Indonesia Expat
Info for Expats

Retiring in Indonesia

Some things in life are worth spending a little extra time and effort preparing for, and retirement is certainly one of those. After several decades of hard work, won’t you deserve the best you can get? For many Indonesian-based expatriates, that might be right on their doorstep – or if you’re based in Jakarta, just a short flight away!

Retiring anywhere in the world is full of options and excitement, if you’re well prepared. But as an expatriate, there are likely to be even more options – you’ll probably know people in several different parts of the world, possibly lived in several parts of the world yourself, and be used to a different standard/style of living than you would have in your home country.

Whilst Jakarta itself isn’t known for having a particularly rocking pensioner scene (apart from BATS of course), many places in Indonesia fit the bill nicely. Bali is the obvious choice with its laid-back, “every day is Sunday” way of life; Yogyakarta and Solo are increasingly prominent choices; maybe you’ve discovered your own secret slice of paradise somewhere.

But apart from deciding where you want to spend what should be the most relaxing years of your life, you’ll also need to decide how you’ll achieve it. Visas, income, healthcare, and security should all be at the top of your list.

Firstly, visas. The last thing you want is Pak Polisi interrupting your afternoon nap to tell you that you’re being deported. Whilst “legally” retiring in Indonesia is nowhere near as easy as other Southeast Asian countries (notably Malaysia), there are plenty of established ways of doing it.

A specific Retirement Visa (which works in a similar way to a KITAS) is the standard way to go; other options are a renewable Social Visa or Spousal Visa, depending on your circumstances. There is one simple rule to follow with any Visa application in Indonesia: use an agent. Yes, it’ll cost you a little more, but it will save you so much time and hassle.

Even if you think you’d prefer to save a few hundred dollars by doing it yourself, don’t. When it’s up for renewal in a few years’ time, you might regret not using an agent while hobbling up the steps with your walking stick.

Once you’re legal, you need to sort out your income. Hopefully, you’ve prepared well by putting a bit of your salary away every month whilst you were earning so that you’ve got a nice pot to fund your retirement. If you’re currently not saving money every month, start. It’s very important.

In retirement, the most important thing is to make sure that your income doesn’t stop. This means proper planning and management of your investment portfolio by you and your financial advisor. Make sure it’s not in anything too risky – and by that I mean not at risk of being too volatile, not at risk of becoming illiquid, and not at risk of disappearing altogether.

Ideally, you’ll be receiving your income from a fixed and guaranteed annuity policy or from consistent investment returns – not by gradually depleting your capital amount, which gets particularly dangerous if you end up living a long time. Make sure you’re living within your means.

In Indonesia, you also have to consider the currency exchange rate – which is notoriously difficult to fully prepare for. One of the best tools available to you is fixing your rate in advance – particularly for regular remittances, for example from an overseas pension – so at least you get a fixed income for a while, with perhaps annual or biannual reviews.

Healthcare provisions are next. Some of us are from countries which have a strong tradition of not letting people die on the street, even if they can’t afford private healthcare. Indonesia isn’t one of those countries, and both common sense and statistics say that almost all retirees will get ill, and need medical treatment, at some point.

If you’re currently relying on medical insurance to cover you in the event of serious illness, that’s great – but beware. Whilst a lot of the major insurers will have a “guaranteed renewable” agreement as part of their policy – which means they guarantee to cover you, as long as you keep paying the premium – it doesn’t guarantee or fix the price.

Most insurers will massively increase the price of your cover when you turn 65. Massively. So massive, that you’ll consider it not worth it, and decide to self-insure. Make sure you have plenty of spare cash which is easily accessible in an emergency.

Finally, security. Indonesia isn’t a particularly dangerous place (in my opinion), but the hidden risks are usually the worst. Remember that you don’t really have any “rights” as a foreigner; rules and regulations can change dramatically and suddenly; and no-one in a position of authority cares about you or your well-being.

For this reason, even if you’re spending the rest of your life in Indonesia, keep some money offshore somewhere. Be nice to your maid. Get to know your local senior neighbourhood person. Maybe even wear batik on a Friday.

And whatever and wherever your retirement will be, make sure you’re saving up for it – you’ll be glad you did, and you’ll always wish you had saved more…

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