Is Johor Still An Affordable Place For Retirement With The Current Inflation?

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Last year in September 2022, I wrote in this post the 8 reasons why I plan to retire in Malaysia, or more specifically, Johor.  Fast-track one year later, it seems evident that more and more people are also interested in the idea of retiring in Malaysia.  Johor and Penang are the two popular regions for retirement, with Johor in close proximity to Singapore, and Penang with great food and with ethnicity composition similar to Singapore.  

So one year later, are there any changes in my plan?  The answer is no.

Do note that the following points are solely from my perspectives, and only for my situation.  Being a Malaysian, Singapore Permanent Residence, I do not have any issues with lengthy stays in Johor, and I am privileged to be able to travel between Singapore and Malaysia as frequent as I wish, as long as my renewal of the re-entry permit in Singapore is successful.  Therefore, please do your own due diligence if Visas or any permits for long term stay is required.  The latest My Malaysia Second Home (MM2H) requirements can be found here.

Personally, with regards to familiarity of the language and culture, food, pace of life, housing, medical and hospitalization, shielded from natural disaster and family and friends, my perspectives remain the same.  I think they are still the pull factors that draw me to the semi-retirement or full retirement life in Johor.  However, with the current rising inflation and high interest rates environment, the rising cost of living prompted me to relook into the expenses of daily life, whether finances and affordability in Johor remains favorable currently.

One year ago, I made a comparison of the affordability of the various regions using the Big Mac Index:

Today, one year later, a revisit to the Big Mac Index showed the following:

Surprisingly, the increase in price of big Mac is the most significant in Malaysia, coupled with the decline in the value of the Ringgit.  This made the cost of living of the locals higher, and made Malaysia a less affordable place, especially for the locals.  This is recently discussed in a documentary by Channel News Asia, concluding that very few Malaysians can afford to retire.  However, do note that this is restricted to the price of Big Mac, which is used as a simple, uniform comparison across countries.  The local food scene still have more affordable, delicious food costing around RM 6.00 to RM 10.00.  

Personally, I think the general cost of goods and services are still affordable to me, simply because I earn Singapore Dollars and my spending power more than triple when I retire back home in Johor.  With respect to this, I admit that I am privileged and the strength of the Singapore Dollar truly makes geographical arbitrage a high possibility.  As such, I believe with affordable cost of living and closer proximity to my family, these major pull factors remain important aspects that encourage me to retain my decision to semi-retire, and retire in Johor, with frequent travels to Singapore and Bangkok.  As per my previous post on my timeline to Barista FIRE, I believe a passive income of SGD 2K to SGD 3K will allow me to gradually transit to Barista FIRE from full-time self-employment soon.  Barista FIRE, here I come...!  

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