Retire in the Philippines
Retire in the Philippines, with No Plan? Well, perhaps not exactly, “No Plan”, but, then again, a lot less “Plan” than many of you are beating yourself up with. I really think everyone even thinking in passing about retiring in the Philippines should give this article a ‘read’ and come back for a little “Retire in the Philippines” discussion, if you are still in the mood
… What on earth is that supposed to mean? It means expatriating without any plans is very difficult and, quite frankly, foolhardy, but those plans should be very flexible.
This title occurred to me after reading an article about how the combination of high inflation, low interest rates, poor exchange rates, and weak economies are making things difficult for many expats and soon-to-be expats. The article offered its advice, which I have distilled down to my “No Plan” Plan… read more about Julie’s “no Plan” plan … recommended … The “No Plan” Plan: Better Than No Plan At All
Retire in the Philippines — A Strategy
For those who don’t want to spend a lot of time reading, I’ll summarize Julie’s major points here, with the “Philly touch” where I fee it’s needed:
Retire in the Philippines — High Points
- “...the world is in a tremendous moment of flux, so the idea of locking yourself into a single course of action, such as selling your current property and immediately investing in property abroad, merits some reconsideration.” Time and time again I get contacted by people who tell me, “I hear what you say about the reasons that investing in property in the Philippines is risky and often a bad deal, but “I prefer” to own rather than rent.” OK, fine, I “prefer” to have hair, rather than be bald, also, but the situation is, it’s unlikely I’ll grow hair any time soon. You can wait until all factors in life align to suit your preferences, or you can use the “marbles” you have left in your jar (3900 Marbles and Government Health Care) to forge a retirement life that is “good enough”.
- “… Culture shock is one major factor that is very difficult to quantify, and how each individual will deal with it once they are abroad is in many cases unpredictable. The stress on families may be another huge issue that can hinder successful expatriation attempts….” I go through this spiel a dozen times a week it seems, but what can I do except keep repeating until it is understood. It costs less to live in the Philippines. The continual fixation on costs of things here in, in my view, the number one mistake most potential retirees are making. It is not the costs that will make or break your successful retirement. It is the cultural and family issues … no doubt about it. A Surplus of Riches — Or Comparisons of Riches
- “… A firm financial foundation is definitely a good plan, while investing in the learning of new skills, such as a foreign language, teaching English as a second language, professional translating, or a highly sought-after professional skill could be considered to be another kind of planning. ...” I write about this subject extensively as well. No matter your age now, you should be planning, today, how to empower your retirement. Whatever your plan for financial support in your retirement, my thought is, do not make yourself a “one trick pony”.
Is This a Plan?
In my case, I have a generous government pension. But you know what? Even though it’s generous, it’s dwindling in real-world purchasing power. Looks like 2008 was going to be my highest pension income year ever. Now with no further COLA’s in sight, government-imposed pay freezes, boosts in medicare costs and contributions, there’s very little chance my income from the government is going to increase for years to come.
The way I look at it, there are two basic courses of action I can follow.
One is join the ranks of the other ‘chronically short on money’ retirees and commiserate with other ‘chronically short on money’ retirees … complaining again and again about “broken promises”, “missed opportunities”, the vagaries of whichever political “color” happens to be the one we hate or hold responsible for the current situation, and so on. Frankly, although I don’t think about suicide very often, that course of action makes me daydream about handguns and just one bullet … not very appealing.
Or. I can do what I’m doing now. Take charge of my own life. Work to empower my own retirement, help others along the way, and do (what I am currently on track to do), make myself independent from political handouts (which often come with a huge price).
So what’s your strategy to Retire in the Philippines (or wherever your dream location might be)?
I never intended to move to The Philippines for retirement or for any other reason. I quite by accident came across a place in Ph while websurfing that attracted my attention through pictures at first, then videos and written articles and other information. After researching Iligan City for a couple of years on the internet I finally went to visit the place to see it all for myself ” Live ” and in person. I have been back 4 times since that first visit and look forward to visiting again.
It was while doing 2 years of research and websurfing that I learned of many that moved to Ph for their retirement. Something I had never even thought of. I like where I live now and I think about the only thing that may make it difficult for me to retire where I live now is the ever increasing taxes. I have seen my own neighborhood ” turn Over ” almost 3 times in the 35 years I have been here. People retire and instantly sell out and move.
Should I find myself approaching a similar situation when the time comes, I’d like the ” try it before you buy it ” plan. On my visits I have learned at least a few things on a first hand basis about the many differences in Ph as compared to where I live in the USA although ” just visiting ” and actually living there are two entirely different things. Before I ever would sell out here for a move to the Philippines I think I would try to rent a place, furnished perhaps , in or near where I would like to live in The Philippines for 6 months or a year, then make my decision to make a permanent move there or not. For me, I don’t really know ” how much ” cheaper it really would cost me to live there. I don’t consider myself to be an extravagant individual but what we consider as ” standard Equipment ” for living in the USA are many times considered luxury items in The Philippines such as hot & cold water on a 24/7 basis, full time Climate Control and the electrical power to run it, and a car or other form of motorized transportation. I am also one of those who prefer to own than rent and I know that would be a compromise for me in The Philippines. Since I have found out about the SRRV Visa, that could eliminate one hurdle for me. So my basic plan would be to Try before I buy ” the idea of retiring to The Philippines.
“…the world is in a tremendous moment of flux, so the idea of locking yourself into a single course of action, such as selling your current property and immediately investing in property abroad, merits some reconsideration.”
I wholeheartedly agree with that statement. If you are over 40, everything you thought you knew about life as you know it (especially in the States) has changed whether you know it or not. You can bury your head in the sand if you want to but the onslaught of change (financially) has come and is here to stay.
Gone are the days of the 40/40 plan. 40 hours a week for 40 years and end up with a sweet retirement.
We would do well to heed the wise words of Philly as he constantly and gently explains that in order to retire in the Philippines (or anywhere), don’t think or expect that it will be easy. All the traditional financial institutions that we formerly relied on are different than they were, even 20 years ago. Jobs are different, “security” is a lie and you better well wake up and smell the coffee!
Secure retirement is no longer a given. Hell, a job is no longer a given. I personally believe the old employer/employee model for achieving personal financial security is severely flawed and we better look more to ourselves than someone else to make sure we get what we need out of life.
So many have such an employee mindset. I say this is dangerous. I worked for a fortune 100 company for the last 14 years and left in January because it was sucking the life/soul right out of me. We had started a part time business about 5 years ago and I made the jump in January to full time in my own venture and it has really opened my eyes to possibilities that I would have never known before! It is so liberating to be your own boss and call the shots for yourself. I have replaced 50% of my former salary in just three months and by year end we are on track to surpass last years income!
My point to all this is to say that, we don’t live in the world of our fathers. We must now continually adapt and change to a new economic climate. Being your own boss, even if it is a part time venture will stretch you and mold you into a different, more capable person.
If you want to retire to the Philippines go out into the marketplace and create something that will enable you to achieve your objectives!
I love the Philippines with everything that is within me. Hell, I think I’m more Filipino than American!
One thing I will not do is to go off “half cocked” and try to retire in a country that will eat your lunch if you don’t have any money!
If you want to retire and have no plan, try it in America first where they have a safety net for folks like you.
Try it in the Philippines and you will find that “Reality” will rear it’s ugly head and bite you in the ass!!
Randall » Thanks for the kind words, Randall and for the very interesting comment. Like you, my wife and I had our own small business in the USA. Many’s the time I wished we had kept that going rather than ‘selling up’ and coming to the Philippines. That’s why i often write about running a business back in the USA while living here in the Philippines.
The government is constantly ‘sniping’ at my retirement benefits. I’m still (relatively, anyway
) young and virile. This is the time to build for my own future.
Sitting back and waiting for the government to do something is not the way to get assurance that I will not die penniless …and Social Security, IRA’s etc. are shaky as well, since they are a ‘bank’ for the demonstrable incompetents who are trying to ‘steer’ the US economy lately.
You need your own, multiple streams of income to be confident in the future … you need to empower your own retirement … and you really need to get them established as soon as possible … most people, when they are, say, in their 40′s and 50′s, will make the excuse they “have no time”., but the reality is, the time they have in those years may be the most valuable time they have left in their allocation of, roughly, 3900 Saturdays. be well, and keep building.
Hi Philly: Living in the Philippines, without outside means is financial suicide. My parents retired in the Philippines (from the U.S. ) for 19 years before their passing. I’ve learned a lot from their talks, my visits, and personal observations. I planned to retire there myself, before the age of 60, but not before I am eligible for early retirement in the University that I am working for in the U.S.. I will need a cash flow which will be my pension. I will definitely venture into a business, later on; but not before living in the Philippines for a while.
Roselyn » Thanks for another great comment, Roselyn. The only thing I’d suggest is, you might want to think seriously about starting additional income streams _before_ you retire and move to the Philippines. Here’s and example of how someone who once had a 9 to 5 job in the education field decided to turn it into a valuable business that will assure his future for as long as he lives, and his children too, should they decide to continue in their dad’s footsteps. Expertise (about almost any subject) is worth money, and one need not earn from the place where they happen to reside.
Great Article. Made me do some additional thinking. Here is our tenitive plan, feedback?
I will retire from the Army October 2012, my asawa will retire November 2012 (she wont recieve an annuity until age 60 how ever.
We (she) owns a house through inheritance in Paranaque. We plan on tearing that house down and rebuilding to our plans. Budget 70-80k USD for this.
My pension should be over 1800 USD a month plus 6 figures in savings.
We have visited our home many times, i love the barangay and the people, my bride has many reletives and friends in the area. I would love to have a discussion with an experienced expat to refine our plans.
Scott Hegerle » Hi Scott, welcome and thanks for your insightful comments. Your plan sounds great to me. Couple of pointers:
1. Never discuss your budget in an open forum like this. To my mind it makes you a target.
2. make sure you have a clear plan in mind what you are going to do with yourself. The number one thing I see fellow Americans suffering with is _boredom_ if they aren’t keeping themselves busy.
3. Whatever you plan to spend on a home, that’s what you are going to wind up spending … and more … so keep your estimates low.
You (or anyone reading here) can feel free to call me any time, 0600-18000 Philippine time. If you have Skype, I am Xingr21. You can also call my US number, 1-719-966-4295, or text me at 0919-231-5625. I am not always available to pick up on the US number, but feel free to leave a callback number and (gosh it’s hard to get people to do this), tell me what time zone you are in and what time is best for a call back.
Dave;
Again you wrote another masterpiece and you list all your references and backup you view points. You kinda remind me of one of my old college professors. When she got done making her point in a lecture and back it up with facts you left in awe!! But one point she always taught us is don’t believe me reshearch it for yourself and you will know I’m telling you the truth.
Well Dave you are telling us alot of truth. I could of commented earlier on this subject but had to do alittle bit of reshearch and thinking and here is what I came up with.
Having a plan is a must when making a choice weather it be moving to the Philippines or managing your budget. But the key ingredient to a sucessful plan is flexibility. I like to think of a plan as a big blob of playdoe.
You know in your mind what you want to make and how you want to do it. So you start to roll it and kneed it and strecth it to get the shape you desire, but you also figured out that duing this process you either had to add or subtract some doe to get your desired out come. A plan is much like that it must be molded into shape
and sometimes you must add or subtract items to acheive your goal. But if you are driven to make your masterpiece you will suceed.
I believe in planning a move to the Philippines you must meet certian benchmarks. 1 Have a certian dollar amount and enough backup money to hold you over for at least six months. This will allow your finances to get online and a budget it place. Leave the States debt free (or as close to it as possible) It is very hard to start a new life there when you still owe on things here. You are splitting you monies when they should be working for you in you new home. Have an exit plan and money to get back home on incase things just don’t work out.
Cost of living in the Philippines HUMM!!! I know Dave you’ve talked about this until that bald spot on you head has turned into a bright red yanica. I think the real question is How much is it going to cost ME to adjust to the Filipino way of life in the Philippines and can it do it. In the States most people hold money and keeping up with the American way of life as a core value. Keeping up with the Jones is a must. I keep hearing from people and seeing these books that potray that you can live like some kind of king in the Philippines. I don’t buy that. The Philippines is not the States. If people belive they can live the American retirment dream in the Philippines there are in for a suprise. Yes you can live better than most but if you don’t adapt to their culture and way of doing things you will be miserable. Their country is a family orientated and a hands on society. They don’t have things catered to them they must get them theirselves. Go to the market.draw the water, cook to food wash the clothes by hand. ect. heck most don’t even have a tv let alone a refrigerator. Sure most Americans won’t be that desperate and sure their are american fastfood and high pesos malls for us but at a price. Are they ready to endure the true cost of living in the Philippines or are they going to rely on their pesosnality to get them by. A person can live on any dollar amount if their happy and willing to do those things necessary to live that standard. The true cost of living in the Philippines is the cost of one ajusting their innerselves to living in a new culture and being happy with it. Are they ready for the bucket showers and one pot feeds all at the torro torro stand?
Bruce » This was too good not to put up in lights. Thanks Mike, as always for keeping this place alive and relevant.
Dave;
Sometime I like to think outside the box and give a new and maybe even a head scratching perspective on old topics. I would like to get people to think a little deeper and really understand what a move to the Philippines really means. If people can do this than they have a better chance of enjoying their life in the Philippines. Instead of wanting the next flight home or being stuck because they have no way home.
Surface questions like cost of living, can I get a job, where do the expats live ect. are redundant and very broad. All they have to do is search your posts and many others and they will find more than enough informantion on these surface items.
Dave, one of the reasons I like your sight is that you get down to the real meat and potatoes. You are honest with people tell them the way it is like it or not it is what it is. By doing this people can make good decisions and move forward with confidence or step back and realize it’s not for them.
Thinking outside the box keeps a man independent and free.
Bruce » Thanks for the kind words. One of the most difficult points I often fail miserably at is conveying the idea that there just really isn’t any one way to do most things.
People spend agonizing amounts of time on budgeting and saving in advance. The reality is, in the first year, especially, costs will likely vary widely from all the careful plan figures. There is _no_ right answer about how much is enough.
Or they agonize, sometime literally, over what visa they should use. It’s not worth the hassle. There are a number of ways to come here and live legally. Some all have advantages, all have disadvantages, and there is not one single one that is “the best”. Just pick one, you can always change course later if you see an advantage in doing so.
Or they agonize over the property ownership issue. It just isn’t that much to be concerned about. rent. Lease long term, buy a home in partnership with your spouse, buy a condo, make a monthly deal to live in a cheap hotel, buy a boat and live aboard that … the possibilities are endless and, again, it’s unlikely that over a span of years, any single choice is going to be irrevocable.
In short, I just wish people would stop making life so hard on themselves. Go with the flow. Life is supposed to be easier here. And, it is, _IF_ you let it be.
Dear Dave,
You write a great article and undoubtedly provide alot of good advice. I have been to the Philippines 3 times in the past year and fell in love with the people and culture. I am coming back in September and plan on staying for 6 months. I have met a wonderful lady that I would like to eventually bring back to my small ranch in Colorado. Do you have any suggestions what might be the best alternative to bring her here if only for a visit?
Thank You,
Richard