Age pensioners are increasingly moving overseas where they can live more cheaply away from Australia
Kelvin Davis
If pensioners are faced with the situation of being unable to fund their retirement in Australia, they will decide to move overseas as many have struggled to find work in their chosen field once approaching the retirement age
nRelatively cheap cost of living overseas will ensure pensioners super lasts until they qualify for age pension
nMost feel that they can have a more comfortable lifestyle overseas than compared to what they had back in Australia
Roy Craney, an Australian who now resides in Udon Thani, Thailand believes that Australian pensioners fleeing overseas are finding themselves in a situation they never expected.He said he had met at least 50 expats who had moved to Thailand for the same reasons he did.
As the pension fails to keep pace with the cost of living in Australia and their superannuation proves inadequate, age pensioners are increasingly moving overseas where they can live more cheaply.
There are now 2.3 million people receiving an Australian age pension, a figure that is steadily climbing as the population ages. About three per cent live overseas.
The maximum basic pension for a single person is AU$766 a fortnight and AU$577.40 for each member of a couple.
Why has this happened?
As the Abbott government moves to extend the retirement age to 70, federal government data shows there was a 30 per cent increase in the number of people claiming the Australian age pension living overseas between 2007 and 2012.
The federal government slashed AU$2.1 billion from pension spending in last month’s budget.
The pension qualifying age will be lifted from 67 to 70 by 2035.
From 2017, pension rises will be pegged to the consumer price index and the value of income test and assets test-free areas will be fixed for three years.
University of South Australia researcher Peter Winwood said many people retiring now had inadequate funds to finance their lifestyle.
Is retiring overseas a Smart Move?
Tens of thousands of Australian retirees are drawing on age pensions while living overseas.
They may enjoy a better quality of life as a result, but should we be concerned when taxpayer-funded social security flows straight offshore?
According to the Minister for Human Services Marise Payne, the majority of overseas welfare recipients are living in Italy (16,800), Greece (13,700) and New Zealand (11,300), with the “vast majority” of these receiving the age pension.
Richard Laidlaw, 69, an ex-journalist from Queensland, is one of the grey Australians who has renounced what he calls his “restrictive and rule-bound” homeland for the island paradise of Bali.
He finds that living somewhere that offers a cheaper alternative to high-cost Australia means people like me can make their own funds last longer.
Retiring folk who are considering taking the overseas retirement path need to think long and hard about first-world health services versus third-world health services. This is because the depth and quality of the services that will be on offer there may well be quite different to what your expectations are.
While the benefits of retiring in another country often speak for themselves, the dangers may not be so obvious. In some instances, many living costs will be lower but these savings can quickly be swamped by increased healthcare costs and unexpected tax bills.
The issue for the government is that these welfare payments are flowing straight offshore, effectively subsidizing the idyllic lifestyles of retirees without any money flowing back into the local economy.
But as the costs of living continue to rise in Australia, more and more needy retirees may look further afield to stretch their welfare dollar.
Failing to investigate exactly what type of healthcare is available to foreign residents is a mistake that many expats have often made.
Although many countries operate a national health service, these won’t necessarily cover the total cost of healthcare.
There are so many variables affecting one’s entitlement therefore it is highly advisable, whether you’re pre or post retirement, that every individual investigates what their own entitlement are.
nKelvin Davis is the director or Greymouse, a cloud 24/7 oursourcing provider, with offices in Fiji and the Philippines. Insider business news is now available at www.greymousefiji.com/fijisun . Just visit the site and sign up for your free news subscription.