White sandy beaches, blue skies, and some of the friendliest people on earth; retiring in the land down under is a dream. Australia, situated between the Indian and Pacific oceans hosts a wide array of climates including scorching hot deserts, tropical rain-forests, and picturesque mountain ranges.
Australia ranks 9th in the world for per capita income and has obtained the silver medal in the human development index rankings. Combining this with the high priority Australia has for the quality of life, health, education, economic freedoms, civil liberties, and political rights of its residents makes Australia the ideal place to settle down and retire.
When it comes to retirement in Australia, unless you have a close relative like a parent or a child currently living in Australia you only have one viable option; the investor retirement 405 visa. While the actual visa starts at a reasonable $330 AUD, the stringent entry requirements which are tabled below could make retirement in Australia an elusive and exclusive option.
Now before you come to the conclusion that this visa is reserved for the super rich, the elite, the aristocrats of this world, take note of the biggest, single way you can reduce the burden of the application; living in a regional or low growth area. In this instance your asset requirement falls to $500,000 AUD, the designated investment becomes $500,000 AUD, and the net income between you and your partner falls to $50,000 AUD. This may swing the move to Australia within arms reach.
Surprisingly the 405 visa is a temporary visa which only lasts for 4 years, whilst frustrating at first, the fact that the reapplication process is smoother and less demanding makes this less of an issue. At the renewal of this visa you will no longer be subjected to the assets requirement, furthermore your designated investment requirement will reduce to $500,000 AUD, or $250,000 AUD if you live in a regional or low growth area.
With Australia’s cost of living index firmly entrenching it in the top 20 most expensive countries to live in worldwide, it can be easy to discount Australia as a place far too expensive for you to retire in. But once you look further into the living standards, the public facilities provided, and the relatively high minimum wage of $18.29 AUD an hour (Oct 2017), the higher cost of living can be seen as a necessity to run a well developed, happy society.
To quantify whether you are on track for retirement the ‘association of superannuation funds of Australia’s retirement standard’ has released data on the funds you need per year in order to lead a nice comfortable lifestyle. They concluded that for a single person you would need $43,695 AUD per year, and a couple would need $60,063 AUD. This comfortable lifestyle would include domestic and international holidays, many leisure activities, a nice car, being able to eat out at a good range of restaurants with good quality food, and private health insurance.
The Australian Bureau of Statistics has released data which has highlighted how the average price of a dwelling in Australia has risen to $679,100 AUD for the June quarter of 2017. Now this figure is a median for all of Australia, which may not be representative of what you may have to pay. The housing market in Australia is very localised with equivalent houses in cities like Sydney and Melbourne costing 50 – 80% more than cities like Adelaide and Hobart. This along with more favourable visa conditions will make moving to a regional or low growth area of Australia (including Adelaide and Hobart) even more attractive.
Retirement in Australia through the 405 visa can be a convoluted process, with the stringent eligibility requirements, forcing you to have acquired a significant amount of wealth over your lifetime. However the relaxation of the eligibility criteria for those wishing to migrate to a regional or low growth area of Australia could be just enough to make the move possible. Australia’s pristine climate, great natural wonders, hospitable people, well developed, joyous lifestyle makes retirement in Australia something to put some serious thought into.
The author of this article Chandan Hegde, has lived in Australia for the last 16 years, if you have any questions or would like some more information, please do not hesitate to comment below or contact us.