Malaysia: World’s Best Retirement Destination?

 A friend of mine lived in Tokyo for many years.

He demonstrated Japanese culture for his many visitors by dropping his wallet on a pedestrian clogged street.  Then he walked briskly away from it, much to the amazement of his visiting friends.  In each case (and yes, I do think he was lucky) a breathless man or woman caught up to him, wallet in hand.

Japan has one of the world’s lowest crime rates.  So while many Americans brave Mexican and Ecuadorean retiree destinations, it’s worth considering where the Japanese flee for a setting sunset of their own.  One such place is Malaysia.

Please read the rest of the article at Assetbuilder.com





Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I’m happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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18 Responses

  1. Matt says:

    Andrew,

    I found reading your article interesting. I live in Malaysia and teach at the big international school here.

    There are a lot of nice things about Malaysia. The beaches, diving and ecotourism are fantastic. And if you can plan ahead with Air Asia, traveling in the region is dirt-cheap. For the last 20+ SE Asian flights that I have booked, I have averaged less than 100 USD. Can anyone in Europe or the US imagine booking a flight of over 5 hours each way (KL to Manila) for 67 USD all-in? How about KL-Bali for 110 USD all-in? It’s pretty nice.

    Wet-market food can be really cheap and of a great quality/variety too. You just have to put up with getting your feet dirty.

    However, apartment rents and real estate prices in general are really going up. I own a one bedroom that rents for a 1000 USD/month, and it isn’t in the most exclusive of buildings or neighborhoods. It would be pretty hard to find a 3 bed/2 bath condo for 2700RM (900 USD), unless you move far away from the center of the city. Even then, you’d be looking at older, run-down buildings without much security.

    An increasing concern for everyone (expats and locals) is the amount of theft, from motorcycle purse-snatchers to theft at traffic lights to breaking into houses. If a family wants a place with security, like a 3 bed condo with electronic key cards, they can easily drop 2-3K USD a month. Houses in gated communities can be much more than that. Working expats (not teachers though) generally pay 4-6K USD a month to have security in the nicer neighborhoods.

    A lot of expats buy condos/houses because they can own a place, freehold. But the place you would pay 200-300K USD to buy here, could be rented in Thailand for 12-15K Baht (400-500 USD) a month. I don’t see how it makes much financial sense to buy.

    Also, the culture of the locals isn’t nearly as warm as Thailand, Cambodia or Laos. To me, this is one of the largest reasons for why I wouldn’t choose to retire in Malaysia.

    I love my job here and by being frugal it is very easy to live cheaply and well, but not for the long-term. The combination of possible theft anywhere you go and total lack of smiles when you aren’t the tourist paying for the stay, really takes away from the living experience.

    Even though Malaysia has a great location and can be a pretty easy place to live, if I had to choose long-term in SE Asia, I’d head north, where my money would go just as far and my daily life would be more enjoyable.

    Matt

    • I like the idea of Thailand too Matt. It is far cheaper…and I think the food is better! Accommodation has risen a lot in Malaysia over the past few years–you’re right! Where are you working?

      • Matt says:

        I work at ISKL. About to finish my 5th year.

        I read about your trip on the Mae Hong Son loop last Christmas. I did it driving with some family. Did you happen to experience any good trail running or hiking? It seems like there should be a lot in the hills around Chiang Mai, but researching on the net and talking to tour leaders who do day trips for mtn biking etc, it seems like there are only a few places and not taking a guide is really frowned upon.

        Matt

  2. Hi Matt,

    I didn’t see anyone mountain biking while I was up there. But our trail guide said you could hike from Mae Hong Son to Chiang Mai. That would be incredible. If you take your mountain bike, perhaps you’d be a pioneer! Did we meet when I was at ISKL a couple of years ago, giving a money talk?

    • Matt says:

      Andrew,

      I was there when you gave the investment talk at ISL–I said I could comfortably retire on 40K USD/year and everyone laughed at that. Then, when you calculated that I would need at least a million to be able to do that, they weren’t laughing so hard! Anyway, I jumped into indexing in Sep 2011 and what a great time to get started! Thanks for that.

      What is the typical answer you get from international school teachers about how much money they would need per year if they retired today? It would be interesting to compare those answers to what public school teachers in the US and Canada would say to the same question.

      Also, I had lunch with you and your wife at the Google Summit last Sep. at SAS. We talked a little about sugar and cancer cells. BTW, I really recommend the book Good Calories Bad Calories, by Gary Taubes and specifically chapter 13, on the role of insulin in cancer and dementia.

      • Hi Matt,

        I remember you now!

        To answer your question, most international teachers say they need far far more than most teachers in North America. It’s not uncommon for people to say they want $120,000. Oddly, those are the same people who have worked for years and don’t have a pot to *iss in.

        There’s a la la land that most expat teachers live in. They live what I call “front end loaded” lifestyles. Their accidental strategy would work best for those planning to die young.

        Thanks for the book recommendation!

        Andrew

  3. Sairam says:

    Hi Andrew,

    My name is Sairam and I live in Dubai. I am 37 years old and have two infants about 6 months old. I am looking out for taking a good term insurance with critical illness benefit for myself and my spouse for about USD 100K each.(Life cover 100K and Critical illness 100K). The financial planner (so called) whom I consulted is heavily recommending Zurich Futura whole of life plan wherein I need to pay a premium of roughly USD 402 per month (For 15 years) for USD100K lifecover+USD100K Critical illness +USD 500K permanent dismemberment for me and spouse.
    I am a bit reluctant in this product because of its link with the investment either in US blue chip or in safe bonds but the planner says no other product can match Zurich Futura in terms of its flexibility and its inexpensive premiums and also he says Zurich cannot be termed as a investment linked insurance but it is a reducing term insurance. Is it true??
    My interest is to just take a plain vanilla term cover including for critical illness. Are there any good products which would be available in UAE which can meet my needs, I need to decide quickly on this and appreciate your thoughts.

  4. Jenny says:

    Hi Andrew, I am going to Chiang Mai later this year for a holiday to see about retiring there. I retired last year and am looking for a more interesting life where I can life a better quality life on my pension. I am considering retiring in Chiang Mai. I have done quite a bit of research and I think that this would be a nice place for me. Have you spent much time there?

    Jenny

    • I have spent some time there Jenny. And I think it’s a good option. I’m also very interesting in hearing how you make out. I’m writing a book on Financial Freedom for expatriates, with personal stories spattered within it. I’d be thrilled if you wouldn’t mind offering your story as part of my “retirement location” chapter. Would you mind, once you’re settled, for us to have a conversation about it and possibly write about your decision in my book. I think the creative retirement option you have would solve problems for many expats believing that they can’t afford to retire.

  5. Bill Grover says:

    I will be retiring to Kuala Lumpur, Malaysia. As an expat I found it difficult to find a good attorney as they are not allowed to advertise. I have found an attorney who knows real estate, Natasha, and her email is Natasha@ant-legal.commy for anyone trying to buy in Malaysia. I hope this helps someone.

  6. Panopticon says:

    Malaysia is a fine country. I would disagree with the previous poster who said it’s less friendly than Thailand, Laos or Cambodia. I find the Thais to be insular and xenophobic to a degree. While it’s true the culture has its social graces it’s also pretty fake at times. Indeed Laos and Cambodia have wonderful, warm people. But would you really want to live there considering that visiting from Thailand or Malaysia is so easy and affordable?

    One thing Malaysia has over all these other SE Asian countries is a tremendous diversity among its people. Malay, Tamil, Chinese, Orang, a large expat population and tourists and students from Africa and the Middle East. Walking through downtown KL is a kaleidoscope of cultures, countries and languages. And the food! Thai food is good, but again thanks to Malaysia’s multicultural heritage the sheer number of cuisines from around the world is mind-boggling. It is foodie heaven, especially if you like tracking down the best of this-and-that around KL and Klang Valley.

    Finally as a Westerner I find I’m not targeted or drawing attention at all in Malaysia, and can comfortably go about my day being treated more or less like anybody else. Yes many countries have wonderful hospitality towards foreigners, but it can get old always being the foreign curiosity (I spent five years in mainland China so I’m over it). This sort of tolerance for people of all stripes makes it a very relaxing place for me to live and simply blend in. Finally, being a former English colony, command of English is quite good overall and in any case Malay is quite easy to pick up. (Unlike Thai).

    Disclosure: I lived in Malaysia for a couple years.

    • Vig says:

      Hello Panopticon,
      Just curious if you found the brand of Islam in Malaysia to be on par with, say, Turkey? Is it a moderate society? What about buying alcohol?
      Finally, I heard that foreigners are currently prohibited from buying any sort of real estate, condos, whatever in Malaysia. Perhaps you have some insight you could share.
      Thanks so much for your input. I am looking to purchase a property somewhere in SE Asia and it’s a bit overwhelming.
      Cheers,

      • Panopticon says:

        Hi Vig, addressing your last question first, foreigners may absolutely purchase property in Malaysia and it is even encouraged by the government. They have a program called “Malaysia My Second Home” or MM2H which grants renewable 10-year residence visas, provided you open a bank account there and maintain a minimum balance (you’re allowed to purchase property from this amount). Over 23,000 people have already been granted residency under this scheme.

        As far as Islam goes, I am not familiar enough with Turkey to make a comparison, and can only state that Malaysia is a very moderate Muslim society. The simple fact is that Malaysia is 60% Muslim and well represented by other major religions, Hinduism, Buddhism, Christianity, etc. so religious tolerance is part of the culture. Rural Malaysia tends to be more conservative, especially in the North and East, while the main cities such as Kuala Lumpur and Penang are heavily Chinese and Indian and the atmosphere is very relaxed. You will find mosques and daily calls to prayer which may wake you up in the morning (if you’re close to a mosque) but that is the extent of the annoyances. There is a conservative Islamic political party called PAS that has stated its intention to make the country a more orthodox Islamic state, but they do not enjoy widespread support, and the ruling party is essentially a coalition representing the varied cultural makeup of the country.

        Alcohol is readily available in bars and pubs and sold at all convenience stores in KL, Penang, Melaka, etc. Also the nicer grocery stores like Cold Storage and Jaya have respectable wine and spirit shops (where they also sell pork products). In the conservative east coast, alcohol sales are more restricted although it’s still possible to buy it from Chinese sellers.

        I sound like a Malaysia cheerleader and that is not my intention, but I really enjoyed it there and consider it one of the most livable countries in SE Asia, with very good infrastructure, top notch medical facilities, English is widely spoken, and excellent access to the rest of the region for travel.

        Hope that helps.

  7. Sean says:

    Stay away from whole of life policies. If you want a term policy (which I recommend), you could try Friends Provident Middle East Protector. I must emphasize that this is a TERM policy — on no account whatsoever should you go for a whole of life policy. Ever.

    Unfortunately, the only way to get a term life insurance policy (outside of those offered by Arab providers) is to use a financial adviser. For example, in Dubai you cannot buy a term policy from Friends Provident directly; you have to use parasitic intermediary financial advisors.

    The good news is that if you buy a term policy, the monthly premium will not be very high (e.g. 200k euro policy with built-in disability for two healthy early-thirties adults is 60 euros per month).

    If I ever leave Dubai I might cancel the policy as it’s not very consumer-friendly compared with term policies available in Europe. But for the time being it’s adequate.

  8. Evan says:

    Hi Andrew, there are not many options for Malaysians to hold index funds in our own currency except buying units of mutual funds offered via platforms like Fundsupermart or eunittrust. I would love to hear any alternatives for us to practice what you preach, that is, buy and hold index funds without having to worry about TD Direct’s complex fee structure unlike the two platforms mentioned earlier.

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