With beautiful beaches, a warm climate, and a laidback lifestyle, it’s no wonder that Indonesia has become a popular destination with retirees. It is also an affordable place to live, with retirees able to enjoy a lavish lifestyle on a relatively small budget.
If you are thinking of moving to Indonesia when you retire, you’ve reached the right place. This guide will explain how much it costs to live in Indonesia. We’ll delve into everything from the cost of food and clothing to healthcare expenses and inheritance rules. Let’s jump in.
Why Move To Indonesia?
The Republic of Indonesia is a large archipelago located off the coast of mainland Southeast Asia. It consists of over seventeen thousand islands, the largest being Sumatra, Java, Kalimantan (Indonesian Borneo), Sulawesi, and Irian Jaya (Western New Guinea).
Although Indonesia has a population of over 270 million people, there are vast expanses of wilderness and a high level of biodiversity across the country. This makes it easy to find a quiet forest retreat or secluded beachfront residence if you enjoy your space. If you prefer an action-packed lifestyle, you could move to a major city like Jakarta, Surabaya, Bandung, or Bali.
The most common reasons why retirees move to Indonesia include:
- Favorable taxation regime
- Warm and sunny climate
- Beautiful natural environment and abundant wildlife (including great beaches)
- Friendly people
- Relaxed way of life
- Incredible food
- Proximity to other enjoyable destinations including Australia, New Zealand, China, Singapore, Vietnam, Thailand, and Japan
Where Does Indonesia Rank In The Cost-Of-Living Index?
The easiest way to assess the affordability of a region is to see where it ranks on the cost-of-living index. This index measures the relative cost of living between different countries, based on a range of different good and services. It’s a simple way to understand how affordable a retirement location is compared to where you currently live.
Indonesia is currently the 42ndmost affordable nation out of 138 countries, with a cost-of-living index of 37.44. This means it is slightly cheaper than countries like Argentina, Vietnam, Ecuador, Philippines, and South Africa. It is slightly more expensive than Mexico, Bolivia, Peru, and Kenya.
For comparison, the United States is the 112th most affordable nation with a cost of living index of 71.92. Indonesia is about twice as affordable as the United States.
Another useful comparison is The Economists Big Mac Index. It compares the cost of buying a big mac in different countries and contrasts it with the exchange rate difference to determine purchasing-power-parity (PPP).
A big Mac costs 34,000 rupiah in Indonesia and US $5.66 in the United States. The difference between this implied exchange rate and the cash money exchange rate means the Indonesian rupiah is currently 57.5% undervalued.
Related: Cheapest Property in Europe
Cost of Food & Dining In Indonesia
One of the best parts of living in Indonesian is the cuisine. The street food is incredible, with a wide variety of traditional Indonesian and south east Asian dishes on offer. There are also many excellent restaurants offering a range of different cuisines.
If you prefer to cook at home, you’ll be happy to discover that fruit, vegetables, meat, and poultry are all very affordable, making it easy to enjoy a nutritious and delicious diet.
A simple meal at an inexpensive restaurant 25,000 Rp (1.78 USD)
A three-course meal mid-range restaurant for two people 200,000 Rp (14.24 USD)
McDonald’s Combo Meal 50,000.00 Rp (3.56 USD)
- Milk (regular, 1 liter) 18,633 Rp (1.33 USD)
- A loaf of White Bread (500g) 16,138 Rp (1.15 USD)
- Rice (white, 1kg) 12,829 Rp (0.91 USD)
- Eggs (dozen) 21,208 Rp (1.51 USD)
- Cheese (1kg) 115,047 Rp (8.19 USD)
- Chicken Breast Fillets (1kg) 47,103 Rp (3.35 USD)
- Beef Round (1kg) 119,112 Rp (8.48 USD)
- Tomato (1kg) 14,112 Rp (1.00 USD)
- Potato (1kg) 17,788 Rp (1.27 USD)
- Water (1.5-liter bottle) 6,418 Rp (0.46 USD)
- Bottle of Wine (Affordable, mid-range) 300,000 Rp (21.36 USD)
- Domestic Beer (0.5-liter bottle) 32,750 Rp (2.33 USD)
- Imported Beer (0.33-liter bottle) 42,835 Rp (3.05 USD)
- Cigarettes 20 Pack (Marlboro, or other popular brands) 26,000 Rp (1.85 USD)
- Coke/Pepsi (0.33 liter bottle) 8,247 Rp (0.59 USD)
Transportation Costs In Indonesia
Indonesia has very good transport infrastructure with four separate rail systems, 673 airports, hundreds of ports, and good roads. It is generally very easy to find a bus, ferry, taxi, train, or hire car that will get you to your destination.
If you intend to live in a more isolated location, you may be better off purchasing your own boat, motorbike, or car to make getting around easier.
Purchasing a Vehicle
Purchasing a new vehicle is expensive compared to the United States, but there are many inexpensive second hand cars available. Expect to pay between USD $24,000 and $42,000 for a new Toyota or Volkswagen. Reliable second hand cars can cost as little as USD $2,000. One liter of gas costs 8,773 Rp (0.62 USD).
Cost Of Getting Around Indonesia Using Public Transport
- One-way Ticket (Local bus) 5,000 Rp (0.36 USD)
- Monthly Pass (Local bus) 200,000 Rp (14.24 USD)
- Taxi Start (Normal Tariff) 7,000 Rp (0.50 USD)
- Taxi 1km (Normal Tariff) 5,000 Rp (0.36 USD)
Cost Of Housing & Utilities in Indonesia
The cost of housing is one of the largest expenses you will face when retiring in Indonesia. However, it is very affordable compared to the United States.
The cost of housing varies widely in Indonesia based on the quality of the property and its location. If you want to live in a large apartment in the heart of Jakarta, expect to pay much more than you would on a remote island like Gili Air.
Apartments (Rent per month in Indonesia)
Located in a major city
(1 bedroom) 3,882,011 Rp (276 USD)
(3 bedrooms) 9,740,337 Rp (693 USD)
Located outside of the City Center
(1 bedroom) 2,456,514 Rp (276 USD)
(3 bedrooms) 6,068,043 Rp (431 USD)
Houses (Rent per month in Indonesia)
Rental prices for a house in a location like Jakarta range from $1,000 per month to $10,000 per month for a luxurious property. Prices are much cheaper in other parts of Indonesia. For example, you can rent a fully furnished 3 bedroom, apartment in Kuta for as little as USD $500 per month.
Buying Property in Indonesia
Foreigners cannot buy houses or land outright in Indonesia. However, they can buy extremely long leases. Expats can obtain:
- 70-year leases on land
- 40 year leases on apartments with 20 year extensions
It’s possible to obtain landed houses through leases, but you cannot buy them outright. It’s important to note that foreigners who undertake these kinds of leases do not receive the same legal protections as Indonesians, which makes it harder to obtain finance. This article shares more details on buying property in Indonesia.
For strata title apartments, expect to pay up to US$ 3,283 per square meter (sq. m.) in Jakarta CBD, US$ 2,433 in South Jakarta, and US$ 1,583 in the non-prime areas. Outside of the city centre, this figure is closer to $950. Prices in small towns and regional areas will be even cheaper.
Utility Cost in Indonesia
Basic monthly payment for an apartment
(Electricity, Heating, Cooling, Water, Garbage) 1,035,937 Rp (73.74 USD)
Basic monthly payment for a home
(Electricity, Heating, Cooling, Water, Garbage) 1,500,000 Rp (106.5 USD)
Internet (60+ Mbps, Unlimited Data) 457,561 Rp (32.57 USD)
It’s worth noting that some cheaper homes and properties in remote locations may not have amenities like air conditioning or Internet access.
Employment & Income in Indonesia
The Indonesian economy is quite strong thanks to large tourism, mining, petroleum and natural gas, textiles, footwear, and raw materials sectors. There are plenty of opportunities for work if you haven’t fully retired yet.
The average yearly salary for jobs in Indonesia is $13,436 a year ($1,120/month) however this will vary based on locations. The average in a major city like Jakarta is closer to $15,000. Skilled workers can earn much more.
Childcare Expenses in Indonesia
Childcare is very affordable in Indonesia:
- Childcare centers in major cities charge about Rp 4 million (US$ 270.12) per month
- State run pre-schools start at IDR 500,000 (around $35) per month
- Prep-schools operating under international standards might cost as much as IDR 10 million (around $750) per month
Healthcare & Medical Expenses in Indonesia
The quality and availability of healthcare varies substantially in Indonesia. The hospitals and medical facilities in the larger cities are modern, but are often understaffed and underfunded.
If you are a non-resident living in Indonesia, you will not have access to government-funded healthcare and will need to pay for your care. Most expats purchase private health insurance to ensure they have access to the best facilities and can afford their medical bills. To receive a retiree visa, you must have private healthcare.
345,000 to 825,000 Rp (USD $24-$56) for a standard consultation
2 million to 3.6 million Rp (USD $137-$247) for a home visit
Cost of Clothing & Shoes in Indonesia
Indonesia is a large manufacturer of clothing and shoes. As a result, you can find virtually any style of clothing, from affordable items through to high-end suits and dresses.
Clothing & shoes can be purchased in street markets, department stores, local shops, and boutique stores. Imported, brand name products will cost more than the items manufactured in Indonesia. Here are the general costs of clothing and shoes in Indonesia:
1 Pair of Jeans (Levis 501 Or Similar) 559,132 Rp (USD $39.80)
1 Summer Dress or Spring Skirt (Popular chain store) 416,692 Rp (USD $29.66)
1 Standard t-shirt from local markets 80,000-150,000 Rp (USD $5.00 to $10.70)
1 Pair of Running Shoes (Nike or Adidas) 967,409.69 Rp (USD $68.86)
Pair of Men’s Business Shoes 959,023.22 Rp (USD $68.27)
Taxes & Legal Information in Indonesia
The taxation and legal implications of living in Indonesia will vary based on whether you are a citizen of not. Here is a short rundown of taxation policy for expats living in Indonesia.
Income Tax in Indonesia
Expats are considered ‘tax residents’ if they spend more than 183 days in Indonesia in any 12 month period, intend to spend 183 days in Indonesia, or continually earn income in Indonesia over a long period.
When you are declared a tax resident, you will start paying a flat rate of 20% tax on all Indonesian-sourced income. If you do not have the Tax Identification Number, the tax rates for withholding tax on employment income are increased by 20%.
Resident tax payers have progressive tax rates which range from 5 percent to 30 percent. This lower rate of taxation is one of the reasons to become a naturalized resident.
Capital Gains Tax in Indonesia
Expats who make capital gains on assets in Indonesia will also have to pay capital gains tax. It is taxed at the same rate as business income and income from employment.
VAT Tax in Indonesia
There are no consumption taxes in Indonesia
Real Estate and Property Tax in Indonesia
The transfer of land and buildings is subject to income tax on the deemed gain resulting from the transfer or sale. The tax will be charged to the transferor (seller).
Currently, the tax is 2.5% of the gross transfer value (tax base). However, if the transfer involves ‘simple houses’ and ‘simple apartments’ and you are engaged in the property development business, the tax rate is 1%.
The payable tax is calculated based on the amount of each payment including interest, any down payments, collection fees and other additional payments from the buyer.
Retirement Tax in Indonesia
Indonesia has very generous provisions for retirees who have moved to the country. When you are in the country on a retired visa, you won’t pay any income tax on your pensions. However, any interest that accumulates on these payments will be taxed at 20%, just like ordinary income.
Related: Funding Retirement with Real Estate
Inheritance Laws in Indonesia
When it comes to expats, inheritance laws in Indonesia are very similar to those in the United States. If you die while married, your spouse will receive your assets. If you do not have a spouse, the inheritance will be given to your closest living relative or disposed of according to your last will and testament.
However, the rules change if an expat is married to an Indonesia national. If your Indonesian partner passed away, their family would be eligible to receive up to 50% of your combined assets.
You would have a year to liquidate enough assets to pay this amount. In some cases, you may be able to create a special agreement with a family so they sign over their claim.
Some expats will set up a company to hold their assets, so the extended family does not have a strong claim if one partner passes away. A pre-nuptial agreement can also be useful to avoid difficult situations.
There is no inheritance tax in Indonesia, as long as there are no business or employment relationships to consider. However, if real estate needs to be transferred, there will be some transfer fees involved.
Entertainment in Indonesia
There are a lot of options when it comes to entertaining yourself in Indonesia. If you want to relax, the best place to start is probably the nearest beach, a day spa, or a meditation retreat.
If you are the active type, there are many national parks throughout Indonesia, with extensive walking trails. If you are close to the coast, there are plenty of water activities to enjoy like fishing, jet skiing, kayaking, surfing, scuba diving and more.
Indonesia is also a foodies paradise, with many incredible restaurants and some of the world’s best street food. The cafe scene is vibrant and there are many bars to enjoy, particularly in locations like Bali.
In terms of cost, you might spend:
- 404,810 Rp (USD $28) for a monthly gym fee
- 114,388 Rp (USD $8) to book a tennis court for an hour
- 50,000 Rp (USD $3.56) to go to the cinema and check out an international release
What to Expect Before Arrival In Indonesia
Here is a little more information to help you understand how much money you will need when moving to Indonesia:
Indonesia Immigration Costs
There are several types of visa available in Indonesia, with different fees:
- Single Entry Tourist Visa (Embassy and On Arrival) USD $50
- Multiple-entry Visa USD $100
- Business Visa
- Limited Stay Visa (Six months: USD $50, one year: USD $90, two years: USD $160)
- Visa on Arrival USD $35
If you intend on retiring in Indonesia, you would be best off applying for a retirement visa. The eligibility requirements for this type of visa are as follows:
- At least 55 years old of age
- Proof of health and life insurance
- Proof of pension or income providing a minimum of roughly $1,520 per month, or at a lump sum of $18,270 for living expenses
- Proof of a rental agreement with the cost set at over $380 a month
- Proof you have hired local workers for tasks like housekeeping, gardening etc.
- A passport with more than 18 months validity
- Sponsor letter, or an agent willing to provide one
- A statement saying you won’t be working while staying in Indonesia
You will need to pay $600 USD for a KITAS (temporary permanent resident card) and a MERP (multiple exit re-entry permit). Both of these documents will be both good for 1 year. You must reapply for these documents every year, then after five years you can applying for a KITAP (permanent residency card), which will cost five times a temporary resident card. After that you will only need to pay $100 per year for MERP.
Can I Use USD in Indonesia?
Yes, you can. In fact, the US dollar is the most widely accepted currency in Indonesia, so it is fairly easy to find shops that accept it. However, you are very likely to overpay for the items you purchase or suffer from a poor exchange rate, so it is best to use Indonesia Rupiah.
How Much Cash Can I Bring into Indonesia?
An individual can bring up to USD $75,000 cash money with them when they enter Indonesia. Only banks and licensed money changers can bring in foreign bank notes worth more than IDR 1 billion.
How Much Does it Cost to Live Comfortably in Indonesia?
The cost of living in Indonesia is quite low, so it’s possible to live comfortably on a surprisingly small amount of cash.
A recent survey found that a single person can live comfortably on Rp 13,415,843 (about $900) a month. A family of four would need about Rp 29,846,962 (about $2,000) to live comfortably.
However, it’s worth noting that these figures can vary greatly depending on where you live in Indonesia. If you are living in a regional area, costs would be low, while living in the CBD of Jakarta would be much more expensive.
How Much Do You Need to Retire in Indonesia?
As mentioned earlier, to obtain a retirement visa, you only need an income of roughly USD $1,520 per month, or savings of at least USD $18,270. This amount would be enough to live comfortably in most parts of Indonesia. A retired couple could live a life of luxury in a location like Bali if they had an income of $1,900 or more per month.
Sample Monthly Indonesian Budget
- Housing (3 bedroom unit in Kuta): $500 USD
- Utilities: $60 USD
- Transportation: $200 USD
- Fuel (Car): $30 USD
- Eating Out: $200 USD
- Entertainment: $200
- Gas: $3 USD
- Internet: $15 USD
- Additional Food: $200 USD
- Health Insurance: $50 USD
- Housekeeper: $100 USD
- Gardener: $25 USD
That comes to a total of USD $1383. For this price, you would be eating out everyday, having a large stockpile of fresh fruit and vegetables at home, be able to travel whenever you felt like it, and have a housekeeper to keep every thing clean — a very comfortable lifestyle overall.
As you can see, Indonesia is a great place to retire. The beautiful natural environment, vibrant culture, incredible food, friendly people, and affordability all add up to make a great option.