Binary Dollar posted an open mic discussion about How Much Money Does One Need to Retire. When I have read the comments just a few hours ago, I’ve noticed that many responded that they need millions of dollars to retire comfortably. Now although I haven’t really given much thought about it in the past, it only took me a few minutes to compute and decide to leave a response that I only need $200k to spend for the last few decades of my life.
Why? Simply because I live in the Philippines. Although the US dollar has depreciated considerably this year - it’s down to Php46 per dollar compared to Php55 per dollar last year I think, a dollar grows 46 times here! 
So if I have $200,000 when I reach the age of 30, my dream retirement age, I’ll have 9.2 million pesos, which when divided into two (inflation issues) is still approximately 4 million pesos. Four million pesos will allow me to have about 11,000 pesos ($239) for monthly expenses, which I think is more than enough if I get to retire with good health. Why only Php11,000 monthly budget? I never intend to retire with any debts and I believe in living cheaply.
How about my beneficiaries? Of course, I don’t want to, God forbid, die without leaving anything for my beneficiaries. So I also included in my comment that I need another $200,000 for my family and other people who I think deserve some inheritance. And while that money’s earning interest from any investment service I decide to keep it in, I’ll keep on reinvesting portions of its interest somewhere else to keep the ball rolling and maybe for me to afford some bits of luxury with my loved ones every now and then.
So yeah, technically, I’m planning to go for $400,000 for my retirement fund.
Anyone who thinks I’m crazy to have these financial goals? I’d love to hear from you.
7 comments ↓
At first, I would have said “yes, you are crazy”, but I do not know what things cost in the Philippines.
Here, that ammount of money won’t go far. If I had my home and everything paid off, I would still have some very large expenses.
1) If not employed, a health care plane can easily get to $700 a month. Then you have to pay deductibles and coinsurance. As you get older, it can easily push to $1000 a month.
2) Home costs out-live the mortgage. I have an average starter home in this area and I still have $50 a month in insurance, $233 in taxes, and an average of probably another $200-$250 in maintenence.
3) Food here is not cheap and the garden we have here only helps a little. We want to eat healthy, so the grocery costs for my wife and I are probably $400 a month. I know I could get by on half this but then we couldn’t eat as healthy.
4) even if we only had 1 car, the cost to replace them whe they are completely dead + gas for minimal trips easily is $300+ a month.
5) If we got rid of high speed internet and cable, our utilities bill for gass, electric, water, sewer, garbage collection, etc. comes to at least $200 a month.
So, Now we are up to over $3000 a month and we have not counted anything for
1) vacation,
2) new clothes
3) entertainment
4) gifts (christmas, birthday)
I would be interestedto know what basic expenses are like there. Here, $239 a month won’t do much.
Hi,
In the Philippines, you can retire in the province (my place can still be considered as province-like compared to the cities in the States), without having to spend much.
Retirees here don’t usually care about health care plans but I do have health insurance and social security contributions which won’t cost me more than $50 per month.
Home costs? That would be covered by the rent fees that my soon-to-be-built apartments. And I’m sure that the home costs you enumerated are too much compared to the home costs here.
Car? I don’t have a car yet and if I’m going to have one it’s not me who’s going to use it because I hate hitting the road. So, no I’m not going to worry about car expenses. But the public utility vehicle fares - 14 cents to about a few dollars depending on where you’re going. And from where I live, the church, malls, schools and other places are just at a walking distance.
Grocery, yeah, that would eat most of my $200+ per month. Maybe about $60 per month.
And as I’ve mentioned on the latter part of my blog post, I’ll be spending the interest that the other $200k will generate on luxuries.
No wonder lots of Australians, Americans and Koreans are here in the Philippines having the time of their lives. It’s just a lot lot lot cheaper here.
[…] as I’ve mentioned on my response on a comment on the post about why I’m only needing $200k for my retirement fund, one dollar gets multiplied to about 45 times in my country - Philippines. So this should be a big […]
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There are two large obstacles that most people have; debt and a lack of any planning. If you get realistic it doesn’t take millions.
Cameron,
Very true! And incurring debt is currently what I’m battling out to get to my goal of retiring comfortably with just $200k retirement fund.
Thanks for dropping by!
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