How to Plan Your Retirement in the Philippines
Are you wondering whether an idyllic setting on the islands of the Philippines might be the best retirement choice for you? There's a lot to consider when you're planning such a significant life change. We take a look at six of the most critical issues: visas, income requirements, cost of living, where to live, housing and healthcare.
The good news is that the Philippines will welcome you with open arms. The government even has a special section of the tourism department to help you get settled as a retiree in the Philippines called the Philippine Retirement Authority, which provides assistance throughout your stay in the Philippines. English is a widely spoken second language; in fact, the BBC reports that teaching English is a major industry in the Philippines, which houses many call centers that serve U.S. businesses.
Before you start the process of formally retiring to the Philippines, you can do initial research at online magazines such as Retiring to the Philippines.com, where you will find information about what it is like to live in the country. You can also explore discussion boards with people who have already retired to the Philippines at MAG-ANAK.org or The World of Filipinas. Traveling to the Philippines and spending some time there should definitely be part of your planning process, if you haven't been there before.Cost of Living
The Philippines ranks in the top 25 as best places to retire on International Living's annual Global Retirement index. Its low cost of living matches that of Ecuador, Thailand, Belize, Guatemala and Cambodia. Only two countries rank higher for their low cost of living: Vietnam and Nicaragua.
Here's how the website Living Beyond the Sea breaks down what it costs to live in the Philippines: housing rental (US$170 to US$450 month; upscale, US$850 month), groceries and dining out (US$160 to US$225 per month), Internet (US$19 month, with a daily cap of 850mb), and cell phone (US$14 per month, unlimited) As long as you choose to live in a city, a car is not essential; taxis, buses and bikes will take you where you need to go. With gas at roughly US$5 a gallon, it can get very expensive to own and drive a car if you choose to live outside a city.
If this sounds attractive, here is what you need to know to make the move.Getting a Visa
Once you have committed to retiring in the Philippines, the first thing to do is apply for a Special Resident Retiree's Visa (SRRV). The most popular for retirees is the SRRV Classic. As long as you are 50 years or older, the visa requires you to deposit into a bank in the Philippines either US$10,000 if you have a pension – or US$20,000 if you don't have a pension. This deposit covers the retiree and two dependents.
The good news: The $10,000 can be used toward the purchase of a condo or townhouse, or for a long-term housing lease. However, in order to use the $10,000 the total amount of your investment in the Philippines must be at least $50,000.
If more than three of you will be moving to the Philippines, there is an additional US$15,000 per dependent. You will need to show proof of the monthly pension, which must be at least US$800 for a single applicant or US$1,000 for a couple. Social Security income counts as a pension for this requirement; the annual letter you get from the Social Security Administration stating your benefit amount is sufficient proof.
The initial application fee is $1,400 for the principal and $300 for each additional person, including spouse and dependents This is a one-time payment. After the first year the annual fee to renew the visa will be $360 and will include the principal, spouse and one child. If you have more dependents, they will cost $100 each.
Other types of SRRV visas are available for people looking to move to the Philippines at a younger age. There is also a special retirement VISA for former diplomats.
In addition to a visa, you will also need to get an ACR I-card (ACR stands for Alien Certificate of Registration). It has a microchip, contains bio-metric data and has a photo, your visa type and other information including your fingerprints. It costs $50, has to be renewed annually and serves as a reentry permit. However, it is not a substitute for a valid passport with a visa stamp; you need both.Income Requirements
As discussed above you must have retirement income to qualify for the SRRV Classic VISA, and Social Security income does count. In fact the Philippines is one of the countries that has US Embassy staff trained to help you with Social Security services.
While you can have a check sent to the Philippines and pick it up at the embassy (you may need an appointment to do so), you are much better off maintaining a U.S. bank account into which your benefit can be deposited directly. You can then transfer funds to a Philippine bank. (For more, see Best Ways to Send Money to the Philippines.) The Philippines is not currently on the list of countries where you can get a direct deposit of your Social Security check to a local bank (but check this link for the latest on which countries are included).Choosing a Location
Finding the best place to live is a highly personal choice. There are 80 provinces, 17 regions and 138 cities in the Philippines. The website Top-Destination-Choice-The-Philippines.com lists the top 20 cities in alphabetical order and provides other information. See Retirement Abroad: 5 Unexpected Foreign Cities for a information on Tagaytay, one of the 20.
Cebu City (described in Retire Abroad: Cosmopolitan Cities) and Metro Manila, both also on the list, are the only two cities with Joint Commission accredited hospitals. If you choose to live a distance from an accredited hospital, be sure to have access to transportation that can get to the hospital quickly. Many rural clinics do not have a doctor on staff – only nurses.
The website Overseas-Filipinos.com also has information on top retirement locations.You Can Rent, But Not Always Buy
Renting with short-term leases may be a good option for you until you find just the right place to live. The problem will arise when you decide you want to buy something (and take advantage of the ability to use that $10,000 visa fee if it's expensive enough). If you are are retiring on an SRRV visa, you can buy a condo or townhouse, but not a house. Real property, other than a condo or townhouse, can only be bought by a Philippines citizen. If you want to live in a house, you'll need to keep renting.
Buying a townhouse or condo in the Philippines is similar to buying real estate in the U.S. The real consideration is location. While you may dream about buying in a rural area on a small island, think about whether it will give you easy access to commercial districts that include malls, hospitals and other modern conveniences. This is another reason to rent before buying in communities you are considering to be sure they have the conveniences you want.Finding Healthcare
Healthcare can be a more difficult issue to resolve. Traditional Medicare is not accepted at Philippine hospitals. Some Medicare Advantage plans do include coverage outside the U.S. They vary on a state-by-state basis, so research your home state to find out if that option exists for you.
Medical services cost much less in the Philippines and you can buy local insurance or sign up for PhilHealth (governmental health benefits). Don't be surprised if you are asked to pay for medical care at the time you receive it. Fortunately, costs are much lower than in the United States. If you are eligible for VA medical care, you can get care in a U.S. VA clinic in the Philippines.
As mentioned above, modern medical facilities with Joint Commission International accreditation are only available in Metro Manila and Cebu City. Some US retirees travel back to the US if they encounter major medical needs. You don't lose your Medicare when you are outside the U.S.; you just can't use it to cover services unless you have arrangements through a Medicare Advantage Plan.The Bottom Line
You can definitely retire more cheaply in the Philippines, but you will face different kinds of problems, such as limitations on purchasing a residence if you are not a Philippine citizen. You also may not be able to access the type of healthcare you want.
The good news is that you will find a welcoming government that will encourage you to choose the Philippines as your retirement destination. For more on retiring abroad, see Plan Your Retirement Abroad, What Does Retirement Abroad Cost? and Retirement: U.S. Vs. Abroad.