The Real Cost of Retiring in Malaysia: Malaysia My Second Home (MM2H) Programme

Retiring in Malaysia could be the ultimate lifehack to achieve a stress-free retirement – if you can afford the hefty financial requirements that’s in the way.

Singapore’s high cost of living may be prompting you to look elsewhere for a more affordable retirement. One popular choice is our northern neighbour, Malaysia, which offers proximity, familiarity and a great exchange rate.

However, you can’t simply rent an Airbnb and take a trip every 30 days to keep renewing your visa-free entry entitlement. Well, technically, you can – visa runs are a legal grey area –  but is the hassle and expense worth it?

Instead, what you should do is to apply for a retirement visa that will allow you to legally stay in Malaysia for extended periods of time, with multiple entries throughout. This scheme is known as “Malaysia My Second Home (MM2H)”, and oh boy, it comes with some pretty steep requirements.

But if you do qualify for MM2H, then yes, you can look forward to lower living expenses. How much lower, though, depends on your personal lifestyle preferences and choices.

Let’s take a closer look at the real cost of retiring in Malaysia.

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Financial requirements for MM2H

Prerequisite	Amount
Liquid assets	MYR 1.5 million (SGD 452,373)
Offshore monthly income	MYR 40,000 (SGD 12,063) For retirees: MYR 10,000 (SGD 3,105)
Fixed deposit with Malaysian bank	MYR 1 million (SGD 301,582) Additional MYR 50,000 per dependant (SGD 15,079) for applicants 35 to 49 years

The table above shows the financial requirements to qualify for MM2H. The SGD equivalents are accurate at the time of writing.

Related to this topic: Retiring Overseas Cost: How Much Do You Need To Get A Retirement Visa?

Before application: Liquid assets of MYR 1.5 million + Monthly offshore income of MYR 40,000

Before you apply, you’ll need to have liquid assets of at least MYR 1.5 million. This can take the form of a stock portfolio, cash savings, and other cash equivalents.

You will also need to have an income that is at least MYR 40,000 a month. For retirees however, the income requirement is lower; you merely need to show proof of pension equivalent to MYR 10,000 per month or more.

After application: Fixed deposit of at least MYR 1 million

After you’ve made your application, you have to make a fixed deposit into a Malaysian bank of no less than MYR 1 million.

For those between the ages of 35 to 49, you’ll need to add MYR 50,000 per dependent.

After one year, you may draw down the funds in your fixed deposit for selected purposes – and only with official clearance. However, you have to maintain at least MYR 500,000 in your fixed deposit at all times.

You may withdraw your fixed deposit funds for the following reasons:

• House purchase

• Car purchase

• Children’s education in Malaysia

• Medical purposes

   

Other associated fees and charges

Let’s not forget the associated expenses, such as processing fees and medical check-ups.

You will need to pay the following:

• Processing fee:

• Main applicant – MYR 5,000 (SGD 1,508)

• Dependents – MYR 2,500 (SGD 704)

• Visa fee: MYR 500 per year (SGD 151)

• Personal bond: MYR 2,000 (SGD 603)

• Social pass: MYR 90 (SGD 27)

• Medical check-up at an approved healthcare institution in Malaysia: MYR 100 (SGD 30)

How much do you need to qualify for MM2H?

Assuming no dependents, and not yet a retiree, here’s how much a Singaporean applicant needs in order to be enrolled into the MM2H retirement visa scheme – in Singapore Dollars.

• Liquid assets: S$452,373

• Offshore monthly income: S$12,063

• Application fee: S$1,508

• Visa fee: S$151

• Personal bond: S$603

• Social pass: S$27

• Medical check-up: S$30

• Grand total: S$466,755

Honestly, that isn’t so bad, compared to the million-dollar-figure that’s often waved over our heads whenever retirement in Singapore is brought up.

But does that mean those who make the grade should plan to retire in Malaysia?

Related to this topic: How Much Do You Really Need For Retirement in Singapore?

Cost of living in Malaysia

Besides having enough money to qualify for MM2H, you’ll also need to be able to fund your living expenses during your retirement years.

Taking the median lifespan for Singaporeans to be 83.7 years, and assuming a retirement age of 65, you’d need enough funds to last you approximately 20 years.

According to Numbeo, the cost of living in Malaysia for one person is around S$616 per month, without rent. A one-bedroom apartment in Kuala Lumpur costs between S$380 to S$600 per month, depending on how close to the city centre the unit is.

Hence, a very, very rough estimate puts the monthly budget for one person in Malaysia to be about S$1,000 to S$1,200 (S$2,000 to S$2,400 for a couple).

Of course, this figure varies depending on your personal preferences and lifestyle choices.

While you could live on S$1,000 per month in Malaysia, don’t forget that you will need to have a pension of at least MYR10,000 or S$3,015 to qualify for MM2H.

That may seem like quite a large budget, but if you decide to buy a property in Malaysia to live in, in most states, you are restricted to properties that cost at least MYR 1 million (S$301,000). The mortgage payments will take a chunk out of your budget.

Regardless, retiring in Malaysia will potentially allow you to get by with a smaller budget. This means you may be better able to put aside money for insurance and healthcare, to indulge in leisure activities like travel, and even allocate some inheritance for your descendants.

But then again, if you manage to achieve a retirement income of S$3,000 a month, would that not be enough for you to have a modest retirement in Singapore – without having to deal with the hassle of moving to another country?

Read these next:

Retiring Early: Why The F.I.R.E Movement Might Not Work For Everyone

A Complete Guide To CPF In Singapore (2023)

Retirement Planning in Singapore: Does The 4% Withdrawal Rule Still Make Sense?

How To Build Sustainable Retirement Income With Your CPF Money

8 Ways To Help Your Parents With Their Finances Without Giving Them Money

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