There have been some recent articles in the Australian media, about Bali becoming a popular place to retire to. One of the reasons in the articles for retiring in Bali is the lower cost of living than in Australia. So I thought it would be interesting to write an article about how much money do you actually need to retire in Bali. Of course, there is no one answer to this question, some people are happy living in a small house and cooking their meals, while others will want to live in a big villa with pool and enjoy eating out.
Cost of Living
While some costs are the same wherever you live in Bali, such as gasoline and food, other things like rent and property, vary greatly. Living overseas you also have to factor in currency fluctuations. The rupiah right now for example is quite weak, making Bali great for anyone receiving foreign income – of course, this can go the other way at any time. So while there is no exact figure how much you need to retire in Bali, this information should help to figure out an approximate budget.
To get the retirement visa, you need to show proof of an income of at least US$1,500 a month. For Bali, the minimum rental accommodation cost should be US$500 a month. For areas outside of Bali (excluding Jakarta), the figure is US$200 a month. You also need to employ at least one Indonesian person, like a maid or a gardener. The minimum salary is around $130, but you may want to pay more depending on hours, work conditions. The actual visa cost is around $600 a year. It is compulsory to use an agent to get the visa.
The Australian pension is currently $713.70 a fortnight for a single person if you are living in Australia. This drops to $641.90 if you live outside of Australia for more than 6 weeks.
Living in any of the popular tourist areas, such as Seminyak, Kuta, Canggu or Sanur. You may need more than this amount to live on. Other areas such as Amed, Singaraja or Lovina, you should be able to live on much less. Property, staff, and entertainment costs are generally cheaper in these areas.
Other than the expense of accommodation, utilities, food, and transport, you also need to pay a fee to register in your village, some money for donations to the village and rubbish removal – not a huge amount of money, but it does add up.
If you have children, you need to factor in any expenses you usually provide. If you have any pre-existing medical issues, your insurance is going to cost you more. Do you like to eat out several times a week at western-style restaurants? Enjoy eating breakfast on the beach? You should add around $400 a month to your budget.
Cost of Insurance
One of the biggest expenses for retirees is the cost of insurance. As we age, the price of insurance only increases. General medical expenses and medications are comparatively low, but the standard of care is not to first worlds standards. Serious medical problems need to be treated outside of Indonesia. Many expats, for example, will fly to Singapore to receive treatment. It is important to have emergency evacuation insurance.
Inflation is the enemy of anyone living on a fixed income. Indonesia is currently at 7.50 percent. Pensions tend to get minimal increases, sometimes just 1-2 percent, per annum, so this is something you will also need to factor in. While some people might think to make some extra money with part-time work, this is forbidden under the conditions of the Indonesian retirement visa. Some foreigners are tempted to start a business and have Indonesian friends and family work in it, but this could end up costing you more than you bargain for.
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