How much to retire?

[Gongchime]

How much do you imagine a relatively frugal person needs to retire in Bali at age 50. Don't drink and don't smoke. Would that invovle putting the money in an investment such as a mutual fund that pays interest on a regular basis? How would you do it if you had $100,000? Is it enough? How about at age 55?

Thanks,

 

[rhondo]

Firstly you have to have some form of health insurance and medical evacuation insurance....So you must figure that into your costs. From $100000 dollars you could generate about $5000/year....clearly CHUMP CHANGE....figure off $1,000,000 you could generate about $50000/year...so you can see somewhere between your figure and that figure should do the job.....and one other thing if you dont smoke or drink what are you going to do with your time in Bali ? Good Luck I hope that helps 8)

 

[tintin]

I recently picked a new primary care doctor. After two visits and exhaustive lab tests, he said I was doing "fairly well" for my age.

A little concerned about that comment, I couldn't resist asking him, "Do you think I'll live to be 80?"

He asked, "Do you smoke tobacco, or drink beer or wine?"

"Oh no," I replied. "I'm not doing drugs, either."

Then he asked, "Do you eat rib-eye steaks and barbecued ribs?"

I said, "No, my former doctor said that all red meat is very unhealthy!"

"Do you spend a lot of time in the sun, like playing golf, sailing, hiking, or bicycling?"

"No, I don't," I said.

He asked, "Do you gamble, drive fast cars, or have a lot of sex?"

"No," I said. "I don't do any of those things."

He looked at me and said, "Then, why do you give a shit?" :lol: :lol: :lol:

 

[tintin]

Gongchime,

Seriously now. As rhondo says, the first thing you need is a health insurance: the ones for expats usually include emergency evacuation, and some other goodies.

If you are considering one of these "retirement" visas, you must put big money up-front, and you have to buy it and renew it. With other visas, it becomes expensive also, in getting them and renewing them. If you look at the forum archives, I am sure you'll get numbers for the different type of visa.

Then, you should plan for the average expenses, not for the "good deals" that you may or may not be able to get, especially in the beginning of your stay. Personaly, I spend an average of US$20.00/day for all my various expenses, including drinks (don't drink much) and a pack of kretek/day, gas for the motorcycle (I drive about 1,500 kms/mo), different repairs, etc. I eat most of my meals out, except breakfasts.

For the house, it varies a lot, depending on: the location, the type of house, how long is your lease (Since you plan retirement, obviously it's a year-lease or multi-year lease), how many pembantu? (the average salary is about Rp300,000 - 500,000/mo. + food and lodging (sometime)).

Transportation. You need to buy a car or a motorcycle. Second-hand transports are iffy because Balinese have never heard of "preventive maintenance" of anything (it must be against their religion). But you could get a deal from an expat or a temp. resident who is leaving. Better buy new: it's relatively inexpensive in the long run (good resale value).

These are few general remarks: I am sure I have left out many items. I think many people on this forum can give you more precise ideas and good, up to date figures to go with them.

Good luck.

 

[Guest]

Do you know the one about the poor fisherman who lived in a small village?

One day a rich Westerner who had made sqillions from speculating on the stock market was strolling along the beach and saw the fisherman pulling in his boat with his meagre catch.

The rich Westerner stopped and remarked "not much of a catch today". The fisherman replied "yes not much" but explained that his small catch was enough for him and his family.

The rich Westerner asked, "But what do you do with the rest of your time?"

"I sleep late, play with my children and have an afternoon's rest under a coconut tree. In the evenings, I go to the bale panjang to see my friends, play some music, and sing a few songs..... I have a full and happy life." replied the fisherman.

The rich Westerner ventured, "I have an MBA from Harvard and I can help you...... You should start by fishing longer every day. You can then sell the extra fish you catch. With the extra revenue, you can buy a bigger boat. With the extra money the larger boat will bring, you can buy a second one and a third one and so on until you have a large fleet. Instead of selling your fish to a middleman, you can negotiate directly with the processing plants and maybe even open your own plant. You can then leave this little village and move to a city from where you can direct your huge enterprise."

"And after that?" asked the fisherman.

"After that? That's when it gets really interesting," answered the rich Westerner, laughing, "When your business gets really big, you can start selling stock in your company and make millions!"

"Millions? Really? And after that?" pressed the fisherman.

"After that you'll be able to retire, move out to a small village by the sea, sleep in late every day, spend time with your family, go fishing, take afternoon naps under a coconut tree, and spend relaxing evenings with friends..."

----------------------------------------------------------------------

You could easily retire in Indonesia with $100,000. After all 99% of Indonesians will never see that much money in their life time. It all depends on where you want to live, what you want to buy and how you want to spend your time.

And if you are lucky enough to come from a country with a national health service like Australia or the UK you won't suffer the same fate as the average Indonesian that needs serious medical attention i.e. destitution.

 

[Gongchime]

Rhondo says it's not enough. Allan says it's more than enough. Who to believe? Who to believe? Hmmm??? I lived on $6000/ year in America till age 35. I should be able to live in Bali cheaper shouldn't I?

 

[manc in oz]

Re: RE: How much to retire?

Rhondo says it's not enough. Allan says it's more than enough. Who to believe? Who to believe? Hmmm??? I lived on $6000/ year in America till age 35. I should be able to live in Bali cheaper shouldn't I?

Hi Gongchime, you've really set the cat amongst the pigeons with this thread. I'm sure you will get Lot's of different advice on here over the coming days. In my opinion, I think your question is a little like asking how long is a piece of string. You are obviously a very frugal person to have managed on $6000 a year in the USA.

As somebody pointed out in a earlier post, you will have essential costs such as, accommodation, transportation, household bills, medical costs etc. Based on the information you supplied and the above unavoidable costs, I would give you a maximum of 12yrs before you ran out of money. But, I could be wrong. :wink: Good luck anyway.

 

[Gongchime]

I lived on $6,000 a year because that's all I ever earned. Thanks for your clearheaded advice though. Exactly what I wanted.

 

[rafalution]

an interesting article on how much you can 'safely' withdraw from your savings


http://www.investorsinsight.com/otb_va. ... tionID=469

 

[Guest]

My wife Ina's parents are renting a house in Mangga Dua (Central Jakarta) for US$500/yr. If you cook at home that's another US$250/yr for one person.

Of course that's not Bali but it's roughly comparable. If you want a reasonable house in Seminyak for example you might pay US$2000/yr if you know where to look and how to bargain. Maybe you will share with someone else and halve the cost. Food would be about the same as Jakarta also if you know where to go and how to bargain.

If you want all the latest gadgets and a Honda Goldwing tear up your budget and start again.

 

[FreoGirl]

You could easily retire in Indonesia with $100,000

To start with you would not meet the retirement visa requirements for income, which requires proof of income of a minimum of USD 1500 per month, or USD18,000 pa.

You could try for a period of time on a social visa (which you would need to do up to age 55 anyway), and then you also need to factor in visa runs and renewals.

See this link: http://www.expat.or.id/info/retirement.html

I lived in Lombok, frugally, and it's cheaper than Bali. Personally I think you are dreaming - however you could have a reasonable (and frugal) 10 years on $100,000 but not have much change at the end of it. Also, have you thought about how you would pay for trips home and that sort of thing?

Best advice - go for a year, see what it takes to live there, both financially and every thing else. Then make the big decision.

 

[Jimbo]

Do not forget that taxes have to be paid in the 18 grand, plus the medical insurance plus a servant, plus a house to rent or buy. You are being given a lot of good advice but here is one I want to add. Do you really want to leave the rest of your life 25-30 years penny pinching. Do not forget inflation will eat away at your savings.

It is a difficult task you have set your self. Why do you not have a couple of years off, do some work and have a couple more until retirement age.

Hope all this helps. For me I will have at least double that amount and a house bought and paid for and pension income on top of that. I do not smoke or drink excessivley and I know how to shop at the market.

 

[froggy]

There is an easy answer to this question and everyone else who has ever asked this question, just visit Bali for a few months and you will know..... everyone has different things they can live or live without, you wont know till you get there, :?: Frog,,, hell make this a sticky?

 

[froggy]

hey did i just make groupie? where does elite kick in, like Mr. Jimbo.. and Jimbo, how bout a bigger shot of your wheels?? Frog

 

[Jimbo]

Elite is quality rather than quantity so you might never make Froggy

I will try and post a bigger picture when I can find it

 

[Gongchime]

Freo girl: No plans for trips "home". I'll pass on the priveledge. Please read with dripping sarcasm.

Jimbo:I lived the last 30 years penny pinching and all I can forsee is doing the same any time in the future no matter where I live or when I retire.

Lombok... I hand'nt thought of that.

Also, If I invested a significant portion of the money then I would get "payments" from the investment that most likely would meet the min income requirement, right?.

Don't need a maid. But I hear you saying I'm dreaming. If you're going to dream, dream BIG.

 

[froggy]

Hey Jimbo are you saying, its not the quantity (size) that counts but the quality? :shock:

 

[shebitme]

You may not need trips home, but you will need to do visa runs, which means a trip to Singapore or similar every 6 months.

Rhondo, I see you are a money manager by profession. I would be very disappointed if my financial adviser was getting me 5%pa on my investments. More realistically I would be expecting a 7% yield, plus a 5 % growth on things like a share fund or listed property trust (LPT). LPT's in Australia will provide pretty secure yields on investments and if you are needing a regular income seem like a good area to invest your money, bring you around $7,000 which it sounds like you are confident you can get by on Gongchime. Just as importantly it will grow so that you are not needing to get by on less each year.

 

[Sanurian]

Hi, Gongchime

I wasn't going to buy-into this thread but having read some posts which, in my opinion, are slightly alarmist and even inaccurate, I thought I'd add a few tit-bits.

A thumb-nail of my current situation: I'm 60 and have been living on the retirement visa for two years. It costs me Rp 10 million/year. I have never had to provide income statements or proof that I earn USD18,000/year. Or that I employ x number of Indonesians, have medical and evacuation insurance, etc. But, perhaps because my wife is Indonesian, those things don't matter (on paper).

I have been renting a reasonable house in Sanur which costs me Rp 35 million/year. My average electricity bill is about Rp 400,000/month (I run two air-conditioners, four hi-fi systems, a couple of computers, have a big refrigerator). My usual telephone bill is also about Rp 400,000/month which includes my "broadband" internet connection. There are a few other expenses that many people forget about like the cost of garbage removal, (depending where you live), "security fee" to your local banjar, and so on. (Definitely not prohibitive, but everything adds up.) Oh, and I nearly forgot to mention this one: the dreaded "fiscal tax" if/when you do want to leave Indonesia...currently still one million Rupiah, after you've applied for an "exit permit" (not sure the cost of the latter but I bet it's not free).

One other area that's not particularly clear is the issue of Indonesian taxation for foreigners, especially "retirees". I would greatly appreciate it if anybody can explain it to me. (With my pension from my country, I don't have to pay tax these days unless I start to make significant extra money. The Indonesian government's position still seems to be a big blur - but watch out...it's slowly "modernising" things. As far as I can ascertain, there is a huge number of Indonesians who don't pay taxes at all, or, if they do, it's extremely minimal. That could change in the future...I'm not holding my breath. I haven't been required to pay any taxes on my foreign "income/pension" in all the years I've been here. Maybe I'm more "frugal" than I thought.)

So you can see that it's not really all doom and gloom financially, as some are trying to suggest. (But nobody has ever accused me of being frugal, so if you are, your expenses should/could be much lower.) Good houses can be rented for Rp 15 million/year, depending on your definition of "good".

Now to a few posted comments that I cannot agree with, based on my own experiences/knowledge.

tintin asserts:

...If you are considering one of these "retirement" visas, you must put big money up-front, and you have to buy it and renew it...

In theory, that was the case when it was first introduced but over the years, when it became pretty obvious that the "requirements" were a bit over-the-top, they have been relaxed to levels more commensurate with the real, as opposed to the imagined, financial means of "typical retirees".

tintin also states that:

...Second-hand transports are iffy because Balinese have never heard of "preventive maintenance" of anything (it must be against their religion)...

I bought my second-hand car (1995 model) from a Balinese who was/is a fanatic when it comes to servicing. I've been driving the thing for more than eight years (all around Bali and all around Java as well). It's still a reliable vehicle. I know many people in western countries who don't service/maintain their cars properly (mainly because of the cost). Only today, I've taken steps to re-register mine - it'll cost less than Rp 500,000. My point here is that not all Balinese are hopeless when it comes to looking after their cars/motorbikes.

And as I've said above, FreoGirl's:

...To start with you would not meet the retirement visa requirements for income, which requires proof of income of a minimum of USD 1500 per month, or USD18,000 pa...

...is simply not true these days.

8)

 

[Jimbo]

It is not a matter of not needing a maid its part of the condition of a retirement visa that you have one. To be short the Indonesian government want to see you bring benifit to Indonesia and that is why the rules are there. Follow Freogirls link and you will see all.

Which everway you do it good luck