How I Retired in Malaysia
A memory from 2018
How I Moved to Penang, Malaysia (Part One)
I received a comment from a follower suggesting that I tell my story of moving to Malaysia to live after retirement. There isn’t much on the Internet about Americans retiring to Malaysia to live, but a great deal about Brits who have moved here, which led me to write a blog about my retirement in Malaysia. My blog, Retired in Malaysia, was published in 2011, three years after moving there. I will try to tell my story again in a summarized form and then publish some favorite memories of living in Malaysia
When I decided to move to Penang (a small island off the west coast of Malaysia), I, too, had a great deal of difficulty finding information on exactly how to do it. I saw little helpful information on the web about retiring in Malaysia. Most of the information centered around moving to Central America and Europe. The expat websites with information regarding Americans usually had one or two useless interviews with Americans living there. The few posts I found were often written by women who had to move to Malaysia because of their husbands’ jobs, which involved childcare, schools, and play dates. There were also blogs about Malaysia that included recipes and arts and crafts, but no information about the logistics of actually moving there. No help to the potential retiree or anyone planning on moving there. The rest of the information on these expat sites was about buying expensive real estate, advertising moving companies, and selling books on how to move overseas.
I found a site for Americans living in Kuala Lumpur, the capital, but it was a site for wives of Americans working there. Membership was limited to women and focused on women’s activities and charitable causes. Useless for me. I contacted them but never got an answer. There were many websites for British people living there, but their information was geared to UK citizens. You could make a post there, but you either wouldn’t get a response or, more than likely, they couldn’t be able to help with your situation. The reason for so many British sites is that Malaysia is a former British colony, and many older expats there think it still is! British English is spoken there; they drive on the left side of the road, and many British customs and mannerisms are evident there. So, the transition from the UK was much easier for them than the transition from the US.
As I could find little or no information on Americans moving to Malaysia, I had to do everything from total ignorance. Luckily, I had a friend (my present husband) who was Malaysian, lived there, and was able to help. First of all, I found the Malaysia My 2nd Home (MM2H) website, which the Malaysian Ministry of Tourism runs. Malaysia offers a long-term (10-year renewable) social visit visa. There are two options for applying to this program. One is a do-it-yourself plan, and the other is to hire an agent. I went the agent route since I was 12,000 miles away, and I would rather pay someone to do the legwork and ensure it was done right. The agency I used was Comfort Life, and I was delighted with their services. I had to place about $40,000 into a fixed deposit account at a major Malaysian bank to get my visa. At the exchange rate of that time, that amount was almost $50,000. (When I use $, I refer to USD.) After 2 years, you can take a large chunk of this for medical expenses, buying property, or educational purposes. The MM2H site explains the other requirements. I believe the money requirements have changed considerably.
Getting the MM2H visa was extremely easy. A very short time after I applied, I was approved for the visa. I had 1 year to visit Malaysia and pick up my visa. At the time of that visit, I was taken to the bank to set up my fixed deposit account at a bank of their choosing. Once I got my visa, the next step was to sell my house and move. Easier said than done.
I put my house in Boston up for sale in October of 2007, and I sweated as the housing prices fell and the housing market went down the toilet. Finally, I sold my house in May of 2008. I planned to leave for Boston on July 3, so I had a lot of work to do. I decided not to bring my furniture and appliances with me. This was costly, and I was not sure if my furniture would fit in my new home when I purchased it. The electrical system is very different there, so the electrical appliances could not be used. I decided to sell everything and buy everything new.
The American banking system was the biggest problem and the most significant source of anger and frustration. Thanks to the Patriot Act, the banking system in the United States is like no other country in the world. It works against the customer instead of with or for the customer. My biggest concern about moving to Malaysia was being able to transfer money from the US to my accounts in Malaysia.
I went to the big banks with branches in Malaysia. I remember seeing Citibank and Bank of America in Malaysia, so I naturally went to these banks in Boston. They both promised me I could quickly transfer money to their branches in Malaysia. They both lied to get me to open an account with them. One bank required me to keep a minimum of $250,000 and the other $500,000 just to be able to make periodic transfers. I didn’t know how much most retirees have hanging around in their savings accounts, but I didn’t have anywhere near that amount.
So, I went to my local Boston bank and explained my situation. They suggested I use my bank’s Internet banking system to pay bills back home or send relatives money at Christmas or other occasions. The only inconvenient thing about using your home bank in the US is that you can’t have a foreign address. If you have a foreign address where your statements could be sent, you cannot use Internet banking. The banks say this is a Department of the Treasury rule. I checked this out, and it is not valid.
The banks can allow foreign addresses as long as they make yearly reports of these addresses. This will cost the banks a little money, so they naturally refuse to do it. Big banks only know how to take from the customers, not give in the form of services.
On the subject of banking, there is one inconvenient and highly unfair requirement the US government shackles expats with: the FBAR. This is the Foreign Bank Account Report, which must be filed annually. ( This is the government document that got Paul Manafort in trouble). This requires the expat to report all foreign bank accounts of over $10,000.
These accounts include investment accounts, checking accounts, joint accounts of any kind, and any other account with your name on it. If you had an account where the balance was $10,000 for just one day, you still have to report it. The penalty for not reporting or even reporting late is extremely and unnecessarily harsh. Groups like American Citizens Abroad are trying to repeal these draconian laws, and hopefully, they will succeed.
How I Moved to Penang, Malaysia to Live (Part 2)
After I figured out the logistics of my move and settled my banking concerns, I was ready to move. I left Boston for the last time on July 3, 2008.
I arrived in Penang on July 4th, 2008 (it was strange not to see any Independence Day celebrations) to start the next chapter in my life. I had put money down and signed a purchase and sales agreement on a condo in a complex I had seen on a previous visit. The unit was furnished and needed no renovation. It was also reasonably priced. When I first arrived in Penang, Kevin (my partner at the time) and I lived in a service apartment for a month, which was inconvenient. It was not near any shopping area or public transportation, but it did have a nice pool and a great bar. It was also relatively cheap to stay there. After only a couple of weeks, the seller of my unit told me I could move into the condo before the final papers were passed and without having to pay any rent. I was pleased, to say the least. At the end of August, the move was accomplished. Shortly afterward, my friend in Boston mailed my few remaining possessions, so I did have a little bit of home with me.
With Kevin’s help, all of the utilities were set up and working. To give an idea of what the utility costs were, I will share what I paid for mine. The amounts are in approximate US dollars. Satellite TV with premium channels came to about $46 a month; electricity (includes washer, dryer, A/C all night in 1 room, one fan 24 hrs/day, TV with home theater system, two laptops, two aquaria, electric oven, and a few smaller kitchen gadgets)averaged out to be about $60 a month; water was $5 every 2 months; condo fees were about $160 every 3 months and finally taxes were about $300 per year. I had bottled gas, which I paid about $16 every 6 months. We ate out most of the time because local food was so much cheaper than buying food and cooking at home. It may not have been healthy, but it was good.
Once I moved in to our new condo, and had it painted with vibrant colors, instead of the all white walls, we got some plants and hung pictures after we had drilled holes n the concrete walls. We were all set. The move was officially completed.
I retired early when I moved there and did not receive Social Security until after living there for a few years. I applied for Social Security online with the US Embassy in Manila, and they called shortly after receiving my application to interview me. This took less than 15 minutes and was painless. I chose to have my benefits deposited into my US account. I was reasonably concerned about filing my federal and state income taxes from Malaysia and had trouble finding answers from the IRS or other government sites. When you look for information, you only see results about people working and living abroad, not retirees. I found out that you MUST have a US address to file electronically with Turbo Tax and other major commercial companies. I settled for a free site suggested on the IRS website, using a US friend’s address. I had to file my Massachusetts tax using the forms downloaded from the Internet.
If some American retirees are reading this and contemplating moving to Malaysia, I would like to offer a few suggestions. If you decide to move there, visit a couple of times, and when you finally decide to move, look for a nice rental place before you buy. Property there is nothing like in the US. When purchasing properties being built, you will pay a lot of money upfront before the building is completed. The price may sound cheap, but remember you will still have to pay between 10 and fifteen thousand to renovate to make it livable. Window and door screens that are standard in the US do not exist there, so you must get used to that. There is no central gas or hot water there either. You can install small hot water heaters in the kitchen, and the bathrooms have water heaters for a hot shower. Local people there do not wash dishes in hot water but in cold water. This goes for food courts, coffee shops, hawker stands and most restaurants too. Western-style kitchens with ovens are becoming a little more common in the newer-built condos. These are always electric. The stove tops are mainly gas-powered by bottled gas, which is cheap and easy to get.
The hardest thing for me to get used to was the Asian-style bathrooms. These bathrooms are small, with no electrical outlets. They consist of a sink, toilet, and a handheld shower. When you take a shower, everything gets wet. And I mean everything. I found it quite annoying to walk into the bathroom in the middle of the night and find a still wet floor. Using the toilet caused my pantcuffs to become wet, which really annoyed me. Many times I dressed to go out, including socks, and then find that I had to use the toilet again. So I had to take my socks off, go to the bathroom, dry my feet, and put my socks back on. I had 2 bathrooms, and I quickly converted one to a Western-style bathroom. Most newer units now have Western-style bathrooms. If you have to convert a bathroom, make sure you go to a reputable contractor, as most local contractors do not understand the concept of a dry bathroom. Most condos do not have enough or convenient electrical outlets, so you may want to have more installed. This is not too expensive, but it is messy as the walls are all concrete, and a good deal of drilling has to be done.
These are only some annoyances or inconveniences you will either have to get used to or try to remedy. You must realize that Malaysia is a country of only a little over 50 years of age and thus cannot be compared to the US and other developed countries. Malaysia has beautiful buildings, scenery, great food, and, most of all, beautiful people. If you do move there, don’t make the mistake that many expats make by just sitting on your balconies drinking and enjoying the view, socializing only with expats, and not getting to know the locals. If you want to socialize with other Americans and ex-pats and eat at high-end Western restaurants, there is no sense in going there. Stay home.
This article was originally published in 2018 when I first moved to Malaysia. I hope you enjoyed my experience.