as developing countries develop the cost of living will naturally rise. I think that the Philippines are starting from such a low base that this impact won’t really be felt for many more years. Of course, I wouldn’t mind if the Philippines developed rapidly. I think the people seem really proud and wonderful and again, I think they deserve a better quality of life.

    Thanks for stopping by!! Take care DGI.

  15. says

    Oculista,

    Thailand is second on my list. I think other SE Asia countries (Cambodia, Vietnam) are also cheap, but lack some of the western amenities I might crave and I think would be TOO MUCH of a culture shock.

    Thailand has its own list of downsides. In particular, I’ve heard many stories of discrimination and intolerance toward foreigners. In addition, the visa laws aren’t as friendly the Philippines. It’s cheap like the Philippines, and yes the women there are beautiful. They have wonderful food and some of the islands are beautiful. It is second on my list.

    Thanks for the ideas! :)

  16. Anonymous says

    I thought about retiring to South Africa, I spent alot of time there in 82 & 85 at my expense. I was in Durban which was alot like Miami, also Cape Town which I liked hands down, nice blue ocean, & look out your window great view of table mountain. I had south african friends in both cities so that would have me alot. South Africa has gone to pot, it is a dangerous third world country so I’m glad I didn’t move there, now I don’t think much about going overseas, there is so much in the USA I have never seen , never been out west hope to one day.

  17. says

    Anonymous,

    South Africa certainly fits the cheap requirement, but it’s extremely dangerous as you point out. That wouldn’t be place on my list. Cape Town looks beautiful, however.

    The USA is also a wonderful place to retire, and the idea of retiring overseas is just that: an idea. It’s not the best idea, and even retiring in the U.S. has its own drawbacks. I also have a desire to see more of my own country, as I have many places on my travel list.

    To our pursuit!

  18. says

    Hello Dividend Mantra,

    Thanks for featuring the Philippines in your blog. I was born and raised in the Philippines, now I am currently in living Toronto, Canada. I had a taste of both living in third world and first world and you are right living in the Philippines is so affordable, however, certain parts of the country can be expensive.
    I live in the island of Mindanao and $500 – $600 is a great budget for 1 person living anywhere in the Philippines. When I was in college(2002 – 2005) I was living with my 2 sisters and our budget for each month was $500 – $600. Our rent that time was $125 per month. We also have Cable for $25(50 – channels and yes we have CNN),Internet(somewhat slow…) $50. water is free,however we do not drink from the tap we buy them and our grocery is $100 – $150 per month (I am not so sure what the price of it now). We also pay hydro – $30 – $50 per month since we have airconditioning, fridge, 2 computers, and a tv, plus an electric water pump.
    We also have a mini garden where we plant our own vegetable. We have dogs who serves as our security and they stay outside most of the time.
    We do not have a car since we take the “jeepneys” or taxi which are extremely inexpensive.
    My favorite Cities in the Philippines are Cebu and Baguio.
    Cebu the second largest city in the Philippines and has an international airport with direct flights to Singapore, Hong Kong, Seoul and Tokyo. I like Cebu because it is pretty much like my home town, the only difference is theres a lot business and it is 10 times bigger. The rent’s may vary, however you can always go shopping and I am sure you can find something decent.
    Baguio is probably my favorite city in the Philippines. I lived in the City for over 2 years and I highly recommended this city. The weather is great and a lot cooler than Cebu or Manila because it located in the mountains and the city has everything you need.
    Philippines Medical tourism is growing and it is so inexpensive to see a dentist or other medical things in this country compared to what we pay here in North America…. The country also has a growing middle class so the cost of living might change. I would not retire there, however I do not mind spending 3 months of my Canadian Winter in the Philippines. It is also close to a lot of inexpensive countries in Southeast Asia.

    Dividend Boy

  19. says

    Dividend Boy,

    Thanks for all the fantastic information. I also got your email and will be writing you back.

    I’m glad that you agree that $500-600 is a feasible budget in the Philippines. It’s interesting to note that you wouldn’t retire there. Any particular reasons? Is it the pollution and rampant poverty? I agree that obviously North America is more attractive and has a lot less poverty with more amenities…but you pay for it. Really great information. I truly appreciate it.

    I seen on your blog that you are also trying to achieve financial independence by 40 years old. I wish you luck as we are both aiming for the same goal.

    To our pursuit!

  20. says

    Hi, I’m from Czech Republic (now living in Sydney, Australia) and Czech is not and never was part of the eastern Europe, geographicaly or economicly. And trying to compare with Philippines really made me laugh :) 1 bedroom apartment in Prague cost $250.000+ … But nice blog! I just add you to my rss and looking forward to new posts. Cheers

  21. says

    Jakub,

    Thanks for stopping by.

    You are right. I suppose it depends on who you ask, but the Czech Republic would probably be considered Central Europe. I guess a better comparison would have been Lithuania or Estonia. I also compared the cost of living in those countries, and they are pretty well on par with a Midwestern U.S. cost structure.

    Since you are from that region, would you say that there are any countries in Eastern Europe that are dramatically cheaper than the U.S.? I have been hard pressed to find any regions outside of SE Asia that are much cheaper than costs here at home. It seems Asia and India are some of the cheapest areas on Earth. Most of Europe is absolutely beautiful, and I wouldn’t mind living there at all. But from a cost-of-living standpoint, it doesn’t seem advantageous.

    Thanks for stopping by. I appreciate your insight!

  22. says

    DM,

    The countries I had in mind included Bulgaria and Romania. I have spend a lot of time in Bulgaria, and a little bit in Romania and Greece. I would say that with $1000/month you can retire and live very well.

    You can either rent an apartment for $200/month or purchase one for $50-$60K in the capital of Bulgaria. You have an extensive public transportation network, plenty of things to do and could travel to anywhere in Europe.
    Utilities such as electricity are slightly more expensive, whereas cable and internet as super cheap and faster than what i have in the US midwest. There is vibrant nightlife and many cultural things to do as well – museums, historic places etc.

    Personally, I like a small university town of 100,000 which is 60 miles south of Sofia which has 2 universities, including an American University. The Greek beaches are a few hours away driving, same is true for a very nice ski resort – Bansko.

    Best of all, a round-trip ticket to the US will be only about $1000 especially if you travel off-season. Most people fly during May – September and December – January periods. Since you will be retired, you can travel whenever you want to.

  23. says

    DGI,

    I didn’t think of Bulgaria or Romania when I was comparing costs. After taking a look, you are right…both countries are significantly cheaper than even modest midwestern U.S. locations.

    The minor issues for me, personally, would be the fact that the climate is not as desirable to me, as I prefer warm climates. That’s really just a personal preference. The other issue might be language barriers.

    I’ll have to keep this area in mind. After looking at pictures of Belarus, and specifically Sofia, it looks very beautiful, culturally rich, and the cost of living is discounted significantly.

    Good choice DGI!. Definitely one to put on the list, if a cooler climate is acceptable.

  24. says

    Hi Dividend Mantra,

    I have been living in the Philippines for 13 years and I could say that this is the best place to retire. With the warm weather, you can go anytime of the year to the beach except when there is storm. Healthcare facilities are excellent. They have excellent English-speaking doctors who also specialized in Europe/US. Quite a number of Europeans are staying here permanently though some are located in the South (Visayas). I opted to stay in the North (Luzon) very near Manila, the capital. I find everything very affordable. From a one hour massage ($6) to watching a movie ($3)eating out in a fine Italian restaurant for 5 with appetizer soup main course ($70) This price is extremely affordable compared to the prices in Belgium. I always look forward going home to Philippines each time I go for a short visit to Belgium. People are generally warm and friendly and they are also very happy people. They have great respect for elders. Each country has its good and bad side. It’s just a matter of deciding whether to move here or not. My mother comes here every year when it’s winter and she enjoys so much the weather and their beautiful nature. I would be glad to answer questions from anyone considering retiring here. I could suggest ideal places for them to stay.

  25. says

    ddn,

    Thanks for stopping by and adding your thoughts. It seems you are very happy living in the Philippines. I’m really glad to hear that.

    Thanks also for the examples of expenses. I think that in general the Philippines is very cheap. While it could be fairly pricey to live in Manila, there are many provinces where you could live comfortably for a fraction of what you would pay here in the States.

    One question I have for you is how do you navigate visa issues? Also, where do you receive your income from? Pension? I know that the Philippines has a retirement visa program (SRRV), but it seems most foreigners who live there op to renew their tourist visas before traveling back out of the country.

    Thanks for stopping by!

  26. says

    Hi, you may check this out. All your questions may be answered by the two American expats happily living in the Philippines. Have a great day!

    • says

      ddn,

      Very nice! The Philippines seems like a great place if you’re looking to live somewhere tropical on much less income. However, I hear the infrastructure and cuisine leaves a bit to be desired. But you can’t have it all.

      Thanks for sharing!!

      Best wishes.

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