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The Golden Years

I've had a couple of friends ask me about retiring in Indonesia. Can it be done? What is the cost of living? Will my retirement income cover my needs? The answers are, "Yes." Indonesia offers cheap living, diverse cultural and natural attractions and a native population that is generally receptive. Prices given assume an exchange rate of Rp.10,000/$1.

For the purposes of illustration, I will use one friend who receives a military pension and Social Security (USA). His total income per month is roughly $4,000.

As far as living expenses, he could take a decent apartment, fully furnished with basic appliances, centally located to shopping and entertainment, with pool, workout room, steam room, 24-hour security (key card and live guards). Cost for a one-year, prepaid contract is around $2,500. Water and electric, plus security and maintenance fees are additional, so that total expense would be about one month's income for the entire year.

He could add a full-time maid for about $50/month and food for both (3 meals a day cooked at home) would be in the range of $60/month. Five gallons of drinking water per week is about average will take about $1.50/week. A cab ride from one end of Jakarta to the other in average traffic runs about $10. The highest I have ever seen in 2 years is $20. A very nice dinner out, with steak and wine for two, runs about $100.

If you live within your means and don't do a lot of clubbing or spend a lot of time at bars, this friend could live nicely for two months of his income per year. That leaves 10 months for savings or travel. Jakarta is central to pretty much anything in Asia. In about 3-4 hours, you can be in Hong Kong, Singapore, Kuala Lumpur, Bangkok, Shanghai, Taipei, Perth, Melbourne, and Manila. That doesn't even include such local attractions as Bali, Manado and Batam. Discount travel is available on airlines such as Air Asia, or the flagship carrier Garuda Air offers excellent service, all with new aircraft. Prices are extremely reasonable, with discounts and special offers frequently available.

Health care in Indonesia is ridiculously cheap, by American standards, and the quality is reasonable, with many physicians speaking English and having been trained in Western countries. The average doctor's visit runs about $18, plus medications, which average about 1/3 the price of US. Most major cities have at least one world-class health center. Additionally, you can avail yourself of traditional Asian medicine, such as acupuncture and herbal medicine, as well as cheap and widely available traditional massage. A full-body traditional massage runs about $4.50 for 2 hours.

Jakarta has an excellent English-language newspaper, The Jakarta Post, with daily deliver (except major holidays) running about $12/month. The also are a plethora of entertainment magazines with reviews and entertainment news, all in English.

If you prefer to buy an apartment or house, things get a bit more complex, but the prices are extremely attractive. Recent changes in Indonesian law allow foreigners to purchase apartments or houses, however you can not buy the land under them. An apartment starts at about $10,000 and goes up quickly. You can purchase these using payments but make sure you vet the contract carefully. Retaining local legal assistance is recommended if you are buying, both for negotiating and to ensure the paperwork is in order. A house starts at roughly the same level, but the prices go up a lot slower as the size increases. Your best option is a new-build, but you will have to look on the outskirts of town, and newly developed areas don't always have full amenities, but they will come in time. Many apartment towers are like self-contained cities with everything you could want without leaving the complex. Housing areas are a little more spread out, but in Indonesia you can get almost anything delivered to your door. It just takes a little initial homework and little leg-work to get it all set up.

Other items include a fairly good cell phone network with a dizzying number of choices, internet access that is quickly improving and a long tradition of handcrafts and textiles. A custom-made, silk batik shirt with inner lining, long sleeves, breast pocket, and meticulously matched pattern, will set you back about $30.

Of course, there are many other considerations, which you can find already addressed in this blog or in coming posts. The biggest consideration is immigration and visas. That will require and entire posting, so look for updates. Income tax for foreigners working in Indonesia is 6%, called the NPWP. All purchases have a VAT included in the price. If you have specific questions, leave a comment or contact me via email, and I will try to address the issue in a future post or get a personal response to you.

As they say in Indonesia, "Ya bisa!" (Yes, you can!)

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