CITRO - 10 places to retire overseas

10 PLACES TO

Retire overseas Retire your way to a better life

Letter from the editor It’s

no surprise that Australia creates adventurous retirees who want to move to new places to enjoy lifestyle, language or cultural experiences they can’t get on home soil.

Our population of 26 million people is diverse and multicultural, with nearly 8 million people born in a country other than Australia and many more descended from them.

Aussie expats litter the globe and while many expats are drawn to move overseas for career opportunities, retiree expats are often drawn by the lower cost of living and travel opportunities in their chosen destination.

Before Covid-19 hit, the Australian Bureau of Statistics estimated there were 9,000 Aussies who were retired and living offshore. If you’re one of the thousands of Australians looking to dust off that passport and make an overseas move in retirement, read on – because there’s a lot to think about.

We've put together a list of pros and cons for 10 overseas retirement locations.

Alex Brooks Guide editorial director

CONTENTS How much does it cost to retire in Australia?

4-7

Cost of living in overseas retirement locations

8-11

Research before you go

10-15

Bali

16-17

Fiji

18-19

Greece

20-21

Italy - with a real life retirement story

22-25

Malaysia

26-27

New Zealand

28-29

Philippines

30-31

Portugal

32-33

Spain

34-35

Thailand - with a real life retirement story

36-39

COMFORTABLE RETIREMENT Single: $50,981.27 per annum Couple: $71,723.56 per annum

These figures assume you own a home with no mortgage

Singles require a super balance of $595,000 to achieve this Couples require a super balance of $690,000 to achieve this

ASFA says Australians need the following superannuation balances to achieve a comfortable retirement by age 67 in Australia, according to the September 2023 retirement standard. Search “ASFA retirement standard” to find out more.

4

HOW MUCH INCOME DO YOU NEED TO RETIRE? Recommended budgets and living standards for those aged 65-84 (September quarter 2023).

These figures assume you own a home outright and do not include the cost of strata fees.

Visit the ASFA website for more detailed information and living cost breakdowns.

MODEST RETIREMENT Single: $32,417.48 per annum Couple: $46,620.05 per annum

Singles and couples can achieve a modest retirement with a super balance of $100,000, say ASFA.

5

AUSTRALIA CAN BE A PRICEY PLACE TO RETIRE

$1747.70 Numbeo’s estimated monthly living cost for a single person (no rent) in Australia in 2024

74.2 Meal at an inexpensive restaurant in Australia = $25

6

Australian cost of living index score

COST OF LIVING INDEX Cost of living is widely variable in cities, towns and countries. The estimates in this guide come from Numbeo and are standardised to reflect costs in overseas locations.

Adelaide

82.1

Melbourne

73.7

Brisbane

72

Perth

78.2

Canberra

87.8

Sydney

76.6

7

Cost of living index in other countries Indonesia

28.5

Meal at an inexpensive restaurant = $2.90

Malaysia

30.7

Meal at an inexpensive restaurant = $3.82

Philippines

33.7

Meal at an inexpensive restaurant = $16.51

48.6

Spain

Meal at an inexpensive restaurant = $19.81

54.9

Greece

Meal at an inexpensive restaurant = $5.39

Meal at an inexpensive restaurant = $24.77

Fiji

Italy

34.3

Meal at an inexpensive restaurant = $6.70

Thailand

36

Meal at an inexpensive restaurant = $4.25

59.6

Meal at an inexpensive restaurant = $24.77

New Zealand

68.1

Meal at an inexpensive restaurant = $23.21

Australia

74.2

8

46.9

Portugal

Meal at an inexpensive restaurant

$25

ACCESS MORE TRAVEL OPPORTUNITIES

ENJOY NEW CULTURES 9

10 OVERSEAS RETIREMENT LOCATIONS

ESTIMATED MONTHLY COST IN $AU

Indonesia

$685.30

Malaysia

$719.10

Philippines

$844.50

Fiji

$820.30

Thailand

$852.00

Portugal

$1,084.40

Spain

$1,136.00

Greece

$1,334.60

Italy

$1,412.00

New Zealand

$1,594.90 Monthly living cost is per single person, excludes rent. Source: NUMBEO

10

A GREAT MEAL CAN COST AS LITTLE AS $2.90 IN INDONESIA

11

RESEARCH visas, money & healthcare

Health insurance costs can be high.

Check that your dream destination allows access to good quality public or private healthcare, or whether you can afford international health insurance that allows for repatriation to Australia if required.

There are 3 big things to consider before you start Googling Balinese villas or ‘cheap homes in Italy’. Read more on other things to consider before you relocate for retirement.

Other countries, such as Italy, offer a one-year visa for retirees, which can be extended each year. We’ve got more details about some of the most popular destinations for Australian retirees in this guide, but it’s essential that you check the fineprint of your particular Legal and visa requirements Even if your Australian passport allows you visa- destination yourself free entry to a particular destination, it’s It’s usually worth: essential you investigate and understand the getting legal advice getting personalised full requirements for staying on in retirement. financial advice about how relocating will affect your banking and superannuation Some countries, such as Portugal and Spain, getting advice about Age Pension or other have a Non-Lucrative Visa for those who have concession entitlements before you make the financial means to support themselves and the big move. dependents without participating in gainful activities.

12

13

Unless you retire to a country that has a social security arrangement with Australia, you’ll need to apply for the Age Pension in Australia.

Financial planning Getting solid advice and detailed financial planning is essential for Australian retiring overseas. You must understand the tax laws, both in Australia and in your destination country to avoid double taxation.

For instance, while superannuation or lumpsum payments might be tax-exempt in Australia, they may not be in your intended home country.

The Age Pension is another area to investigate. You may still be eligible for your Age Pension entitlement but social security payments may change depending on your personal situation.

Basically, the Age Pension becomes an Outside Australia rate, which means some supplements and entitlements may be affected. You must also meet the age requirements and pass the usual income and assets test

14

Currency exchange & banking Managing finances across borders and with different exchange rates brings its own set of complications.

If you remain an Australian resident for tax purposes, you’ll be taxed on your global income from all sources, while foreign residents are only taxed on their Australian-sourced income.

Even choosing the right banking solution can make a difference between a relaxed retirement and one wrapped up in a heap of red tape.

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28.5

$685.30pm

, i l a B n i g n i Retir nesia Indo Distance to Australia: 4,600km Expect mostly clear and sunny weather with occasional rain and temperatures ranging between 21-32°C. The dry season runs between May and October.

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Australian residents can’t technically own property in Bali and have to lease it - only Indonesians can buy a home outright.

Pros There is no doubt that one of Australia’s favourite holiday destinations is also a top option for many dreaming of an overseas retirement. Drawn by the low cost of living, familiarity and a large Australian ex-pat community, Aussies are also attracted by the short flight home.

Cons Bali no longer offers fee-free visas for Australian visitors. You must be at least 60 years old and in possession of a retirement visa (allowing a stay of up to 12 months) to retire in Bali. Qualifying for a retirement visa requires proof of income ($1500 USD/month), along with other criteria, including life and health insurance providing cover in Indonesia.

Australia does not have reciprocal health care or social security agreements with Indonesia.

There is also a cultural adjustment to living in Bali and other parts of Indonesia that can be significant for some.

17

34.3

$820.30pm

i j i F n i g n i r i t Re Distance to Australia: 4,600km Expect mostly clear and sunny weather with occasional rain and temperatures ranging between 26-31°C. The dry season runs between May and October.

5

18

Suva is the economic and governmental hub of Fiji offering a nice mix of urban and tropical life. Nadi is the tourist hub and has an international airport.

Pros For a quiet life in the sun, in close proximity to friends and family in Australia, Fiji could be an attractive option. Foreigners can apply for resident permits on assured income, assuming they have sufficient income for themselves and any dependants.

Cons Import restrictions and some limitations on buying property may be an obstacle.

Australia does not have a reciprocal healthcare agreement with Fiji, and the principal applicant must have health insurance. Australia does not have a reciprocal social security agreement with Fiji. Political instability may be a concern for some - Fiji has had 4 coup d'état since 1987.

19

54.9

$1334.60pm

e c e e r G n i g n i r i t Re Distance to Australia: 13,700km Expect a Mediterranean climate with temperatures decreasing as you head north. Temperatures can hit 36°C or more in summer but can plunge to below zero.

The average temperature is around 25°C.

20

The small island of Icaria in Eastern Greece is considered one of the five “Blue Zones” around the world, where people regularly live past the age of 90.

Pros With its warm climate, relaxed lifestyle, and a variety of islands from which to choose, Greece is a picture postcard perfect retirement destination. Australia and Greece have a Society Security Agreement, allowing people who live in either country to claim their entitlement to pensions in both countries. A tax treaty is also in place to prevent double taxation of income on individuals and businesses. Greece also has a golden visa program for those who want to buy a home.

Cons Australia does not currently have reciprocal healthcare or Medicare agreements with Greece, so your Medicare card or private health insurance cover is not valid. You will need to apply for a national long-term visa or residence permit, and requirements vary on factors such as family ties. To obtain a residence permit, you need to apply at a Greek immigration office.

21

59.6

$1412.00pm

y l a t I n i g n i r i t Re Distance to Australia: 14,400km Expect a Mediterranean climate with temperatures decreasing as you head north. Temperatures can hit 36°C or more in summer but can plunge to below zero.

The average temperature is ranges between 23-28°C in summer, with cooler temperatures in the alps.

22

Coupled with lower housing costs, and a reliable healthcare plan for medical services for retirees, doctor visits in Italy won’t cost the world.

Pros

Cons

It’s a rare person who visits Italy and doesn’t fall in love with the place. Retirement in a centrally located European country of diverse landscapes, friendly people, great food, a laidback lifestyle and a cost of living 20-40% lower than Australia’s? Yes, please. Added to this is a Reciprocal Health Care Agreement, which may cover some of your medical costs in the Italian public health system, and a Society Security Agreement that will allow you to submit a claim for an Australian Age Pension and live overseas, and it’s easy to see why Australians are drawn to the place. Italy also offers a flat tax of 7% for foreign retirees, provided they move to regions in the south.

Language may be a barrier – not as many people speak English as you may think, particularly among the elderly – as may distance from family and friends in Australia. Italian bureaucracy can also be difficult to navigate. You will need to apply for an Elective Residence Visa Italy, a one-year visa for foreigners who intend to relocate to Italy and can financially support themselves (requiring extensive documentation and a minimum annual income). Italy has also recently introduced a new Golden Visa, designed as a residency by investment option.

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A real life story of retiring to Italy In 2009, Zander and Joanna* moved from Sydney to Bergamo, Italy, for a “1 to 2 year” sabbatical, working as journalists. Zander was travelling on an Australian passport with a renewable foreign correspondent visa, Joanna on a UK (EU) passport, allowing her to live and work in Italy as she wished.

15 years later, Zander, 66, is retiring this year and the couple is working through a complex web of pension and superannuation details.

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“The money stuff is difficult,” says Zander.

“Australian superannuation is unlike the Italian system and it’s hard to get sound advice on how drawing a pension stream will be viewed for taxation purposes by the Italian authorities.”

On top of this, the treaty between the Australian and Italian governments means that Zander has to apply for the Australian Aged Pension in Italy.

In 2009, Zander and Joanna* moved from Australia to Bergamo, Italy, for a “1 to 2 year” sabbatical but have stayed for 15 years.

One of the big drawbacks of living here is the language,” says Joanna, 64. “We are far from fluent, which is problematic at times, and it makes it impossible to completely integrate in a cultural sense, too.”

Brexit has also impacted on Joanna’s residency status, removing the EU entitlements.

“Fortunately, I was able to apply for a permanent residency permit, as I’d been resident and working for 5 years,” she says.

“But Zander and Joanna agree that it is cheaper to live in Bergamo than Sydney. Housing costs are much, much lower in smaller provincial cities like ours,” says Joanna, 64. “Food was much cheaper, but prices have risen postCovid. And the people are just wonderful – incredibly friendly and helpful.”

Despite occasional difficulties, Zander and Joanna have never regretted making the move.

“The sheer wonder and glory of Italy surpasses any bureaucratic dramas you may encounter.”

25

30.7

$719.10pm

n i g n i r i t Re a i s y a l a M Distance to Australia: 4,700km

5

26

Expect a humid tropical climate, with steady temperatures year-round averaging 27-28°C, with the west coast and east coast experiencing different wet and dry season.

The most recent data from the Australian Bureau of Statistics, shows 9,600 Australians opted to retire overseas.

Pros With English widely spoken, a low cost of living, modern bustling cities and tropical rural areas, Malaysia is made even more attractive for retirees by the MM2H (Malaysia My Second Home) residency scheme. MM2H allows foreigners to apply for renewable visas of 5 years or 15 years or for permanent residency, dependent on fixed deposit requirements.

Cons Recent updates to the MM2H scheme are still to be clarified, and may impact on applicants aged 50+. There are 3 tiers of visas available, depending on whether certain income and asset thresholds are met.

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68.1

$1594.90pm

n i g n i r i t Re d n a l a e Z New Distance to Australia: 4,100km Expect a cooler climate, with summer temperatures averaging 20-25°C, with the south cooler than the north.

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In New Zealand, the age pension (which is called NZ Super, making it confusing for Australians) is paid to everyone of pension age. There's no income test or assets test. You get it because you are a citizen or permanent resident.

Pros Proximity, jaw-dropping scenery and no visa requirements for Australians to work, live and retire, make New Zealand a popular choice. There’s no language barrier, political and economic conditions are similar to those in Australia, as is access to affordable healthcare.

Cons If financial concerns are driving your interest in hopping the Tasman Sea, you might want to look further afield. Cost of living in New Zealand is comparable to Australia, particularly in capital cities, and the national average cost of buying a house is pushed up by the pricey housing in and around Auckland.

29

33.7

$844.50pm

n i g n i r i t Re s e n i p p i l i Ph Distance to Australia: 4,400km

5

30

Expect a tropical climate with high humidity and average temperatures of 25-30°C. The country experiences the rainy season from June to November and a dry season from December to May.

The Special Resident Retiree’s Visa (SRRV) is a special nonimmigrant visa for foreign nationals who would like to make the Philippines their second home.

Pros With an affordable cost of living, widelyspoken English and beautiful beaches and 7000+ islands, the Philippines is a short flight from Australia, with regular services

to

major

centres.

Quality

healthcare is available in major cities and key tourist areas.

Cons Australia does not have reciprocal social security or healthcare agreements with the Philippines, and the visa process can be complex and require guaranteed monthly income. Research your location carefully to ensure the infrastructure and healthcare available will meet your personal needs.

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46.9

$1084.40pm

n i g n i r i t Re l a g u t r o P Distance to Australia: 16,200km Expect a Mediterranean climate with temperatures decreasing as you head north. Temperatures can hit 40°C or more in summer in central Portugal but can plunge to 3-4°C in winter.

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Golfers are spoiled for choice in Portugal with 100s of courses located on the Algarve and in the north including Oitavos Dunes and Penha Longa in Lisbon, and Estela in Porto.

Pros Portugal continually ranks high on the lists of best countries for foreigners look to retire overseas – most recently in the International Living 2024 Annual Global Retirement Index. A small country, with a warm climate and good transport connections, Portugal also shares a social security agreement with Australia and the cost of living is lower.

Cons Until recently, Portugal offered a Non- Habitual Residency (NHR) tax regime, a special tax status for new residents, beneficial for retirees as it exempted those residents from paying taxes on global income in Portugal for ten years. The NHR system was rescinded in October 2023, and its impacts on Portugal’s status as a desired retirement haven are yet to be seen. There is no reciprocal health care agreement with Australia. It’s also a long flight home (though more centrally located for further travel).

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48.6

$1136.00pm

n i a p S n i g n i r Reti Distance to Australia: 15,700km Expect a Mediterranean climate with temperatures decreasing as you head north. Temperatures can hit 40°C or more in summer but can plunge to 4-8°C in winter.

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More than 1000 British people retire to Spain each month - they love the food, weather and proximity to home.

Pros Like Portugal, and as generations of British retirees have discovered, Spain offers a Mediterranean climate, rich culture, affordable cost of living, and good healthcare. Australia has a reciprocal social security agreement with Spain.

Cons Spain offers a Non-Lucrative Visa allowing you to live, but not work, in Spain long term. The first is 1 year and then you’ll need to reapply every 2 years. The minimum income requirement for retired applicants for this visa is €25,560 (around $43,000 Australian) a year. Spanish tax rates and thresholds are decided by each region, so do your homework before choosing a location. Also consider potential language barriers.

35

36

$852.00pm

d n a l i a h T n i g n i r i t e R Distance to Australia: 5,800km Expect a tropical climate with high humidity and average temperatures ranging between 18-38°C. The country experiences a wet season from May to October, a cool season from November to February and a hot season from March to May. 36

From lush mountains to beautiful coastal beach resorts, Thailand is a great base from which to explore and travel Asia.

Pros A low cost of living, affordable healthcare, and relaxed, tropical atmosphere draws Australians to Thailand in retirement. The country is also renowned for friendly people, great good, and a location a short flight from home and handily placed for international travel.

Cons Long term visas require regular renewals and the system can be complex. Australia does not have reciprocal social security or healthcare agreements with Thailand.

37

f o y r o t s e d i s n i d n e a l h i T a h T o t g n i r i t e r Ros, 65, and Alan, 63, moved to Thailand in 2015, having decided not to wait until the Australian retirement age to travel more. “We had lost a few close family members, which made us realise that time isn’t guaranteed,” says Alan.

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“We felt an urgency to follow our dreams.”

Travelling on Australian passports, Ros and Alan started with a 12-month visa, but soon discovered that Thailand has many different visa options depending on your circumstances. Setting up bank accounts in Thailand had to be completed after they first arrived, as it’s only possible once in the country.

Ros and Alan spent six months getting ready for the move, including renting out their home to provide some income, selling unwanted possessions and putting others in storage.

The lower cost of living in Thailand meant they would be in a position leave full time work.

“While we retired from our full time jobs, our intention was not to fully retire in the traditional sense, as we were both in our 50s at the time, but we knew that with the rental income from our Australian home and other minor investments we could sustain a reasonable lifestyle without full time work.”

The couple planned the move with care. “We researched real estate in Thailand for accommodation, pricing and general cost of living to work out our monthly living costs, talked to relatives about our plans, and initially only rented our Australian house on a sixmonth lease, in case things didn’t go to plan.”

Once the move was complete, Ros and Alan started their first blog to document their travels. Today, the blog is a website called Frequent Traveller, and it provides the couple with an additional source of income.

“By the end of our first 12 months, we were using Thailand as our base and would return there for a few months at a time,” says Alan.

For Ros and Alan, the pros of retiring in Thailand include the laidback lifestyle, affordable cost of living, and the people they have met. “Living in a foreign country broadens your outlook on life,” says Ros. They do, however, warn that cultural differences can, at times, be frustrating, and that remembering you are ‘essentially a guest’ in a foreign country can go a long way.

They also advise having funds set aside for unexpected emergencies.“You may also find that some friends may not understand why would you would choose to live overseas,” says Alan. Read more of Ros and Alan’s story at frequenttraveller.com.au

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