Cost of Raising a Family in Malaysia?

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Really appreciate this forum, guys.  Thanks to all who contribute so generously.

I am of Indian origin, and visited Malaysia (KL/Penang) in the early 1970's.  Loved it.  Have the urge to go back and spend some more time in my beloved Malaysia. 

I have since become a US citizen and and can retire at any time I want to.  My pension will amount to approx 16,000 Ringgit, and I will be 50 -- so I meet the criteria.  My concern is this:  I have a daughter who is 5. My wife is also 16 years younger than I am (she is employed as a nurse, RN here in the US).

Is there anyone out there who could tell me whether 16k MR a month would be enough for a family of 3 in Malaysia?   I know the requirement for MM2h is 10k MR.  Is this for singles?  or a family or, say, a couple?  (I assume most folks in the MM2H program would not have young children, but I may be wrong).

We will not be living an extravagant life style.  I have always preferred the hawker stalls to the 5 star hotels.  But the basic essentials of life are important:  air conditioning, a decent car, a 3 bedroom apartment.  We would love to visit Singapore,Thailand, and India on vacatiions, perhaps even the US from time to time (but this might be too expensive, I realize).

My major concern (and expense) would be private school for my daughter (I assume public schools are in Bahasa Malaysia).  Of course, this could be offset to some extent if my wife got a decent paying job as a nurse, and I put some of my Information Technology (IT) experience to use (for 20 hours a week max)

Can anyone address my unique situation?  Does my wife have to be 50 (or older) too?  How much can a nurse earn in Malaysia?  What are the working conditions in hospitals? How much is the tuition at a good private school? I guess the requirement of living near accessible private schools and good hospitals means that we will have to be in fairly urban area -- probably means higher cost of living, right?

I visit India quite often, and am considering it as a retirement option as well.  However, I find it too crowded, polluted, and it is getting expensive (especially real estate).  Malaysia is probably headed that way too, but I believe it is not there yet.  But perhaps I am wrong.  I would really appreciate it if you could share your views with me.  I thought Malaysia, would provide proximity to India, low cost of living, but a much better infrastructure than India.  Of course, my view of Malaysia is based in the 1970's.  I will definitely visit before making a decision.  But would really like to know what your experiences have been.

Warm regards,

Alfred.

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Good Day Alfred

I too lived for a while in Penang in the seventies but these days it is more congested but still nice. Those days there were barely any high-rise building but now that's all you see!

RM$ 16k pm is an awesome amount in Malaysia where the average family income is about RM$2k pm. You can live like a lord. No need for your wife to work with that kind of dough! The most you will spend to live lavishly is under RM$10k pm but I got through at about RM$2k on a test trial in Kedah about few years back.

Private school for your child should present no problem. The International School in Penang seems popular.

For advice and application talk to JoyStay MM2H agent. (ps: not a agent rep.)

India is better if you like going there often. If I were you I will use GOA as my camp and Malaysia for some holidays.

cheers mate

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Hi, Rag.  You got me intrigued with Goa as a second home alternative.  I have never been there but know it as an off-the-beaten track tourist resort.  Could you give a few pointer web sites?  Thanks.

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Thanks for replying, rag.  Much appreciated.  I will send an email to your contact.  Another thing I am concerned about is the exchange rate.  Right now it is 3.7MR to 1US$.  But that fluctuates as much as 10%   With the growing deficits in the US, I feel that the US dollar is in danger of losing much of it's value versus other currencies.  I wonder how expats deal with the currency fluctuations.

I agree with you about Goa.  I was there in Aug 2007 and enjoyed it a lot.  But getting around is a chore.  Infrastructure is bad in Goa (as it is all over India). 

I will start processing papers to get the PIO (Person of Indian Origin) soon.  This is like dual citizenship between US and India.  It will allow me to visit India without a visa, and invest freely in stocks and real estate, and live there as long as I wish.

Another question I had was whether I can apply for mm2h a few months before I retire (say a 3 months before)?  I guess that will be another question for your contact.

Thanks for the encouraging, words!

Alfred.

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rmyu,

India may be slightly more expensive than Malaysia  for general cost of living.  Real estate much more expensive.  But India has been hit hard by the economic downturn -- so this may have brought the real estate bubble down to size.  When I was there in Aug 2007, the country was euphoric, almost arrogant.  Stock index (Sensex, equivalent to the Dow), was at 22000.  Today it is less than 9000 (up after hitting 7000).  The terrorist attacks at the Taj Mahal hotel in Mumbai and the huge accounting scandal at a very prominent IT company have severely tarnished Indias' confidence in the near term.  Investors have bailed out in a huge way.

India is also a very complex country, and I would say that it is very difficult for a non Indian to be truly accepted there.  I do not know your background, but I would highly recommend that you visit and stay in Goa for a while -- try to experience the worst that the weather has to offer, such as May - September, where first the heat and then the rain can be very frustrating to deal with. 

Retiring to India may be a viable option for an Indian who has left  India and lived in the US or UK for a while, earned a good living, and accumulated a tidy nest egg or pension.  Every Indian yearns to go back home to his roots.  Millions of Indians leave the country in search of jobs and better opportunities abroad.  But we are never truly comortable anywhere else.  We always yearn for the motherland.  This, combined with the rising middle class contributed the real estate bubble.  While India may be a viable alternative for an Indian to return to, I do not believe it is a viable option for a non-Indian.  This may not be the answer you were looking for, but I have to be brutally honest with you. 

But don't take my word for it.  Do your research, visit, stay, and make up your own opinions.  There used to be a very interesting site on Indians wanting to return home (a favorite topic amongst Indians).  But I see that it is now shut down due non payment of website fees.  Here is another interesting link to get you started:

http://www.garamchai.com/Return2India.htm#BlogsRTI

fyi:  garamchai = hot tea.

Warm regards, my friend.

Alfred.

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hi, alfredv,

Welcome to the forum.

With the growing deficits in the US, I feel that the US dollar is in danger of losing much of it's value versus other currencies.  I wonder how expats deal with the currency fluctuations.

Another question I had was whether I can apply for mm2h a few months before I retire (say a 3 months before)?  I guess that will be another question for your contact.

You can apply for MM2H anytime that you want. The criteria is "under 50" or "over 50" so it's not based on actually retiring. You apply for conditional approval, and once this is granted you have 6 months to come to Malaysia and get the visa put into your passports. So work out your timing based on this.

On the currency exchange it's a bit like crystal-balling. Many articles that I've read say that the US$ is due for a big drop. They've been saying this for years and it hasn't happened yet. Last year the euro was up and now it's down. Sterling was nearly US$2 and now it's US$1.45.

However, the ringgit has recently dropped against the US$ (last year's high about 3.2, currently 3.65) so you'll need to make a judgement on the pros and cons of holding US$ or holding ringgit or some other currency.

The point is that the cost of living in Malaysia is very low for even a comfortable lifestyle and with MR16k per month you have loadsacash. You'll need to change enough for the FD (if you choose this Option) so that's done at whatever the going rate is on the day.

For living expenses etc. you have to make a decision. Change it all now, change a lot/less now, change a bit now. Or buy gold. If you're changing currency because you think that the US$ will drop then it's an investment decision which is different from changing because of living expenses which is a necessity decision.

The only help that I can offer is the phrase : win some, lose some. That's what happens to me.

regards, Scott

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Thank you, Scott, for taking the time to reply. 

My understanding is that since I will be above 50, I can show proof of a pension paying more than 10k OR the FD option.  Am I right?  So, I would go to my employer and have them project what my pension would be say, assuming a June 2009 retirement, and attach this letter to my pension application?  Perhaps that will work for a "conditional approval?"

I do have a 401(k) that will more than meet the FD requirement, but I have earmarked it for my daughter's college education.  Besides, there are too many tax penalties to pay for cashing that in and converting it to a Malaysian FD (before I turn 65).  So FD is not an option for me -- pension proof is the only way to go for me!

Congratulations on a very well conceived and useful forum!  It must be a labor of love since I do not see any advertisements to support the site!

Warmly,

Alfred.

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hi,

You are right. Above 50 and you can choose (a) the Monthly Off-Shore Income (Pension) Option or (b) the FD Option.

Can either choose to:
- Open a fixed deposit account of RM150,000.00 ; OR
- Show proof of monthly off-shore income of RM10,000.00 in government pension.

This quote is taken from the www.mm2h.gov.my site. Also taken from this official site is the following :

Only applicants who are drawing from Government Pensions will be considered to have fulfilled the "Monthly off - Shore Income" criterion.

So you have to make sure that you have a Government pension. If your money is coming from a private company then you will not be able to apply under the Monthly Off-Shore Income (Pension) Option. And, from what has previously been posted on this site, the mm2h authorities are very strict on this.

Also, as well as having an FD or a Government Pension you'll need to show that you have additional funds to support your stay in Malaysia.

a). Applying under FD Option.

For over 50, you'll need to show RM350,000 in cash in a bank, and a monthly income of RM10,000. Note : You would obviously plan for the FD to come out of the RM350,000 if/when the conditional application is successful.

b). Applying under Government (Pension) Monthly Off-Shore Income Option.

For over 50, you'll need to show RM200,000 in cash in a bank.

So, these are the amounts that you need to show that you have at the time of making the "conditional" application.  And they are the minimum amounts that have been shown, by practice, to result in an approval. The more cash the better.

There is always some confusion between the RM10,000 Monthly Off-Shore Income (Pension) Option, and the RM10,000 monthly income. In previous posts, I've tried distinguish the RM10,000 monthly income required under the FD Option by calling it "support income". It didn't really work.   

Many thanks for the comments about the forum. The forum doesn't allow ads, and there are quite a few of us that post daily/weekly which is good fun.

regards, Scott

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Thank you, Scott.  Yes, my pension will be  a government pension.  I am thankful for that, and I realize why MM2H folks insist on it.  Many private companies have reneged on pension responsibilities after declaring bankrupty to "restructure".  United Airlines comes to mind.  After they declared bankruptcy, it was "sayonara pensions."   GM will probably do the same thing soon. 

However, I  I missed the MR200,000 cash requirement.  So, despite showing proof of a MR16,000 government pension, I must still show MR200,000 cash in a Malaysian bank?  Did I understand this correctly?  Perhaps this is "settling in" money?

One final question:  Is there an application fee?  I am thankful that agents are no more required, so I will do this myself.  However, I did not notice an application fee required by the government.  Again, old age is catching up to me, and I may have just missed it, like I missed the MR200k cash requirment.

Hmmm...I can smell the kwa teo already!

Warmly,

Alfred.

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Hi Scott,

Went back to the mm2h site and there is no mention of the MR200,000 cash requirmement.  I reproduce the requirments for 50 year olds here:

ii Aged 50 years and above 
 
Can either choose to:

- Open a fixed deposit account of RM150,000.00 ; OR
- Show proof of monthly off-shore income of RM10,000.00 in government pension.

After a period of one year, participant who fulfills the fixed deposit criteria can withdraw up to RM90,000.00 for approved expenses relating to house purchase, education for children in Malaysia and medical purposes.

Participant must maintain a minimum balance of RM60,000.00 from the second year onwards and throughout his/her stay in Malaysia under this programme.

I think paragraph 3 (RM60,000 minimum balance from second year onward) is referring to folks who are are using the FD route, correct? 

The RM200,000 cash requirement may have been an earlier requirement.  This may have changed Feb 2009 (along with 20 hours/week employement allowed in critical sectors).  Or, it may be a requirement my 50yo eyes cannot find. Please clarify.

Warmly,

Alfred.
 

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hi,

If you check on the site you'll see this :

Applicants are expected to be financially capable of supporting themselves for ten years on this programme in Malaysia, without the need to work in the country.  Besides fulfilling the basic financial criteria of Fixed Deposit placement of RM150,000 (for those aged 50 and above) or RM 300,000 (for those aged below 50), applicants should furnish documentation on their financial position to strengthen their application.

It's at the top of the Terms and Conditions page under Financial Requirements.

So you have to show that you can support yourself for the 10 years of the visa, and that you have financial strength. In practice, for those over 50 using the Monthly Off-Shore Income (Government Pension) Option it means cash of at least RM200,000, in addition to the pension. You need to show that you have this amount. It does not have to be deposited anywhere in particular as far as I know.

The RM60,000 does indeed refer to the FD Option and it is the amount that needs to be left as a FD after withdrawing RM90,000 towards property purchase.

There is no application fee. If the visa is granted there is a RM90 yearly visa fee per person.

regards, Scott