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  • Writer's pictureCliff

Financing Your Retirement

Before you start planning your retirement you need to make sure that it is sustainable. You need both a safety net and a monthly income source that will allow you to live the lifestyle you want. Here we are going to talk about how much you should need in reserves and the steady stream of income, be it a 401K or other fund. Maybe you are relying only on social security, maybe you have annuities, or maybe you have an income from a remote job. But whatever source of income you have, it will need to be “enough” to retire in The Philippines.

There are vloggers who will tell you that you can retire on as little as $500 to $800 per month. Can it be done? Sure. But you will have next to nothing of your western lifestyle. You’ll likely need to live in the provinces where you will be far from western amenities such as stores with western products (so you’ll have to eat like a local). You’ll also be further from medical centers than if you lived in a metro area such as Cebu, Davao or Manila. You’ll also not have the basics like reliable internet or phone service. And air conditioning?... Forget about it. On $500 to $800 a month, or pretty much anything less than $1000 you are going to survive but not thrive. And this rule applies just about anywhere in The Philippines.

The $1000 to $1200 monthly range will allow you to live comfortable but still not provide you with luxuries like travel, dining out, dating, or even shopping for brands from back home that you were once accustomed to. But again, you can survive and thrive a little better than in the provinces as this budget allows you to live closer to the metro areas and the ability to afford little things like air con. And in the tropics, you will really miss air con if you don’t have it.

A better range is between $1500 and $2000. This budget will allow you to thrive. You can dine out occasionally, see a movie every so often, go on a few dates and even afford some of the creature comforts you’re accustomed to. In this range you can afford better internet thus quality streaming services for your evening entertainment. Your accommodations will be at a higher level as well.

But if you can swing a $2000 to $2500 monthly budget then you can live like a rock star. $3000 or higher and you can live like a king. You can have many of the things you desire and more. But more importantly, this budget will allow you to save some money to sock away into your safety net (more on this in a moment) as well as obtain insurance to cover you for things that you’ll no longer be able to rely on Medicare for.

And then there’s your safety net. Why is this important? Well, have you ever moved somewhere and eventually regretted it? The Philippines, as great as it is, is not for everyone. Should you decide to return home you are going to need to re-establish yourself there. You can’t go home with a few hundred in your pocket and expect to pick up where you left off. Bare minimum I would want if I returned home would be $10,000. Some might get by on less than that if they have family to return to.

If you’re on social security only and you decided to opt out of Medicare to increase your monthly payment, factor in there are penalties should you sign up after you return home. And the longer you were away the stiffer those penalties are going to be. That being said, if one can afford it, keep your Part B if you feel you A) might decide to return home, or B) you feel your health is at a point where you might need to return home for any kind of specialized treatment you can only get from back home.

All things considered, if someone asked me how they can come here on less than $1000 per month, I would not in good conscience be able to help them do so. I’ve seen too many stories of men who went broke and didn’t even have money to return home. Do not be like them! And unless you have a bare minimum income stream of $1000 per month then first thing you have to do before coming to The Philippines is figure out how to increase your cashflow. That is not something I can help you with.

These numbers are all based on year 2023 estimates and are likely to go up over time. If your social security goes up by 1% and inflation is 6%, every year that goes by your belt will get a little tighter. You need breathing room. You have come to The Philippines to retire and enjoy the rest of your life. Why come here to have more worries than you might have had if you stayed back home?

So, you did the math and feel you can afford a good quality of life here. That’s great, you’re in a good place for some great information and support.

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