I saw a reader searching for “Concept of early retirement options in malaysia” and thought I would elaborate more on why Malaysia is such a great place for early retirement. In fact, I think most countries in southeast Asia including Thailand, Philippines, Vietnam etc make great retirement options if you want to retire early. All except Singapore where the cost of living is rising too fast relative to the growth of one’s salary or wages.
Born in Malaysia
I was actually born in Batu Pahat, Johor, Malaysia although I came to Singapore since I was seven years old. My parents decided that I should study in Singapore due to its higher education standards and the use of English as the first language. For that I am eternally grateful as everything I have now might not be possible if I never leave Malaysia.
Having stayed in Singapore for more than 20 years, it is strange that I never felt inclined to retire in Singapore. Maybe it is the stressful environment or the emphasis on material wants, but I never felt carefree and comfortable here.
How much I need to retire in Malaysia
I did a simple budget on how much I need to retire early but that is based on the assumption that I would do a lot of traveling and had to finance my condo. If I was to stay in Malaysia more and travel less, the money I need will be very different. Let’s look at some numbers.
Mortgage payment: A nice bungelow in Malaysia will cost about SGD250,000. Assuming a 4% interest rate, a 90% housing loan and a 30 year payment period, the monthly payment is about SGD1,000. These new bungelows that I saw in Johor is really nice. Most of them came with 4-5 rooms that have their own attached toilets. Some of the bigger units even have gardens.
Car payment: Assuming a SGD15,000 car that has a 6% interest and a 10 year payment period, my car loan will be only around SGD165. Amazing!
Petrol: SGD100 should cover it well as prices of petrol is much cheaper in Malaysia due to the fact that we produce our own oil.
Utility Bills: SGD 150 should be enough to cover electricity, water and Internet. Prices are much cheaper in Malaysia for these basic necessities relative to Singapore.
Food Expenses: SGD500 will cover you nicely for food and entertainment. A typical meal at the coffee shop or hawker is about SGD2-3. A meal at the most expensive restuarnt for 2 is around SGD50. So, a SGD500 budget is more than enough to get me good food if I don’t cook at all.
Insurance: Medical fees in Malaysia is very cheap especially in the public hospitals. This is why I don’t need as much insurance coverage compared to when I am in Singapore. SGD50 should cover it.
Parent’s allowance: SGD700 which is more than enough for them to enjoy lifestyle in Malaysia.
Total living expenses: SGD2,265
For only SGD2,265, I can stay in a big house, drive a normal car and eat out most of the time if I want to. That is so different from Singapore where for the same amount, I would probably be living a much humble lifestyle.
Why retire at Malaysia
There are a couple of pull factors that make me want to retire at the country where I was born.
- Low cost living: Living standards has been pretty low in Malaysia although the flux of Singaporeans to the country has inflated the prices of many good and services. Fortunately, the big ticket items such as cars and real assets are still relatively cheap when compared to Singapore. For example, a bungalow will cost around SGD250,000 to SGD500,000 in Malaysia while it might cost at least a million dollars in Singapore. Cars are even more cheaper as my mum just bought a new car for SGD15,000.
- A more relaxed environment: If you avoid the busy cities such as Kuala Lumpar, most of the cities in Malaysia are pretty relaxed. Not only there, there are plenty of beaches, templates, food places that I can visit when I am bored. This variety of choices makes Malaysia a much more interesting place to retire in.
- Different types of living options: In Malaysia, I can choose what Singapore offers: apartment living, However, there are other options that I can consider if I hated that kind of living. A beach house is definitely a possibility. Bungalow living is another form of option that I can consider if I want to live in a bigger space. In fact, I can even live in farms or mountains if I desired such a lifestyle but I don’t. The point is there are many more options on how you want to live in Malaysia due to its larger land size and the different natural landscapes.
Can I retire at Malaysia if I am not a Malaysian
Currently, there is a programme called Malaysian second home that allows a foreign to stay in Malaysia for 10 years. This is a programme that is designed to attract foreigners to stay in Singapore. There is no rules that you must owned a property in Malaysia to qualify for the programme but you are not allowed to work during your stay here unless you are over 50 years old.
If you need more facts about retiring in Malaysia, click on the link above to find out more.