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- Category: cost of living
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How much does it Cost to retire in the Philippines?
It's understandable when contemplating retirement that you'd be concerned about the cost of living. There are few other subjects that command more anxiety when you plan to retire. Processing accurate lists of someone's experiences in various areas would seem a logical assist. I think most of us who've retired have been down that road before retirement and it is indeed important.
I've been "retired" since July of 1995 and have learned a thing or two about those concerns. I had 34 years into the Boeing Company and was planning for retirement for the last 25 of those years. With the uncertainty of the economy over those years I was afraid that I might have to remain working until 65, though I always dreamed of an early retirement. From about 1992 and on, going was getting hard for the company. Commercial carriers were having a slump and the Clinton administration had pulled the rug from under many defense contractors. We were going through another cutback. I had reached that magic number of 30 where there was an unwritten rule in the company that those of us who reached that number had earned tenure. Younger employees were being whacked at a steady rate while those of us with 30+ years were being left alone. There were rumors from corporate that they were considering a golden parachute for older employees, but we'd been hearing that from the time of my first day with the company.
Then one morning I got a call from an associate on the east coast that there was a golden parachute coming, the first ever being offered by the company. There was an attempt that day to make the announcement simultaneously to all Boeing locations around the world, but the news was announced on the east coast first. By the time it reached us on the west coast I'd already made up my mind. We were given six months to think about it. Most of us who were eligible were allowed to file the initial papers with HR knowing that we could withdraw them up to the last day, which was going to be July 1st, 1995. I was joined by 9,999 other employees and we walked out on that day. I never looked back!
From the moment of the first announcement I began to really worry about having enough! I took the retirement classes that my credit union and the company offered, but they couldn't tell me how much was going to be enough. The only figure they would wave about was that it was going to cost us from 60% to 80% of what we were living on that day. Even with their generous offer, I would only barely reach those numbers with my pension which was going to be okay because I had also been participating in IRA's and a company savings/retirement savings plan. A bonus was coming in four years when I reached 62; SS could start.
The point of all this demonstrates my concern about having enough income in retirement. The day did come and in retrospect the pre-planning did well. The first week I was getting up at 5:30 AM, but didn't have anywhere to go. The second week I began filling in the time with projects I'd not have been able to finish while working. The third week I was taking on new projects and by the end of the first month the thought occurred to me that if they called me back to work that I didn't have time. I continued to worry about finances for another month or two and realized a simple truth. My standard of living hadn't changed much, but I was learning to live within the budget available to me just as I had been doing for every working day of my life. Also, the pre-planning years earlier were paying off.
So it is with every other retired person I know. It seems so simple and logical now. Getting back to the question of cost of living in the RP, I don't think location has as much to do with it as you might think. Large population centers tend to be more expensive than the provinces, some a little more than others. How you choose to live has more to do with it than anything else. If you want to live in expensive gated communities with all the western amenities you will have no trouble spending whatever income is available to you. If you chose a simple rural life, very little is needed to survive. 80% of the Filipino population lives on less than P5, 000-P10, 000 per month. Bottom line, only you can decide. Come on over for a while. Learn about living here and find what makes your life comfortable. Keep a back out plan in your hip pocket, but give it a try by all means.
Ron October 14, 2006