According to the United States Bureau of Labor Statistics, a retiree in the United States spends an average of $40,938 USD per year for living expenses. Note that all amounts in this article are in US currency. If retiring in a more expensive part of the country—which is rapidly becoming a sizable chunk of the United States—this number could be at least twice as high. To make matters worse, wages in the United States have been stagnant for more than fifty years, while living costs have trended upward, preventing most hard working Americans from accruing as much as they need. Luckily there is a solution, one with warm sun, beautiful beaches, and great food. Bali.
You may have noticed that the title of this article refers to retiring for free. This does require some retirement savings on your part, but it will be worthwhile. Using this hack, you could even grow your wealth. Continue reading this article to see how you can retire for free.
The first step is for you to find a permanent residence in Bali. The easiest way to get started on this is by reserving a home from us on our website. We are the only retirement apartment community in Bali, and provide services to help make every step of this process easy as apple pie.
The next step will be to obtain a retirement visa and KITAS. A KITAS is a temporary residence card that you can renew yearly. If you buy your home through us, we will provide a visa agent who can guide you through this process.
After you receive your KITAS, and move to Bali, the next step will be to open a bank account. We recommend CIMB, which we will base all of our examples on in this article. We can help you get your account setup, but the process is the same as it is in the US, and the banking staff speak English making this the easiest step involved in the hack. You are able to open an account in various non Indonesian (IDR) currencies, including USD. If you do this, however, you are subject to higher fees, and lower interest rates. The examples cited in this article assume that you open your account with Indonesian currency.
To open the account, you will need to bring both your passport and KITAS to the bank. The minimum deposit to open an IDR account is about $40. You will have to keep a minimum balance of $3 in your account to keep it open. If your balance is under $1,925, you will be charged a monthly maintenance fee of about $1.50.
How much money do you need to live out here? The cooperative’s maintenance fee of $200 provides for many of your monthly living expenses. Some of these include housekeeping, 24-hour on-site security, landscaping, building upkeep and maintenance, hazard and liability insurance, all of your utilities (except electricity, which will cost you about $12 per month), transportation for shopping and outings, in addition to many other services.
The leftover expenses like food and electricity will cost another $350 per month. This means that your overall cost of living to maintain that $40,938 per year retirement lifestyle in North Bali will be in the ballpark of $550 per month. Even without the hack to make it free, this is still quite the bargain!
At this point you are probably thinking, “What about the free part? Yes, it’s cheap, but how can I retire on one of the world’s most beautiful islands for free?” Don’t worry, it’s time to reveal the hack. The secret is found in the high interest rates on CD’s offered in Bali. Because much of Bali’s population is living on close to $200 per month, and Indonesia’s economy is almost all cash based, banks have to offer great rates on CD’s to attract customers with more money. You can have the interest paid into your bank account on a monthly basis, so if you have enough in a CD, you get to live on the interest you make. The Indonesian government will automatically take taxes out of accrued interest, but we have already accounted for this in our example below.
At today’s rates, if you have about $134,500 invested in a CD, you will make a little more than the $550 per month that is required to live comfortably in Bali. This leaves your social security income for other things like large purchases, travel, and anything else you can think of. As you can imagine, you could end up not only living for free, but making extra money on the side. You may want to check with your home country’s tax laws in case you will need to pay additional taxes on your earnings.
Before our cooperative in Bali, retirees didn’t have an easy way to get a home in Bali, or find guidance through the immigration process. That’s why we decided to start a retirement community here, to make your retirement in Bali a smooth, easy, and wonderful one. We believe everyone has a right to live the retirement of their dreams. See you in paradise, it’s more affordable than you think.