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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.
Retirement Visa
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.
Accommodation Costs
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.
Other Considerations
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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In my view, anybody intending to retire to a foreign country, no matter how low the cost of living, and whose only source of income is the aged pension from Australia, is nuts.
Doing that is akin to buying a house with a 90%+ mortgage, because interest rates are at an all time low, and struggling to meet repayments, without factoring in at least several percent rise in interest rates.
I’ve spent a lot of time in Bali, lived there for a year, and my belief is that even living somewhere way out of the tourist areas, your minimum monthly income for a single should be $2000.00, or almost $500 a week. If you don’t have that, don’t do it.
Don’t forget that health insurance is expensive, and you would want to return ‘home’ occasionally so airfares need to be held in reserve, fuel is cheap, but cars aren’t, eating out at western style restaurants is expensive, any social security benefits aren’t available to foreign retirees, etc..
I note on another forum that Thailand has many destitute foreigners living on the streets, many foreigner suicides (no doubt some money [or lack of] related, and the agencies that provide assistance back home aren’t available to foreigners.
Additionally, when living in a village environment, there will be all sorts of ‘demands’, but disguised as ‘donations’ required for different causes.
When I lived there, it became a requirement that I build a stone wall to prevent water erosion. That went from a ‘basket of stones’ type wall, about a meter high costing $2000, to a fully laid 4 meter high stone wall, 60 meters long, that was going to cost $25,000.
I’d already said that I’d donate several computers to the local school, but there were signs that whatever I did was not going to be enough.
My project was going to employ possibly 6 people when finished, housekeeper/s, gardeners, security people, but I bailed out when the demands became too great, I sold the land, and they had no jobs, no school computers, and no stone wall.
There were demands that I employ locals to build the villas, even though there weren’t the skills in the village, so I’d have been paying the locals to sit on their butts and smoke while the required skilled people from elsewhere were brought in to do the work.
On a recent visit, the land now owned by Balinese, is covered in weeds, and no stone wall, even a modest one, had been built.
The lesson from this is that they are mercenary people, and see every foreigner as very wealthy, ready to be financially bled.
Friends owned Sanda Villas in Pupuan, and the demands never stopped. They subsequently sold after about 10 years. Enough was enough.
Sorry my last post was somewhat off topic, but it’s a heads up for anybody thinking that they may go into business in Bali.
Thanks Ross for your comment. Your comments are completely relevant. I think it is possible to live cheaply in Bali, depending on your lifestyle. As you say you need to have good insurance and you should have savings behind you should anything go wrong.
One of the biggest problems facing potential retirees in Bali/Indonesia is actually getting accurate information in the first place. Different offices, officials, agents, etc, have widely different “interpretations” of the so-called “rules”.
For example…I am in my 7th year of a retirement visa (in Bali). I have never had to meet the “requirements” you spell out below. And you missed is that one is supposed to have “medical insurance”. After six years on my retirement visa, I was asked if I actually had medical insurance. (I don’t – foolish, I know.) But I said I had an Australian Medicare care card. That seemed to satisfy them.
I have had no problems leaving Bali for short trips overseas (my visa is a multiple re-entry one). Costs about $100 more per year (at least in my case), but saves a lot of hassles (like applying, paying and waiting for an “exit permit”).
“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 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.”
You were right (I think) in that it is compulsory to use an “agent”. That “agent” must be an approved one.
@Johnny Cool. I understand what you are saying. When trying to give advice to people, I think it would be wrong of me to suggest to people, not to follow the rules. Kind of like driving without a driver’s licence, yes it is possible and many people do it, the problem is when you have some kind of trouble.
Yes, the “problem” is what IS the “right advice”? And there is no correct answer, in my experiences..
My retirement visas have been handled by Immigration officials and the approved agent. Nothing illegal, as far as I know.
It’s all well and good to “follow the rules”, IF we know what they are and IF they are applied consistently. I don’t think that they are.
I have a legal Indonesian driver’s licence. As for my retirement KITAS, I have never had a problem leaving or returning to Indonesia on it.
Everybody’s mileage might be different, (corrupt practices aside), but it is impossible to get REAL and accurate information about the requirements. IMHO, that’s a big bummer.
It’s somewhat ludicrous trying to give advice to people when there is so much disinformation around (even within Immigration offices). Nice to try, but fraught with humungous difficulties.
Dear,
I’m in love with Bali and Blinese for many years, but now, I’m really anxious for the futur of Bali….
Too much building everywhere despite enough hotel rooms, crazy traffic on the road, so dangerous with “the law of the jungle” as rules, many trashes and rubbish, pollution from trucks…and If you have an health problem “good luck”…Oh my God!!
They want “more and more tourists”, proud because today more than 3.2 millions foreigners come to Bali, but they spent less and less money and balinese people has always same salary, very small!
And now they want a new airport in the north, close Buleleng…Don’t forget tourists are very ” changing” and I’m really scare than the day were Bali will be a big piece of concrete, tourist will go away…
I’m really sad and anxious, I would love to retire in Bali but today….I dont think so!
Am I alone to be sad about the futur of Bali? Sorry for my english…but I’m sure you understood the main idea of my mail
Best regards
I can assure you, you are not alone in your thinking!
You’re spot on Adler.
Come to Lombok, err… actually forget I said that.
Anybody leaving Australia for retirement in Bali should keep in mind that this can only ever be TEMPORARY, either because of later visa or health problems. This being so, it would be foolish to leave Australia without owning a house there which, of course, may during your absence in Bali be profitably rented out. The net rents received from such a home in Australia may be low enough not to attract Australian income tax and also low enough not to affect (or only partially) the Australian age pension. It will, however, impose an immediate tax liability in Indonesia if the recipient has lived in Indonesia for more than 183 in any one tax year. This tax liability kicks in at 5% for up to Rp.50million and, in stages, goes as high as 30% for more than Rp.500million.
P.S. I may have read it here or in other forums that “because you don’t pay tax on it in Australia, you are also exempt from paying tax on it in Indonesia”. This is not so! Your Australian income may be small enough to fall under the taxable threshold in Australia but, given the general level of income, it would almost certainly be taxable in Indonesia. Of course, the Indonesian tax authorities give a credit IF tax has already been paid abroad but they don’t give a total exemption. The rule is simply this: A taxpayer (that is, a resident of Indonesia) who has income derived outside Indonesia that is subject to taxation abroad is entitled to a credit not exceeding the Indonesian tax payable on the foreign income. Of course, you could chose not to declare it altogether but in this globalised world it is difficult to keep a secret. And would you really want to spend your retirement looking over your shoulder?
Looking for information on living in Bali with cancer 42 and no curer
The catch is I have termoral cancer and asking can I live the life with out stress and healthy as long as I can
My carer is 55 and on pension . I also on health care . Money is not the problem
I do have health cover and need to return to perth every 6 to 8 weeks . So please any information be fantastic , willing to hire carer for me as well