Finance Retirement Asian retirement: Options for a new life offshore

Asian retirement: Options for a new life offshore

Asian retirement options.
Asian retirement is attractive, but do your homework. Photo: AAP
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When Larry Abramson turned 50, he quit his advertising job and decided work was no longer going to be part of his life. 

“It takes up far too much time,” says Mr Abramson, whose father and uncle both died of heart attacks at that age. 

Now a fit 66, the pensioner spends a large chunk of the year in Phuket, Thailand, where his money goes much further and he can enjoy an active lifestyle of cycling and running. 

With abundant free WiFi, expat mates, cheap living, a Thai girlfriend and ready access to AFL games on TV, Mr Abramson says his beach lifestyle choice is a “no-brainer”. 

Getting a retirement visa was easy, he says. “Basically they’re very happy for old farts to go there and spend their money.” 

Moving to a cheaper lifestyle in south-east Asia might be on the minds of some of the 318,000 pensioners set to have their pensions cut or scrapped entirely from January 1.

A new pension asset test will hit many part-pensioners who will now have to figure out a way to live on less.

There’s plenty to like about the concept of moving to tropical climes, including the prospect of cheaper rent, new adventures and perhaps even a full-time housekeeper. But it can also come with downsides if you don’t research the practicalities.

In another blow, the federal government will scrap the Pension Supplement for those overseas for more than six weeks at a time from next July (it automatically recommences once you return to Australia).

That will mean a single pensioner living or travelling overseas for an extended period is $22.70 worse off a fortnight. Couples will lose $37.40. About 175,000 pensioners will be affected in the first year.

Asian retirement options
Larry Abramson enjoys his new life.

For those thinking of shifting overseas full-time, there are many other factors to consider, says Shane McNally, director of the Exfin advisory group.

Many people move to south-east Asia in their late 50s once they gain access to super, he says. They think when that comes to an end, I’ll simply go on the pension.”

But, he says, to be eligible, a retiree will have to return to Australia for about two years to prove residency and this catches many unawares.

The amount of pension you receive also depends on your working life in Australia, he says. If you’ve worked less than 35 years, you’ll only receive a pro rata rate.

Mr McNally says it’s crucial to seek advice from a financial planner or tax agent.

There’s a period of time known as the “golden years”, he adds, where a retiree often loves their new lifestyle. “Often you’re in good health, but beyond 75 you need to think in terms of access to medical health services.”

Asian health cover can cost big time 

International health insurance can cost a fortune. Mr McNally says one healthy couple in their 80s wanting to live in Indonesia were quoted $US100,000 a year for insurance.

Some expats aren’t eligible for health insurance and decide to wing it, says Mr McNally. However if you have a heart attack, he warns it could cost about $250,000 to fly home.

Paul McKeon, founder of website My Life Change, says distance from family and friends can be another huge issue.

“Obviously you lose contact with family, friends and all your networks so you’re really living amongst a pile of acquaintances,” he says. “If a heart attack or a stroke or anything diabolical happens, all of a sudden you’re with people who don’t care that much about you.”

Asian health cover can cost big time. Photo: AAP
Asian health cover can cost big time. Photo: AAP

Mr McKeon notes that living somewhere permanently is very different to enjoying a short holiday, so he suggests a trial run of at least six months.

For Mr Abramson, it’s all coming up trumps so far. His large studio apartment costs $400 a month, and electricity is cheap.

He says there are a few downsides – being a “second-class citizen” who must always pay more than the locals, the potential for danger and a loss of civil liberties since the country’s military coup.

But as long as you keep your nose clean and avoid disputes, Thailand is a beautiful place to live, says Mr Abramson, who is in good health.

“If I got infirm I’d just come home and access the Australian health system,” he says.

This year he spent eight months in Thailand, before shooting back to his caravan on Victoria’s Mornington Peninsula for summer, which he says provides a welcome contrast.

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