Brits and Americans are increasingly retiring to locations overseas for a whole range of reasons – so why hasn’t this concept taken off in Australia?
The UK has one of the world’s strongest currencies and ironically one of the worst climates! Retired Brits are heading to continental Europe in ever-increasing numbers where they immediately double their savings by converting their nest-eggs from pounds to euros. Naturally, they head to areas with warmer climates, typically around the Mediterranean – Italy, France, Spain and Greece, as well as Portugal and Croatia. All of these areas are now home to little enclaves of English retirees who have traded long, damp, nine-month winters for better food and more sunshine, as well as a much cheaper cost of living.
American retirees are also fleeing their homeland for south American ports such as Panama, Costa Rica and the new retiree hotspot of Mexico. Weather is certainly an attraction, but the main reason appears to be financial – lower taxes, a cheaper cost of living and of course a great exchange rate on their US dollars.
So why don’t we see hawaiian-shirted conga-lines of Aussie retirees heading overseas to live?
Well for starters, Australia appears to have everything you could ever want in a retirement destination – a developed, English-speaking nation with clean air and water, mostly crime-free cities and towns, and of course a great climate.
How could you possibly improve on that?
It seems you can.
Rob is a 66-year old who fled Brisbane two years ago after a messy divorce. He has now settled in Hanoi and is loving his new expatriate life. “The cost of living here is about 60% cheaper here than in Australia. The people are friendly and I have made some terrific friends from both the local and expatriate communities” he says.
Rob travels regularly, taking advantage of the cheap flights on offer from the many discount airlines that service Asia. “Since I have been living in Vietnam I have visited Korea, Japan, China, Malaysia, Cambodia and Laos. I also go to Thailand with friends at least once a month” said Rob.
Other Aussies retire overseas for a variety of reasons:
Currency
The Aussie dollar is quite strong compared with our local neighbours. This positive exchange rate can instantly double or triple your retirement nest-egg when converted to a foreign currency. If you are on a pension this fact alone could significantly enhance your quality of life.
Tax
Australia is one of the highest-taxing nations on earth. There is nothing worse than seeing your hard-earned retirement nest-egg decimated by tax-hungry state and federal governments. In contrast, many of our Asian neighbours enjoy low levels of personal taxation.
Cost of living
The cost of living in many of our cities is probably about average in comparison with other developed, western nations, but much higher in relation to our Asian neighbours. The recently published Mercer’s Cost of Living 2010 report listed Sydney at number 24 and Melbourne at 33. Although below established Asian cities like Beijing, Tokyo and Seoul, in places like Thailand, Malaysia or Vietnam your cost of living could be less than half that in Sydney or Melbourne.
Climate
Many people migrate north from the southern states of Australia to enjoy the warmer climes of Queensland in their retirement. Did you know that similar climates to Queensland can be found throughout southeast Asia?
Health Care
There is a popular misconception that we have great health care in Australia and that Asia is “third world”.
Nothing could be further from the truth!
Doctors and hospitals in Asia are now so good, and so cheap, that it has spawned a completely new industry called medical tourism. Medical tourism is where people from expensive, developed countries like Australia fly to Asia for medical treatment – plastic surgery or dental work – and spend a few weeks recuperating by the pool in their luxury hotel. The treatment and two week holiday, including flights and accommodation, is typically much less than the price of simply getting the treatment performed in Australia (usually by a foreign-trained doctor anyway!).
And seriously, could you argue that the Queensland and New South Wales health systems are “first world”?
Cheap Travel
If you ever needed convincing about how over-charged Aussies are on air travel, research the prices on some of the budget airlines hubbing out of the major regional ports of Singapore, Hanoi and Kuala Lumpur!
So where are Aussie retirees going?
Malaysia, Thailand, Bali, Vanuatu and New Zealand.
And how do our neighbours feel about Aussie retirees moving to their country?
Great! Malaysia even has a government-sponsored program to encourage foreigners to retire in their country – contrast this with our own attitude on immigrants!
There are some downsides however.
Leaving your family to live overseas can be daunting and forsaking established networks of friends that have taken years to build is a huge decision. It takes time to settle in a new place – even longer when the language and culture is different.
However, if you are thinking about retirement and yearn for a lifestyle worlds away from Aussie suburbia, then trade your local Westfield shopping mall for a village fresh produce market in Asia and consider a move overseas.
Richard Andrews is the founder and CEO of Find My Retirement Home, a company that provides independent advice and buyer’s agency services to retirees looking to purchase a retirement home.
