Retirement in the Philippines: Planning Your Golden Years

If you’re planning to retire in the Philippines, there’s a lot you’ll need to consider. Where exactly are you going to live? How will you manage your finances? What lifestyle do you want? Chances are, you’ve already given some thought to these and many other questions. In this article, we’ll help you think about many of the things you’ll need to consider before retiring in the Philippines.

Moving to the Philippines to Retire

Key fact: The retirement age in the Philippines begins at 60 and becomes compulsory at 65.

If you’ll be moving to the Philippines for your retirement, there will be things to get in order before you even get on a plane.

There are many ways to build your retirement fund in the Philippines. Let’s take a look at some of them.

Building your Retirement Fund

Personal Equity Retirement Account (PERA). You can find yourself with a large lump of money with a pension plan, but it won’t necessarily cover all your expenses. Having your money sitting in a regular savings account might not provide as much benefit as you can get. PERA accounts come with a lot of upside, like tax benefits. Another such benefit is the ability to withdraw your investments tax-free.

Variable Universal Life (VUL) Insurance. Insurance policies are much more comprehensive than they used to be. They often cover more than just death, illness or disability these days, as many now come with investment benefits. With VUL insurance, you get more than just financial security, but the potential for lots of passive income. VUL insurance invests premium into various places, like bonds and stocks, meaning your money can continue to grow during your retirement in the Philippines.

You can also read our blog on health insurance in the Philippines for more information on the topic.

Real Estate Investment. When done judiciously, investing in real estate can have extreme financial upside. Buying property and renting it out provides you with a source of passive income. Given most property appreciates over time, investing in real estate has significant potential upside.

Investment Funds. Stocks, bonds and mutual funds can all be great investments. They tend to yield higher returns over a long period of time than bank accounts, but these require a lot of financial understanding and acumen.

*These should be taken as ideas only. For the best advice on making the most of your retirement funds, speak to a financial advisor.

Getting Your Visa

Sometimes getting your Visa for retirement in the Philippines can be a complicated process. You’ll need to obtain a Special Resident Retiree’s Visa (SRRV), for which you have to:

Be at least 50 years old.

Deposit at least $10,000 in a Philippines bank, if you have guaranteed monthly income.

Deposit $15,000 for each additional dependent.

Provide proof of pension that pays at least $800 a month, or $1,000 for couples.

When we say “pension”, that refers to most forms of retirement income, including social security benefits.

There is a Visa application fee of $1,400 plus an extra $300 for each additional family member, as well as an annual renewal fee of $360. That will cover you, your spouse and one child. There is an extra $100 fee for any additional children.

You will also need to obtain an Alien Certificate of Registration (ACR-I) card, which has a microchip that contains biometric data, as well as your fingerprints. This is used as your re-entry permit in conjunction with your passport. It costs $50 and needs to be renewed each year.

Keep in mind that all quoted prices are present at the time of publication and are subject to change.

Lifestyle for Your Retirement in the Philippines

Let’s have a look at some of the different factors you should consider about retirement lifestyle in the Philippines.

Cost of Living. Broadly speaking, the cost of living in the Philippines is much lower than in Australia. Most of your main expenses like housing, food, transportation and healthcare are all much lower, especially in rural areas, but even in major cities.

Healthcare. You should do your research about healthcare in the Philippines. The quality of care is much higher in the major cities, and is often sorely lacking in rural areas, with a limited number of doctors, and certain services not being offered.

Infrastructure. This is another area where major cities have an advantage. Some rural areas of the Philippines lack basic facilities like electricity and a reliable water supply.

Housing. Retirees will find various housing options in the Philippines, and they will all depend on the kind of lifestyle you’re interested in. There are many modern condominiums in the major cities. Or maybe you’d prefer a traditional house in a rural area? Renting or buying property in the Philippines can be much more affordable than in Australia.

Expat communities. Some retirees might like to live amongst other expats. There are many established expat communities in the Philippines, which can give a sense of support and familiarity.

Culture. Maybe you’re more interested in immersing yourself in Filipino culture. The Philippines has a rich cultural heritage, with lots of traditions, festivals and historical sites. You’ll find many restaurants where you can eat the local cuisine, which is often eaten with your hands. But be careful, some cultural traditions in the Philippines find eating with your left hand to be offensive!

Leisure. Thankfully, if you’re moving from Australia for retirement in the Philippines, you won’t have to give up incredible beaches. The Philippines has some of the most stunning beaches in the world, many beautiful islands and natural landscapes. Swimming, diving and hiking are all ways to explore the country’s beauty.

Language. While it might be a good idea to learn local dialects, English is very widely spoken in the Philippines.

Climate. The Philippines has a very tropical climate, that those in the more Northern parts of Australia would be used to. This is perfect beach weather. Just do you research on typhoon season; some areas are worse than others.

Considerations for Retirement in the Philippines

*Some of these considerations will apply to those planning to move to the Philippines in the near future, others to those in the longer term. They should all be considered as considerations only, and not financial advice. Speak to a financial advisor for the best advice on how to make the most of your money.

Create multiple sources of income. Once we stop working, we have a much more limited income. Inflation, health issues and daily life expenses are all likely to rise in our golden years, so having multiple income streams can help make your retirement much easier.

Invest or save? When you invest your money effectively, the gains can be incredible. If you invest well, you can find your bank account is in very good shape for your retirement. Of course, investment always comes with the kind of risk that saving your money doesn’t.

Consider inflation. Yes, you need to know all of your expenses before your retirement in the Philippines so you can plan as well as possible. But you can’t just think in terms of present prices. Inflation will always be a factor, and as a result, the cost of living is growing all the time. There are many tools available online to help you navigate inflation, such as the WorldData calculator or Philippines Inflation Calculator.

Never take health for granted. While ageing is inevitable, you can make your life more comfortable in retirement by taking care of your health. Taking good care of our finances in our younger years is good for our retirement, and the same is true when it comes to our health.

Conclusion

Retirement in the Philippines is an attractive option for many people because of the low cost of living, the beautiful landscapes, and the range of lifestyle options. If you get your investments right, manage your money well and take care of yourself, it can be a wonderful place to retire.

To learn more about the Philippines, you can read our blogs on the country. You can also use e-Pocket to Transfer Money to the Philippines.