When anyone heads for retirement, it creates an uncertain financial future.
Your income is reduced and you have no clue about your future expenditures.
However, you can reduce the stress of retirement by living in a place where your income exceeds expenditure.
Fortunately for people, retirement in Malaysia is an option because of low cost of living.
Malaysia has a tax regime that is welcoming to most foreigners.
After living in Malaysia for 182 days in the first tax year and 90 days in the each subsequent tax year, a retiree is deemed as a resident for tax purposes.
In Malaysia, no taxes are levied on income derived outside Malaysia.
Interest on any number of fixed deposits under RM 100,000 and held in Malaysian registered banks are also interest free.
The government considered any bank registered in Malaysia as Malaysian registered bank and this means banks like Citi Bank, HSBC and Chartered Bank are okay to open fixed deposits.
Some banks offer interest on fixed deposits on an annual basis while others pay it monthly.
Malaysia does not have Inheritance Tax or Capital Gains Tax on assets other than property.
If you own a property for less than 5 years and end up selling it, you will have pay a 30 percent Capital Gains Tax.
However, if you sell it after 5 years of ownership, the tax immediately falls to less than 5 percent.
There is no VAT (Value Added Tax) in Malaysia.
Instead a Government Sales Tax (GST) of 5 percent is levied on hotel and restaurant bills, and on professional bills.
You can become a Malaysian taxpayer by earning money on Malaysian rentals or from royalties of works published in the country.
The good part is that there are many allowances that help in reducing the tax liability substantially.
When you retire in Malaysia, personal possessions for personal use are exempt from taxes.
If you bring in recorded videos, VCDs and DVDs, they will be immediately checked for content and you will have to pay a checking charge of RM30 for each checked item.
Utility charges in Malaysia are lower than those compared to countries like the UK.
The night time temperatures in Malaysia never fall below 22 degrees centigrade so there is no need for central heating.
However, having an air-conditioner is the bedroom is a must.
There is no piped natural gas available in Malaysia but you can get large cylinders of LP gas for hardly any money.
In addition, international calls via call cards are quite economical so you can speak to friends and family back home.
The fact that the cost of living in Malaysia is much lower than that of countries like the UK, many retirees are viewing retirement in Malaysia as the best possible alternative.