Retiring in South Africa

[SAman4Aus]

We live in Aus and hold dual citizenship (Aus and RSA). Now that we are in our 50's the retirement thing becomes more of a consideration. We visit South Africa yearly for family reasons and to be honest things are waaaay cheaper there than in good al Australia. Food and drinks are an average 3 to 4 times cheaper than here in Aus even for the same brand product. I know prices keep going up in RSA, but realistically they cant get too expensive as the majority of the population are on the bread line.

So we're thinking, if one retires in RSA debt free, one's AU$ savings would last 3 times longer than if you retire in Australia, Thinking of buying a cottage on the beach in the Cape and live with our heads in the sand to avoid any of the local politics etc. (Yes I know it will have to be in a secure estate, crime will still be there etc etc)

The one drawback I can think of is medical services. In Australia you don't really need private medical but in RSA it's not an option to be without it. Even then I don't think the private hospitals in RSA are as good as the Ausy public hospitals (but then I don't really know for sure). Also not sure if one can even get medical cover once you're in your 60's and I'm sure it wont be cheap.

I know it's early days yet, but what other considerations am I missing with my retirement planning in South Africa? Has anyone else given the idea a thought?

BTW we don't have kids in Australia which makes it easier to up and go.

[Jordy]

Apart from negatives of the country as a whole, nothing wrong with it. Many British people did it in 80's. They brought their pounds and lived like kings. Many people still do it, particularly if you retire in the Cape Town area.

I think you would need to do your maths and check if you have enough to cover medical aid etc. I dont think you will get the government Australian Pension if you leave Australia. That is $2000 a month for a couple gone.

[Bronwyn&Co]

Hmmm we are in a similar boat in 10 years' time. Also factor in increased insurance costs, levies if you are in an Estate, and ADT or similar. I'm also seeing that people are paying a lot for phone contracts and internet. Maybe do a dummy budget?

[Nev]

yep you are also betting that in the 20+ years after you retire that the country will still be somewhere you want to live, women live longer than men so would you also be ok with your wife perhaps living on alone there without you.

Na, dont think it is my cup of tea,

on a different line, you can easily get a retirement visa in Thailand and spend a couple of years there while being a much shorter flight away from Auz to head back when you are tired of gallivanting, that is our rough plan at the mo.

Monthly income of $2300 per month and older than 50, here is you PR retirement visa.

[B007]

does all citizens qualify for a state Pension or must you be working for an X amount of years before you Qualifies And at what age do you Qualify ?

[chzaau]

10 years and it is means tested.

[DaffyDuck]

Food and drinks are an average 3 to 4 times cheaper than here in Aus even for the same brand product.

I wouldn't say that this is true SAman4Aus. Just make sure when you do your rough budget. Food has gotten ridiculously expensive in SA. A chicken costs close to R70-R80 at Woolworths and it's not a big chicken either. A small single 200g porterhouse steak for the braai from Checkers averages between R40-R50. Since 2009 our grocery bill has DOUBLED. A tub of 2l ice cream for example is about R40 and a loaf of bread averages between R9-R15. Clover 2l milk costs R23 and an average box of cereal falls in the R30 range and up. Yes, wine is cheaper with the entry cheap bottles between R30-R40, but a mid level nicer wine will cost you from R60 upwards to R80. Really good wine, from R80-R120 upwards. I think wine is Aus is expensive, but generally speaking, when I looked at Aldi and Coles' prices online, RSA food prices and AUS is on par with each other. In a lot of cases Aus worked out CHEAPER to buy the same groceries at. Let me know if you need more examples, I'll scratch around for a grocery slip to give you some ideas of cost if you need help to do the estimate.

[SAman4Aus]

DaffyDuck, I visit South Africa once a year and I don't agree with your assessment. In fact I went to the trouble tonight of checking Coles and Pick n Pay online for a few items that I would be purchasing. Working on a rate of 10 to 1:

Bread that I would buy: Coles $5 PnP R10 (on average) ( that's $1 for a loaf of bread if you convert)

Rump steak: Coles $14kg (and that's on special - normally $19kg) PnP R80 (or $8 a kg)

Eggs: C $5 for 12 PnP R33 for 18 ( $3.30 for 18 eggs!)

Kelloggs All Bran C $7 PnP R47 ($4.70)

Case of VB (beer) $40 ----- case of Castle R150 (that's $15 for a case of beer!!!)

Nescafe Gold coffee C $14 PnP R79 ($8)

Biltong at South African shop in Aus $60 kg PnP R180 kg ( $18 kg !!)

I saw Avos for 4 for R20 at Woollies and here at Coles you pay about $2 for one Avo. Fruit and Vegetables are much cheaper in RSA compared to Aus.

Yes you can shop around and get things cheaper or of lesser quality but these are the items I would typically buy. So maybe things aren't all 3-4 times cheaper....except maybe fruit and vegetables....and beer Another example is eating out in RSA. You pay around R150 for a steak in a decent restaurant and R16 a beer. In Aus you pay $30+ (R300) for a steak in a decent restaurant and $7 (R70) a beer.

But comparing prices wasn't my point to start out with, I just wanted to prove a point in response to the previous message. I do agree that one would have to do the maths nearer the time of retirement as prices can and will go up over the next 10 years. Security costs is a good one to consider and I do like the Thailand option........

[RYLC]

While you are fit and well life as a retiree in RSA it may be wonderful. I just wouldn't want to take my chances with medical when old. I've heard of whites being turned away from emergency and hospitals being short of drugs and blood products. Maybe urban legend maybe not. I wouldn't like to chance it.

On the other hand Thailand would be wonderful

[Bronwyn&Co]

Aldi is cheaper than Coles, and not in every town/suburb, but if you are very careful you can do a similar shop, maybe eating more baked beans and less tuna, if you know what I mean.

Having said that, we are like kids in a candy store when we get near a Pick 'n Pay when we go back. We usually stay with family so we buy the basics to top up every day, meat etc. While I can see prices have shot up (R20 for a Stasoft refill!!??) it's still cheaper in Rands.

I do think you still get bread for $1 at Coles...if you don't mind no name brands.

I think maybe there are more opportunities to look for food bargains in Australia?

Edited February 17, 2014 by Bronwyn&Co

[summer24]

@SAman4Aus, lets never forget visiting and living are two very different things....if you truly think RSA has improved since you left, then I suggest you don't hesitate, jump on a plane and retire there....trying to make a call re whether money is better/stretch further should be the last your worries while trying to make this decision.

[Donovan83]

I do think you still get bread for $1 at Coles...if you don't mind no name brands.

I'm not a brand name snob, but I tried that $1 bread from Coles once and it was so siff

[chzaau]

I think comparing prices is like an apples for pears story. So you earn aud and have cheaper fuel but you pay out your nose to eat descent food, or you live in South Africa earn Zar, pay out your nose for fuel but can afford to eat good food.

One must decide what is better, for the,, but in the end it sort of all evens out to be honest.

[rozellem]

My sister and family returned to RSA last October, after 12 years in the UK. They are staying in a granny flat provided by family, so not paying rent/mortgage. They thought they would be laughing with the money her husband was offered to go back to RSA, and that she wont need to work. She has now started to look for work as they just come out with their money and dont really have anything to show for it. They are taken by surprise by all the hidden costs.

I would seriously look at your options for medical aid. Not a matter to be taken lightly. I was surprised on our recent trip how many friends our age (late 30's) did not have medical aid. One of them fell down stairs while we were there, broke a wrist and had to fork out 40k to the hospital and 25k to the surgeon!

If I was you, I would keep at least a flat in Aus, making coming back easier. Rent it out while away. Maybe starting with 6 months there, 6 months here. Just till you figure out the lay of the land.

[heidim]

I have also been contemplating this, although we're still a long way from retiring. However, at our age (late 30's) starting to save all over for retirement is a bit of a worry. So I've been hoping that in 30 years time the AUD/ZAR would be R50=$1, so then we can buy the entire country and get it back on track for our grandchildren

On a serious note. The thing that bothers me the most, is not the cost of private medical care, but the actual quality of private medical care. There has been a mass exodus of qualified doctors our age and the ones who are still in the country and studied under a decent curriculum will soon retire. Just last week they had an interview on RSG with a girl who had like 9 distinctions but were not accepted to study medicine because of the quota system. She is now going overseas on a bursary. Which means the students who ARE accepted into the degree are not the best, they are purely chosen on a quota system. Having worked at a university for 10 years myself, I know that if more than 35% of the class fails (yes it happens more often than you think!!), you as the lecturer are required to do a "block adjustment", which means you give the entire group an extra 10% for example to get more students to pass.

So when I'm 80, I will probably be at my most vulnerable health wise and the question I ask myself is do I want a "block adjustment" operating on me?

[Sibella]

Also there are small things like getting around. If you retire here as far as I know you can use public transport for free?

While in South Africa once you can't drive anymore you are stuck.

The elderly people I see here in Melbourne always seem to be having a great time, having seniors lunches and getting discounts on just about everything!

[AndreaL]

I think that retiring overseas is a good option, but you would want to research a number of things such as taxes, medical treatment etc.

Plenty of people from the UK retire in Spain or over in Asia, and some countries like Malaysia offer incentives to retire there.

I don't know if your wish to retire in RSA is because you are familiar with the country, but I do agree that life there has a lot of hidden costs and would look at other options, it could be a wonderful adventure, especially if you are in good health.

[qwerty]

Avos are R50 for 4 at Woolies - bought some yesterday. Use it or lose it

[RYLC]

Doesn't matter how far your money stretches - a third world country is a third world country...

Forgot to add: My sister still lives in RSA and cannot run her freezer and has the bare minimum in the fridge because the electricity blackouts are so frequent (and this is in a city area).

Edited February 18, 2014 by Crisplet

[SurferMan]

No chance I would take it in my old age. The risk is too high. Also, you need to to be totally self-sufficient or seriously loaded to live well in SA. I don't think anyone in their correct frame of mind can argue that medical has gone down in recent years. Yes you still get to see your specialist, and GP and life is good. But i reckon many of them squirrel it away for a rainy day. My former GP makes a small fortune ( you would not believe me if I told you what he makes) but he is still putting it abroad, and making plans to move to Aus.

I still think on the balance of things, you have a better quality of life chance in Aus than in SA. (Unless stupidity rich, as mentioned above) Even so, I just don't feel the risk is worth the potential reward. My kids would not go back in any event.

[McCabes]

hmm, the avos thing could be due to in-season vs out-of-season prices, but they do vary a lot.

PnP are cheaper, but unless you want to toss half of the fruit& veg you buy out, then it's probably best to compare against Woollies prices.

What I would consider:

Support - do you have someone you could call who is close enough to take you to an emergency room should you fall or have a minor accident? Or would you trust public or airport-type taxi services (not the mini buses).

Healthcare - almost 3 years ago, I was pregnant with my third child and suddenly found myself diagnosed with asthma. Looking back, I've probably had it for years, but it got worse during that specific pregnancy. It took 3 weeks - of me coughing through the night and unable to laugh even a little without having an attack - before my GP could get hold of a pulmonologist to check what was safe to give me. Why? Because there are only about 5 left in the country, and they simply don't answer the phones anymore, because they are fully booked 8 months to a year in advance. I'm guessing this is roughly accurate for all the specialist-specialists. I'm even seeing a trend where the obgyns are kind of disappearing, and there are usually loads of those! So looking at the big picture, whether you have the money for private hospitales and Discovery Health membership, when push comes to shove, these still don't guarantee that the skills you may need will still be in the country when you need them, and as Andrea (I think) said, they are using the WONDERFUL quota system - and started to do so when I entered Wits doing a medical degree some 13 years ago... so for at least that long, they've had the quota system in place. Then you add in how reliable the matric results are, and consider how "qualified" for uni the students really are, 9 As or not. Even IEB students don't rank as high as the international average for other countries. So it's not just the government schools.

Safety - I hate to raise this, but there are honestly so many attacks on the elderly, vicious and violent, that make our local paper but don't even get a mention in the national ones. Yes, we're not in the cape, we're in joburg, but this is a really worrying, and growing trend.

Peace of mind - I think once you've been gone for a few years, you forget what it's like not to have this. To wake and have your heart pound when the dogs bark, or you hear your neighbours coming in late (well, until you realise it's the neighbours I mean). To never be able to leave windows open (had my whole jewellery box stolen that way), or leave your garage unlocked. To check and recheck all the doors and safety doors. Not to worry when you walk down the street, to be able to have your wife walk around without concern. This is something I really don't remember ever feeling. Oh wait I lie. We went camping a while back, and funnily enough it was the first time I can remember since childhood where I was walking around at night and not watching for danger, not wondering about the people around me and their intentions.

I'm sure I'll get blasted, but I'm still here, and with my mom living with us most of the time, this is what is apparent to me, and how I feel. If I knew you personally, I'd implore you to consider somewhere else, not here... all I can really say is be sure, and be careful, and make sure you do have that way back if things don't work out.

All the best.

[HarryVR]

I would not like to retire in South Africa. Once you have experienced the peace and safety of living in Australia, it's hard to go back. Fortunately here are so many opportunities to build wealth for oneself to be able to retire, not worrying about the cost. I'll be here in 20 years' time!!

[SAman4Aus]

I read your responses with interest and do appreciate the honest and genuine feedback. What you all say has merit and it is what I wanted to get out from posting this message. Its not that we don't like or appreciate the benefits of living in Australia it was more a decision of getting more bang for your buck. But as pointed out, it's not only about the money.........fortunately it's not a decision we have to make just yet but certainly now have more to take into consideration.

[Guest May]

Also getting older. Been here 1 year and OH 57 on Friday. Living on the beach! Find a safe one....last time I tried holidaying close to water there was an alarm with fencing and owner had been held up. Also they pick off defenseless old folk. Food prices I earn well and I am frugal...I am minimalistic and I live well. Old folk have loads to do here. My 2c.

[pastapete]

If you have Aus $ as income, it could work out for you. I once knew a person who spent 9 months there and 3 months here. took travel insurance as medical aid was too expensive. I think you lose your Aus pension if you are away for more than 6 months. Kept my home in SA with the idea of doing the same thing, to spend time with old friends. However as time goes by i am becoming too Aussie and finding SA very frustrating to deal with. Banks are a nightmare. Good luck. just like immigration, its a personal thing and may be good for some but not for others.

[Riekie]

Yes, things are waaaay cheaper in South Africa, and the cheapest of them all: life!

I'd rather live poor than die cheap... (But that's just me)

PS: Fiji is cheap too...

(You could fly to Oz for medical treatment under Medicare... )