Overseas Cost of Living
Cost of living is the great equalizer that cuts across all residents of Southeast Asia whether they are native born or Expats.
After all, even if you receive favorable income tax treatment, the cost of gasoline, bread, housing, energy and medical care is still going to be the same for you as it is for anyone else.
Regardless of where you live on the planet, food, housing, energy and health care costs continue to account for as much as 89% of annual spending according to a survey by the World Bank. This is why it is extremely important that you investigate each of these line items on a country-by-country basis as part of your retirement due diligence.
You can get a general picture of the cost of living as a percentage of your retirement income by using an International Salary Calculator. They are all over the Internet. Just Google the term "International Salary Calculator" and take your pick.
According to one calculator, a person earning 100,000 GBP, and living in London, would need the equivalent of 70,000 GBP to live in Bangkok, Thailand. The numbers that they provide are just estimates and should not be used for making a final decision.
Never make the mistake of assuming that costs will be more or less level across a region simply because the countries are geographically close to each other. Often times there are significant costs differences in certain market sectors due to government policies.
Singapore, for example, does not provide any fuel subsidies to it's residential or commercial customers. Indonesia, Malaysia and Thailand do. As a result, Singapore has the highest fuel costs in the region even though it is a major oil trading hub in Southeast Asia.
With a litre of milk running near U.S. $2.72, 10 eggs for $1.80 and a loaf of bread at $2.00 Singapore, actually mirrors many U.S. cities when it comes to everyday living expenses.
Over in Thailand, that same litre of milk runs about U.S. $.77, while the eggs will only set you back $.64, and a loaf of bread costs just $.38.
Today's cost of living is only a point on the retirement planning graph. In order to insure long-term survivability you need to account for inflation and unexpected surges in costs due to global or regional events. The recent dramatic increases in oil costs due to the war in the Middle East is a good example.
Your complete financial retirement income picture cannot be seen until you have estimated current and future cost of living trends as well as your current and projected retirement income.
When calculating your future income, be sure to take inflation, interest rates and stock market performance into consideration. While there is no foolproof way of predicting these individual variables, you should play some "what if" scenarios out in your spreadsheet to take a look at the best and worst case results.
So much depends upon your ability to support your retirement lifestyle. Make sure that you give the cost of living investigation the attention and level of detail that it warrants.