Yahoo Finance 7 cheap countries for Aussies to retire overseas without huge super nest egg
As cost of living pressures rise, retiring overseas looks increasing more appealing. But where can you get the best bang for your buck?
About to retire and worried about the cost of living in Australia? You might want to consider doing it in a cheaper country.
Singles now need $51,278 a year, while couples need $72,148 for a comfortable retirement here, according to the ASFA. So, it's no surprise many Aussies are heading overseas.
Financial adviser and author Ben Nash, founder of Pivot Wealth, said there are many things to consider before booking that one-way ticket to a tranquil Greek village or Thai paradise – from superannuation, pension and tax implications, to visas, healthcare and cost of living factors.
“For example, if you're living in Spain and own property in Australia, you will be paying tax in Australia and Spain,” he told Yahoo Finance. "If you sell everything up, you will only be subject to the tax payments of that country. There is no relocation tax or exit fees from Australia or entry into another country."
In Sydney, the median cost of a buying house sits at $1.4 million, or $25,770 per sq/m for an apartment in the CBD, dinner for two at a mid-range restaurant is $120, a five-item grocery shop is around $29, a full-price cinema ticket is $24 and filling your car with unleaded costs $2.05/litre.
Yahoo Finance has used the global crowd-sourced cost of living database Numbeo to give you an idea of the price you'd pay in seven other destinations, along with the information you need to work out if spending your retirement overseas is the right move for you.
Greece
Cost to retire
To apply for a long term residence visa you'll need to prove a steady income through pension or investments of at least $3,288 per month for the main applicant and an extra $657 for a spouse. If buying real estate over $411,000, you can qualify for the Golden Visa. This will rise to $657,000 from May.
Housing: $4,844 per sq/m for an apartment in Athens
Eating out: $91
Grocery: $30.24
Cinema: $14.89
Petrol: $3.08/L
Pros
Great healthcare offered free or for minimal costs for residents and citizens. Family members can also become residents and tax is a flat rate of 7 per cent if you shift your tax residence.
Cons
Bureaucracy is time-consuming and strikes are common. Popular sights can be expensive and crowded.
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Spain
Cost to retire
Aussies without an EU passport, will need $3,945 a month in passive income for a retirement visa, with additional annual costs for spouses or dependants. For the Golden visa, you'll need to invest $822,035 in real estate.
Housing: $7,274 per sq/m in Madrid
Eating out: $99
Grocery: $23.51
Cinema: $16.54
Petrol: $2.72/L
Pros
Large expat community, hassle-free culture, secure banking system and dependable infrastructure.
Cons
English proficiency is low, bureaucracy is slow and there's a complicated tax system. To maintain permanent residence, you'll need to live in Spain for at least six months of the year.
Malaysia
Cost to retire
Anyone over 50 must put $48,500 into a bank account or prove a monthly income of at least $3,233 in pension payments or investments. Money you bring into the country is tax-exempt.
Housing: $3,823 per sq/m for an apartment in Kuala Lumpur
Eating out: $42.25
Groceries: $14.90
Cinema: $6.51
Petrol: $0.67/L
Pros
Low cost quality healthcare, multicultural capital and great food. People speak English, road signs are in English and Malay. The retirement visa grants multiple entry for 10-years and is automatically renewed.
Cons
Air quality can be poor and the country is prone to natural disasters.
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Thailand
Cost to retire
Thailand offers options from low-cost to luxury living but to get a retirement visa, which is renewed yearly, you must be over 50 and pay $33,700 into a Thai bank account prior to applying or prove a monthly income of S2,735.
Housing: $7,879 per sq/m for an apartment in Bangkok
Eating out: $38.57
Groceries: $15.35
Cinema: $10.58
Petrol: $1.72/L
Pros
Warm weather, large ex-pat community, quality healthcare, modern amenities, great food.
Cons
Tourist spots can be hectic and roads chaotic, foreigners should be wary of scams. Weather can be hot and humid with heavy monsoons. You will need private health insurance.
Indonesia
Cost to retire
To obtain a retirement visa, which must be renewed annually at a cost of $1,200, you need to be over 55, have an Indonesian sponsor and be able to demonstrate a $28,000 yearly income.
Housing costs: $2,838 per sq/m for an apartment in Bali
Eating out: $36
Groceries: $16.40
Cinema: $4.80
Petrol: $1.32/L
Pros
Tropical climate, inexpensive living, rich culture and delicious food.
Cons
English is not widely spoken and Indonesia is a strict Muslim country with rules around behaviour and attire. Highly populated areas can be prone to congestion. Healthcare can be poor and overcrowded.
New Zealand
Cost to retire
New Zealand is a popular option as there are no visa restrictions for Aussies. Singles are advised to budget at least $3,200 a month for a 'no frills' lifestyle and $3,900 for couples.
Housing: $5,453 per sq/m for an apartment in Christchurch
Eating out: $119.63
Groceries: $33.03
Cinema: $16.56
Petrol: $2.50/L
Pros
Free health care for Aussies, who become automatic New Zealanders under an agreement between the two countries. Low crime rates, good food and coffee culture.
Cons
Dental care is expensive so health insurance would be wise.
Italy
Cost to retire
You'll need an elective residency visa, which allows you to permanently relocate if you have sufficient funds. Singles must have $50,976 a year, or $62,487 for married couples.
Housing: $11,577 per sq/m for an apartment in Rome
Eating out: $103.40
Groceries: $31.28
Cinema: $16.57
Petrol: $2.99
Pros
Warm weather, incredible art, architecture and culture, delicious cuisine, great healthcare.
Cons
Cities can be heavily congested and bureaucracy complicated. Some public hospitals have long wait times so private healthcare is advised.
How easy is it for Aussies to retire overseas?
Nash told Yahoo Finance, there are rules around claiming the Aged Care Pension when retiring overseas, but in many cases you will still be able to access payments.
Australia also has social security agreements with certain countries, allowing you to still claim Centrelink payments.
"Typically, if you are dependant on the aged care pension, relocating overseas in retirement is not an avenue you want to pursue," he said. "If you are self-funded or semi self-funded, that could be helpful."
