Beer and Tax in Retirement

Even though we were only 13 at the time, the decision to move to Australia was made by your editor.

At the time, our family was a complete mess. And so the move from Germany was up in the air, although the furniture was already on its way to Brisbane. But Australia was the chance to get away from the shemozzle and so we wanted to go through with it. We departed on New Year’s Eve.

Looking back, it was the biggest and best decision your editor ever made. Everything else since has flowed from it.

We think Australia is still the greatest country on earth to grow up in. But is it the best place to spend your working years? It might be. We’re still working that one out.

One thing it isn’t is the best place to retire.

That’s why we’ve been preparing a report on some places you might want to escape to as you think about working less and living more.

Moving overseas for your retirement could be the most financially rewarding decision you ever make. A better lifestyle, cheaper cost of living and the experience of somewhere new. But is Australia really so bad that you need to escape it in your leisure years?

The Great Beer and Tax Rip Off

Congratulations Australia, you have the second most expensive beer and second most ‘progressive’ tax system in the world. The world being ‘select OECD countries’. And ‘progressive’ meaning higher income is taxed at a higher rate. So whether it’s working hard or drinking hard, Australia isn’t the place to be.

It gets worse. Our resident Japan expert informs us that a pint will set you back far less in Japan than here, making us number 1, even if the Economist disagrees. As for tax, our bet is that if you throw in the recently raised tax free threshold and the higher compliance costs, we’d beat America for top spot.

Worst of all for retirees, passive income (income from investing) is taxed at your marginal rate in Australia. Many countries tax dividends and capital gains at a lower rate to help out retirees who are cashing out of their investments.

Of course, it’s not just the two certainties of life which are more expensive in Australia (beer and tax). Just about everything is. For earners, that’s offset by high wages. But retirees who want to enjoy life are reliant on rising asset prices and high interest rates. Neither is on the cards.

Luxurious, Cheap, Cultured, Safe and Free

Taking a look at Australia’s cost of living, high dollar, and tax system, it’s hard not to come to one conclusion: There’s never been a better time to make the move overseas. Of course, it’s not for everyone.

But everyone should at least take a moment to ponder the idea. When my family first came to Australia for a holiday, only one of us expected it to be our eventual home.

There are a whole bunch of obvious reasons not to make a move overseas. It’s difficult moving half your life and beginning the other half over again. But you need to be aware of the benefits to make an informed decision.

For example, regular travel back and forth to your new home in paradise might cost a fortune. But that paradise might be closer to parts of the world you want to see anyway, saving you money in the long run.

Or you might find yourself saving more than a thousand dollars a month in living costs and taxes by making the move. That makes up for a few flights pretty quickly. More importantly, your hard earned retirement dollars could go much further. It will last longer and buy you more too.

It’s no secret that the last few years have been disappointing for Australians trying to get their finances up to shape in preparation for retirement. Many will have to cut back on the lifestyle they expected.

Moving overseas could be the solution that sees you improve your lifestyle and save money at the same time. Spending less for a better quality of life sounds like a pretty good trade off.

You might also find some great investment opportunities in your new home country. Australian property prices are outrageously high, but there are great real estate bargains in promising locations around the world.

And developing countries, where the cost of living is cheap, feature rapidly growing economies for you to take advantage of.

It’s not much good telling you all this without mentioning a few specific places to think about. Right now, we’re polishing off a report on three retirement havens Australians should think about moving to. It probably still sounds like an outlandish daydream to you.

But so did moving to Australia for my family many years ago. Back then, someone was willing to give us the advice to move. Without it, we could have ended up in somewhere like Melbourne and not sunny Queensland…

We’ll be releasing the report with the launch of a new newsletter in coming weeks. Moving overseas is just one way of dealing with the difficult decisions Australians have to make for retirement. There are two other big opportunities brewing to solve the problems you face.

More on them soon…


Nick Hubble
for Markets and Money

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Nick Hubble
Nick Hubble is a feature editor of Markets and Money and editor of The Money for Life Letter. Having gained degrees in Finance, Economics and Law from the prestigious Bond University, Nick completed an internship at probably the most famous investment bank in the world, where he discovered what the financial world was really like. He then brought his youthful enthusiasm and energy to Port Phillip Publishing, where, instead of telling everyone about Markets and Money, he started writing for it. To follow Nick's financial world view more closely you can you can subscribe to Markets and Money for free here. If you’re already a Markets and Money subscriber, then we recommend you also join him on Google+. It's where he shares investment research, commentary and ideas that he can't always fit into his regular Markets and Money emails.

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9 Comments on "Beer and Tax in Retirement"

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Don’t move until they’ve remeasured your wealth …. Wayne Swan might even put it in your bank account passbook with a little coloured stamp alongside it

Sell some of these kangawombi’s to China before you go.

I was sorry to leave: after 44 years in Australia, now retired, I live in Europe. I am much better off financially and socially, but I still think of the country that at the time was the best. You worked, paid your taxes and the government left you alone. Then Australia changed, restrictions and annoyances crept in like having to prove who you are all the time. I did not know my adopted country any more. I now live where you are pretty much left alone, no petty regulations and as long as you obey the law you are free… Read more »

” … higher income is taxed at a higher rate. So whether it’s working hard or drinking hard, Australia isn’t the place to be.” Cute comment but higher incomes do not correlate with working hard and hard drinkers have a net negative impact on society (for example, killing themselves and others on the road).

We are now retired and still very happy with the progressive tax system and the cost of beer – a small price to pay for living in a safe country that has a bit of everything. We wish all prospective emigrants good luck.

David & Brigitte Bode
David & Brigitte Bode
We lived overseas for the past 8 years. We were fortunate enough to travel to and spend time in a number of countries in Europe and the Middle East. Returning here earlier this year (to retire) was a truely nasty shock. It’s not only the beer, Nick – this country is more expensive than Europe and the ME for all staples, real estate, services and the cost of electricity is just horrendous – and will keep rising while the red/green loonies run Canberra. (On top of that the quality of service is truly appalling) We are now seriously considering moving… Read more »

There is good reason to consider retiring in the Philippines.
You can live a high quality lifestyle on under $AUD500.00 a week for a family, down to $50.00 a week if you prefer something more “local”. Forget about Manila. Go to one of the islands near to Cebu. You can build a quality house for around $AUD400.00 a sq metre. Happy to answer questions via my email.

Harold Christensen

Of course if you worked overseas in the halcyon days when the the $oz was around 48 to 55 cents and sent all your savings hame you would be able to live well. The people who work overseas now and return to a high $oz are going to say it’s so expensive to live here. Gee whiz people work it out before you write will you.


Don’t be so nasty Harold, its terrific to have hindsight like you. Besides there are many reasons why people working overseas do not repatriate their money, double taxation for one, bringing up a family for another. In case you have not noticed the A$ is falling, but your ‘hindsight’ would have told you that, wouldn’t it?. It has lost 4c against the £ in the last few days. Lucky me, I saw that coming., its called ‘reading the signs’.


An addendum to the above., a couple of days ago bought some gold, its already up £24 an ounce, lucky me again. Mind you the increase is compensating for the crappy deposit rates here. But must not get to cocky though, look what it did to John Howard. On another tack, people are taking money out of Europe, principally Greece, Spain, France, by the truck load and buying real estate in London. Does that say something for the strength of the £ ? Must watch this.


‘a pint will set you back far less in Japan than here’ ?

sitting in Tokyo now after a reday, I’m about to step out and buy a nice chilled can of Ebisu biru at the local supermarket – probably 289Yen (about A$3.50) – methinks that a bit more expensive than Oz

but I usually brew my own at 20c a stubbie, so anything I buy is way more expensive than my usual

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